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Seoul imposes financial, shipping sanctions on North Korea

South Korea levied a fresh set of unilateral sanctions against North Korea on Tuesday, aimed at further squeezing Pyongyang’s financial and shipping networks and sources of foreign currency while tightening the global export control regimes.

The government newly designated 30 North Korean and foreign organizations, and 40 individuals subject to an asset freeze and a ban on financial and property transactions with any South Korean entity, sharply expanding the existing blacklist to 34 groups and 43 people. 

North Korean citizens sail on a boat on Amnok River, which shares a border with China, on Tuesday. (Yonhap)
North Korean citizens sail on a boat on Amnok River, which shares a border with China, on Tuesday. (Yonhap)


Under the measures, foreign-flag vessels and flag-on-convenience ships owned in fact by North Korea will be barred from entering South Korea if they had stopped in the communist country within 180 days. They will now also be prohibited from sailing an inter-Korean route.

Seoul also pledged to reinforce export controls by devising tailored guidelines and a list of items for scrutiny to be distributed to other countries so that North Korean goods are not brought into the South in a roundabout way, and related U.N. resolutions will be better enforced.

With North Korean restaurants around the world serving as a cash-earning tool, the government appealed to citizens not to visit them and other profit-making facilities overseas. Some 130 branches in 12 countries are believed to make about $10 million in total every year, it said.

In another development, the Foreign Ministry said it would freeze a trilateral trans-Korea logistics project with Russia that had been the focal point of President Park Geun-hye’s “Eurasia Initiative.”

“We’re expecting the latest steps, along with a new U.N. Security Council resolution, will raise awareness of any dealings related to the development of weapons of mass destruction with North Korean and third-country individuals and organizations, while contributing greatly to blocking the shipment of suspicious supplies to and from North Korea,” Government Policy Coordination Office Minister Lee Suk-joon said at a news conference.

“The government will continue to sanction and press the North in close cooperation with the international community so as to create conditions where there is nothing for it but to change.” 

Government Policy Coordination Office Minister Lee Suk-joon speaks during a news conference at the government complex in downtown Seoul on Tuesday. (Yonhap)
Government Policy Coordination Office Minister Lee Suk-joon speaks during a news conference at the government complex in downtown Seoul on Tuesday. (Yonhap)

The announcement came as Seoul intensifies its sanctions push since Pyongyang’s latest nuclear and missile tests, in part to prop up the UNSC resolution adopted last week.

The fresh actions are deemed some of the few remaining options for Seoul given that most inter-Korean initiatives have already been idle, including tours to a North Korean mountain resort. Bilateral trade and other exchanges are also outlawed by the “May 24 measures” slapped after Pyongyang’s attack on a South Korean corvette in 2010.

Last month, it pulled out from a joint factory park in a North Korean border city that had been a symbol of cross-border rapprochement for more than a decade, taking issue with the regime’s perceived diversion of its proceeds for military purposes.

The Foreign Ministry had informed the U.S., China, Japan, Russia and other relevant nations on the measures ahead of its unveiling to promote their understanding, spokesperson Cho June-hyuck said.

The blacklist includes some military, financial and trading institutions that are already under sanctions imposed by the U.N., the U.S., European Union or other countries for their suspected involvement in the North’s nuclear and missile programs, such as the Foreign Trade Bank, Strategic Forces, Korea Daesong General Trading Corporation and Kim Yong-chol, former director of the Reconnaissance General Bureau.

Among the newly banned are Ilsim International Bank, Korea Foreign Technical Trade Center, deputy director of the ruling Workers’ Party’s Munitions Industry Department Ri Byong-chol and Hong Yong-chil, a deputy director of the party’s Central Committee.

Six institutions of foreign nationalities also made it to the record, in addition to Leonard Lai Yong Chian, the Singaporean president of Senat Shipping Agency, and Lyou Jen-Yi, the Taiwanese head of Royal Team Corporation. The firms are EKO Development and Investment Company of Egypt, Senat Shipping Agency Ltd. of Singapore, Soe Min Htike Co. Ltd. of Myanmar, Daedong Credit Bank or DCB Finance Ltd. of the British Virgin Island, Mariner’s Shipping & Trading of Thailand, and Royal Team Corporation of Taiwan. The first four are already sanctioned by Washington, and all the six are assumed to have been supporting North Korea’s illicit activities. 

Bank of Dandong's branch located in the city of Dandong in Liaoning Province, China (Yonhap)
Bank of Dandong's branch located in the city of Dandong in Liaoning Province, China (Yonhap)

With the port entry ban in place, international shipping companies will now eschew doing business with the North given that carriage contracts are usually made on a six month basis, officials said, citing Japan’s case.

Last year, 66 third-country-flagged ships with records of staying in the North made a total of 104 entries to South Korean ports, typically loaded with steel and general merchandise, government data shows.

Tokyo also imposed a similar embargo last month on all North Korean and foreign-flag vessels including on humanitarian missions. The Japanese government said 44 ships that previously went to the North arrived in the country last year alone.

“As South Korea and Japan took steps to strengthen shipping controls in unison, it will further prompt other countries’ ships to shun docking at North Korean harbors, and bring substantial difficulties to the North’s marine transport of dubious cargoes,” the government said in a joint statement.

By Shin Hyon-hee (heeshin@heraldcorp.com)
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