Banco Delta Asia SARL, which is challenging a US ruling barring banks from doing business with the Macau lender because of its ties to North Korea, said the US encouraged its dealings with North Korea.

Stanley Au, chairman of the lender's parent, Delta Asia Financial Group, said in a statement that he met with US government officials in 1994 after reporting that a North Korean client deposited counterfeit US dollars.

The officials "said that they would like us to continue to deal with them, as it was better that we conducted this business rather than another financial entity that may not be so cooperative with the United States," Au said in the statement, released by law firm Jones Day.

Delta Asia Financial filed a petition contesting the US Treasury Department ruling, saying there is no evidence it let North Korea launder money. The bank holds $25 million in previously frozen North Korea funds that the country demanded be released before implementing an agreement to shut its nuclear reactor. Talks on transferring the funds are under way.

"We are reviewing the petition that has been submitted," US Treasury spokeswoman Molly Millerwise said. "Our designation of BDA was based on a lengthy process and strong administrative record, and we continue to stand by our action."