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(LEAD) U.S. closely watching front companies North Korea uses to evade sanctions: State Dept.
By Hwang Doo-hyong
WASHINGTON, July 26 (Yonhap) -- The United States said Monday it is closely looking at front companies North Korea has been using to evade international sanctions imposed after its nuclear and missile tests early last year.
"This is something that we watch carefully," State Department spokesman Philip Crowley said in response to the report that Washington has found more than 100 North Korean accounts in foreign banks involved in illicit activities. "We're looking to identify front companies which help North Korea evade existing sanctions." Data picture
U.S. Secretary of State Hillary Clinton said last week that Washington will blacklist more North Korean entities and individuals to cut off money flowing to its leaders through the trafficking of weapons of mass destruction and counterfeit and luxury goods in violation of U.N. resolutions.
"As the secretary announced last week, we're going to take additional steps," Crowley said. "We'll have more to say about that in the next couple of weeks."
The move to slap additional sanctions follow the North's torpedoing of the South Korean warship Cheonan in the Yellow Sea in March, killing 46 sailors.
North Korea denies responsibility, and the U.N. Security Council earlier this month condemned the attack without directly blaming the North.
A diplomatic source here said the U.S. will blacklist more North Korean entities and individuals in the coming weeks so that international financial institutions would cut off ties with them.
Any foreign banks refusing to sever business ties with the North Korean entities and individuals in question will have U.S. financial institutions suspend ties with them, the source said. "Think of Citibank or Bank of America suspending business ties with Bank of China or Bank of Shanghai. That will be a great burden to China."
Crowley said last week that the U.S. will not only use existing measures like the Patriot Act, but will also establish "new executive authorities" to blacklist more "entities and individuals supporting proliferation, subjecting them to an asset freeze; new efforts with key governments to stop DPRK trading companies engaged in illicit activities from operating in those countries and prevent their banks from facilitating these companies' illicit transactions."
DPRK stands for North Korea's official name, the Democratic People's Republic of Korea.
"It is to interrupt programs and funding that enable them to conduct these illicit activities: conventional arms exports, counterfeiting, drug trafficking," the spokesman said.
The source denied reports that Robert Einhorn, the special adviser for nonproliferation and arms control for Secretary of State Hillary Clinton, visited Europe recently to discuss freezing of North Korean assets in European banks, saying Einhorn's European trip was on Iran sanctions.
Einhorn currently serves as the intra-government coordinator for implementation of U.N. sanctions on North Korea and Iran for their nuclear weapons ambitions.
North Korean accounts are mostly in banks in China, Southeast Asia and the Middle East, the source said.
Despite opposition from China as well as North Korea, South Korea and the U.S. began a four-day joint naval drill Sunday in the East Sea with the participation of the aircraft carrier USS George Washington. It is the first in a series of exercises scheduled for the coming months in the Yellow and East seas to show joint deterrence against North Korea.
North Korea's all-powerful National Defense Commission on Saturday threatened to trump the exercises with "nuclear deterrence."
Crowley did not comment on reports that Pyongyang might conduct a third nuclear test, following underground detonations in 2006 and 2009.
"I can't really answer that question without getting into intelligence matters," the spokesman said. "But as we've made clear, the military exercises that are under way are defensive in nature. And what we would like to see from North Korea are fewer provocative words and more constructive actions."
Amid heightening tensions on the Korean Peninsula after the Cheonan incident, James Clapper, director-designate of national intelligence, said last week the incident may signal "a dangerous new period when North Korea will once again attempt to advance its internal and external political goals through direct attacks on our allies in the Republic of Korea."
It also shattered hopes for an early resumption of the six-party talks on ending the North's nuclear weapons programs. The negotiations have been stalled since December 2008 due to the U.N. sanctions.
North Korea insists on the removal of sanctions and the signing of a peace treaty to replace the armistice that ended the 1950-53 Korean War as conditions to returning to the six-party talks, involving the two Koreas, the U.S., China, Japan and Russia.
Chinese Foreign Minister Yang Jiechi demanded Friday that all parties concerned "turn the page" on the Cheonan incident toward an early revival of the six-party talks.
Clinton, however, said last week that a new round of the nuclear talks "is not something we're looking at yet," noting that North Korea has shown no commitment to halt provocative actions or forswear nuclear weapons.
hdh@yna.co.kr
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