Proliferation Press

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

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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