The U.S. government is stepping up efforts to apply financial pressure on North Korea following Pyongyang’s recent bellicose statements threatening nuclear attacks and war.
“The United States has been increasing pressure on North Korea through a variety of means in response to its recent destabilizing actions,” a Treasury official tells Inside the Ring.
“Treasury has been using tools at its disposal to increase financial pressure on the North Korean regime by targeting individuals and entities responsible for facilitating payments connected to North Korea’s nuclear and ballistic missile program, as well as financial institutions such as the Foreign Trade Bank, which has served as a key node for the regime’s foreign exchange.”
The administration is acting under U.N. Security Council Resolution 2094 that expands the power to freeze assets of North Korean entities.
“We are working with governments around the world to aggressively implement this provision,” the official said. “We also expect financial institutions around the world will take steps to protect themselves against the risk of participating in illicit transactions with North Korean entities.”
An intelligence official said there are reports that North Korean leader Kim Jong-un and his family maintain secret bank accounts in Switzerland, Austria and Luxembourg with at least $1 billion.
“In order to cut off North Korea’s funds for developing weapons of mass destruction, we should trace and block the Kim family’s overseas secret funds in addition to calling for creditor companies to call on North Korea to repay its debts.”
Pressuring Pyongyang’s creditors to repay outstanding debts is a new line of covert attack to force the rogue regime to stop developing missiles and nuclear weapons. Estimates put the amount of foreign debt owed by North Korea at $14 billion from some 30 countries.
According to the Treasury official, North Korea owes Japan $400 million, Sweden $330 million, Iran $300 million, Germany $300 million, Thailand $260 million, Switzerland $100 million and Iraq $50 million. Governments from all these states are demanding repayment.
However, several other states, including China and Russia, are not going along with the international debt repayment effort. China, a key North Korean patron, is owed $6.98 billion by Pyongyang and Russia is owed $1.1 billion, mainly from transfers of military and other assistance. Others states that are not demanding repayment include France, owed $280 million; Austria, owed $210 million; Syria, owed $140 million, and Taiwan, owed $86 million.
The intelligence official said these states appear to have given up seeking repayment.
“These countries need to more actively request debt repayments,” the official added.
The Treasury official said North Korea holds no debt to the United States.
“Treasury officials also regularly interact with governments and financial institutions to discuss the importance of identifying and blocking illicit transactions, including those linked to Kim family assets,” the official said.
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