After North Korea showed up at last month’s disarmament talks just long enough to give the United States the finger, you wouldn’t expect us to go wobbly on our financial measures against North Korea’s financing of WMD’s, counterfeit currency, and other illegal proceeds. With the passage of U.N. Security Council Resolutions 1695 and 1718, those measurements have become requirements. The good news is that we’re not going wobbly.
Treasury, mainly in the physical form of Undersecretary Stuart Levey, has been the instrument in that new policy, which started here. Since then, Levey has traveled to various nations making polite requests of bankers to cease their suspicion transactions with North Korea (and that’s just about all of them). Since last August, when Treasury made a vivid example of Banco Delta Asia, polite requests have worked remarkably well in such places as Japan, Singapore, and even some South Korean banks. The latest bank to offer its cooperation was based in Vietnam (much more here).
It was inevitable, of course, that a polite request would eventually be refused. That regrettable choice was made by Iran’s Bank Sepah, so Stuart Levey politely unholstered his weapon, squeezed the trigger, and recaptured everyone’s undivided attention with the pool of Sepah assets that’s spreading across the lobby floor. Here’s a quote from Levy’s official statement today:
“Bank Sepah is the financial linchpin of Iran’s missile procurement network and has actively assisted Iran’s pursuit of missiles capable of carrying weapons of mass destruction,” said Stuart Levey, Treasury’s Under Secretary for Terrorism and Financial Intelligence (TFI). “Our action today gives effect to the United Nation’s call on all nations to deny financial assistance to Iran’s nuclear and missile programs, and we urge other countries likewise to fulfill this serious obligation.”
The designation was under the authority of Executive Order 13,382, which I’ve often mentioned as a potential option against North Korea on this blog. The designation of Sepah and its directors freezes all of their assets under U.S. jurisdiction, and bars banks that are linked into the U.S. financial system from engaging in transactions with Sepah. Sepah was one of Iran’s oldest banks, and its fifth-largest, with nearly $14 billion in assets and offices in London, Paris, Frankfurt, and Rome. It was also closely connected with Iran’s military. And you’ll never guess whose missiles Bank Sepah helped the Iranians buy:
In 2005, Bank Sepah financed a Chinese firm’s sale of missile related items to Iran. Also in that year, AIO directed Sepah to transfer well over half of a million dollars to a North Korean firm associated with Komid, a North Korean entity designated for providing Iran with missile technology.
SHIG is responsible for Iran’s ballistic missile program, most notably the Shahab series of medium range ballistic missiles based on the North Korean-designed No Dong missile. The Shahab is believed to be capable of carrying unconventional warheads and has a range of at least 1500 kilometers. SHIG has received help from China and North Korea in the development of this missile.
SBIG, an affiliate of Iran’s AIO, is also involved in Iran’s missile program. Among the weapons SBIG produces is the Fateh-110 missile, with a range of 200 kilometers, and the Fajr rocket systems, a series of North Korean-designed rockets produced under license by SBIG with ranges of between 40 and 100 kilometers. Both systems are capable of being armed with at least chemical warheads.
You can see video of some of those North Korean missiles being tested in Iran recently here, on YouTube. You can see more on KOMID’s designation here and here, and on other recent designations of North Korean entities here. More on Iran-North Korea collaboration here.
Following the announcement of the Sepah designation, Levey told the press that he’s prepared to talk to the North Koreans, but not to cave:
Stuart Levey, the Treasury’s undersecretary for terrorism and financial intelligence, said on Tuesday he was looking forward to further “business-like” discussions with.
“Our objectives would be to continue the kind of discussion that we had, where we laid out our concerns and made it clear that our concerns relate to the systemic abuse of the international financial system for illicit conduct, including drug trafficking and the other things that we’ve made public in the past,” Levey told a news conference in.
“Those are the types of concerns that we need to see addressed,” he added.
Levey declined to confirm any dates for a second round of talks.‘s Foreign Minister Song Min-soon said over the weekend that a tentative deal was reached to resume the talks on Jan. 22.
Where is the real action here? Focused on North Korea’s two main sources of income: China and South Korea. Both continue to pass plenty of money to Kim Jong Il under a don’t ask, don’t tell theory that’s not even arguably compliant with the new U.N. Resolutions (for which we are deeply indebted to John Bolton). Both nations will eventually find themselves under greater scrutiny.
Hat tip and my thanks to a reader.