U.S. tightens financial noose on North Korea

August 11, 2009

WASHINGTON (AP) -- The Obama administration moved Tuesday to freeze the assets of a North Korean bank accused of providing financial services to companies involved in Pyongyang's missile programs.

The Treasury Department's action against Korea Kwangson Banking Corp., or KKBC, means any bank accounts or other financial assets found in the United States that belong to the firm are blocked. Americans also are prohibited from doing business with the bank. It is based in North Korea and has operated at least one overseas branch in Dandong, China.

The department alleges that the bank has provided financial services to Tanchon Commercial Bank and Korea Hyoksin Trading Corp., which the United States has branded as proliferators of weapons of mass destruction. Those two firms also have alleged ties to North Korea's missile programs, the department said.

"North Korea's use of a little-known bank, KKBC, to mask the international financial business of sanctioned proliferators demonstrated the lengths to which the regime will go to continue its proliferation activities, said Stuart Levey, the department's undersecretary for terrorism and financial intelligence.


The department said Tanchon has been using KKBC to transfer funds likely amounting to "millions of dollars." Those transfers also involved arms dealer Korea Mining Development Trading and the movement of money from Burma to China, the department said.

Hyoksin sought to use KKBC "in connection with a purchase of dual-use equipment in 2008," Treasury said. It didn't provide additional details.

The blocking order is the latest move by the United States to keep pressure on Pyongyang, whose nuclear ambitions have ratcheted up global tensions.

North Korea in recent months has made some bold moves with respect to its nuclear ambitions that have touched an international nerve. It conducted a long-range rocket launch in April, quit the six-nation nuclear talks, restarted its nuclear facilities, conducted its second-ever nuclear test, and test-launched a barrage of banned ballistic missiles.

The U.N. Security Council has adopted tough sanctions to punish Pyongyang.

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