Proliferation Press

A webpage devoted to tracking and analyzing current events related to the proliferation of WMD/CBRN.

Archive for July 1st, 2009

U.S. Teasury Goes After North Korea’s Proliferation Funds

Posted by K.E. White on July 1, 2009

Yesterday the U.S. Treasury Department clamped down on two firms suspected of funneling funds North Korea’s missile and nuclear weapons programs: Iranian-based Hong Kong Electronics and North Korean-based Namchongang Trading Corporation.

From Michael O’Brien’s blog at TheHill.com:

The Treasury Department took aim at North Korea’s nuclear weapons program on Tuesday, freezing the assets of an Iranian firm suspected of financing the Korean regime’s [proliferation] efforts.

The Treasury targeted Hong Kong Electronics — an Iranian firm — for funneling money to a North Korean bank and mining company suspected of facilitating the country’s nuclear weapons program.

The State Department also targeted a North Korean trading company under Executive Order 13382, which reezes the assets of designated proliferators of weapons of mass destruction and their supporters and prohibits U.S. persons from engaging in any transactions with them.

“North Korea uses front companies like Hong Kong Electronics and a range of other deceptive practices to obscure the true nature of its financial dealings, making it nearly impossible for responsible banks and governments to distinguish legitimate from illegitimate North Korean transactions,” said Stuart Levey, Under Secretary for Terrorism and Financial Intelligence.

Jay Soloman delves a little deeper in today’s Wall Street Journal:

The U.S.’s sanctioning Tuesday of Namchongang Trading Corp. and Iran-based Hong Kong Electronics is intended to choke off funds for two firms charged with being at the center of Pyongyang’s attempts to export its nuclear and long-range missile technologies, said U.S. officials.

The U.S. sanctions bar any American firms from conducting business with Namchongang and Hong Kong Electronics. The designations also freeze any assets the firms may have in the U.S. Treasury Department officials intend these actions to cause non-American companies to also scrutinize any dealings with these North Korean-linked firms.

U.S. officials say Namchongang played a direct role in helping Syria start construction of a nuclear reactor near the Euphrates River that Israeli jets destroyed in 2007. Syria denied it is developing a nuclear program.

The company has also aided Myanmar’s arms industry and was importing centrifuge equipment that North Korea is using to develop a uranium-enrichment capability, U.S. officials say. Uranium, when enriched to a weapons grade, can be used to build atomic weapons.

Namchongang is headed by Yun Ho Jin, a former senior North Korea diplomat who served at Pyongyang’s mission to the International Atomic Energy Agency, the U.N.’s atomic watchdog. He’s also believed to be closely aligned with senior members of North Korea leader Kim Jong Il’s government. Mr. Yun and Namchongang couldn’t be reached for comment.

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Containing North Korea: Gordon Chang Calls for Interdiction Now

Posted by K.E. White on July 1, 2009

Today’s Wall Street Journal features Gordon G. Chang’s call for the United States to start interdicting suspected North Korean weapons shipments now. Instead of seeking accommodation with China and obtaining a new U.N. resolution on the matter, Chang argues America already has full authority to stop, inspect and seize North Korean weapons exports.

Yesterday, the North Korean ship Kang Nam–suspected of carrying weapons and thus bringing the interdiction issue to the forefront–turned around. Whether this event reflects the effectiveness of current sanctions, or merely a delaying tactic on the part of North Korea has yet to been seen.

(Backgrounder: The latest UN Security Resolution, passed June 12th after North Korea’s second nuclear test, requires permission of the “flag state” [i.e. the nation that exercises regulatory control of a commercial vessel] for any inspection. Chang gets around this by pointing out that Kim Jong-Il has withdrawn from the Korean War Armistice Agreement on May 29th, returning America and North Korea back to a state of war.)

North Korea is yet again testing the international community’s resolve. Should America go it alone, as Chang suggests? Or is Chinese support required for any North Korean interdiction policy to be effective?

Below is a section of Chang’s editorial, followed by David Sanger’s June 7th New York Times report exploring Obamaland’s weighing of the interdiction option—highlighting China’s thorny middle-ground position of wishing to contain North Korea proliferation, but not destabilizing the North Korean regime.

From Chang’s editorial How To Stop North Korea’s Weapons Proliferation:

Furthermore, there has never been a peace treaty formally ending the Korean War. This means the U.S., a combatant in the conflict, as leader of the U.N. Command, is free to use force against Pyongyang. On legal grounds, the U.S. Navy therefore has every right to seize the Kang Nam, treat the crew as prisoners of war, and confiscate its cargo, even if the ship is carrying nothing more dangerous than melons. Because the Navy has the right to torpedo the vessel, which proudly flies the flag of another combatant in the war, it of course has the right to board her.

The lesson of the last few years is that the U.N. is not capable of stopping North Korean proliferation. No nation can stop it except the U.S. Of course, ending North Korea’s sales of dangerous technologies to hostile regimes will anger Pyongyang. This month, for instance, the North said that interception of the Kang Nam would constitute an “act of war.”

Yet, as much as the international community would like to avoid a confrontation, the world cannot let Kim Jong Il continue to proliferate weapons. Moreover, it is unlikely that he will carry through on his blustery threats. The North Koreans did not in fact start a war when, at America’s request, Spain’s special forces intercepted an unflagged North Korean freighter carrying Scud missiles bound for Yemen in December 2002. Even though the Spanish risked lives to board the vessel, Washington soon asked Madrid to release it. At the time, the Bush administration explained there was no legal justification to seize the missiles.

Now, the Obama administration has no such excuse. There is definitely a legal justification to seize the Kang Nam. North Korea, after all, has resumed the Korean War.

And from David Sanger’s June 7th NYTimes report:

In conducting any interdictions, the United States could risk open confrontation with North Korea. That prospect — and the likelihood of escalating conflict if the North resisted an inspection — is why China has balked at American proposals for a resolution by the United Nations Security Council that would explicitly allow interceptions at sea. A previous Security Council resolution, passed after the North’s first nuclear test, in 2006, allowed interdictions “consistent with international law.” But that term was never defined, and few of the provisions were enforced.

North Korea has repeatedly said it would regard any interdiction as an act of war, and officials in Washington have been trying to find ways to stop the shipments without a conflict. Late last week, James B. Steinberg, the deputy secretary of state, visited Beijing with a delegation of American officials, seeking ideas from China about sanctions, including financial pressure, that might force North Korea to change direction.

“The Chinese face a dilemma that they have always faced,” a senior administration official said. “They don’t want North Korea to become a full nuclear weapons state. But they don’t want to cause the state to collapse.” They have been walking a fine line, the official said, taking a tough position against the North of late, but unwilling to publicly embrace steps that would put China in America’s camp.

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