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(News Focus) S. Korea's sanctions zero in on North's foreign currency earnings

2016/12/02 18:36

By Park Boram

SEOUL, Dec. 2 (Yonhap) -- South Korea added a host of top North Korean officials and key government entities on its latest sanctions list on Friday, as the country zeroes in on drying up Pyongyang's foreign currency earnings, which has sustained the country's development of nuclear weapons and ballistic missiles.

Announcing a package of standalone sanctions, the government said it has put Hawng Pyong-so, the director of the North Korean military's general political bureau and the vice chairman of the ruling party's Central Committee Choe Ryong-hae -- North Korean leader Kim Joun-un's two highest aides -- on the list of people subject to Seoul's stringent financial sanctions.

Financial transactions with such blacklisted individuals are prohibited in South Korea and their assets based in South Korea can be frozen.

In addition to the two ranking officials, the new sanctions added a total of 36 individuals -- 32 North Koreans, mostly from the military, and four Chinese -- to the list, increasing the total number of people being penalized to 79.

Anther 34 North Korean government entities and companies, along with one Chinese firm, are to be punished, for assisting the North in developing weapons of mass destruction (WMD).

Lee Suk-joon (2nd R), head of government policy coordination at the Prime Minister's Office, announces South Korea's standalone sanction measures against the North in Seoul on Dec. 2, 2016. (Yonhap) Lee Suk-joon (2nd R), head of government policy coordination at the Prime Minister's Office, announces South Korea's standalone sanction measures against the North in Seoul on Dec. 2, 2016. (Yonhap)

With the latest move, the number of North Korean organizations penalized swelled to 69.

The sanctions lists newly targets North Korean individuals and entities that are responsible for the country's coal exports, the biggest foreign currency source, and the dispatch of North Korean workers overseas, the third-biggest foreign money earner.

"Whereas the previous (sanctions) focused on blocking proliferation of weapons of mass destruction, (the latest sanctions) is centered on cutting-off the inflow of North Korea's foreign currency income," the government said, announcing the sanctions measures.

"North Korean entities and individuals who take the lead in coal exports and dispatching of foreign workers were included in our financial sanctions lists for the first time, opening up a new chapter in punitive measures against North Korea," it noted.

The measures are in line with the latest resolution adopted by the United Nations Security Council that aims to hurt the North for carrying out its largest ever nuclear test on Sept. 9.

Resolution 2321 unanimously adopted earlier in the week placed a hard cap on North Korea's coal exports and seeks to slash its annual coal exports by more than 60 percent, a move designed to deplete the regime's foreign currency holdings.

Nevertheless, South Korea's latest blacklisting is unlikely to bear tangible results in the short run, given a dearth of actual economic exchange between the two Koreas.

In February, South Korea shut down the Kaesong Industrial Complex, a industrial factory park in the North Korean border town of Kaesong jointly run by the two countries.

It was a punitive action designed to shut off hard currency from flowing into North Korea shortly after Pyongyang conducted its fourth nuclear test a month earlier.

The measure effectively halted all inter-Korean economic ties that were already sparse after Seoul axed most exchanges in retaliation for the communist country's sinking of a South Korean warship in 2010 that left 46 sailors dead.

Though the impact of the sanctions needs to be examined, the latest effort "calls attention to the fact that targeting individuals and entities can play a role in hindering North Korea's push for the sophistication of its WMD," a government official said.

Besides the two nuclear detonations carried out this year, the North tested three nukes in 2006, 2009 and 2013, as well as firing off scores of missiles.

Mindful of foreign currency inflow into North Korea, the government also on Friday banned any imports of North Korean textiles that are often shipped to the South via a third country without information on country of origin. Textile accounts for 32.2 percent of Pyongyang's outbound shipments, making it its second biggest source of foreign currency.

Reflecting Seoul's determination to hurt the North, a Chinese company -- Dandong Hongxiang Industrial Development -- was blacklisted for the first time, along with four officials at the firm.

Hongxiang has already been sanctioned by the United States Department of the Treasury in September for secretly exporting key nuclear weapons components to North Korea.

Japan, meanwhile, announced its own sanction plan against Pyongyang in which human exchanges, trade and shipping between Japan and North Korea will be restricted on a broad scale. The measures are subject to final approval.

South Korean Foreign Ministry spokesman Cho June-hyuck said a day earlier "South Korea, Japan and the United States have been coordinating the texts and the timing of their individual sanctions since September."

   He said the U.S. will unveil another set of sanctions soon as part of the three countries' bid to maximize the combined impact against the North.