From AFP:
10/9/2006
The US already has broad sanctions in place against North Korea, giving it little additional economic and trade leverage to bring to bear following Pyongyang’s defiant nuclear test explosion.
Washington imposed a near total economic embargo on North Korea at the start of the Korean War in June 1950, only beginning to ease the sanctions slightly from 1989 amid efforts to draw the reclusive Stalinist regime into the international community.
A series of measures aimed at encouraging North Korea to not develop nuclear arms culminated in a June 2000 Executive Order legalizing most transactions between US and North Korean nationals.
The order allowed many products to be sold to North Korea, though sanctions affecting trade in military, so-called dual-use and missile-related items remained in place.
But imports from the country remain under tight restrictions, managed by the Treasury Department’s Office of Foreign Assets Control, and North Korean assets frozen since 1950 remained frozen.
While restrictions on US investments in North Korea and on the travel of US citizens to North Korea were also eased under the 2000 measure, the two countries have no formal diplomatic relations and have never officially ended the Korean War.
Most forms of US economic assistance, other than purely humanitarian aid, remain prohibited and North Korea does not enjoy “Normal Trade Relations” with the United States, so allowable exports are hit by high tariffs.
The State Department acknowledges that “US economic interaction with North Korea remains minimal” and that Washington’s leverage over the reclusive regime is limited.
“There’s not a lot to grab hold of,” commented a senior State Department official about the hunt for ways to impact the North Korean economy bilaterally.
North Korea receives the bulk of its imports over the Chinese and Russian borders and relies on hefty aid from South Korea, giving those three governments far greater potential leverage in economic sanctions.
Washington did find one powerful pressure point last year when the Treasury Department slapped sanctions against a Macau-based bank, Banco Delta Asia, which US officials charged was the main conduit for bringing North Korean counterfeit dollar bills into the international system.
Washington and its allies have long contended North Korea uses counterfeiting, drug trafficking and sales of weapons to prop up its ailing economy.
The US decision to designate the Banco Delta Asia a “primary money-laundering concern” left the bank teetering and could foreshadow similar action targetting other financial transactions by the North.
Many analysts pointed to the banking sanction as possibly the main reason North Korea went ahead with its nuclear test shock at this time.
The North Koreans were “feeling under a great pressure from the United States and the sanctions that were being imposed, particularly the financial sanctions,” said David Albright, a former UN nuclear weapons inspector.
“I think this test is coming from that sense of being backed into a corner,” he said.
