Haste can make wasteAre Seoul and Washington on the same page on North Korean issues? The U.S. Treasury Department called on South Korean banks to remind them of their obligation to comply with international sanctions on North Korea following President Moon Jae-in’s visit to Pyongyang in September. It is rare for the U.S. Treasury to directly contact Korean banks to deliver warnings.
The department had conference calls on Sept. 20 and 21 with state lenders Korea Development Bank and Industrial Bank of Korea as well as commercial banks, including Kookmin, Shinhan and Nonghyup. The calls were made shortly after Moon held summit talks and a joint press conference with North Korean leader Kim Jong-un on Sept. 19. During the telephone conversations, U.S. officials reminded South Korean lenders that they must not violate sanctions guidelines.
Before Moon’s visit to Pyongyang, U.S. Secretary of State Mike Pompeo called up South Korean Foreign Minister Kang Kyung-wha to protest an inter-Korean military agreement. In the 40-minute phone call, Pompeo reportedly complained about the details of the military agreement and being notified only two days before the summit in Pyongyang. After Kang said Seoul was reviewing whether to lift South Korea’s own sanctions on the North, put in place after the deadly torpedo attack on a South Korean warship in 2010, U.S. President Donald Trump snapped that Seoul cannot lift sanctions without “our approval.”
Seoul and Washington have differed on the easing of sanctions. Seoul wants to normalize inter-Korean ties and believes this could accelerate denuclearization. Washington believes hurried normalization of inter-Korean relations can complicate the process. That’s where the two allies clash.
Washington has been harboring doubts about Seoul’s commitment to sanctions after it discovered an illicit smuggling of North Korean coal to the South in July. The UN in August denied South Korean officials’ visit to the North for a joint railway and road inspection. The two states also collided over the opening of an inter-Korean liaison office in Kaesong. Seoul’s plan to ship 800,000 tons of oil to the North without sufficient consultation also irked Washington.
South Korean banks cannot take the Treasury’s warning lightly. If their names fall under a secondary boycott, U.S. funds could be pulled out of Korean institutions, shaking the banking sector. Yet Seoul has no intention of slowing down its North Korean policy. The Unification Ministry is looking to follow up on the Pyongyang Declaration by holding senior level talks with the North as early as next week. We welcome improvement in inter-Korea relations. But the pace must be in tune with the United States. Haste can make waste. Denuclearization and lasting peace is not possible without U.S. support.
JoongAng Sunday, Oct. 13-14, Page 34