U.S. to shutter North’s overseas banking

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U.S. to shutter North’s overseas banking

Washington is working on measures to deny North Korea access to international banking infrastructure, said Daniel Russel, the U.S. assistant secretary of state for East Asia and Pacific affairs, to further cut off funding for the regime’s nuclear and missile program.

“We are in discussions with our partners - including the EU - about tightening the application of sanctions and pressure,” said Russel at a congressional hearing on Tuesday in Washington, “in particular to deny North Korea access to the international banking infrastructure that it has abused and manipulated in furtherance of its illicit programs.”

Russel, who spoke to the House Foreign Affairs Subcommittee on Asia and the Pacific during a hearing on the “Trilateral Cooperation between the United States, Japan, and the Republic of Korea,” responded to its chairman’s concern that the current sanctions on North Korea have not been effective.

Republican Rep. Matt Salmon of Arizona, chairman of the Subcommittee on Asia and the Pacific, said that this was “mostly due to China’s lack of resolve on the implementation” and suggested that the “next step” is to impose sanctions on specialized financial messaging services that allow communications and transactions to banks that would fund North Korea’s nuclear and missile program.

Salmon said legislation to sanction such specialized financial messaging services is set to be introduced to Congress this week.

“Such measures were taken on Iran’s banking system,” Salmon pointed out, “with great success.”

The main global financial messaging system, Society for Worldwide Interbank Financial Telecommunication, or Swift, is not under the United States’ direct control since it is Belgium-based, Russel said, adding that Washington is in talks with its EU partners on the issue.

“I think that our hope” said Russell, “ is that we will, in fact, ultimately be able to reach an agreement that will further restrict North Korea’s access” to such financial services.

He added that simultaneously, the U.S. government, in particular the Department of Treasury and its Office of Foreign Assets Control, “looks at North Korean banks and North Korean banking activities with a view to shutting down anything that might contribute to the illicit programs” or otherwise violate the UN Security Council resolutions or U.S. laws.

Based on the accelerated pace of North Korea’s missile tests, Russel also said at the hearing that Washington intends to deploy the U.S.-led Terminal High Altitude Area Defense (Thaad) system to South Korea “as soon as possible.”

While he was not able to say how quickly the Thaad system would be deployed to South Korea, he answered a congressman’s question asking if the placement was a done deal with a strong affirmative.

“This is a defensive measure aimed not at China, but at North Korea,” Russel added. “It is a defense-based decision, not a political decision.”

He also highlighted the alliance between Seoul, Washington and Tokyo, and said that countering North Korea’s growing threat from its nuclear and missile program is “our most important area of trilateral cooperation.”

He continued, “The net effect of this effort is we’re disrupting the North’s arms trade, we are deflagging their ships, we are cutting off their external revenue, such as that generated by overseas workers.

“Together, our three countries are imposing higher and higher costs on North Korea, not to bring Pyongyang to its knees but to bring it to its senses. The pressure will mount until the North agrees to return to negotiations on denuclearization and comply with its international commitments.” This comes as the North Korean Embassy in Russia issued a statement claiming that Pyongyang had basically completed development of its nuclear weapons, reported Russian media agency RIA Novosti on Tuesday.

The statement said Pyongyang’s fifth nuclear test on Sept. 9 verified the capabilities of a nuclear warhead that could be mounted on a ballistic missile and that it will continue to work toward the buildup of its nuclear forces.

The U.S. House of Representatives last week passed an amendment to a bill prohibiting Washington from any future ransom payments to Iran to also ban such cash payments, precious metal or promissory notes to North Korea and state sponsors of terrorism.

This bill, sponsored by Rep. Ed Royce, a Republican from California, passed the House on Sept. 22 after an amendment to include application to North Korea by Republican Rep. Sean Duffy. It is under review in the Senate.

BY SARAH KIM [kim.sarah@joongang.co.kr]
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