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U.S. officials discussing Iran-style sanctions on N. Korea: source

On a trip to Northeast Asia, a couple of senior U.S. officials specializing in economic sanctions have been discussing ways to impose financial restrictions on North Korea as tough as those on Iran, multiple sources said Tuesday.

David Cohen, under secretary of the Treasury for terrorism and financial intelligence, and Dan Fried, the State Department's sanctions coordinator, are due in Beijing following trips to Tokyo and Seoul. The two are in charge of Washington's sanctions worldwide.

"It is unusual that China accepted a simultaneous trip by two ranking U.S. government officials handling sanctions on North Korea," an informed source told Yonhap News Agency, requesting anonymity.

Their mission is to discuss bilateral and multilateral sanctions on North Korea to follow through on U.N. Security Council Resolution 2094, adopted after its Feb. 12 nuclear test, added the source.

China has been traditionally reluctant to allow any high-profile visit by U.S. sanctions officials on North Korea, another source noted.

"The trip by the two officials -- Cohen and Fried -- itself may send a message to North Korea," the diplomatic source said.

The U.S. officials are requesting Beijing's cooperation as they hope for de-facto "secondary boycott" sanctions on North Korea, which are sanctions imposed against particular non-U.S. companies and individuals in response to specified types of activity.

Secondary boycott sanctions do not involve traditional civil or criminal penalties but instead are measures designed to prevent non-U.S. persons from accessing the U.S. market or conducting business with U.S. nationals.

The U.S. has such sanctions on Iran.

Many agree that China would not formally consent to secondary boycott sanctions on North Korea.

"What the U.S. government is seeking is to put psychological pressure on Chinese banks," the source said.

"If U.S. banks avoid transactions with Chinese banks that have ties with blacklisted North Korean banks or other entities, it could lead to effects similar to those from secondary boycott sanctions."

In its own bilateral sanctions, the Treasury Department blacklisted the Foreign Trade Bank, North Korea's primary foreign exchange bank, last week.

U.S. officials are stepping up efforts to curb North Korea's financial transactions for the development and trade of nuclear weapons and missiles.

Cohen is in charge of the Treasury Department's campaign against money laundering and financial crimes by proliferators, international terrorist organizations and narcotics traffickers.

Fried oversees all sanctions policy at the State Department, heading a newly created office tasked with imposing and enforcing sanctions on North Korea, Iran and other nations.

In Seoul, Cohen and Fried met with South Korea's chief nuclear envoy, Lim Sung-nam, and officials at the Finance Ministry.

During their visit to Tokyo earlier this week, the Japanese government reportedly said it would take measures to ban the country's financial institutions from doing business with North Korea's Foreign Trade Bank. (Yonhap News)

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