U.S. legislation to force N. Korea to do financial transactions through shipments of cash
By Chang Jae-soon
WASHINGTON, Sept. 30 (Yonhap) -- North Korea will have to do international transactions through shipments of cash if it is blocked from access to the global banking network under newly introduced U.S. legislation, the bill's author said Friday.
Rep. Matt Salmon (R-AZ) submitted the legislation (H.R.6281) earlier this week. The bill calls for preventing specialized financial messaging services to, or direct or indirect access to such messaging services" for the North's central bank and other financial institutions.
Specialized financial messaging services are essential for international financial transactions. Without such services, wire transfers and other global transactions are impossible. The most representative of such services is the Society for Worldwide Interbank Financial Telecommunication or SWIFT.
The legislation calls for sanctioning those who knowingly provide such services for the Central Bank of the Democratic People's Republic of Korea, other financial institutions assisting the North with its nuclear programs and other entities blacklisted for links to the nuclear program.
That means that SWIFT could be sanctioned if it provides its services to the North.
"The Democratic People's Republic of Korea (North Korea) is a despotic fiefdom that prioritizes investments in weapons of mass destruction over the wellbeing of the citizens unfortunate enough to live within its borders. Sadly, no amount of international chiding will impact their ability to continue this quest for a nuclear weapon," Rep. Salmon said in a statement issued Friday.
"What we can do is deny them access to services designed to quickly and easily transfer money worldwide. Without access to these services, we can force the North Koreans to purchase supplies and receive support in the way typically favored by state sponsors of terrorism: shipments of anonymous, small denomination bills."
Should the legislation be enacted, it would have powerful impacts on the North, possibly similar or even greater than the 2005 U.S. blacklisting of a Macau bank for doing business with Pyongyang.
By designating the bank in the Chinese territory, Banco Delta Asia (BDA), the U.S. not only froze $24 million in North Korean money held in the bank, but also scared away other financial institutions from dealing with Pyongyang for fear they would also be blacklisted.
The measure hit Pyongyang hard, and reports at the time said North Korean officials had to carry around bags of cash for financial transactions because they were not able to use banks. The sanctions were later lifted in exchange for a denuclearization agreement that later fell apart.