U.S. sanctions North Korea bank as it targets weapons program

Reuters News
Posted: Jun 27, 2013 11:29 AM

WASHINGTON (Reuters) - The Obama administration said on Thursday it was sanctioning North Korea's Daedong Credit Bank for its role in supporting Pyongyang's weapons of mass destruction program.

The U.S. Treasury said Daedong Credit Bank has been providing financial services to the Korea Mining Developing Trading Corp or KOMID, which it said was Pyongyang's premier arms dealers, and the Tanchon Commercial Bank or TCB, its main financial arm.

"Since at least 2007, Daedong Credit Bank has facilitated hundreds of financial transactions worth millions of dollars on behalf of KOMID and TCB," the Treasury said. "In some cases, (it) had knowingly facilitated transactions by using deceptive financial practices."

The Treasury said it was also sanctioning a Daedong front company called DCB Financial Limited, that company's representative, Kim Chol Sam, and Son Mun San, the external affairs bureau chief of North Korea's Bureau of Atomic Energy.

It said the front company had carried out international financial transactions as a way to avoid scrutiny by institutions trying to avoid doing business with North Korea.

The action generally prohibits U.S. citizens from engaging in any transactions with the entities or persons targeted, and freezes any assets they might have in the United States.

The fresh set of sanctions follows a decision by the United States in March to target North Korean's Foreign Trade Bank, its main foreign exchange institution, to try to choke off cash to the government in Pyongyang.

University Corruption
Walter E. Williams

Banks in the European Union have been reluctant to do business with FTB in the wake of the U.S. sanctions, and China's biggest foreign exchange bank, the Bank of China, closed FTB's account.

The United Nations said in May that increasingly tough financial sanctions, an arms embargo and other international restrictions on trade have significantly delayed expansion of North Korea's nuclear arms program. The report did not cover the effects of the sanctions imposed in March.

(Reporting by Paige Gance)