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U.S. targets North Korea 'money laundering' with new sanctions

By
Elizabeth Shim
The U.S. Treasury is taking action to curb North Korea’s transactions in the international financial system, according a statement released Wednesday. File Photo by Roger L. Wollenberg/UPI
The U.S. Treasury is taking action to curb North Korea’s transactions in the international financial system, according a statement released Wednesday. File Photo by Roger L. Wollenberg/UPI | License Photo

SEOUL, June 1 (UPI) -- The U.S. Treasury has decided to increase pressure on North Korea, a "primary money-laundering concern," through a provision of the USA Patriot Act.

Under Section 311 of the law, the Treasury is recommending a measure to "further isolate North Korea from the international financial system," according to a statement issued Wednesday.

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The Treasury is proposing action under Section 311 because North Korea uses state banks and "front companies" to conduct transactions that "support the proliferation and development of [weapons of mass destruction] and ballistic missiles."

The move would ban all North Korea trade and prohibit countries from processing banking transactions on behalf of the Kim Jong Un regime, a practice known as a "U-turn," The Wall Street Journal reported.

"The [measure], if finalized, would prohibit the use of third-country banks' U.S. correspondent accounts to process transactions for North Korea financial institutions," the Treasury stated.

U.S. officials have said the policy could have a serious impact on Chinese banks, according to The Journal.

The Treasury is implementing the law in response to the passage of the North Korea Sanctions and Policy Enhancement Act, or H.R. 757, adopted in February by Congress.

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Washington is also implementing the United Nations Security Council sanctions Resolution 2270.

"Today's action is a further step toward severing banking relationships with North Korea, and we expect all governments and financial authorities to do likewise," the Treasury Department's Adam Szubin said. "The regime is notoriously deceitful in its financial transactions in order to continue its illicit weapons programs and other destabilizing activities."

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