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US Takes Aim at North Korea's Remaining Financial Links

Amb. Sung Kim (L), Special Representative for North Korea Policy and Deputy Assistant Secretary for Korea and Japan, and Assistant Treasury Secretary for Terrorist Financing, Daniel Glaser (2nd L) and retired U.S. Air Force Brig. Gen. Gregory Touhill (R), deputy assistant Homeland Security secretary for cybersecurity operations appear before a House Foreign Affairs Committee, Jan. 13, 2015 in Washington, D.C.

The United States aims to use new sanctions imposed on North Korea over the cyber attack on Sony Pictures to cut off the country's remaining links to the international financial system, a senior U.S. Treasury official said on Tuesday.

Daniel Glaser, assistant secretary for terrorist financing at the U.S. Treasury Department, said past sanctions had already discouraged “hundreds” of overseas banks, including China's major commercial banks, from doing business with North Korea.

New sanctions announced by President Barack Obama on Jan 2. provided “a tremendous amount of flexibility” and the goal was to identity remaining financial institutions that allowed North Korea access to the global system, which could face sanction themselves, Glaser told a House of Representatives briefing.

“We could target any North Korean government agency; we could target any North Korean government official ... we could apply sanctions with respect to any individual or entity who is providing them, in turn, material support,” he said.

Ed Royce, chairman of the House Foreign Affairs Committee, called for use of the full scope of the new sanctions announced after U.S. authorities said North Korea was behind the Sony attack. North Korea has denied involvement.

“The significance of this new Executive Order may come from the broad power it gives the president to target anyone who is a part of the North Korean government, or is assisting them in any way, that is if the administration chooses to use it to its full advantage,” he told the briefing.

“We need to step up and target those financial institutions in Asia and beyond that are supporting the brutal and dangerous North Korean regime,” he added.

When challenged by Royce about “a number of small banks” still doing business with North Korea and the need to choke off the country's access to hard currency, Glaser replied: “That's exactly what we are trying to do.”

Royce said he hoped a bipartisan bill he sponsored that would label North Korea “a primary money laundering concern” would be passed by the Senate this year.

Long-standing international sanctions have sought to push North Korea to end its nuclear weapons program, but while they have slowed the program, they have not stopped it.

North Korea's main economic ties are with China and, according U.S. government reports, the country's tiny economy has supported itself with money-making scams ranging from counterfeiting $100 bills to illicit arms sales and drug smuggling.