U.S. at Work on Strangling Kim Jong-il's Cash Flow

      November 12, 2009 09:08

      Philip Goldberg

      The U.S. envoy charged with UN sanctions, Philip Goldberg, is still trying to block North Korean leader Kim Jong-il's cash flow, even as Washington has agreed to talks with Pyongyang aimed at persuading it to return to nuclear negotiations.

      North Korea invited U.S. North Korea envoy Stephen Bosworth on Aug. 4, when former U.S. president Bill Clinton was in Pyongyang to win the release of two American journalists. The same day, Goldberg was on his way to Moscow, where he met Russian Vice Foreign Minister Alexei Borodavkin and reportedly asked Russia to crack down on a mafia gang based on a tip-off that it had been involved in the laundering slush funds for Kim Jong-il.

      South Korean and U.S. intelligence authorities believe that North Korea recently earned a lot of foreign currency by smuggling ivory from Africa and distributing fake Viagra as well as selling drugs and circulating counterfeit dollars.

      The North allegedly laundered money or operated secret bank accounts with the help of the Russian gangsters after it became practically impossible for the North to carry out normal transactions using the real names of top officials or agencies. Russia then passed an advisory circular which the U.S. had sent around Russian banks.

      According to the source, North Korea expanded arms exports even after UN Security Council Resolution 1874 took effect in the wake of its second nuclear test on May 25. "North Korea has developed new markets in Africa and Latin America, in addition to expanding exports to its existing markets in Southeast Asia and the Middle East," the source said. "It seems the North is mainly exporting small vessels such as Hovercraft and patrol boats and Air Force equipment including radar and GPS to Africa and Latin America."

      Goldberg then visited China in late October to persuade his hosts to implement sanctions against the North. He pledged to concentrate on blocking any money flow related to weapons of mass destruction. There are fears that the sanctions lost their bite when China in early October promised the North a massive aid package, but some experts disagree.

      Prof. Cho Young-ki of Korea University said, "The U.S.-led financial sanctions will deal a blow especially to Kim Jong-il's slush funds and the North's munitions economy. Unlike in 2005 when it sanctioned Banco Delta Asia, the U.S. now seems to have found a way to inflict pain on the North while not allowing it to openly resist."

      U.S. Secretary of State Hillary Clinton apparently believes Golberg's efforts have been successful, saying Monday that North Korea now wants dialogue because nations of the six-party talks are taking concerted action in implementing sanctions against the North.

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