U.S. sanctions North’s spy service

The U.S. government slapped new sanctions on North Korea, including a crackdown on its top security agency and the secret bureau Kim Jong-il uses as his foreign currency slush fund, stepping up pressure on Pyongyang to stop its rogue behavior.

On Monday, the White House released a statement on President Barack Obama’s executive order, which expanded sanctions on the North by freezing assets in the U.S. of people and entities suspected of being linked to illicit activities. The sanctions also prohibit U.S. financial institutions from doing business with people or entities on the list, and Washington is trying to get foreign financial institutions to follow suit.

According to the U.S. Treasury Department, four people and eight organizations will be affected, with more sanctions to come in the ensuing weeks. The organizations on the list include the North’s top intelligence agency and Office 39, Kim’s secret fund-raising bureau.

In the executive order, Obama said the North’s actions and policies constitute “an unusual and extraordinary threat to the national security, foreign policy, and economy of the United States.” The North’s “unprovoked attack that resulted in the sinking of the Republic of Korea Navy ship Cheonan and the deaths of 46 sailors in March,” along with Pyongyang’s nuclear and missile tests last year, were the key reasons for new sanctions, the order said.

The sanctions target not only the North’s nuclear weapons program but also illicit economic activities such as narcotics trading and counterfeiting of banknotes and cigarettes, which shows that the Obama administration is trying to choke off Pyongyang’s international revenues.

Robert Einhorn, the U.S. State Department’s North Korea sanctions czar, made clear that the U.S. government won’t stop squeezing Pyongyang’s purse until the communist regime convinces Washington it has changed its behavior.

“If it continues with its defiance, it will continue to suffer the consequences, and sanctions will strengthen and intensify,” Einhorn said, adding that the North must do more than simply return to six-party nuclear disarmament talks.

A secret branch of the North’s Workers’ Party, Office 39, was also placed under sanctions. The Treasury Department said Office 39 provides “critical support to North Korean leadership in part through engaging in illicit economic activities and managing the leadership’s slush funds.”

Also referred to as Room 39, Bureau 39 or Division 39, the unit has international bank accounts, gold mines and about 100 North Korean trading companies under its control.

Office 39 was accused of trafficking drugs, counterfeiting money, importing luxury goods for the North’s leadership and selling conventional weapons to countries in the Middle East, Southeast Asia and Africa. The U.S. government accused the office of producing methamphetamine and distributing the drug throughout China and South Korea. Office 39 was also suspected of operating poppy farms and producing opium and heroin.

According to the U.S. government, Office 39 was also believed to be behind a failed attempt in 2009 to purchase two luxury yachts worth more than $15 million. Italian authorities stopped the sale at the time, since it was in violation of UN sanctions.

The North’s Reconnaissance General Bureau and its chief, General Kim Yong-chol, were also sanctioned by Washington. The bureau and General Kim have been suspected of masterminding the torpedo attack against the South’s warship Cheonan in March. North Korea has denied responsibility.

Green Pine Associated Corporation, suspected of being controlled by Kim’s intelligence bureau, was also sanctioned for arms trades. The company, established in 2007 to dodge UN sanctions on arms sales, is known to be the exporter of the CHT-02D torpedo, which was used to sink the Cheonan.

The company also supervises more than half of the North’s total conventional arms exports, the U.S. government said.

Five North Korean entities and three more individuals were sanctioned for involvement in Pyongyang’s weapons of mass destruction programs.

Ri Je-son, head of North Korea’s atomic energy bureau, and Ri Hong-sop, former head of the Yongbyon nuclear research center, were sanctioned. The Yongbyon research facility was suspected of producing weapons-grade nuclear materials.
Yun Ho-jin, head of the Namchongang Trading Corporation, was also on the list. The Treasury Department said Yun oversaw the import of items needed for North Korea’s uranium enrichment program and was involved in purchases of materials linked to the construction of a nuclear reactor in Syria.

“These measures are not directed at the people of North Korea, who, as Secretary [of State Hillary] Clinton has said, have suffered too long due to the misguided priorities of their government,” said Treasury Under Secretary Stuart Levey. “Instead, the financial measures the president took today, as well as additional actions we will take in the weeks and months to come, are aimed at disrupting North Korea’s efforts to engage in illicit activities and its ability to surreptitiously move its money by deceiving banks and smuggling cash worldwide.”

Einhorn also made clear that the sanctions will only be lifted when Pyongyang truly changes.

“We are not prepared to reward North Korea simply for returning to the negotiating table [at the six-party talks],” Einhorn told reporters Monday. “North Korea needs to demonstrate with concrete actions that it is taking irreversible steps to live up to its . . . commitment to denuclearize.”

By Ser Myo-ja [myoja@joongang.co.kr]