The United States Wednesday announced new restrictions to block North Korea’s ability to use the U.S. and world financial systems to fund its controversial weapons programs. It also declared the country a “primary money laundering concern.”
The U.S. Treasury Department called for a prohibition on certain U.S. financial institutions opening or maintaining correspondent accounts with North Korean financial institutions. The statement also prohibited the use of third parties' U.S. correspondent accounts to process transactions for the North Korean institutions.
The announcement came after South Korea reported that Pyongyang had attempted to launch a missile from its east coast Tuesday and failed in the endeavor.
Adam J. Szubin, U.S. acting undersecretary for terrorism and financial intelligence, said: “It is essential that we all take action to prevent the regime from abusing financial institutions around the world — through their own accounts or other means,” urging other countries to take steps to sever banking ties with North Korea.
"This is meaningful," said Victor Cha, Korea Chair at the Center for Strategic and International Studies in Washington, according to Reuters. "This is designating the entire country, which means essentially that any entity that is interested in interacting with U.S. financial institutions should no longer have any business with North Korea."
"Most, if not all, entities, if faced with the choice of having access to the U.S. financial system or doing business with North Korea, are going to make the obvious choice," Cha added.
In March this year, a U.N. Security Council resolution (2270) had levied new financial sanctions on the East Asian country. These included a ban on any North Korean banks opening branches outside the country, and freezing of the assets of North Korean entities connected to the nuclear or missile programs.
Despite being Pyongyang’s biggest source of diplomatic support, Beijing agreed to the sanctions, leading to concerns that tensions may arise in the relations. However, Chinese President Xi Jinping Wednesday met with a high-ranking North Korean envoy, giving rest to the speculation.
U.S. Secretary of State John Kerry is scheduled to visit China next week.