U.S. Financial Moves on North Korea Deemed Effective

U.S. financial regulatory actions against a Macao bank accused of laundering money for North Korea have been more effective in putting pressure on Pyongyang than anyone had expected, senior Bush administration officials told the New York Times (see GSN, March 9).

Banks around the world are now wary of dealing with North Korea, the Times reported today, and Pyongyang is protesting the action strenuously. It has been so effective that a North Korean delegation met with U.S. officials on Tuesday to try “to get their money unfrozen,” a senior official said.

“It really struck a nerve,” said the official.

Other U.S. officials said further such enforcement actions are planned and that the use of those tactics has coalesced into a strategy. They said the Justice and Treasury departments have been granted full authority to take additional legal and financial actions against Pyongyang.

One senior official characterized the new strategy as: “Squeeze them, but keep the negotiations going.”

Several administration officials said Washington had concluded that the multilateral North Korea disarmament negotiations were unlikely to succeed unless accompanied by pressure tactics. By late summer, the administration had decided “to move toward more confrontational measures,” a former senior Bush administration official said.

One senior State Department official complained that the new policy would turn the talks into a mere “surrender mechanism.”

David Asher, who was coordinator of the State Department’s working group on North Korea until last summer, said officials believed “the beauty of this approach is it is not full-bore sanctions” (Joel Brinkley, New York Times, March 10).

March 10, 2006
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U.S. financial regulatory actions against a Macao bank accused of laundering money for North Korea have been more effective in putting pressure on Pyongyang than anyone had expected, senior Bush administration officials told the New York Times (see GSN, March 9).

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