POLITICS & ECONOMICS: “U.S. to Cut Off Macau Bank: Move Follows Probe of North Korean Ties, Could Hinder Nuclear Talks,” by Neil King Jr. and Jay Solomon, Wall Street Journal, 13 March 2007, p. A4. ARTICLE: “U.S. Cautions Foreign Companies on Iran Deals: Oil and Gas Assistance Could Lead to Penalties,” by Steven R. Weisman, New York Times, 21 March 2007, p. C1.

The Bush administration’s push against the Banco Delta Asia bank in Macau is interesting to watch. The whole SARBOX/Patriot Act rule set was basically America telling the world, “this is the new minimum level security practices you must adhere to or we’ll run you out of business.” Riggs bank in DC was set up as the example case, and the bank, which was way lax on keeping tabs on its most nefarious customers, was forced to sell itself to PNC. Poof! Just like that, the “bank of presidents” was gone. That sent a real chill and signaled just how serious the government was about these new rules. Now, with North Korea and Iran, we’re seeing a similar exporting of our internal rule sets. With Banco Delta, we’re being very Patriot Act, basically saying, “we know your bad customers and if you don’t treat them as such, we’ll treat you as such by cutting off any financial connectivity with the U.S. financial system. Decide for yourself which line of business is more important.” With Iran, Bush is using a Clinton law to warn energy companies and foreign governments about long-term investments in Iran, getting better responses for now from our European friends (who love sanctions per se) than our Asian ones (India and China are definitely going to invest a lot in Iran, one way or another, simply because they have little choice given the rapid ramp up of their energy needs). Tricky business, because--of course--we’re learning just how useful it can be to have China on our side on a host of troubling situations around the world. Just name a situation or nasty regime, and I’ll tell you how we’re quickly realizing that China’s on the far side of that equation.