WASHINGTON—U.S. Treasury financial sanctions aimed at ending North Korean money laundering, illicit financing activities and weapons proliferation remain in effect despite the easing of other sanctions against Pyongyang, a Treasury spokesman said on Thursday.
The move by the Bush administration to lift some sanctions after North Korea delivered a long-delayed account of its nuclear activities will not restore the country's access to the international banking system, Treasury spokesman John Rankin said.
"Any change in this situation will be a long-term process that depends on North Korea changing its behavior and bringing its domestic anti-money-laundering and counterterrorist financing regime into compliance with international standards," Rankin told Reuters.
North Korea was largely cut off from the international banking system in 2005 when the Treasury named Banco Delta Asia, a small bank in the Chinese gambling enclave of Macau, as a primary money laundering concern.
The Treasury accused the bank of circulating counterfeit U.S. currency produced by North Korea, and of knowingly handling transactions by North Korean entities involved in illicit activities, including the narcotics trade and sales of counterfeit cigarettes and other goods.
Both North Korea and Banco Delta Asia have denied the Treasury's allegations.
The move had the broader effect of cutting off Pyongyang's access to international banking transactions and led to a long delay in multilateral talks over North Korea's nuclear plans.
Although about $25 million in frozen North Korean funds in Banco Delta Asia was released last year, the sanctions against the bank, which prohibit transactions with U.S. banks, remain in effect, Rankin said. International banks have largely shunned Banco Delta Asia as well.
As recently as April, Treasury officials said so called "supernotes"—high quality counterfeit $100 bills produced by North Korea, were still surfacing.
The Bush administration's lifting of some sanctions under the Trading with the Enemy Act will allow limited trade between the two countries, but it will not affect some $32 million in North Korean assets that remain frozen, Rankin said.
"The lifting of sanctions associated with the Trading with the Enemy Act, and removing North Korea from the list of state sponsors of terrorism does not represent North Korea's re-integration into the international financial system," he said.
Sanctions that prohibit U.S. companies from owning, leasing, operating, insuring North Korean-flagged shipping vessels, as well as registering vessels in North Korea, remain in place.
The Treasury currently has no meetings with North Korean officials scheduled to discuss the financial sanctions.
"We are prepared to continue talking with them," Rankin said. "The purpose of any future meetings would be to discuss steps needed to address concerns regarding illicit financial conduct."
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