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Monday, August 2, 2010

U.S. to strengthen sanctions against N. Korea amid concerns of Chinese influence

U.S. to strengthen sanctions against N. Korea amid concerns of Chinese influence


Washington Post Foreign Service
Monday, August 2, 2010; 8:47 AM


SEOUL -- The chief U.S. official in charge of nonproliferation outlined a plan Monday to penalizeNorth Korea by choking off the international network of front companies and banks that largely fund its nuclear weapons program and the lifestyles of its elite.
-Reuters July 21, 2010
Secretary of State Hillary Clinton shaking hands with
South Korean Foreign Minister following news conference.
Robert Einhorn, the U.S. State Department's special adviser for nonproliferation and arms control, said during a trip to Seoul on Monday that new sanctions against North Korea will be finalized within several weeks. But he also emphasized the need for cooperation from other countries -- China, in particular -- to target the entities that do illegal business with North Korea.


Einhorn called it a "serious concern" held by many countries that China could capitalize on the situation, increasing its business dealings with a desperate Pyongyang. China could seize upon similar opportunities in Iran, which in June was hit by the latest round of U.N. sanctions.


"We want China to be a stakeholder in the international system," Einhorn said, "and not take advantage of the restraint of other countries."
(Read more about the U.S. relationship with China.)

The desire to increase pressure on North Korea -- yet another attempt to push Kim Jong Il's government toward denuclearization -- comes as a direct response to the March sinking of the Cheonan warship, which killed 46 South Korean sailors and raised fears of further provocations on the Korean peninsula. North Korea has denied involvement with the sinking, despite an investigation claiming otherwise.


(Read about joint military exercises by the United States and South Korea that were intended to send a message to North Korea, and see video of the exercises.)

According to Einhorn, North Korea accesses hundreds of millions of dollars annually by counterfeiting currency, smuggling narcotics and using overseas banks for illicit activities. Existing U.N. security resolutions already target some of these activities, but Einhorn said that upcoming penalties represented a strengthening of these sanctions.


"Our new measures will allow us to designate entities and individuals involved in these activities and to block any property or assets they posses that are under the control of a U.S. person or bank," Einhorn said. "But by publicly naming these entities, these measures can have the broader effect of isolating them from the international community."


For Einhorn, the trip to Asia -- he'll head to Tokyo on Tuesday -- is a means to gather support for the sanctions, not only against North Korea, but also against Iran. Traveling with Treasury Department Deputy Assistant Secretary Daniel Glaser, Einhorn on Monday encouraged South Korea to approve new sanctions against Iran, as member countries of the European Union did last month.



Though he doesn't yet know when, Einhorn will also travel soon to China, whose financial support of North Korea has buffered it from the worst effects of previous U.N. resolutions. Analysts believe that pending U.S. actions against the socialist dictatorship won't have too much impact unless other countries add their support. Indeed, North Korea has relatively few assets tied to the U.S.


"If we're serious about going after illicit transactions, how do we do that if a lot of it takes place through Chinese firms?" said one U.S. official involved in sanctions discussions, requesting anonymity in order to speak freely about U.S. thinking. "I don't know."
The current U.S. plan resembles 2005 strategy in which the Macao-based Banco Delta Asia bank was targeted by the Treasury for its alleged involvement in a North Korea money-laundering scheme. Other banks around the world, Glaser said, took notice and "decided they'd reexamine their relationship with North Korea."


Einhorn was not ready on Monday to specify the financial institutions that according to the United States are doing business with North Korea. He said identifying those firms will be a part of the finalized sanctions.
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