The South Korean government hoped the measure will block North Korea’s access to the USA financial system, EFE news reported. Tensions in the region have been high since January when North Korea conducted its fourth nuclear test and then followed that with a satellite launch and test launches of various missiles. The statement also prohibited the use of third parties’ US correspondent accounts to process transactions for the North Korean institutions.
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On Wednesday, the U.S. Treasury Department announced new steps it’s taking to “further isolate North Korea”, a cash-strapped military state that operates with few global allies.
“This is meaningful”, said Victor Cha, Korea Chair at the Center for Strategic and International Studies in Washington. China is by far North Korea’s largest trading partner.
“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”, Szubin said in a statement.
“The conclusion is that this incident, too, was the organized and premeditated abduction by gangsters of the puppet National Intelligence Service of South Korea”, an unidentified spokesman for the North’s Central Committee of the Red Cross Society said in a statement.
The North Korean authorities use the country’s financial institutions to support the proliferation of ballistic missiles and weapons of mass destruction, and disregard anti-money laundering activities, according to the US Treasury.
But in Beijing, Chinese President Xi Jinping met with a high-ranking North Korean envoy on Wednesday, in an apparent move aimed at easing strains between the two countries.
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In September 2005, the U.S. Treasury Department used a similar tactic by freezing some $24 million in North Korean assets in BDA for its role in facilitating the criminal activities of North Korean agencies, as part of efforts to dry up resources for Pyongyang’s nuclear arms development. Just a day after Pyongyang’s failed Musudan ballistic missile launch, the council adopted a press statement saying the launches are in (quote) “grave violation of the DPRK’s worldwide obligations under United Nations Security Council resolutions”.
