Archive for the ‘Korea Mining Development Trading Corporation (aka Kapmun Tosong, KOMID)’ Category

US sanctions DPRK Daedong Credit Bank

Thursday, June 27th, 2013

Here is the press release from the Treasury Department:

Treasury Sanctions Bank, Front Company, and Official Linked to North Korean Weapons of Mass Destruction Programs

6/27/2013
Action Targets North Korea’s Use of Deceptive Financial Practices
to Support its Weapons Programs

WASHINGTON – Today the U.S. Department of the Treasury took another step in our ongoing efforts to disrupt North Korean financial networks supporting the regime’s illicit ballistic missile and weapons of mass destruction (WMD) programs and proliferation activities. Daedong Credit Bank (DCB), together with DCB Finance Limited—a DCB front company—and DCB’s representative Kim Chol Sam were designated pursuant to Executive Order (E.O.) 13382, which targets proliferators of WMD and their supporters. The financial operations carried out by DCB, DCB Finance Limited, and Kim Chol Sam are responsible for managing millions of dollars of transactions in support of the North Korean regime’s destabilizing activities.

The Treasury Department also designated Son Mun San, the External Affairs Bureau Chief of North Korea’s General Bureau of Atomic Energy (GBAE) under E.O. 13882 for his work directing North Korea’s nuclear-related research efforts. The GBAE, which was previously designated by the U.S. and the UN, is responsible for North Korea’s nuclear program, which includes the Yongbyon Nuclear Research Center and its five megawatt plutonium production research reactor, as well as its fuel fabrication and reprocessing facilities.

“Although the recent spate of provocations has waned, North Korea’s dangerous and destabilizing illicit nuclear and ballistic missile program continues apace, supported by North Korean financial institutions like Daedong Credit Bank. We are committed to increasing the sanctions pressure on North Korea until it complies with its international obligations,” said Under Secretary for Terrorism and Financial Intelligence David S. Cohen. “We urge financial institutions around the world to be wary of dealing with Daedong Credit Bank and the other designated entities in order to maintain the transparency and legitimacy of the international financial system.”

North Korea’s nuclear and missile programs and proliferation activities violate UN Security Council Resolutions 1718 (2006), 1874 (2009), and 2094 (2013); destabilize the region; and undermine the global nonproliferation regime. Today’s designations build upon other recent U.S. efforts to target DPRK proliferation activities, including the March 2013 designation of North Korea’s main foreign exchange bank, the Foreign Trade Bank (FTB).

Daedong Credit Bank has engaged in the same type of activity that was at issue in the FTB designation, most notably providing financial services to the Korea Mining Development Trading Corporation (KOMID), Pyongyang’s premier arms dealer as well as KOMID’s main financial arm, the Tanchon Commercial Bank (TCB), both of which have been previously designated by the U.S. for the central role they play supporting North Korea’s illicit nuclear and ballistic missiles programs. KOMID and TCB were also designated by the United Nations. UNSCR 2094 requires the imposition of targeted financial sanctions on entities that work for or on behalf of, or at the direction of, UN-designated North Korean entities. Since at least 2007, Daedong Credit Bank (DCB) has facilitated hundreds of financial transactions worth millions of dollars on behalf of KOMID and TCB. In some cases, DCB has knowingly facilitated transactions by using deceptive financial practices.

DCB Finance Limited and Kim Chol Sam

Since at least 2006, Daedong Credit Bank has used its front company, DCB Finance Limited, to carry out international financial transactions as a means to avoid scrutiny by financial institutions avoiding business with North Korea. DCB Finance Limited is registered in the British Virgin Islands and also operates out of China.

Kim Chol Sam is a representative for Daedong Credit Bank who has also been involved in managing transactions on behalf of DCB Finance Limited. As a Dalian, China-based representative of DCB, it is suspected Kim Chol Sam has facilitated transactions worth hundreds of thousands of dollars and likely managed millions of dollars in North-Korean related accounts.

Son Mun San

Since at least 2010, Son Mun San has served as the External Affairs Bureau Chief of North Korea’s General Bureau of Atomic Energy (GBAE).

GBAE is responsible for North Korea’s nuclear program, which includes the Yongbyon Nuclear Research Center and its five megawatt plutonium production research reactor, as well as its fuel fabrication and reprocessing facilities. GBAE was designated by the United Nations Security Council in July 2009 and was also designated pursuant to E.O. 13382 in September 2009.

U.S. persons are generally prohibited from engaging in any transactions with the entities and individuals listed today, and any assets they may have subject to U.S. jurisdiction are frozen.

Identifying information:

Entity Name: Daedong Credit Bank
AKA: DCB
AKA: Taedong Credit Bank
Address: Suite 401, Potonggang Hotel, Ansan-Dong, Pyongchon District, Pyongyang, DPRK
Alt. Address: Ansan-dong, Botonggang Hotel, Pongchon, Pyongyang, DPRK
SWIFT: DCBK KPPY

Entity: DCB Finance Limited
Address: Akara Building, 24 de Castro Street, Wickhams Cay I, Road Town, Tortola, British Virgin Islands
Alt. Address: Dalian, China

Name:Kim Chol Sam
Date of Birth: March 11, 1971
Nationality: Democratic People’s Republic of North Korea
Role: Treasurer, Daedong Credit Bank

Name: Son Mun San
Date of Birth: January 23, 1951
Role: External Affairs Bureau Chief, General Bureau of Atomic Energy

According to Reuters:

The U.S. Treasury said Daedong Credit Bank has been providing financial services to the Korea Mining Developing Trading Corp, or KOMID, which it said was Pyongyang’s premier arms dealer, and the Tanchon Commercial Bank, or TCB, its main financial arm.

“Since at least 2007, Daedong Credit Bank has facilitated hundreds of financial transactions worth millions of dollars on behalf of KOMID and TCB,” the Treasury said. “In some cases, (it) had knowingly facilitated transactions by using deceptive financial practices.”

The Treasury said it was also sanctioning a Daedong front company called DCB Financial Limited, that company’s representative, Kim Chol Sam, and Son Mun San, the external affairs bureau chief of North Korea’s Bureau of Atomic Energy.

It said the front company had carried out international financial transactions as a way to avoid scrutiny by institutions trying to avoid doing business with North Korea.

The action generally prohibits U.S. citizens from engaging in any transactions with the entities or persons targeted, and freezes any assets they might have in the United States.

The fresh set of sanctions follows a decision by the United States in March to target North Korean’s Foreign Trade Bank, its main foreign exchange institution, to try to choke off cash to the government in Pyongyang.

Banks in the European Union have been reluctant to do business with FTB in the wake of the U.S. sanctions, and China’s biggest foreign exchange bank, the Bank of China, closed FTB’s account.

Treasury Under Secretary David Cohen told reporters on a conference call that he expects banks outside the United States to continue to limit or terminate their dealings with the sanctioned banks. “Being exposed to a financial institution like Daedong Credit Bank exposes those financial institutions to real risk, in particular reputational risk,” he said.

Cohen said previous sanctions had increased the North Korean regime’s financial isolation and that these latest designations would ratchet the pressure up further.

Here is the Wall Street Journal’s coverage.

Additional information:

1. Previous posts on Daedong Credit Bank here.

2. The US recently sanctioned the DPRK’s Foreign Trade Bank. Previous posts on the Foreign Trade Bank here.

3. Previous posts on KOMID here.

Read the full story here:
U.S. sanctions North Korea bank as it targets weapons program
Reuters
Paige Gance
2013-6-27

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US imposes new sanctions on DPRK

Monday, March 11th, 2013

These new sanctions are in response to the DPRK’s third nuclear test. Here is a link to information on UNSC resolution 2094, which the UNSC passed in response to the same test.

Here is the full statement by the Treasury Department:

___________________

Treasury Sanctions Bank and Official Linked to North Korean Weapons of Mass Destruction Programs 3/11/2013

​WASHINGTON – To impede North Korea’s ballistic missile and weapons of mass destruction (WMD) programs, the U.S. Department of the Treasury today designated the Foreign Trade Bank (FTB), North Korea’s primary foreign exchange bank, pursuant to Executive Order (E.O.) 13382, which targets proliferators of weapons of mass destruction (WMD) and their supporters. Treasury is also designating Paek Se-Bong, the chairman of North Korea’s Second Economic Committee (SEC) under E.O. 13882.

North Korea’s nuclear and missile proliferation activities violate the UN Security Council regime, comprised of resolutions 1718 (2006), 1874 (2009), 2087 (2013), and 2094 (2013), destabilize the region, and undermine the global nonproliferation regime. The international community has condemned North Korea’s WMD proliferation activity, most recently in last week’s UN Security Council Resolution 2094. Today’s designations of FTB and a senior member of the North Korean government linked to the DPRK missile program, follow actions taken March 7, 2013 by the Treasury Department against China-based representatives of the Korea Mining Development Corporation (KOMID) and Tanchon Commercial Bank (TCB).

“North Korea uses FTB to facilitate transactions on behalf of actors linked to its proliferation network, which is under increasing pressure from recent international sanctions. The United States will take strong measures to protect its financial system from this type of illicit activity, and we urge financial institutions around the world to be particularly wary of the risks of doing business with FTB,” said Under Secretary for Terrorism and Financial Intelligence David S. Cohen.

The U.S. Department of State is today also designating Pak To-Chun, Chu Kyu-Chang, and O Kuk-Ryol. To view the release, click here.

By designating FTB, the Treasury Department is targeting a key financial node in North Korea’s WMD apparatus, and cutting it off from the U.S. financial system. FTB is a state-owned bank established in 1959. FTB acts as North Korea’s primary foreign exchange bank and has provided key financial support to the Korea Kwangson Banking Corporation (KKBC). KKBC was designated under E.O. 13382 in August 2009 for providing financial services in support of the previously designated entities TCB and the Korea Hyoksin Trading Corporation (Hyoksin). Hyoksin used its connections to KKBC to purchase dual-use equipment in 2008.

FTB has also facilitated millions of dollars in transactions that have benefited KOMID—North Korea’s premier arms dealer—and its financial arm, TCB. North Korea’s Second Economic Committee oversees the production of North Korea’s ballistic missiles and directs the activities of KOMID. TCB, KOMID and Hyoskin were designated by the UNSCR 1718 Committee in April 2009.

Paek Se-Bong is the chairman of the SEC. The SEC, which oversees the production of North Korea’s ballistic missiles and directs the activities of KOMID, was previously designated by the U.S. State Department in August 2010. Paek Se Bong is also an alternate member of the Central Committee of North Korea’s Workers Party and a member North Korea’s National Defense Commission.

This designation generally prohibits transactions between the designees and any U.S. person, and freezes any assets they may have under U.S. jurisdiction.

Identifying information:

Name: Foreign Trade Bank of the Democratic People’s Republic of Korea
AKA: North Korea’s Foreign Trade Bank
Location: FTB Building, Jungsong-dong, Central District, Pyongyang, North Korea
SWIFT/BIC: FTBD KP PY

Name: Paek Se-Bong
AKA: Paek Se Pong
DOB: 21 March 1938
Title: Chairman, Second Economic Committee

ADDITIONAL INFORMATION
1. Here is a summary in the Daily NK.

2. Here is the Treasury Departments DPRK Resource Center Page.

3. Here is the State Department press release which includes additional sanctioned individuals.

4. Here is coverage in the Hankyoreh.

5. Stephan Haggard on the sanctions.

6. The EU also imposed sanctions. The US wants them expanded to cover the DPRK’s Foreign Trade Bank.

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DPRK forges trade documents to dodge sanctions

Wednesday, September 1st, 2010

According to the AFP:

North Korea is forging trade documents and changing the names of its trading firms to try to dodge international sanctions, a Seoul intelligence official and a media report said Wednesday.

Pyongyang changed the name of the Korea Mining and Development Corp to Kapmun Tosong Trade after the UN Security Council blacklisted the firm following the North’s missile test in April 2009, Dong-A Ilbo newspaper reported.

The communist state also renamed weapons trader Tangun Trade as Chasongdang Trade when the company was put on the sanctions list after the North’s second nuclear test in May 2009.

The tests prompted the Security Council to impose tougher sanctions targeting Pyongyang’s weapons exports and blacklisting companies suspected of such dealings.

The sanctions also called on UN member states to inspect ships and planes suspected of carrying banned cargo to or from the North.

Since then, the North has mostly used China to transport its arms exports, Dong-A said.

It had forged trade invoices on military products, for instance by labelling torpedoes as fish processing equipment and anti-tank rockets as oil boring machinery, the paper added.

A spokesman for Seoul’s National Intelligence Service confirmed the report but declined to give details.

“Intelligence authorities in South Korea and the United States are trying to crack down on the North’s forging of company names and export invoices, but it is becoming increasingly difficult since the North keeps coming up with new schemes,” the paper quoted one South Korean official as saying.

The impoverished North faces multiple sanctions imposed by the UN and the United States and targeting its illegal trade in arms, drugs and luxury goods.

The US Treasury Department announced Monday it was imposing sanctions on four people and eight organisations accused of aiding the communist government through illicit trade.

Of course these games are nothing new. About this time last year DPRK sanctions enforcement was in the news.  Marcus Noland referred to the task as “Whac-a-mole”.

Read the full stories here:
N.Korea forges trade documents to dodge sanctions
AFP
9/1/2010

N. Korea Fakes Trade Documents to Export WMDs 
Donga Ilbo
9/1/2010

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US freezes assets in DPRK proliferation case

Monday, August 30th, 2010

UPDATE 4: The following statement appeared on the Treasury Department web page:

In joint actions, the U.S. Departments of Treasury and State today announced the designations of five North Korean entities and three individuals under Executive Order (E.O.) 13382 for supporting North Korea’s Weapons of Mass Destruction (WMD) program. Executive Order 13382 is an authority aimed at freezing the assets of WMD proliferators and their supporters thereby isolating them from the U.S. financial and commercial systems.

Also today, President Obama signed an Executive Order that directs the Secretary of the Treasury, in consultation with the Secretary of State, to target for sanctions individuals and entities facilitating North Korean trafficking in arms and related materiel; procurement of luxury goods; and engagement in illicit activities, including money laundering, the counterfeiting of goods and currency, bulk cash smuggling and narcotics trafficking. The new Executive Order supplements E.O 13382, under which North Korean entities have been designated to date, and is consistent with measures required in UNSCRs 1718 and 1874.

The following individuals have been added to OFAC’s SDN list:

KIM, Yong Chol (a.k.a. KIM, Yong-Chol; a.k.a. KIM, Young-Cheol; a.k.a. KIM, Young-Chol; a.k.a. KIM, Young-Chul); DOB circa 1947; alt. DOB circa 1946; POB Pyongan-Pukto, North Korea (individual) [DPRK]

RI, Hong-Sop, c/o General Bureau of Atomic Energy , Haeudong, Pyongchen District, Pyongyang, Korea, North; DOB 1940; nationality Korea, North (individual) [NPWMD]

RI, Je-Son (a.k.a. RI, Che-Son), c/o General Bureau of Atomic Energy, Haeudong, Pyongchen District, Pyongyang, Korea, North; DOB 1938; nationality Korea, North (individual) [NPWMD]

YUN, Ho-Jin (a.k.a. YUN, Ho-Chin), c/o Namchongang Trading Corporation, Pyongyang, Korea, North; DOB 13 Oct 1944; nationality Korea, North (individual) [NPWMD]

The following entities have been added to OFAC’s SDN list:

GREEN PINE ASSOCIATED CORPORATION (a.k.a. CHONGSONG YONHAP; a.k.a. CH’O’NGSONG YO’NHAP), Nungrado, Pyongyang, Korea, North; c/o Reconnaissance General Bureau Headquarters, Hyongjesan-Guyok, Pyongyang, Korea, North [DPRK]

KOREA HEUNGJIN TRADING COMPANY (a.k.a. HUNJIN TRADING CO.), Pyongyang, Korea, North [NPWMD]

KOREA TAESONG TRADING COMPANY, Pyongyang, Korea, North [NPWMD]

MUNITIONS INDUSTRY DEPARTMENT (a.k.a. MILITARY SUPPLIES INDUSTRY DEPARTMENT), Pyongyang, Korea,
North [NPWMD]

OFFICE 39 (a.k.a. BUREAU 39; a.k.a. CENTRAL COMMITTEE BUREAU 39; a.k.a. DIVISION 39; a.k.a. OFFICE #39; a.k.a. OFFICE NO. 39; a.k.a. THIRD FLOOR), Second KWP Government Building (Korean – Ch’o’ngsa), Chungso’ng, Urban Town (Korean – Dong), Chung Ward, Pyongyang, Korea, North; Chung-Guyok (Central District), Sosong Street, Kyongrim-Dong, Pyongyang, Korea, North; Changgwang Street, Pyongyang, Korea, North [DPRK]

RECONNAISSANCE GENERAL BUREAU (a.k.a. CHONGCH’AL CH’ONGGUK; a.k.a. KPA UNIT 586; a.k.a. “RGB”), Hyongjesan-Guyok, Pyongyang, Korea, North; Nungrado, Pyongyang, Korea, North [DPRK]

SECOND ACADEMY OF NATURAL SCIENCES (a.k.a. 2ND ACADEMY OF NATURAL SCIENCES; a.k.a. ACADEMY OF NATURAL SCIENCES; a.k.a. CHAYON KWAHAK-WON; a.k.a. CHE 2 CHAYON KWAHAK-WON; a.k.a. KUKPANG KWAHAK-WON; a.k.a. NATIONAL DEFENSE ACADEMY; a.k.a. SANSRI; a.k.a. SECOND ACADEMY OF NATURAL SCIENCES RESEARCH INSTITUTE), Pyongyang, Korea, North [NPWMD]

SECOND ECONOMIC COMMITTEE, Kangdong, Korea, North [NPWMD]

UPDATE 3: According to the Wall Street Journal:

The Obama administration outlined new financial sanctions on North Korea aimed at further choking off Pyongyang’s arms trade and the illicit businesses funding dictator Kim Jong Il’s government.

The U.S. specifically targeted a secretive unit of Pyongyang’s ruling Korean Workers’ Party, known as Office 39, which American officials believe serves as a private slush fund for Mr. Kim.

Washington also blacklisted nearly a dozen North Korean individuals and entities alleged to be overseeing Pyongyang’s development of conventional arms and weapons of mass destruction, as well as their sales to third countries.

Among those designated are the Second Economic Committee of the Workers’ Party and Yun Ho-jin, Pyongyang’s onetime ambassador to the United Nations’ nuclear watchdog, the International Atomic Energy Agency. The U.S. also named to its sanctions list two top officials from Pyongyang’s General Bureau of Atomic Energy, Ri Je-son and Ri Hong-sop.

“When it comes to focusing on illicit activity, we have seen that the world reacts to this kind of thing very, very positively,” said Stuart Levey, the Treasury Department’s undersecretary for terrorism and financial intelligence. “We believe that this sort of program can have a very powerful impact.”

The new U.S. measures freeze any assets of the designated persons or entities inside the U.S. and bars American companies from conducting business with the listed North Koreans. Mr. Levey also said that any foreign entities conducting business with the sanctioned North Koreans could also face U.S. penalties.

Secretary of State Hillary Clinton announced in June that the U.S. would enact new financial penalties on Pyongyang, in part, in response to the North’s alleged torpedoing of a South Korean naval vessel. The March sinking of the Cheonan killed 46 South Korean servicemen and has led to heightened tensions on the Korean peninsula.

U.S. officials fear the attack could be linked to a political succession process inside Pyongyang and could presage other provocative acts by the North. U.S. and Asian officials believe Kim Jong Il is seeking to pass power to his third son, Kim Jong Eun.

…U.S. officials said the targeting of Office 39 is among the most direct assaults on Kim Jong Il’s finances to date and illustrates Washington’s support for the North Korean people. Office 39 has been directly involved in procuring luxury goods for Mr. Kim and Pyongyang’s political elite, even as many North Koreans face starvation.

Office 39 was blacklisted under a new executive order signed by President Barack Obama on Monday that specifically seeks to end North Korea’s ability to raise hard currency through illicit activities like drug smuggling and counterfeit $100 bills. The Treasury said Office 39 was directly involved in a 2009 scheme to illegally export into North Korea two luxury yachts valued at $15 million for Kim Jong Il.

UPDATE 2: According to the Wall Street Journal:

A North Korean arms chief and Pyongyang’s former ambassador to the United Nation’s nuclear agency have emerged as key figures in an intensifying international effort to curb North Korea’s weapons-trading activities.

The global dealings of the two men, Chun Byung-ho and Yun Ho-jin, whom North Korea analysts believe to be related through marriage, date back to the 1980s. They have played leading roles in North Korea’s development and testing of atomic weapons, according to current and former U.S. officials, Asian intelligence analysts and U.N. nonproliferation staffers.

More troubling to officials, Messrs. Chun and Yun also oversee Pyongyang’s vast arms-trading network, which appears to be spreading. They have shipped components for long-range missiles, nuclear reactors and conventional arms to countries including Iran, Syria and Myanmar.

On Monday, the Obama administration announced economic sanctions against various individuals and entities involved in Pyongyang’s nuclear work and in alleged illicit trading activities. The Treasury Department named Mr. Yun and the North Korean body headed by Mr. Chun—the Second Economic Committee of Pyongyang’s ruling Korean Workers’ Party. The sanctions freeze any U.S. assets of those named and bar Americans from conducting business with them. Treasury also warned that foreign firms doing business with them risked sanctions.

The Second Economic Committee oversees a little-known foreign trade office with the Orwellian name of Office 99. The proceeds from the Office’s arms sales go directly to North Korean dictator Kim Jong Il and Pyongyang’s senior leadership, according to these officials and recent North Korean defectors.

“It is broadly believed that the Second Economic Committee…plays the largest and most prominent role in nuclear, other WMD and missile-related development programs, as well as arranging and conducting arms-related exports” for North Korea, says a report issued in May by the U.N. committee tasked with enforcing international sanctions on Pyongyang.

The U.S. and U.N. recently have intensified efforts to combat the Second Economic Committee and Office 99, alarmed by Pyongyang’s two nuclear-weapons tests and its alleged role in sinking a South Korean naval vessel in March. Last year, the U.N. formally sanctioned Mr. Yun and his arms company, Namchongang Trading Co.

North Korean arms shipments moving through Thailand, the United Arab Emirates, South Africa and the South China Sea have been seized or turned back by the U.S. and its allies over the past few years. A Japanese court convicted a Tokyo-based trading company in November of procuring military technologies for Pyongyang with the intent of shipping them to Myanmar.

Still, Messrs. Chun and Yun’s decades of experience in the weapons trade pose a challenge to an international community keen to disrupt Pyongyang’s proliferation activities, say U.S. and Asian officials. “There is no reason to assume that Chun and Yun won’t sell nuclear weapons,” says David Asher, a former Bush administration official who has tracked Pyongyang’s arms trade for a decade. “There needs to be an active effort to disrupt their WMD networks and drive them out of business now, before it’s too late.”

The two men have established a network of front companies in Asia, Europe and the Middle East and have partnered with Southeast Asian, Japanese and Taiwanese criminal syndicates to move cash and contraband, say U.S. officials. And Mr. Yun has used the political cover provided by Pyongyang’s closest ally, China, to openly conduct business in cities such as Beijing and Shenyang, drawing official rebukes from Washington.

North Korean diplomats at Pyongyang’s U.N. mission in New York did not respond to requests for comment. Messrs. Chun and Yun couldn’t be reached.

Current and former U.S. officials say North Korea’s operations resemble in both scale and tactics those of Pakistan’s Abdul Qadeer Khan—one of the most notorious arms dealers in recent years. U.S. officials fear that isolated North Korea, desperate for hard currency, could accelerate its arms exports in a bid to prop up Kim Jong Il’s finances.

Mr. Chun, now 84 years old, and his Second Economic Committee emerged as major global arms exporters in the 1980s, as North Korea shipped as much as $3 billion worth of rockets, pistols and submarines to Tehran during the eight-year Iran-Iraq war, say recent defectors and North Korea analysts.

Pyongyang assisted some communist and socialist countries militarily during the 1960s and 1970s, and provided fighter pilots to aid Egypt and Syria in their wars against Israel. But North Korea found a largely captive market in Iran, which faced a U.S.-led weapons embargo as the West threw its support behind Iraqi strongman Saddam Hussein.

One senior North Korean defector who worked in Pyongyang’s munitions industries says he was dispatched to Iran by the Second Economic Committee in 1987 with the task of constructing missile batteries on the Iranian island of Kish to help Tehran better control the movement of ships through the Straits of Hormuz.

His main interlocutor was Iran’s elite military unit, the Islamic Revolutionary Guard Corps. The former hydro-mechanic says camaraderie developed between his 100-man team and the Guard, despite their different backgrounds.

Mr. Chun’s control over the Second Economic Committee was tied to his close relationship with Pyongyang’s ruling Kim family, say defectors and North Korea experts. The Russian-trained bureaucrat served as a member of North Korean founder Kim Il Sung’s bodyguard unit. He rose up the ranks of the Korean Workers’ Party with the political support of Kim Jong Il, eventually securing a position on Pyongyang’s most powerful political body, the National Defense Commission.

North Korea’s high-level defector, Hwang Jang-yop, has identified Mr. Chun as the broker of a key barter trade in the 1990s with Pakistan that significantly advanced Pyongyang’s nuclear infrastructure. The agreement resulted in North Korea shipping parts for long-range missiles to Islamabad in exchange for A.Q. Khan sending centrifuge equipment used in producing nuclear fuel.

As Mr. Chun pushed forward North Korea’s nuclear program from Pyongyang, Mr. Yun, believed to be the husband of Mr. Chun’s second daughter, emerged as a key player in procuring technologies for the Second Economic Committee from Europe, according to U.S., U.N. and European officials.

Mr. Yun, 66, arrived in Vienna in 1985 as Pyongyang’s ambassador to the International Atomic Energy Agency. The English and German speaker led negotiations with the U.N. agency aimed at forging a nuclear-inspection agreement with North Korea, and he helped oversee a 1992 tour of his nation’s Yongbyon nuclear facility for Hans Blix, the IAEA’s then-managing director.

“Yun was dedicated to turning things around. I truly believe that,” says Willi Theis, who worked closely with Mr. Yun as the head of the IAEA’s safeguards unit overseeing North Korea. Mr. Theis is now retired.

Still, concerns grew inside the IAEA about Mr. Yun’s activities, as relations between Pyongyang and the international community deteriorated, according to IAEA officials.

In 1993, North Korea broke off talks with the IAEA over the agency’s demands for an inspection of the country’s nuclear operations, and the U.S. charged Pyongyang with secretly stockpiling plutonium for atomic weapons. The next year, the Clinton administration threatened to bomb the Yongbyon facility if North Korea didn’t explain where the plutonium had gone. Mr. Yun grew embittered with the diplomatic process and mistrustful of the U.S. and its allies, according to IAEA staff and journalists who met with him.

Mr. Theis says he spent hours discussing the process with Mr. Yun and pressed the Agency to remain engaged with Pyongyang. The West German-born nuclear inspector says he grew suspicious of Mr. Yun’s many trips to other European cities and his contacts with local companies. Mr. Yun even hinted to Mr. Theis that he might have no choice but to directly support North Korea’s nuclear-weapons programs if relations with the IAEA collapsed.

“He came to the conclusion that dealing with the international community was totally disappointing,” said Mr. Theis in a phone interview from Austria. “Mr. Yun had definitely learned how to establish contacts with all types of people [while in Vienna]—not just from the IAEA, but managers of companies.”

Mr. Theis’s concerns about Mr. Yun would be borne out in 2003, when a German businessman, Hans Werner Truppel, was arrested and eventually convicted by a Stuttgart court of selling 22 metric tons of aluminum tubes to Mr. Yun.

The North Korean and his company, Namchongang Trading, used offices in Beijing and Shenyang, China, to place orders for the equipment, which is critical to building centrifuges needed to enrich uranium, according to a German Customs Bureau report. U.S. officials briefed on the case were alarmed that Mr. Yun conducted some of his business through the offices of Shenyang Aircraft Industry Co., a Chinese state-owned firm.

In the ensuing months, the State Department aired its concerns about Mr. Yun’s activities to China’s government, according to former U.S. officials. But Beijing took no action.

China’s ministries of foreign affairs and commerce didn’t respond to requests for comment. Shenyang Aircraft says it had no recollection of any dealings with Mr. Yun.

Messrs. Chun and Yun have sought to accelerate North Korea’s weapons sales and procurement in recent years and allegedly have played important roles in strengthening Pyongyang’s military ties to countries such as Syria and Myanmar, say current and former U.S. officials.

North Korea analysts believe most of these transactions have been conducted through Office 99, which they describe as an international sales office and slush fund for Kim Jong Il.

“Anything that has to do with the imports and exports of weapons flows through Office 99,” says Oh Kongdan, a North Korea expert at Virginia’s Institute of Defense Analyses, a Pentagon-funded think tank. “It’s a royal patronage system.”

U.S. officials say that since the late 1990s they detected through intelligence channels intensifying military cooperation between North Korea and Syria, focused on everything from the development of chemical weapons to missiles.

In September 2007, Israeli jets bombed a facility in eastern Syria that U.S. officials say was a nearly operational replica of North Korea’s Yongbyon nuclear reactor. As many as 10 North Koreans died in the Israeli attack, according to U.S. officials. Mr. Yun and Namchongang Trading are believed to have played a central role in brokering development of the facility.

“That particular company was all over the nuclear trade. There’s no question about it,” says John Bolton, who served as the Bush administration’s top non-proliferation official. Both Syria and North Korea have denied cooperating on developing nuclear technologies.

Over the past two years, U.S. and U.N. officials have also voiced concerns about North Korea’s deepening military ties with Myanmar, the Southeast Asian country formerly known as Burma.

North Korea engineers have helped Myanmar build a maze of fortified bunkers to house senior government officials and military installations, according to Burmese defectors and commercial satellite photos. Current and former U.S. officials say Washington has intervened to block the transfer of Scud missiles to Myanmar from Pyongyang.

In June, Japan’s Ministry of Economy and Trade banned Tokyo-based Toko Boeki Trading Co. and device maker Riken Denshi from conducting international trade after three of their affiliated executives, one of them an ethnic Korean, were arrested trying to send machine tools on an export-control list to Myanmar using a dummy company in Malaysia. The equipment could be used to develop either ballistic missiles or centrifuges for a uranium-enrichment program, according to weapons experts. And the U.N. in its May report said it was examining “suspicious” ties between Mr. Yun’s Namchongang Trading and Myanmar, possibly linked to these activities in Japan.

The Obama administration, in response, has announced a stepped-up campaign to block North Korea’s ability to raise funds through the arms trade. In addition to the new sanctions, the Pentagon has said it will intensify the interdiction of ships and planes believed to be carrying North Korean arms.

Still, Mr. Theis and other North Korea experts believe that it is only through dialogue that the West will be able to curb the North’s proliferation threat. Mr. Theis says he is recently lobbied the IAEA to allow him to return to Pyongyang to hold meetings with Mr. Yun. So far, he says, the IAEA hasn’t agreed.

UPDATE 1: According to Reuters:

President Barack Obama on Monday broadened U.S. financial sanctions on North Korea, freezing the U.S. assets of eight North Korean companies or agencies and four individual citizens.

The U.S. Treasury released a fact sheet detailing U.S. allegations against the North Korean entities and individuals targeted under the new U.S. executive order and a previous one. The following is a summary:

Companies and Agencies

The Reconnainance General Bureau
The Reconnaissance General Bureau (RGB) is North Korea’s premiere intelligence organization, created in early 2009 by the merger of existing intelligence agencies. The RGB trades in conventional arms and controls the North Korean conventional arms firm Green Pine Associated Corporation, which was also identified for sanctions under Obama’s order for exporting arms or related materiel from North Korea, the Treasury said.

Green Pine Associated Corp.
Green Pine was brought under the control of the RGB in 2009. The Treasury said it specializes in the production of maritime military craft and armaments, such as submarines, military boats and missiles systems, and has exported torpedoes and technical assistance to Iranian defense-related firms.

Green Pine is responsible for approximately half of the arms and related materiel exported by North Korea and has taken over many of the activities of the Korea Mining Development Trading Corporation, according to the Treasury.

Office 39
Office 39 of the Korean Workers’ Party engages in illicit economic activity to support the North Korean government, the U.S. Treasury fact sheet said. Office 39 has branches throughout the nation that raise and manage funds and is responsible for earning foreign currency for senior party leaders through illicit activities such as narcotics trafficking.

Office 39 controls a number of entities inside North Korea and abroad through which the Treasury said it is involved in the production, smuggling, and distribution of narcotics, and it has also been involved in the attempted procurement and transfer to North Korea of luxury goods.

Office 39 produced methamphetamine and was also involved in its supply to small-scale North Korean smugglers for distribution through China and South Korea. It also operates poppy farms and produces opium and heroin, the Treasury said.

In 2009, Office 39 was involved in the failed attempt to purchase and export to North Korea — through China — two Italian-made luxury yachts worth more than $15 million and destined for North Korean leader Kim Jong-il, the Treasury said.

Korea Mining Development Trading Corp. (KOMID)
KOMID is Pyongyang’s main arms dealer and main exporter of goods and equipment related to ballistic missiles and conventional weapons, with offices located in multiple countries around the world with the primary goal of facilitating weapons sales and seeking new customers for its weapons, according to the Treasury.

KOMID uses Korea Taesong Trading Company and Korea Heungjin Trading Company for trading purposes. Korea Taesong has acted on behalf of KOMID in dealings with Syria, and Korea Heungjin acts as the procurement arm of KOMID, the Treasury fact sheet said. Korea Heungjin is also suspected to have been involved in supplying missile-related goods to Iran’s Shahid Hemmat Industrial Group, it said.

Korea Taesong was previously sanctioned by the U.S. Department of State in 2008 under the Iran, North Korea, and Syria Nonproliferation Act.

Munitions Industry Department
The Treasury said the Munitions Industry Department is responsible for overseeing the development of North Korea’s ballistic missiles, including the Taepodong-2 which was first test-launched in 2006 and has a possible range of 4,100 miles.

The Second Economic Committee
The Second Economic Committee is responsible for overseeing production of North Korea’s ballistic missiles. It also directs the activities of KOMID, according to the U.S. Treasury.

The Second Academy of Natural Sciences
The Second Academy of Natural Sciences is a national-level organization responsible for research and development of North Korea’s advanced weapons systems, including missiles and probably nuclear weapons. It uses a number of subordinate organizations, including Tangun Trading Corporation, to obtain technology, equipment, and information from overseas for use in North Korea’s missile and probably nuclear weapons programs, the U.S. Treasury said.

Individuals

Kim Yong-chol
General Kim Yong-chol commands the Reconnaissance General Bureau.

Ri Je-son and Ri Hong-sap
The U.S. Treasury fact sheet said Ri Je-son and Ri Hong-sop act for or on behalf of the General Bureau of Atomic Energy (GBAE), which is responsible for North Korea’s nuclear program and manages operations at the Yongbyon Nuclear Research Center. GBAE was designated by the United Nations in July 2009 for its involvement in North Korea’s nuclear program and subsequently sanctioned by the State Department.

Ri Je-son is the director of GBAE and is responsible for facilitating several nuclear endeavors including GBAE’s management of Yongbyon Nuclear Research Center and Namchongang Trading Corporation, according to the Treasury.

Ri Hong-sop is a councilor for GBAE. He is also the former Director of Yongbyon Nuclear Research Center. In that capacity he oversaw the three core facilities that North Korea used to produce weapons-grade plutonium, the Treasury said.

Both Ri Je-son and Ri Hong-sop are also subject to the asset freeze and travel ban provisions under an earlier United Nations Security Council resolution.

Yun Ho-jin
Yun Ho-jin acts for or on behalf of Namchongang Trading Corporation (NCG), a North Korean trading company subordinate to GBAE. NCG has been involved in the procurement of Japanese- origin vacuum pumps that were identified at a North Korean nuclear facility, as well as nuclear-related procurement associated with a German individual.

Yun Ho-jin has acted on behalf of NCG in various capacities since the 1980s. As a senior official at NCG, he oversaw the import of items needed for North Korea’s uranium enrichment program.

Through an NCG office in China, Yun Ho-jin was also involved in purchases of sensitive material linked to the construction of a nuclear reactor in Syria, the Treasury fact sheet said.

He is also under U.N. Security Council asset freeze and travel ban sanctions.

ORIGINAL POST: Here is the full statement by the US Treasury Department:

August 30, 2010
TG-840

United States Designates North Korean Entities and Individuals for Activities Related to North Korea’s Weapons of Mass Destruction Program

WASHINGTON – In joint actions, the U.S. Departments of Treasury and State today announced the designations of five North Korean entities and three individuals under Executive Order (E.O.) 13382 for supporting North Korea’s Weapons of Mass Destruction (WMD) program. Executive Order 13382 is an authority aimed at freezing the assets of WMD proliferators and their supporters thereby isolating them from the U.S. financial and commercial systems.

Also today, President Obama signed an Executive Order that directs the Secretary of the Treasury, in consultation with the Secretary of State, to target for sanctions individuals and entities facilitating North Korean trafficking in arms and related materiel; procurement of luxury goods; and engagement in illicit activities, including money laundering, the counterfeiting of goods and currency, bulk cash smuggling and narcotics trafficking. The new Executive Order supplements E.O 13382, under which North Korean entities have been designated to date, and is consistent with measures required in UNSCRs 1718 and 1874.

Korea Taesong Trading Company and Korea Heungjin Trading Company
Pyongyang-based entities the Korea Taesong Trading Company and Korea Heungjin Trading Company, are used by the Korea Mining Development Trading Corporation (KOMID) for trading purposes. Korea Taesong Trading Company has acted on behalf of KOMID in dealings with Syria, and Korea Heungjin Trading Company acts as the procurement arm of KOMID. Korea Heungjin Trading Company is also suspected to have been involved in supplying missile-related goods to Iran’s Shahid Hemmat Industrial Group.

KOMID is Pyongyang’s premier arms dealer and main exporter of goods and equipment related to ballistic missiles and conventional weapons, with offices located in multiple countries around the world with the primary goal of facilitating weapons sales and seeking new customers for its weapons. It was listed in the Annex to E.O. 13382 of June 2005 and has been sanctioned by the United States repeatedly over the last 10 years for trading in missile technology. KOMID was also designated by the UNSCR 1718 Committee to be subject to the asset freeze provisions of UNSCR 1718.

Korea Taesong Trading Company was previously sanctioned by the U.S. Department of State in 2008 under the Iran, North Korea, and Syria Nonproliferation Act (INKSNA). INKSNA provides for the imposition of measures on entities or individuals for the transfer to or acquisition from Iran, Syria, or North Korea of equipment or technology controlled under multilateral export control lists or otherwise having the potential to make a material contribution to the proliferation of WMD or cruise or ballistic missile systems.

Second Economic Committee, Munitions Industry Department and Second Academy of Natural Sciences
The Munitions Industry Department and Second Economic Committee are involved in key aspects of North Korea’s missile program. The Munitions Industry Department is responsible for overseeing the development of North Korea’s ballistic missiles, including the Taepo Dong-2.

The Second Economic Committee is responsible for overseeing the production of North Korea’s ballistic missiles. The Second Economic Committee also directs the activities of KOMID.

The Second Academy of Natural Sciences is a national-level organization responsible for research and development of North Korea’s advanced weapons systems, including missiles and probably nuclear weapons. The Second Academy of Natural Sciences uses a number of subordinate organizations to obtain technology, equipment, and information from overseas, including Tangun Trading Corporation, for use in North Korea’s missile and probably nuclear weapons programs.

Tangun Trading Corporation is subordinate to the Second Academy of Natural Sciences and is primarily responsible for the procurement of commodities and technologies to support North Korea’s defense research and development programs and procurement, including materials that are controlled under the Missile Technology Control Regime (MTCR) or the Australia Group. Tangun Trading Corporation was designated by the Department of State pursuant to E.O. 13382 in September 2009. Tangun Trading Corporation was also designated by the UNSCR 1718 Committee to be subject to the asset freeze provisions of UNSCR 1718.

Ri Je-son and Ri Hong-sop
Ri Je-son and Ri Hong-sop act for or on behalf of the General Bureau of Atomic Energy (GBAE), which is responsible for North Korea’s nuclear program and manages operations at the Yongbyon Nuclear Research Center. GBAE was designated by the United Nations in July 2009 for its involvement in North Korea’s nuclear program and subsequently sanctioned by the Department of State under E.O. 13382 in September 2009.

Ri Je-son is the Director of GBAE and is responsible for facilitating several nuclear endeavors including GBAE’s management of Yongbyon Nuclear Research Center and Namchongang Trading Corporation.

Ri Hong-sop is a councilor for GBAE. He is also the former Director of Yongbyon Nuclear Research Center. In that capacity he oversaw the three core facilities that the DPRK used to produce of weapons-grade plutonium: the Fuel Fabrication Facility, the 5MWe Experimental Reactor, and the Radiological Laboratory (Reprocessing Plant).

Ri Je-son and Ri Hong-sop were also designated by the UNSCR 1718 Committee to be subject to the asset freeze and travel ban provisions of UNSCR 1718.

Yun Ho-lin
Yun Ho-jin acts for or on behalf of Namchongang Trading Corporation (NCG), a North Korean trading company subordinate to GBAE. NCG has been involved in the procurement of Japanese- origin vacuum pumps that were identified at a North Korean nuclear facility, as well as nuclear-related procurement associated with a German individual. NCG was designated by the State Department pursuant to E.O. 13382 in June 2009.

Yun Ho-jin has acted on behalf of NCG in various capacities since the 1980s. As a senior official at NCG, he oversaw the import of items needed for North Korea’s uranium enrichment program.

Through an NCG office in China, Yun Ho-jin was also involved in purchases of sensitive material linked to the construction of a nuclear reactor in Syria.

Yun Ho-jin was also designated by the UNSCR 1718 Committee to be subject to the asset freeze and travel ban provisions of UNSCR 1718.

Identifying Information:
Entity: Korea Taesong Trading Company
Location: Pyongyang, North Korea

Entity: Korea Heungjin Trading Company
AKA: Hunjin Trading Co.
Location: Pyongyang, North Korea

Entity: Second Economic Committee
Location: Kangdong, North Korea

Entity: Munitions Industry Department
AKA: Military Supplies Industry Department
Location: Pyongyang, North Korea

Entity: Second Academy of Natural Sciences
AKA: 2nd Academy of Natural Sciences
AKA: Che 2 Chayon Kwahak-Won
AKA: Academy of Natural Sciences
AKA: Chayon Kwahak-Won
AKA: National Defense Academy
AKA: Kukpang Kwahak-Won
AKA: Second Academy of Natural Sciences Research Institute SANSRI
Location: Pyongyang, North Korea

Individual: Ri Je-Son
AKA: Ri Che-Son
DOB: 1938

Individual: Ri Hong-Sop
DOB: 1940

Individual: Yun Ho-jin
AKA: Yun Ho-chin

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UN report explains sanctions decisions

Friday, August 6th, 2010

According to the Daily NK:

The 1718 Committee of the UN Security Council has published the final version of its “Report to the Security Council from the Panel of Experts established Pursuant to Resolution 1874,”

In the report, of which the Daily NK has obtained a copy, the 1718 Committee revealed North Korean overseas accounts which had likely been used for North Korea’s illicit activities such as conventional weapons transactions and luxury goods, and the names of entities and individuals involved in those activities. The lists were submitted by UN member states.

The report singles out 17 North Korean officials thought likely to violate UN Resolutions 1718 and 1874, and outlines the reasons why they were designated by the UN member states.

They are Jang Sung Taek, Vice-chairman of the National Defense Commission and the closest associate of Kim Jong Il, Vice-chairman of the National Defense Commission Oh Keuk Ryul, Kim Young Chun, the Minister for the People’s Armed Forces, Director of No. 39 Department Kim Dong Woon, Military Supplies Secretary in the Central Committee of the Party Jeon Byung Ho, former Yongbyon technical director Jeon Chi Bu, First Vice-director of the Ministry of the Munitions Industry Chu Kyu Chang, Standing Vice-director of the People’s Army’s General Political Department Hyun Cheul Hae, President of the Tanchon Commercial Bank Kim Dong Myung, Member of the National Defence Commission Baek Se Bong, Deputy Director of the General Political Department of the People’s Armed Forces Park Jae Kyung, President of the Academy of Science Byeon Youong Rip, Director of the General Bureau of Atomic Energy Ryeom Young, Head of the Department of Nuclear Physics of Kim Il Sung University Seo Sang Il, President of Kohas AG Jacop Steiger and Alex H.T. Tsai, who is known to have provided financial, technological and other support for KOMID, and his wife, Su Lu-chi.

It also released a list of autonomous designations provided by member states, covering 19 North Korean entities. That list was made based on information collected as of April 30th this year.

They are Amroggang Development Banking Corporation, Global Interface Company Inc., Hesong Trading Corporation, Korea Complex Equipment Import Corporation, Kohas AG, Korea International Chemical Joint Venture Company, Korea Kwangson Banking Corp, Korea Kwangsong Trading Corporation, Korea Pugang Trading Corporation, Korea Pugang Mining and Machinery Corporation ltd., Korea Ryongwang Trading Corporation, Korea Ryonha Machinery Joint Venture Corporation, Korea Tonghae Shipping Company, Ponghwa Hospital, Pyongyang Informatics Centre, Sobaeku United Corp., Tosong Technology Trading Corporation, Trans Merits Co. Ltd., and Yongbyon Nuclear Research Centre.

13 out of the 19 have direct or indirect links to Tanchon Commercial Bank and Korea Mining Development Trading Corporation (KOMID).

Amroggang Development Banking Corporation is the financial arm of KOMID and related to Tanchon Commercial Bank, which has also been designated by the 1718 Committee. Additionally, Global Interface Company Inc. is owned by Alex Tsai, who is thought to have provided, or attempted to provide, support to KOMID.

Sobaeku United Corp. is involved in activities related to natural graphite, producing graphite blocks that can be used in missiles.

The report points out, “North Korea has established a highly sophisticated international network for the acquisition, marketing and sale of arms and military equipment, and arms exports have become one of the country’s principal sources for obtaining foreign exchange,” and goes on to say, “Agencies under the National Defense Commission (NDC), the Workers’ Party of Korea (WPK) and the Korean People’s Army (KPA) are most active in this regard.”

The report explains, “The Second Economic Committee of the National Defense Commission plays the largest and most prominent role in nuclear, other WMD and missile-related development programs as well as in arranging and conducting arms-related exports.”

It adds, “The General Bureau of Surveillance of the Korean People’s Army is involved in the production and sale of conventional armaments.”

The report points out that North Korea has opened 39 accounts with 18 overseas banks in 14 countries. 17 of which are held with Chinese banks.

Besides China, 11 banks in eight European and former Soviet countries (Russia, Switzerland, Denmark, Hungary, Poland, Italy, German, Belarus and Kazakhstan) hold 18 North Korean accounts. There is one account in Malaysia.

“The DPRK also employs a broad range of techniques to mask its financial transactions, including the use of overseas entities, shell companies, informal transfer mechanisms, cash couriers and barter arrangements,” the report notes.

According to experts on North Korea, since North Korean overseas illegal activities are all led by the loyal group surrounding Kim Jong Il, U.S. financial sanctions in accordance with UN Security Council resolutions 1817 and 1874 and also U.S. Executive Order (E.O.) 13382 have the potential to be a great pressure on the Kim Jong Il regime.

The Panel of Experts, which was appointed by the UN Secretary-General on 12 August 2009 to author the report, are David J. Birch (United Kingdom of Great Britain and Northern Ireland, coordinator), Masahiko Asada (Japan), Victor D. Comras (United States of America), Erik Marzolf (France), Young Wan Song (Republic of Korea), Alexander Vilnin (Russian Federation), and Xiaodong Xue (People’s Republic of China).

Read the full story here:
Report Explains Sanctions Decisions
Daily NK
Kim Yong Hun
8/6/2010

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US attempts to apply more pressure to DPRK

Thursday, July 22nd, 2010

UPDATE 2: More details are coming out about the US led initiative to track down DPRK-owned accounts in foreign banks. 

According to the Choson Ilbo:

North Korean leader Kim Jong-il is believed to have a US$4 billion slush fund stashed away in secret accounts in Switzerland, Luxembourg and Liechtenstein.

According to sources, North Korean bank accounts in Russia are being tracked after the U.S. government obtained information that the Russian mafia is laundering money for the North. Kim Jong-il and other officials cannot engage in financial transactions using their real names, so they are believed to operate secret bank accounts or rely on the Russian mob.

Philip Goldberg, the former U.S. State Department envoy charged with enforcing UN sanctions, visited Russia in August last year and reportedly asked Deputy Foreign Minister Alexei Borodavkin to crack down on the mob for its involvement in laundering money for North Korea.

North Korean accounts held in African banks are being tracked, because the reclusive regime has been earning a substantial amount of money in the region by smuggling ivory and selling weapons. “Despite the UN sanctions, North Korea has opened up new markets in Africa and Latin America,” said one North Korean source.

The U.S. sanctions against North Korea are expected to differ from pressure applied to Macao-based Banco Delta Asia back in 2005. “Rather than freezing the operations of an entire financial institution like BDA by getting the U.S. Treasury Department to blacklist it on suspicion of money laundering, the measures this time will probably involve the tracking of individual North Korean accounts directly linked to illicit activities and freezing them,” a diplomatic source said.

Sanctioning entire banks could prompt North Korea to complain that its legal financial transactions are also being blocked and this could make the lives of ordinary North Koreans even more difficult. This is probably why U.S. Secretary of State Hillary Clinton said these measures “are not directed at the people of North Korea,” but at the “destabilizing, illicit and provocative policies pursued by that government.”

Others say the latest sanctions could be more comprehensive than previous ones by automatically limiting U.S. transactions with all banks found to deal in a certain amount of money with North Korea, rather than singling out particular banks. Under such pressure, banks could voluntarily sever relations with North Korean businesses or individuals to avoid being blacklisted.

The South Korean government has apparently notified the U.S. of between 10 to 20 North Korean bank accounts under suspicion of being involved in illicit deals. There are fears that massive Chinese aid to the North could render the U.S. sanctions useless, but judging from the vehement protests lodged by North Korea when its accounts at BDA were frozen, experts say financial sanctions are an effective means of pressure.

And according to a different Choson Ilbo story:

The U.S. will freeze North Korean leader Kim Jong-il’s overseas secret bank accounts based on a tip-off from a whistleblower at a state-run bank in Liechtenstein in 2006-2007.

The August issue of the Monthly Chosun said since the North’s attack on the South Korean Navy corvette Cheonan in March, speculation has been rife among North Korea experts in Washington that the Obama administration will freeze Kim Jong-il’s secret accounts in Liechtenstein and Switzerland.

The tip-off from Heinrich Kieber, a former employee of LGT Bank, which is owned by the Liechtenstein royal family, contributed decisively to the U.S. obtaining information about Kim’s secret accounts. According to the U.S. Senate, Kieber said the “head of department in a socialist government” wanted to deposit more than US$5 million “with no explanation in the files whatever in regard to the source of the vast amount.”

The U.S. recently signed a tax information exchange agreement with Liechtenstein which could allow it to freeze bank accounts suspected of belonging to Kim.

The US also plans to distribute a lack list of North Korean firms to distribute internationally.  According to Asahi:

The United States plans to release a blacklist of North Korean companies and individuals believed to be involved in transactions of weapons of mass destruction and luxury items as part of new sanctions on Pyongyang in the wake of the sinking of the South Korean corvette Cheonan.

An official with the South Korean government divulged the plan on Friday. Seoul has been contacted by Washington about the blacklist.

The official said financial institutions would be under pressure to freeze or close accounts held by the companies and individuals on the blacklist.

The new measure is designed to avoid the problems that arose in September 2005 when the U.S. Treasury Department designated Banco Delta Asia of Macao as a financial institution suspected of laundering money for North Korea.

That designation caused a run on the bank and the Macao government was forced to place it under its control.

Under the new blacklist proposal, the United States hopes to provide financial institutions around the world with the names of individuals and companies with close ties to North Korea.

A South Korean government official said, “If a foreign government or financial institution does not cooperate with the new sanctions, there is the possibility that it could lose trust so the blacklist would apply silent pressure to conform.”

One problem is that many North Korean-related accounts are held in China and it remains unclear what, if any, cooperation will be obtained from Beijing and Chinese financial institutions.

One report from China does indicate that this strategy will make business with North Korea more difficult.  According to the Korea Herald:

Chinese banks ― mostly bigger institutions with international operations ― will not be able to avoid the sanctions that the U.S. is pursuing against North Korea, an official here said Monday.

“The bigger banks cannot avoid the sanctions because all of its transactions go through the U.S.,” he said.

He stressed that even smaller institutions ― such as Banco Delta Asia in the past ― could come under scrutiny because all wiring services go through New York.

“This means that for everyone dealing with North Korea, it will become difficult for them to send and receive money from the North,” the official said on the condition of anonymity.

The U.S. has already called for a dozen banks around the world including those in China to freeze the North Korean assets in their accounts, according to diplomatic sources in Washington. The accounts are suspected of being used for illicit activities by the North, such as purchasing weapons, luxury goods and trading in counterfeit.

UPDATE 1:  The US has already begun going after DPRK bank accounts.  According to the Donga Ilbo:

The U.S. government will reportedly freeze some 100 illegal bank accounts allegedly linked to North Korea, a diplomatic source said Thursday.

Washington is known to have discovered about 200 bank accounts worldwide linked to Pyongyang in the process of mulling financial sanctions separate from those of the U.N. since the March 26 sinking of the South Korean naval vessel Cheonan.

“The U.S. is closely tracking 100 of the suspected accounts that are highly likely to be illegal,” the source said.

If Washington takes action against the accounts, including suspension of transactions, its sanctions are expected to be stronger than the September 2005 freeze of 25 million U.S. dollars in the North’s accounts at the Macau-based Banco Delta Asia.

“As U.N. Security Council resolutions 1718 and 1874 ban financial transactions that could be used for weapons of mass destruction or missile programs, bank accounts under borrowed names related to such transactions can be seen as illegal,” the source said.

“Investigations by the CIA and the Treasury Department will reveal how many of the 100 accounts are directly linked to illegal transactions.”

The source said the level of sanctions sought will likely be 100 times stronger than the measures taken against Banco Delta Asia.

Even if Washington imposes sanctions on illegal accounts, however, it will likely ask each bank to close them rather than disclosing them on its official gazette, the source said.

“Disclosing the names of the banks where the accounts were opened will likely cause a strong protest from the banks because of possible damage to the banks` reputations and transactions,” the source said. “The U.S. government has continued to consult the banks and will likely induce them to quietly close the accounts.”

A detailed outline of the U.S. financial sanctions is expected to be released by Robert J. Einhorn, new U.S. coordinator for sanctions on North Korea and Iran, when he visits Seoul early next month.

And according to the Joong Ang Daily:

The United States has already begun quietly freezing assets in North Korean accounts at about 10 banks around the world, diplomatic sources familiar with the situation told the JoongAng Ilbo yesterday.

On Tuesday in Seoul, U.S. Secretary of State Hillary Clinton said the U.S. would levy additional sanctions on North Korea for the March sinking of the Cheonan.

“The U.S. Treasury Department and intelligence authorities began looking into about 200 bank accounts that showed suspicious activities involving North Korea,” an informed diplomatic source said. “Bank accounts used to deposit money earned from the North’s exports of arms, in violation of UN Security Council resolutions 1718 and 1874, were studied, along with accounts used to purchase luxury goods believed to be supplied to the North’s leadership.”

Of the 200 suspicious accounts, U.S. authorities narrowed their attention to about 100 and began freezing their assets, the source said. The accounts belong to about 10 banks in Southeast Asia, southern Europe and the Middle East, the sources said. All the accounts were opened and operated under aliases, the source said.

Resolution 1718 was adopted on Oct. 14, 2006, after the North’s nuclear test that month. The main sanctions were an arms embargo, inspection of cargo going in and out of the North, an export ban on luxury goods to the North and the freezing of assets of individuals and entities designated by the UN sanctions committee. Resolution 1874 was adopted in June 2009 after the second nuclear test in May 2009, and it reinforced the existing sanctions.

While the U.S. was public about freezing North Korean accounts at the Macao-based Banco Delta Asia in 2005, the latest freezings were done quietly, the source said.

“When the U.S. authorities informed the banks that there were problems associated with certain accounts, the banks quietly froze the assets, making it hard for the media to detect,” the source said. “The assets in those accounts are likely to be money Kim Jong-il needs to operate his regime, so this will deal a serious blow to the North.”

“The U.S. began the freezings before June,” the source said. “The moves should be interpreted as a part of new sanctions on the North to hold it responsible for the sinking of the Cheonan.”

The assets in those accounts were presumably raised through illicit trade of arms, counterfeiting money, money laundering and drug trafficking, the source said. “In the past, the North deposited money in African bank accounts created under aliases and raised through trafficking in elephant ivory, selling of counterfeit Viagra and exporting arms in Africa,” the source said.

The source said the new financial sanctions will be different from what happened in the Banco Delta Asia crisis that stalled the six-party nuclear talks for years due to the North’s protest. Instead of naming and shaming a specific bank as a money laundering institution and pressuring it to freeze North Korean assets, “quiet” moves are now preferred to avoid blowback from Pyongyang, the source said.

Another source confirmed the additional financial sanctions, noting that, “If the charges are very clear, then the Banco Delta Asia method will be used, while the silent method will be used in more ambiguous cases.”

Meanwhile, a senior U.S. official said a package of sanctions aimed at stopping Pyongyang’s illegal activities will be announced in the next couple of weeks. In a press briefing in Washington on Wednesday, Assistant Secretary of State Philip J. Crowley elaborated on the fresh sanctions announced by Clinton in Seoul.

“Much of what we’ve done up to this point has centered on proliferation activities that stem from specific authorities,” Crowley said. “We’re moving into strengthening our national steps to attack the illicit activities that help to fund the weapons programs that are of specific concern to us – things like the importation of luxury goods into North Korea, concerns that we have long had about trafficking in conventional arms. So there are authorities that we will strengthen nationally, and we’ll have more to say about that in the next couple of weeks.”

North Korea’s counterfeiting of banknotes and cigarettes, diplomats’ smuggling of cigarettes, banking transactions that fund weapons programs and support the government and its policies were named as some of the illegal activities to be tackled under the sanctions.

Crowley also said Robert Einhorn, special adviser for nonproliferation arms control, will soon begin a trip to encourage countries that have been reluctant to implement earlier sanctions, noting that the North has found ways to sidestep the measures.

“They look to see if there are seams and gaps in the international effort,” Crowley said. “That’s what Bob Einhorn is going to be consulting with a range of countries where we think there needs to be more aggressive implementation of Security Council resolutions 1718 and 1874.”

Crowley, however, refused to say what Einhorn’s destinations are and if they include China.

“China obviously has a big role to play in this,” Crowley only said.

ORIGINAL POST: Sec. of State Hillary Clinton has announced the US will impose tighter financial sanctions on the DPRK.  According to Al Jazeera:

The United States will impose new sanctions on North Korea in a bid to stem its nuclear weapons ambitions, Hillary Clinton, the US secretary of state, said.

Clinton said the measures were designed to stamp out illegal money-making ventures used to fund the nuclear programme.

“These measures are not directed at the people of North Korea, who have suffered too long due to the misguided priorities of their government,” Clinton said after talks with defence and military officials in South Korea on Wednesday.

“They are directed at the destabilising, illicit, and provocative policies pursued by that government,” she said.

She said the sanctions would be aimed at the sale or procurement of arms and related goods as well as the procurement of luxury items.

The US will freeze assets as well as prevent some businesses and individuals from travelling abroad, and collaborate with banks to stop illegal financial transactions, Clinton said.

Also the US Department of the Treasury (h/t Josh) has announced new procedures that apply to U.S. financial institutions maintaining correspondent accounts for “foreign banks operating under a banking license issued by” North Korea.  According to FinCEN:

The Democratic People’s Republic of Korea (DPRK) has not committed to the AML/CFT international standards, nor has it responded to the FATF’s numerous requests for engagement on these issues. DPRK’s lack of a comprehensive AML/CFT regime poses a risk to the international financial system. DPRK should work with the FATF to develop a viable AML/CFT regime in line with international standards.

B. Jurisdictions in FATF Statement Section 2 have been identified by the FATF as having strategic AML/CFT deficiencies and not having committed to an action plan developed with the FATF to address key deficiencies. Based on the FATF’s adoption of the ICRG’s findings, a decision by the FATF in which the United States concurs, FinCEN is advising U.S. financial institutions of their increased obligations under Section 312 of the USA PATRIOT ACT, 31 USC § 5318(i). Accordingly, U.S. financial institutions should apply enhanced due diligence, as described under implementing regulations 31 CFR § 103.176(b) and (c) when maintaining correspondent accounts for foreign banks operating under a banking license issued by DPRK and São Tomé and Príncipe.

Read the full statement here.

Also, the US Department of State has added the DPRK’s Korea Mining Development Trading Corporation (KOMID) to its list of sanctioned companies.   According to the Chosn Ilbo:

The U.S. State Department on Tuesday put another North Korean company on a list of sanctions targets based on the Iran, North Korea, and Syria Nonproliferation Act.

The Korea Mining Development Trading Corporation was added to the list due to suspected dealings in weapons of mass destruction or ballistic missiles in violation of the Missile Technology Control Regime since 2006.

The company had already been designated by the U.S. Treasury Department as a target of financial sanctions. The blacklisting came as part of wider U.S. sanctions against the Stalinist country that largely cover well-trodden ground.

KOMID will not be permitted to conclude supply contracts with any U.S. government agencies or to take part in any U.S. government support programs. The newest round of sanctions will be effective for two years from the moment they take effect.

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Burma-North Korea Ties: Escalating Over Two Decades

Wednesday, July 7th, 2010

According to the Irrawaddy:

A recent New York Times op-ed article by Aung Lynn Htut, formerly a high-ranking Burmese military intelligence officer who defected in 2005 while he served as an attaché at the Burmese embassy in Washington, shed new light on the history of the still murky relationship between Burma and North Korea, two of the world’s most isolated, secretive and oppressive regimes.

Burma broke diplomatic relations with North Korea in 1983, when North Korean agents attempted to assassinate the South Korean president on Burmese soil. But according to Aung Lynn Htut, shortly after current junta-chief Snr-Gen Than Shwe assumed power in 1992, he surreptitiously moved to renew ties with Pyongyang.

“Than Shwe secretly made contact with Pyongyang. Posing as South Korean businessmen, North Korean weapon experts began arriving in Burma. I remember these visitors. They were given special treatment at the Rangoon airport,” Aung Lynn Htut said in his June 18 article.

The junta kept its renewed ties with North Korea secret for more than a decade because it was working to establish relationships with Japanese and South Korean businesses, Aung Lynn Htut said. By 2006, however, “the junta’s generals felt either desperate or confident enough to publicly resume diplomatic relations with North Korea.” 

In November 2008, the junta’s No 3, Gen Shwe Mann, visited North Korea and signed a memorandum of understanding, officially formalizing military cooperation between Burma and North Korea. Photographs showed him touring secret tunnel complexes built into the sides of mountains thought to store and protect jet aircraft, missiles, tanks and nuclear and chemical weapons.

According to Aung Lynn Htut, Lt-Gen Tin Aye, the No.5 in the Burma armed forces and the chief of Military Ordnance, is now the main liaison in the relationship with Pyongyang. Tin Aye has often traveled to North Korea as well as attended ceremonies at the North Korean embassy in Rangoon.

In September 2009, The New Light of Myanmar reported that Tin Aye went to the anniversary celebration of the Democratic People’s Republic of Korea (DPRK), held in a hotel in Rangoon. In February, Tin Aye, along with other senior officials, attended the birthday event of the Dear Leader of North Korea at the embassy.

Flights and ships from North Korea to Burma have been carrying more than just Burmese generals. Analysts, including Burma military expert Andrew Selth, say that for years Burma and North Korea have used a barter system whereby Burma exchanges primary products for North Korean military technologies.

In June 2009, a North Korean ship, the Kang Nam I, was diverted from going to Burma after being trailed by the US navy. Then in April, another North Korean ship, the Chong Gen, docked in Burma carrying suspicious cargo, allegedly in violation of the UN Security Council Resolution 1874, which restricts North Korea from arms deals and from trading in technology that could be used for nuclear weapons.

In May, the seven-member UN panel monitoring the implementation of sanctions against North Korea said in a report that Pyongyang is involved in banned nuclear and ballistic activities in Iran, Syria and Burma with the aid of front companies around the world.

According to the UN report, a North Korean company, Namchongang Trading, which is known to be associated with illicit procurement for Burma’s nuclear and military program and is on the US sanctions list, was involved in suspicious activities in Burma.

The report also noted three individuals were arrested in Japan in 2009 for attempting to illegally export a magnetometer—a dual-use instrument that can be employed in making missile control system magnets and gas centrifuge magnets—to Burma via Malaysia allegedly under the direction of another company known to be associated with illicit procurement for North Korea’s nuclear and military programs.

The UN experts also said that the Korea Kwangson Banking Corporation has handled several transactions involving millions of dollars directly related to deals between Burma and the Korea Mining Development Trading Corporation.
 
With this string of events and the suspicions surrounding them as a dramatic lead in, on June 4, Al Jazeera aired a news documentary prepared by the Democratic Voice of Burma (DVB) which was written by Robert Kelley, a nuclear scientist and former director of the International Atomic Energy Agency (IAEA). The DVB report claimed that the ruling military junta in Burma is “mining uranium, converting it to uranium compounds for reactors and bombs, and is trying to build a reactor and/or an enrichment plant that could only be useful for a bomb.”

The IAEA wrote to Burma’s agency representative, Tin Win, on June 14 and asked whether the information provided in the DVB report was true. Burma, which is a member of the IAEA, a party to the Nuclear Non-Proliferation Treaty and a signatory to the Southeast Asia Nuclear-Weapon-Free Zone Treaty, responded with a letter stating that the DVB report allegations are “groundless and unfounded.”

“No activity related to uranium conversion, enrichment, reactor construction or operation has been carried out in the past, is ongoing or is planned for the future in Myanmar [Burma],” the letter said.

The letter also noted that Burma is a signatory of the Nuclear Non-Proliferation Treaty and the agency’s so-called safeguards agreement. “As stated in the safeguards agreement, Myanmar will notify the agency if it plans to carry out any nuclear activities,” the letter said.

The regime, however, has not signed the IAEA’s Additional Protocol, meaning that the agency has no power to set up an inspection of Burma’s nuclear facilities under the existing mechanism known as the Small Quantities Protocol.

Previously, on June 11, Burma’s state radio and television news had reported the Foreign Ministry’s denial of the allegations in the DVB report. The denial claimed that anti-government groups in collusion with the media had launched the allegations with the goal of “hindering Burma’s democratic process and to tarnish the political image of the government.”

The Foreign Ministry denial also addressed Nyapyidaw’s relationship with Pyongyang. “Following the re-establishment of diplomatic relations, Myanmar [Burma] and the DPRK, as independent sovereign states, have been engaging in promoting trade and cooperation between the two countries in the same way Myanmar is dealing with others,” the ministry said in its statement.

The regime did acknowledge that the Chong Gen docked at Thilawa Port near Rangoon in April. But the statement said the North Korean vessel was involved in importing cement from North Korea and exporting rice from Burma.

But in an article for Asia Times online, Burma analyst Bertil Linter noted that, “if carrying only innocuous civilian goods, as the statement maintains, there would seemingly have been no reason for authorities to cut electricity around the area when the Chong Gen, a North Korean ship flying the Mongolian flag of convenience, docked on the outskirts of Yangon.”

“According to intelligence sources, security was tight as military personnel offloaded heavy material, including Korean-made air defense radars. The ship left the port with a return cargo of rice and sugar, which could mean that it was, at least in part, a barter deal. On January 31 this year, another North Korean ship, the Yang M V Han A, reportedly delivered missile components also at Yangon’s Thilawa port,” Linter said.

Strategypage.com, a military affairs website covering armed forces worldwide, said, “Indications are that the North Korean ship that delivered a mysterious cargo four months ago, was carrying air defense radars (which are now being placed on hills up north) and ballistic missile manufacturing equipment. Dozens of North Korean technicians have entered the country in the last few months, and have been seen working at a military facility outside Mandalay. It’s unclear what this is for. Burma has no external enemies, and ballistic missiles are of no use against internal opposition.”

In his Asia Times online story, Lintner noted that on June 24, the DVB reported that a new radar and missile base had been completed near Mohnyin in Myanmar’s northern Kachin State, and he reported that work on similar radar and missile bases has been reported from Kengtung in eastern Shan State,160 kilometers north of the Thai border town of Mae Sai.

“Since Myanmar is not known to have imported radars and missile components from any country other than North Korea, the installations would appear to be one of the first visible outcomes of a decade of military cooperation,” Lintner said.

Lintner also reported that Western intelligence sources know that 30 to 40 North Korean missile technicians are currently working at a facility near Minhla on the Irrawaddy River in Magwe Division, and that some of the technicians may have arrived overland by bus from China to give the appearance of being Chinese tourists. 

North Korea has also issued adamant denials with respect to allegations regarding its relationship with Burma.

According to the Korean Central News Agency (KCNA), on June 21 Pyongyang said, “The US is now making much fuss, floating the sheer fiction that the DPRK is helping Myanmar [Burma] in its nuclear development.”

The KCNA often highlights the close relationship between North Korea and Burma.

On June 20, the Pyongyang news agency reported that ex-Col Than Tun, deputy chairman of the Union of Myanmar Economic Holding Ltd., sent a statement cheering Kim Jong Il’s 46th anniversary at the Central Committee of the ruling Workers’ Party of Korea.

On April 18, Korean state-run- media reported that Than Tun also issued a statement cheering the 17th anniversary of Kim Jong Il’s chairing of North Korea’s National Defense Commission.

“Kim Jong Il’s field inspection of KPA [Korean People’s Army] units served as a main source that helped bolster [North Korea’s] self-reliant defense capability in every way,” the statement noted.

Military sources said the Union of Myanmar Economic Holding Ltd, managed by the junta, is responsible for purchasing imported weapons for Burma’s armed forces, including transferring money to overseas banks such as Korea Kwangson Banking Corporation.

Meanwhile, in addition to its escalating relationship with North Korea, the Burmese military regime has recently boosted ties with Iran, which according to the UN report is also allegedly receiving nuclear and missile technologies from North Korea.

In recent years, Burmese and Iranian officials visited their counterparts homeland for the purported purpose of improving economic ties. Observers, however, said Than Shwe has made a tactical decision to develop relationships with other “pariah states,” particularly enemies of the US, to relieve Western pressure on his regime.

Iranian Deputy Foreign Minister Mohammad Ali Fathollahi met Burmese Foreign Minister Nyan Win and Minister of Energy Lun Thi during his trip to Burma on June 15-17.

“The two sides reiterated their desire to further expand the ties of friendship and economic cooperation and to increase cooperation in the regional international forums such as [the] United Nations and Non-Aligned Movement,” The New Light of Myanmar reported on June 18.

Fathollahi’s visit came three months after Maung Myint’s visit to Iran on March 8-11, when he met Iranian Foreign Minister Manochehr Mottaki and Deputy Minister of Petroleum H. Noghrehkar Shirazi.

Read the full story below:
Burma-North Korea Ties: Escalating Over Two Decades
Irrawaddy
Wai Moe
7/7/2010

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UN panel claims DPRK evading sanctions

Wednesday, November 18th, 2009

The UN panel responsible for implementing UNSC resolutions pertaining to the DPRK has written a report (which is not yet publicly available) claiming that the DPRK continues to evade UN sanctions. According to two different Bloomberg stories :

“The Democratic People’s Republic of Korea has established a highly sophisticated international network for the acquisition, marketing and sale of arms and military equipment,” said the report by a Security Council panel established in June to assess the effectiveness of UN sanctions.

The report said arms sales banned by the UN “have increasingly become one of the country’s principal sources for obtaining foreign exchange.” North Korea has used “reputable shipping entities, misdescription of goods and multiple transfers” to hide arms smuggling, according to the report, which has been circulated within the Security Council and not yet publicly released.

North Korean companies and banks that have been barred from foreign transactions are circumventing the prohibition through subsidiaries, according to “indications” from some member governments, the report said. The Korea Mining Development Trading Corp., cited in April for violations of UN sanctions, “continues to operate through its subsidiary companies,” according to the report.

The Kwangson Banking Corp. and Amroggang Development Bank substitute for or act on behalf of Tanchon Commercial Bank and the Korea Hyoksin Trading Corp., the UN panel said authorities in unspecified countries have determined. The U.S. earlier this year froze the assets of the Kwangson and Amroggang banks.

The UN panel said North Korea is believed to have exported arms to countries in Africa, Southeast Asia, the Middle East and Latin America. Only a “very small percentage” of North Korea’s illegal arms trade has been reported or discovered, the report said.

An example of attempted trade in contraband was reported in August by the United Arab Emirates, which seized a ship carrying North Korean-manufactured munitions, detonators, explosives and rocket-propelled grenades bound for Iran.

According to Reuters:

The Security Council imposed the sanctions, including arms embargoes, asset freezes and travel bans, in resolutions in 2006 and 2009, in response to North Korean nuclear tests and ballistic missile launches. This year for the first time, it listed eight entities and five people who were being targeted.

A report obtained by Reuters on Wednesday was the first to be written by an expert panel set up by the Security Council in May to vet implementation of the sanctions. It is due to be discussed in closed-door council consultations on Thursday.

The six experts said there were several different techniques employed by the isolated communist state to conceal its involvement.

“These include falsification of manifests, fallacious labeling and description of cargo, the use of multiple layers of intermediaries, ‘shell’ companies and financial institutions to hide the true originators and recipients,” the report said.

“In many cases overseas accounts maintained for or on behalf of the DPRK are likely being used for this purpose, making it difficult to trace such transactions, or to relate them to the precise cargo they are intended to cover.”

The experts said North Korea likely also used correspondent accounts in foreign banks, informal transfer mechanisms, cash couriers “and other well known techniques that can be used for money laundering or other surreptitious transactions.”

On illicit arms shipments, the report raised the case of the seizure of a “substantial cargo” of weapons from North Korea. It was apparently referring to arms seized in August by the United Arab Emirates from an Australian-owned ship.

The report also said the North continued to import luxury goods intended for its leadership, despite a U.N. ban. It noted that in July, Italy blocked the sale of two yachts that police said were destined for North Korean leader Kim Jong-il.

The panel, which began work just two months ago, said it would work on recommendations to the Security Council for further firms and individuals to be put on the sanctions list as well as goods whose import by North Korea should be banned.

It also promised more exact definitions of small arms — the only kind of arms Pyongyang can import under existing sanctions — as well as of luxury goods.

Marcus Noland has cleverly named the strategy of tracking down North Korean military financiers and arms dealers “Wac-a-mole“.

Read the full stories below:
North Korean Global Arms Smuggling Evades Ban, UN Panel Says
Bloomberg
Bill Varner
11/18/2009

North Korea Arms Trade Funds Nuclear-Bomb Work, UN Panel Says
Bloomberg
Bill Varner
11/19/2009

North Korea maneuvers to evade U.N. sanctions: experts
Reuters
11/18/2009

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Treasury blacklists another DPRK bank

Sunday, October 25th, 2009

The US Treasury Department has targeted  the Amroggang Development Bank for its connections with the Tanchon Commercial Bank.

According to Reuters:

Tanchon was previously hit with sanctions by both the United States and the United Nations Security Council for its involvement in Pyongyang’s proliferation activities.

Treasury said assets of Tanchon under U.S. jurisdiction are frozen and Americans are banned from any dealing with it. It said that Tanchon’s president, Kim Tong Myong, also was being added to the list of weapons proliferators.

Treasury described Amroggang as a Tanchon-related company run by Tanchon officials. It said Tanchon helps finance Korea Mining Development Corp’s sales of ballistic missiles and has been involved in Komid’s ballistic missile transactions with an Iranian industrial group.

The US has sanctioned several companies and banks this year (here, here, here).

The UN Security Council has also sanctioned several companies and individuals (here).

Here is a link to the Treasury Department Statement.  Some text below:

Amroggang, which was established in 2006, is a Tanchon-related company managed by Tanchon officials.  Tanchon, the financial arm of the U.S. and UN-designated North Korean company Korea Mining Development Corporation (KOMID), plays a role in financing KOMID’s sales of ballistic missiles and has also been involved in ballistic missile transactions from KOMID to Iran’s Shahid Hemmat Industrial Group (SHIG), the U.S. and UN-designated Iranian organization responsible for developing liquid-fueled ballistic missiles. KOMID is North Korea’s premiere arms dealer and main exporter of goods and equipment related to ballistic missiles and conventional weapons.

A North Korean individual Kim Tong Myong was also designated today for acting on behalf of Tanchon.  Kim Tong Myong has held various positions within Tanchon since at least 2002 and is currently Tanchon’s President.  He has also played a role in managing Amroggang’s affairs using the alias Kim Chin-so’k.

Read the full Reuters article here:
Treasury puts North Korean bank on blacklist
Reuters
10/23/2009

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China pulls out of DPRK mining deal

Thursday, July 30th, 2009

According to the Choson Ilbo:

A Chinese investment company developing a copper mine in North Korea with a North Korean company sanctioned by the UN Security Council has reportedly called an abrupt halt to the project.

An industry source in China said the investment firm sent a letter to NHI Shenyang Mining Machinery, the company it had commissioned to build facilities for the mine in Hyesan, North Korea, telling it to stop construction. An estimated 400,000 tons of copper are deposited there.

The Chinese firm had signed an agreement with (North) Korea Mining Development Trading Corporation (KOMID) [NKeconWatch: a.k.a. Korea Mining Development Corporation) to develop the mine in November 2006. But the North Korean partner was blacklisted by the UN Security Council after North Korea carried out its latest nuclear test.

The industry source said, “When Chinese Vice President Xi Jinping visited Pyongyang in June last year, he pledged full support for the development of the Hyesan copper mine so that it could become a model for investment by Chinese business in North Korea. This prompted NHI to hurry construction so that production could start in September this year.”

But he added the Chinese government apparently persuaded the investment firm to stop the project as Beijing takes part in the UN sanctions. “Otherwise, it’s unusual for a project to be stopped at this late stage,” he said. The investment firm reportedly gave NHI no reason for the cancellation.

Looking at Hyesan on Google Earth, this appears to be the only large-scale minig operation in Hyesan.

Read the full article below:
N.Korea Mining Project Buckles Under UN Sanctions
Choson Ilbo
7/31/2009

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