Published: August 30 2010 20:35

http://www.ft.com/cms/s/0/b7cc6b56-b46a-11df-8208-00144feabdc0.html

The US on Monday announced some of its toughest sanctions against North Korea, targeting Pyongyang’s alleged drug trafficking, counterfeiting and military activities, as well as “slush funds” used by the country’s elite.

The move includes a new executive order issued by President Barack Obama and sanctions against a North Korean intelligence agency and an office of the Korean Workers party the US Treasury says is involved in the methamphetamines and heroin trades.

It comes as Washington seeks to step up the pressure on Pyongyang over the sinking of a South Korean ship this year and North Korea’s nuclear weapons programme. Washington and South Korea blame Pyongyang for the sinking in March of the Cheonan warship, which killed 46 sailors.

A US official said the order sought “to disrupt the financial networks that facilitate North Korean trafficking in arms and related material, procurement of luxury goods and engagement in other illicit activities, including money laundering and currency counterfeiting”. Other sanctions on Monday are authorised by existing rules against weapons of mass destruction.

Among the bodies targeted are Office 39 of the Korean Workers’ party, which the US says produced methamphetamines for distribution in China and South Korea, as well as producing opium and heroin. The US Treasury adds that officials in Turkey, Egypt, Taiwan and Japan have linked North Korean officials to narcotics possession, distribution and smuggling. It says that Office 39 has also sought to procure luxury goods – such as the failed bid in 2009 to buy two Italian-made yachts worth more than $15m for Kim Jong-il, North Korea’s ruler.

US officials add that while North Korea has expressed interest in returning to talks on its nuclear weapons programme, to date it has insisted on the relaxation of sanctions as its price for sitting at the table. The Obama administration has sworn not to make that concession.

“We are looking to see if North Korea ... is committed to denuclearisation,” said the State Department on Monday. “If they are, then there are some specific steps laid out under previous agreements that they can follow.”

Washington says it is trying to hit North Korea’s weapons programme, illicit activities, and the privileges of the country’s elite, while minimising the impact on the population. The US also took action against the Reconnaissance General Bureau, North Korea’s leading intelligence organisation, which Washington says is involved in the conventional arms trade, as well as against the bureau’s arms-production subsidiary, which the US says has exported torpedoes and technical assistance to Iran.

While the direct impact of such unilateral sanctions is often limited – because the targeted groups have little contact or business with the US – Washington says they can be effective in leading others to cut ties.

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