WASHINGTON -- The United States on Wednesday proposed new restrictions to close off North Korea's access to the international financial system and to prevent the country from using banks to launder money.
The Treasury Department declared North Korea a "primary money-laundering concern," the latest step toward severing U.S. banking relationships with North Korea and deepening its economic isolation. U.S. banks are generally prohibited now from dealing with North Korea.
A proposal under Treasury Department review would prevent foreign banks from using their accounts for dealings with U.S. banks to process financial transactions on behalf of North Korean banks.
"Basically they have put everyone on notice, if you do financial transactions with North Korea, you are subject to investigation by U.S. bank regulators who may exclude you from the U.S. market," said Marcus Noland, an expert on North Korea at the Petersen Institute for International Economics.
The Treasury Department was required by legislation enacted in February to consider whether to make the money-laundering designation. Having made that determination, the government can impose penalties after a 60-day comment period.
Adam Szubin, acting Treasury Department undersecretary for terrorism and financial intelligence, urged other countries to take similar steps on severing banking ties with North Korea. After the North conducted atomic and missile tests early in 2016, the United Nations in March issued its toughest sanctions yet.
"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.
Despite the international censure, North Korea has pressed ahead with weapons testing. The U.S. and South Korean militaries reported that North Korea conducted the latest in a series of failed ballistic missile launches on Tuesday.
A Section on 06/02/2016