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(3rd LD) U.S. to announce new sanctions on N. Korea in several weeks

All Headlines 18:42 August 02, 2010

(ATTN: RECASTS throughout to INCORPORATE story slugged Einhorn-NK sanctions)
By Chang Jae-soon and Lee Haye-ah

SEOUL, Aug. 2 (Yonhap) -- The United States will announce fresh sanctions on North Korea "in the next several weeks" that could lead to cutting companies or individuals involved in Pyongyang's illicit activities off the international financial system, a senior envoy from Washington said Monday.

Robert Einhorn, the State Department's special adviser for nonproliferation and arms control, said the purpose of the new measures is to put an end to Pyongyang's "destabilizing proliferation activities, to halt illicit activities that help fund its nuclear and missile programs and to discourage further provocative actions."

Einhorn arrived in Seoul Sunday night on a three-day trip for talks on the new sanctions that the U.S. is putting together to punish North Korea over the deadly sinking of the South Korean warship Cheonan in March and to push Pyongyang to abandon its nuclear weapons programs.

His trip comes after Secretary of State Hillary Clinton announced in Seoul last month that the U.S. will slap new penalties on North Korea, targeting its leadership and their assets in an effort to prevent the regime's proliferation and further provocations.

"The United States will soon adopt and begin implementing new country-specific measures ... that will target entities engaged in the export or procurement of conventional arms by or for North Korea, the procurement of luxury goods for North Korea, and other illicit activities, which are often conducted by or for North Korean officials," Einhorn told a press conference.

Other illicit activities include counterfeiting U.S. dollars and other goods, narcotics smuggling and other deceptive activities in the international financial and banking system, he said.

"We know that these activities bring hundreds of millions of dollars in hard currency annually to North Korea, which can be used to support" the North's nuclear and military programs or fund luxury goods purchases in violation of U.N. sanctions resolutions, he said.

Under the new measures, Washington will blacklist entities and individual involved in illicit dealings and block any property or assets they possess in the U.S., Einhorn said, without naming who will be on the list. He said the list will be announced "in the next several weeks."

Officials and analysts have said that the measures themselves are not expected to have much impact on Pyongyang, as the communist nation has few assets and financial transactions in the U.S. But they could prove painful to the North if Washington's blacklisting leads to financial institutions in other nations, halting dealings with targeted entities, they said.

"By publicly naming these entities, these measures can have the broader effect of isolating them from the international financial and commercial system," Einhorn said.

In 2005, the U.S. imposed similar financial sanctions on Pyongyang by blacklisting a bank in the Chinese territory of Macau with links to the North. That led to the freezing of US$24 million in North Korean money held in Banco Delta Asia and scared away other global financial institutions from dealing with Pyongyang for fear they would also be blacklisted.

The measure hit Pyongyang hard, and reports at the time said that North Korean officials had to carry around bags of cash for financial transactions because they were not able to use the international banking system.

Einhorn said that a key to achieving the broader effect of isolating North Korean entities from the international financial system is cooperation from third countries, especially China, Pyongyang's last-remaining major ally that provides the North with food and energy aid.

"We will approach the government of that country and say, 'Look at this activity, you need to shut it down,'" he said. "We will go out diplomatically and seek their cooperation. And their cooperation will be very important."

Einhorn said China's cooperation is "critical" and urged Beijing to be a "responsible stakeholder."

Earlier in the day, Einhorn held a series of meetings with South Korean officials, including Foreign Minister Yu Myung-hwan, chief nuclear envoy Wi Sung-lac and Deputy Foreign Minister Lee Yong-joon.

"Our hope is that these measures will be effective, that they will provide strong incentives for North Korea's leaders to abide by their international obligations not to pursue any provocative activities and to fulfill completely their commitments to denuclearization of the Korean Peninsula," the U.S. envoy said after talks with Lee.

After the U.N. Security Council issued a mild rebuke over the ship sinking, North Korea has indicated its willingness to rejoin the stalled six-party talks on ending its nuclear programs. Pyongyang has denied any involvement in the sinking that left 46 sailors dead.

South Korea and the U.S. have rejected the overtures, demanding that the North first show a responsible attitude over the ship sinking and prove through action that it is serious about abandoning its nuclear ambitions.

"We can't repeat the kind of cycle we have been through on a number of previous occasions where North Korea engages in talks, makes commitments and then abandons those talks and reneges on its commitments. We have to break that cycle," Einhorn said.

"So before the six-party talks can reconvene, it's essential that North Korea demonstrate in tangible ways that it is prepared this time to make commitments and to fulfill them ... Unless they do, then talks for talks' sake are not interesting to us," he said.

The nuclear talks, which involve the two Koreas, China, Japan, Russia and the U.S., have been stalled since the last session in December 2008.


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