At one point, curious North Korean soldiers peered through the building’s windows at the high-profile American visitors – a surreal juxtaposition, given that the sanctions that Clinton announced are designed in part to hit the North’s powerful military.
Clinton provided only a broad overview on the new steps against the North that will target the arms sales and other activities that fund the regime, as well as the purchase and importation of luxury goods used to reward the regime’s elites in the military and other administrations. More North Korean officials will be hit with travel bans while asset freezes are to be expanded.
The US is also planning to step up collaboration with international banks to curtail the North’s money laundering – the one measure that analysts say holds out any real hope of influencing Pyongyang.
“The one approach that has caught North Korea’s attention in the past is financial sanctions that disrupt its access to the international banking system,” says Ken Lieberthal, a senior fellow in foreign policy and a Northeast Asia expert at the Brookings Institution in Washington. “If we are not resorting to any Treasury-Department-sponsored efforts to get at North Korea’s banking activities abroad,” he adds, “there is reason to lack confidence that more sanctions will have any significant effect.”
The one US action analysts cite as successful: the US Treasury's designation in 2005 of the Macau-based Banco Delta Asia as a primary money launderer of North Korean illicit assets. That action prompted a wave of cooperation from other international financial institutions, including Chinese banks, that had no desire to run afoul of the treasury. North Korea took note, and eventually returned to the six-party nuclear talks, but in exchange for securing the release of $25 million held by Banco Delta Asia.