By Na Jeong-ju
Staff reporter

The U.S. plan to impose new financial sanctions on North Korea will focus on cracking down on its overseas arms sales and the supply of luxury goods to its leadership, according to South Korean intelligence sources, Friday.

Washington is reportedly taking steps to freeze Pyongyang’s secret overseas bank accounts used to deposit money from arms transactions, counterfeiting, money laundering and drug trafficking.

“American investigators have discovered about 200 overseas accounts linked to Pyongyang. It is closely monitoring about 100 of them,” an official from the National Intelligence Service told reporters Thursday, asking not to be named.

“The accounts are in about 10 banks in Southeast Asia, southern Europe and the Middle East and were opened under false names.”

Regarding this, Hong Kong’s financial authorities are considering an audit of North Korea’s state-run firms operating in Southeast Asia, including Taepung International Investment Group, whose main mission is to attract foreign investment for the North’s economic projects, another source said.

The probe will focus on revealing whether the firms engaged in illegal deals and stashed slush funds are in violation of U.N. Security Council resolutions 1718 and 1874, which were adopted after the North’s missile and nuclear tests in 2005 and 2009 to ban its arms exports, transactions linked to its nuclear and atomic activities.

“The U.S. sanctions against North Korea will address its illegal and suspicious overseas activities on a wide range of areas,” the Ministry of Foreign Affairs and Trade said in a press release.

“We expect the measures to include stopping the supply of cash earned from arms sales and illegal deals to Pyongyang, banning suspicious figures from travelling overseas and looking into involvement of diplomats in illicit activities.”

The U.S. State Department said Robert Einhorn, the envoy on nonproliferation, would travel to Asia in early August to encourage enforcement of the sanctions.

“We would like to see other countries also take the same kinds of national steps that we’ve announced,” spokesman Philip Crowley said Wednesday.

In 2005, Macau’s Banco Delta Asia froze some $25 million in North Korean accounts after the U.S. Treasury Department accused it of laundering money for the Pyongyang regime.

The measure reportedly hit Pyongyang hard after other financial institutions also cut ties to Pyongyang. The Macau bank unfroze the funds in 2007 amid nuclear disarmament negotiations.

The remarks came after U.S. Secretary of State Hillary Clinton announced that Washington will slap new financial sanctions on Pyongyang in response to its torpedo attack on the South Korean warship Cheonan in March.

Earlier this week, Clinton visited Seoul with Defense Secretary Robert Gates for the inaugural “2+2” security talks with South Korean foreign and defense ministers.