Aug 12 2009 Brett Wolf
The US Treasury Department's Office of Foreign Assets Control has blacklisted a small North Korean bank that allegedly provides services to several financial institutions previously sanctioned as "weapons of mass destruction proliferators". The Korea Kwangson Banking Corp provides services to Tanchon Commercial Bank and Korea Hyoksin Trading Corporation, a subordinate of the Korea Ryonbong General Corporation, according to OFAC.
OFAC blacklisted Tanchon and Ryonbong in June 2005. It sanctioned Hyoksin last month because it is "owned or controlled" by Ryonbong. All three entities have been also been designated by the UN pursuant to Security Council Resolution 1718 for their alleged roles in North Korea's WMD and missile programs. KKBC is based in North Korea and has operated at least one overseas branch in Dandong, China, according to OFAC.
"North Korea's use of a little-known bank, KKBC, to mask the international financial business of sanctioned proliferators demonstrates the lengths to which the regime will go to continue its proliferation activities and the high risk that any business with North Korea may well be illicit," said Stuart Levey, Treasury's under secretary for terrorism and financial intelligence.
According to OFAC, since last year, Tanchon has used KKBC to facilitate millions of dollars in funds transfers, including Korea Mining Development Trading Corporation's transfers from Burma to China. KOMID, sanctioned by both the US and UN, allegedly is North Korea's premier arms dealer and main exporter of goods and equipment related to ballistic missiles and conventional weapons.
Tanchon, the financial arm of KOMID, plays a key role in financing KOMID's sales of ballistic missiles, OFAC stated. It added that Hyoksin, which the UN described as being involved in the development of weapons of mass destruction, sought to use KKBC in connection with a purchase of dual-use equipment last year.
"Due to KKBC's relationship to Tanchon, Hyoksin, and Ryonbong, today's action is consistent with UNSCR 1718's requirement to freeze the funds of and deny financial services to UN-designated entities," Treasury stated. "It is also consistent with UNSCR 1874's call to prevent the provision of financial services or any financial assets that could contribute to North Korea's nuclear, ballistic missile, or other WMD-related programs."
