Sunday, March 17, 2013

US imposes additional sanctions on North Korea

The US Treasury Department has added its own financial sanctions against North Korea to ones recently imposed by the UN Security Council. The new measures are expected to have major repercussions. The department included North Korea's Foreign Trade Bank, the country's institution in charge of foreign banking transactions and foreign exchange, as one of the targets for sanctions as a means of "Blocking Property of Weapons of Mass Destruction Proliferators and Their Supporters." The measure bar it from doing business with US banks and freeze all assets under US legal jurisdiction. The US already has executive orders sanctioning more than 20 North Korean institutions, but the latest measures are different in that they target the country's key foreign exchange bank. The decision to halt transaction with the FTB is expected to have significant repercussions, since the business will have to migrate over to other banks. Moreover, the US Treasury Department issued a press release urging banks around the world to be wary of the risks of doing business with FTB. One factor that could affect the impact of the US sanctions is the response form China, which is far and away North Korea's top trading partner. As with the UNSC sanctions, the question is how much cooperation can be expected from Beijing. China will probably go along with the US since have already took sides with the UN Security Council in imposing sanctions on North Korea. Moreover, Some observers have hinted that China may cooperate with the US for fear of encountering problems with its own dollar transaction system.

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