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Sunday, June 21, 2009

Korean Peninsula Today, 20 - 22 June 2009

Kim Jong-il's Health 'Getting Rapidly Worse' (Chosun Ilbo)

The health of North Korean leader Kim Jong-il is rapidly deteriorating, prompting the hasty decision to name his third son Jong-un as heir apparent, sources told the Chinese press. The Global News, a sister paper of the official People’s Daily, on Thursday quoted a foreign ambassador in Pyongyang as saying that Kim Jong-il's fragile health made the situation in North Korea "very complicated."

The envoy told the Global News that authorities in Pyongyang are keeping tight lid on information about Kim's health.

A North Korean source in Beijing said Beijing-based North Korean officials from Ponghwa Hospital, which is treating Kim's illness, are looking to import expensive medical equipment, which has become contraband since the North conducted its first nuclear test in 2006. Pyongyang is also seeking to import an emergency helicopter from overseas. "Kim seems to be in serious condition," the source added.

North Korea's nuclear test and imminent test of an intercontinental ballistic missile is an attempt to reduce the power vacuum and hand over a stable regime to Kim Jong-un, the source speculated.

Since early this year, Kim Jong-il has tripled the frequency of so-called "on-the-spot guidance" to local areas and military units across the country out of impatience to hand over power to his son before it is too late, the source added.

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North Korean Ship with Suspicious Cargo Heads for Myanmar (ITAR-TASS)

TOKYO -- The Kang Nam ship flying the North Korean flag is now being followed by US armed forces, since it is suspected of carrying cargoes, related to ballistic missiles and nuclear weapons.

It is supposedly heading for Myanmar, reported on Sunday South Korean news channel YTV, referring to sources at the South Korean intelligence service.

American authorities do not specify what exactly the North Korean vessel carries. However, they noted that the cargoes are "of interest" to them.

It was reported earlier that the Kang Nam might head for the Singapore port, and the U.S. Navy destroyer USS John McCain with the multifunctional tracking and zeroing-in system Aegis sailed there from the Japanese Yokosuka Navy base. Singapore stated that it "is ready to act duly if suspicions are confirmed with respect to the North Korean cargo".

The Kang Nam is the first North Korean vessel that is shadowed after introduction of new sanctions against Pyongyang in response to the nuclear test, carried out last May. The resolution of the UN Security Council permitted the Organisation's member countries to inspect North Korean cargoes, carried by land, sea and air.

In the opinion of some analysts, Pyongyang carried out the latest missile launches and the nuclear test so as to consolidate the political position of Kim Jong-un, the junior son of North Korean leader Kim Jong-Il who suffered a serious apoplectic stoke last year.

The Japanese Mainichi Shinbun, referring to sources close to the republican leadership, reported on Saturday that Kim Jong-un allegedly already performs the duties of the chairman the National Defence Commission, the country's top governing body.

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U.S. warns of N. Korea relying on cash transactions to avoid financial sanctions (Yonhap News Agency)

WASHINGTON -- The U.S. Treasury Department Thursday advised financial institutions to take precautions against North Korea trying to do cash transactions to circumvent financial sanctions under a U.N. resolution adopted after the North's nuclear test last month.

"Treasury is concerned that, in an attempt to evade U.N. Security Council Resolution provisions, North Korea may increasingly rely on cash transactions," the Financial Crimes Enforcement Network (FinCEN) of the department said in an advisory. "All financial institutions should remain vigilant regarding attempts by North Korean customers to make large cash deposits into new or existing accounts, as well as the associated risk of the passing of counterfeit currency."

The 34-point resolution calls for an overall arms embargo on North Korea except for light weapons or small arms, and imposes financial sanctions to prevent the flow of funds that could benefit North Korea's missile, nuclear or any other proliferation activities.

The resolution also advises U.N. member states to reduce or refrain from providing any further financial aid to North Korea unless the aid is related to humanitarian activity.

U.S. officials have also said they were considering seeking their own financial sanctions against North Korea aside from the U.N. sanctions.

Washington slapped financial sanctions on a Macau bank in 2005 to freeze US$25 million worth of North Korean assets, effectively cutting off Pyongyang's access to the international financial system. Banco Delta Asia had been accused of helping North Korea launder money from circulating sophisticated counterfeit US$100 bills called "supernotes."

The advisory said the U.S. government "remains concerned about North Korean production and distribution of high-quality counterfeit U.S. currency."

"The U.S. government is ready to assist with the investigation of North Korean counterfeiting of U.S. currency wherever it is detected," it said.

Reports said that the U.S. recently found that North Korea circulated about US$1 million worth of supernotes at a South Korean port late last year.

The FinCEN advisory asked "all U.S. financial institutions to take commensurate risk mitigation measures."

"FinCEN notes that with respect to correspondent accounts held for North Korean financial institutions, as well as their foreign branches and subsidiaries, there is now an increased likelihood that such vehicles may be used to hide illicit conduct and related financial proceeds in an attempt to circumvent existing sanctions," it said. "Financial institutions should also continue to ensure that they are not providing financial services for North Korea's procurement of luxury goods."

The advisory listed 17 North Korean banks to help "assist in applying enhanced scrutiny" by U.S. and overseas financial institutions.

They are Amroggang Development Bank, Bank of East Land, Central Bank of the Democratic People's Republic of Korea, Credit Bank of Korea, Dae-Dong Credit Bank, First Credit Bank, Foreign Trade Bank of the Democratic People's Republic of Korea, Hana Banking Corp. Ltd., The International Industrial Development Bank, Korea Joint Bank (KBJ), Korea Daesong Bank, Korea Kwangson Banking Corp., Korea United Development Bank, Koryo Commercial Bank Ltd., Koryo Credit Development Bank, North East Asia Bank and Tanchon Commercial Bank.

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Koreas End Talks without Agreement, To Meet Again Next Month (Yonhap News Agency)

SEOUL -- South and North Korea failed to agree on the future operation of a joint industrial park and the fate of a detained worker in talks on Friday, but left room for negotiation by scheduling the next meeting, officials said.

Pyongyang refused to release the factory worker who has been held for months, said Kim Young-tak, the chief of the South Korean delegation, after returning from the joint park in the North's border town of Kaesong. However, the two sides agreed to meet again on July 2 to continue negotiations, he said.

"We strongly urged the early release of our detained worker and demanded access to him," Kim said. North Korea only responded there is "no problem" with him.

The inter-Korean talks came amid growing confrontation between North Korea and the outside world. The U.N. Security Council punished North Korea for its May 25 nuclear test by sharpening financial sanctions and allowing searches of North Korean vessels suspected of carrying missile and nuclear materials. In response, Pyongyang vowed to bolster its nuclear deterrence and threatened military clashes in case of search attempts.

Friday's talks were a follow-up to a June 11 meeting in which the North demanded steep increases in rent and workers' wages.

Seoul officials said North Korea reiterated its demands that South Korean firms quadruple monthly wages to US$300 from the current $70-$80. Pyongyang also wants to raise the 50-year rental fee for land to $500 million. South Korean developers already paid $16 million when the park opened in 2004.

"They insisted we accept them, and we made clear those demands are against common sense and against the law," Kim said.

No progress was made on the case of the Hyundai Asan Corp. employee, identified only by his family name of Yu, who was detained at the joint park on March 30 on charges of "slandering" the North's political system. North Korea refused Seoul's request to deliver letters from his family, Kim said.

Many feared the North would shut down the joint park in retaliation against Seoul for its hard-line policy, but Pyongyang did not appear to be trying to do so in the latest talks, analysts said.

In an unexpected gesture, North Korea offered to lift a traffic curfew on South Korean businessmen traveling to the joint park. The restriction was imposed in December to protest Seoul's conservative policy.

"North Korea won't give up the Kaesong industrial park, especially now that it faces U.N. sanctions," said Cho Myung-cheol, a former economics professor at Pyongyang's Kim Il Sung University who defected to the South in 1994 and is now a think tank analyst.

The joint venture holds even greater economic value for the cash-strapped North after the U.N. Security Council banned its weapons trade under Resolution 1874, he said. South Korean businesses paid $26.8 million in wages last year to the North Korean government.

South Korea proposed holding joint surveys with North Korea in foreign industrial zones in China, Vietnam and even the United States to reach a reasonable conclusion for both sides, officials said. North Korea did not respond to the proposal, they said.

The joint park, just an hour's drive from Seoul, was born out of the first historic inter-Korean summit in 2000 and continued to grow despite the North's first nuclear test in 2006. More than 100 South Korean firms currently operate there, making clothes, kitchenware, electronic equipment and other labor-intensive goods with about 40,000 North Korean employees.

Yoo Ho-yeol, a North Korea studies professor at Korea University, said North Korea appears to be dragging its feet in the face of strong international sanctions. While inter-Korean talks continue, North Korea will not attempt a military provocation, he said.

"It may continue to make threats, but will not put them into action, which will then completely freeze any exchange with the outside," he said.

Political relations rapidly soured after President Lee Myung-bak took office in South Korea last year, taking a tougher stance on the North's nuclear program and ending the decade-long unconditional economic aid to the impoverished state. As a sign of increased stress on businesses, a clothing manufacturer withdrew this month in the first pullout by a South Korean firm from the industrial park.

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S. Korea's new flu cases surge to 115 (Yonhap News Agency)

SEOUL – An additional 10 South Koreans were found to have been infected with the new Influenza A, bringing the nation's total number of flu infections to 115 as of Sunday, health authorities here said.

The 10 patients tested positive for the H1N1 virus after returning from trips overseas, the health ministry said in a statement. A total of 41 patients, including the newly infected, are being treated at state-designated hospitals.

The latest infections, mostly of people returning from trips to the United States, come as the disease seems to be spreading at a faster pace across the world.

South Korea had been considered relatively insulated from the highly contagious virus, originally called "swine flu." But authorities worry that infections could increase, with many Koreans returning home or taking overseas trips with the summer vacation season drawing near.

On June 11, the World Health Organization (WHO) declared the new H1N1 flu the first influenza pandemic since 1968 and raised its disease alert status to the highest level.

A total of 76 countries have officially reported some 36,000 infections and 163 deaths related to the disease, mostly in Mexico and the U.S, according to the WHO's latest tally.

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