U.S. sanctions another N. Korean bank for WMD involvement: Treasury Dept.

(ATTN: UPDATES with more details, background throughout)
By Hwang Doo-hyong
WASHINGTON, Aug. 11 (Yonhap) -- The United States Tuesday blacklisted another
North Korean financial institution for its affiliations with North Korean firms
and banks already sanctioned under U.N. resolutions adopted after North Korea's
nuclear and missile tests in recent years.

In a statement, the Department of Treasury said it has "designated the Korea
Kwangson Banking Corp. (KKBC) under Executive Order (E.O.) 13382 for providing
financial services in support of both Tanchon Commercial Bank (Tanchon) and Korea
Hyoksin Trading Corporation (Hyoksin), a subordinate of the Korea Ryonbong
General Corporation (Ryonbong)."
Executive Order 13382 "freezes the assets of proliferators of weapons of mass
destruction and their supporters and prohibits U.S. persons from engaging in
transactions with them, thereby isolating them from the U.S. financial and
commercial systems."
Hyoksin is among five North Korean firms blacklisted by the U.N. Security Council
in June under Resolution 1874, adopted after North Korea's second nuclear test on
May 25.
Ryonbong was among three North Korean firms targeted by the Security Council in
2006 under Resolution 1718, adopted after the North's first nuclear test in 2006.
The additional listing comes amid growing optimism for a breakthrough in the
stalled negotiations over North Korea's nuclear weapons program after the
landmark visit to Pyongyang by former U.S. President Bill Clinton last week to
win the release of two American journalists held there for four months for
illegally entering the North.
Clinton met with reclusive North Korean leader Kim Jong-il for more than three
hours, during which Kim expressed his willingness to have bilateral talks and
improve ties with the U.S., according to U.S. officials who debriefed the former
president.
U.S. officials dismissed Kim's proposal for bilateral talks, saying those will be
possible only within the framework of the six-party talks involving the two
Koreas, the U.S., China, Japan and Russia, which Pyongyang refuses to attend,
citing punitive U.N. resolutions.
National Security Adviser James Jones, however, was a bit optimistic about the
future U.S.-North Korea ties after the Clinton trip.
"We certainly hope it could lead to other good things, but we won't know that for
a while," Jones told reporters last week. "Who knows where the future will lead?"
U.S. officials have, meanwhile, dismissed the Clinton trip as a "private
mission," warning the U.S. will continue to sanction the North unless Pyongyang
returns to the six-party talks.
In blacklisting KKBC, Stuart Levey, undersecretary for terrorism and financial
intelligence, said, "North Korea's use of a little-known bank, KKBC, to mask the
international financial business of sanctioned proliferators demonstrates the
lengths to which the regime will go to continue its proliferation activities and
the high risk that any business with North Korea may well be illicit."
KKBC is based in North Korea and has operated at least one overseas branch, in
Dandong, China, according to the department.
Tanchon, Ryonbong and Hyoksin have already been listed by the U.N. resolution as
well as the Treasury Department for their involvement in the North Korean WMD
programs.
The Treasury Department accused Tanchon of utilizing KKBC since 2008 to
"facilitate funds transfers likely amounting to millions of dollars, including
transfers involving Korea Mining Development Trading Corporation (KOMID)-related
funds from Burma to China in 2009."
KOMID is "North Korea's premier arms dealer and main exporter of goods and
equipment related to ballistic missiles and conventional weapons," and Tanchon
"plays a key role in financing KOMID's sales of ballistic missiles," the
department said, suspecting Hyoksin "sought to use KKBC in connection with a
purchase of dual-use equipment in 2008."
In a strategic dialogue here last month, U.S. Secretary of State Hillary Clinton
and Treasury Secretary Tim Geithner agreed with their Chinese counterparts to
cooperate closely on implementing U.N. resolutions on sanctioning North Korea.
Any sanctions on North Korea, already one of the most heavily sanctioned nations
in the world, are seen as ineffective without the full participation of China,
North Korea's staunchest communist ally.
China has often been accused of disregarding U.N. resolutions against North
Korea, which is heavily dependent on its communist neighbor for food, energy and
other necessities.
Beijing is believed to dislike any instability on its border with North Korea as
it is gearing up to be an economic power in the coming decades to match the
world's superpower, the U.S.
hdh@yna.co.kr
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