Korean Peninsula Today, 01 July 2009

N. Korea enriching uranium as leader's health may be relapsing (Yonhap)

SEOUL -- North Korea appears to be "definitely" pressing ahead with uranium enrichment that would give it another means to build nuclear arms, South Korea's defense chief said Tuesday.

Defense Minister Lee Sang-hee [Yi Sang-hu'i] also said in a parliamentary hearing that recent outside observations concerning North Korean leader Kim Jong Il [Kim Cho'ng-il] could suggest he is experiencing a relapse in his health.

Kim, 67, reportedly suffered a stroke in August last year but has since recovered enough to reassert control over his secretive regime. Health experts say the risk of a relapse is a threat among stroke patients.

"The military is intensely monitoring (the situation) while bearing in mind the possibilities that Kim's health has degraded," Lee said, citing speculation that North Korea recently used an old photo of Kim to fabricate a report about a recent field inspection.

Lee professed his belief that North Korea is enriching uranium -- a second track to developing a nuclear bomb.

"It seems it is definitely being pursued," he said.

"Uranium enrichment can be conducted in a space as small as 600 square meters," he said. "It is easier to hide than plutonium reprocessing."

North Korea vowed on June 13 to go ahead with uranium enrichment in anger over a U.N. Security Council resolution that expands sanctions on it for its May 25 nuclear test.

Announcing it had achieved "enough success" in the development of uranium enrichment technology, the North also said it will weaponize all new plutonium it produces.

South Korea believes the North has about 40 kilograms of plutonium, enough to produce at least six bombs.

North Korea conducted its first nuclear test in 2006. South and North Korea remain technically at war after the 1950-53 Korean War ended in a truce rather than a peace treaty.

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U.S. Pursues Financial Leverage Over North Korea (Wall Street Journal)

WASHINGTON -- The Obama administration is preparing to wield broad financial pressure to try to force North Korea to dial back its weapons program, building on strategies former President George W. Bush employed, but then unwound.

The Treasury Department is taking a leading role and will work through international banking channels to try to restrict funds to 17 North Korean banks and companies that U.S. officials say are central players in Pyongyang's nuclear and weapons trade. These firms serve as a financial lifeline to leader Kim Jong Il, his family and ruling circle.

United Nations sanctions call for the banning of the shipment of all luxury goods to Pyongyang's leadership. American diplomats are also negotiating through the U.N. Security Council to sanction by July 12 as many as a dozen North Korean individuals or companies active in Pyongyang's weapons trade. There is likely to be overlap with the U.S. Treasury's list of 17 sanction targets.

U.S. officials said they're targeting key nodes in the North Korean financial system. The language of the new Security Council resolution also provides Washington with leeway to go after a much wider range of targets, said these officials.

"There are some very powerful provisions" in the new resolution, said a senior U.S. official working on the effort. "It calls for the prevention of all financial services that could contribute to North Korea's...weapons of mass destruction-related programs."

The Bush administration pioneered the use of the global banking system as a weapon against nations involved in arms proliferation and terrorism, such as North Korea, Iran and Syria.

The Treasury Department's 2005 blacklisting of Macau's Banco Delta Asia, which held a large number of North Korea accounts, is viewed today as a model for how the private sector can punish rogue states. The Treasury didn't initially ban U.S. firms from engaging the bank, but simply warned that such transactions risked skirting U.S. law. The result was a run on the bank's accounts and a contagion effect that nearly froze North Korea out of the international banking system in 2006, said current and former U.S. officials.

Mr. Bush eventually eased the clampdown as an incentive for North Korea pushing ahead with disarmament talks.

Senior Obama administration officials say this decision was a mistake that eased pressure on Pyongyang before it took irreversible steps to dismantle its nuclear program. They also said it reaffirmed Pyongyang's belief that it could use international diplomacy to win economic concessions from the U.S.

U.S. officials said Treasury's targeting of a wider number of North Korean banks could potentially have a much more punishing effect on Kim Jong Il than the lone BDA action. These officials also said Pyongyang's recent second nuclear test and a string of missile tests have hardened the resolve of the international community to punish Pyongyang.

"We want to get out of the mindset where the North Koreans are conditioned that these are somehow temporary measures that we'll renegotiate with them at various occasions," said a senior Obama administration official involved in the diplomacy.

Two of the architects of Mr. Bush's action against Banco Delta Asia, the Treasury Department's Stuart Levey and Daniel Glaser, are overseeing President Barack Obama's financial clampdown on North Korea, said U.S. officials.

Last week, the White House named Ambassador Philip Goldberg, who served in Bolivia before his expulsion by the government there last year, to head an interagency body focused on implementing the North Korea sanctions. Messrs. Goldberg and Glaser are scheduled to travel to China and Southeast Asia in the coming week to seek consensus on targeting Pyongyang's finances.

China will be the key to any successful action against North Korea, said current and former U.S. officials. Beijing has proven wary of participating in U.S. actions aimed at interdicting North Korean ships believed to be ferrying weapons or contraband. But China has been willing in the past to constrict Pyongyang's banking activities, particularly when they risked infecting Beijing's own financial system. U.S. officials said China cooperated in blacklisting Banco Delta Asia, in part, because they feared any scrutiny of Macau's financial system could hurt Beijing and the operations of Chinese firms. Macau is a special administrative region of China.

"China looks out for itself and is worried about reputational risk," said Michael Green, who advised Mr. Bush on North Korea.

Countries including Myanmar, Thailand and Singapore could also be key targets in efforts to punish North Korea. Myanmar, in particular, has become a trans-shipment point for North Korean arms and contraband in recent years, said U.S. and Asian diplomats. North Korea in the past has conducted significant financial transactions through Bangkok and Singapore.

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North Korean Ship Kang Nam Turns Around (Huffington Post)

WASHINGTON — U.S. officials said Tuesday that a North Korean ship has turned around and is headed back toward the north where it came from, after being tracked for more than a week by American Navy vessels on suspicion of carrying illegal weapons.

The move keeps the U.S. and the rest of the international community guessing: Where is the Kang Nam going? Does its cargo include materials banned by a new U.N. anti-proliferation resolution?

The ship left a North Korean port of Nampo on June 17 and is the first vessel monitored under U.N. sanctions that ban the regime from selling arms and nuclear-related material.

The Navy has been watching it _ at times following it from a distance. It traveled south and southwest for more than a week; then, on Sunday, it turned around and headed back north, two U.S. officials said on condition of anonymity to discuss intelligence.

Nearly two weeks after the ship left North Korea, officials said Tuesday they still don't know where it is going. But it was some 250 miles south of Hong Kong on Tuesday, one official said.

Though acknowledging all along that the Kang Nam's destination was unclear, some officials said last week that it could be going to Myanmar and that it was unclear whether it could reach there without stopping in another port to refuel.

The U.N. resolution allows the international community to ask for permission to board and search any suspect ship on the seas. If permission for inspection is refused, authorities can ask for an inspection in whichever nation where the ship pulls into port.

North Korea has said it would consider any interception of its ships a declaration of war.

Two officials had said earlier in the day Tuesday that the Kang Nam had been moving very slowly in recent days, something that could signal it was trying to conserve fuel.

They said they didn't know what the turnaround of the ship means, nor what prompted it.

The U.S. ambassador to the United Nations, Susan Rice, said Sunday that Washington was "following the progress of that ship very closely," but she would not say whether the U.S. would confront the Kang Nam.

The sailing of the vessel _ and efforts to track it _ set up the first test of a new U.N. Security Council resolution that authorizes member states to inspect North Korean vessels. The sanctions are punishment for an underground nuclear test the North carried out in May in defiance of past resolutions.

Meanwhile on Tuesday, the Obama administration imposed financial sanctions on a company in Iran that is accused of involvement in North Korea's missile proliferation network.

In the latest move to keep pressure on Pyongyang and its nuclear ambitions, the Treasury Department moved against Hong Kong Electronics, a company located in Kish Island, Iran. The action means that any bank accounts or other financial assets found in the United States belonging to the company must be frozen. Americans also are prohibited from doing business with the firm.

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3 Held Over Export Bid of DPRK Missile Know-how to Myanmar (Yomiuri Shimbun)

YOKOHAMA--Kanagawa prefectural police arrested three people Monday over an attempt to illegally export to Myanmar a magnetic measuring device believed necessary for developing long-range ballistic missile systems on instructions from North Korea, the police said.

Arrested on suspicion of violating the Foreign Exchange and Foreign Trade Law were Lee Kyoung Ho, 41, of Itabashi Ward, Tokyo, president of trading firm Toko Boeki; Miaki Katsuki, 75, of Setagaya Ward, president of a manufacturing firm; and Yasuhiko Muto, 57, of Nerima Ward, president of an export agency.

The police initially thought the company was trying to export the device to North Korea itself via Myanmar, but they then found out the content of the order from a North Korea-aligned Hong Kong-based firm.

As the police now suspect the firm has exported other missile development-related equipment to Myanmar, they believe North Korea was attempting to promote the transfer of missile technologies, such as its Taepodong system, to Myanmar.

According to the police, the three conspired to export the magnetic measuring device to Myanmar via Malaysia around January 2009 at a price of about 7 million yen without seeking approval from the Economy, Trade and Industry Ministry.

Export of the device is restricted under the so-called Catch-all Control that prohibits exports of products that could be used for weapons of mass destruction.

Previously, around September 2008, the company had also tried to export the same instrument to Myanmar's Second Industry Ministry. Both attempts to export the device were aborted immediately before shipment when METI notified the company that it had failed to submit an export application.

According to investigation sources, the prefectural police have analyzed material they seized during a search of Toko Boeki in February this year.

The illegal export attempts to Myanmar were based on an order by the Beijing office of New East International Trading Ltd. based in Hong Kong around spring 2008. The firm is believed to be under the direct control of the Second Economic Committee of Pyongyang's Workers' Party of Korea. The committee is responsible for the party's military procurement.

The company's Pyongyang office has been included in a METI-announced blacklist of companies believed to have been involved in the development of weapons of mass destruction.

Diplomatic ties between Myanmar and North Korea were severed after a 1983 terrorist attack by North Korean agents in Yangon, but the two countries resumed ties in 2007. In 2004 a high-ranking U.S. government official revealed that North Korea had proposed the sale of missiles to Myanmar.

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N. Korea Offers 'Non-Governmental' Meeting With S. Korea (Yonhap)

SEOUL -- North Korea has proposed a rare non-governmental meeting with a South Korean organization to discuss joint projects amid chilled ties, activists in Seoul said Tuesday.

The North Korean Committee for the June 15 Joint Declaration, which was established after the first inter-Korean summit in 2000 to promote the implementation of the summit accords, sent a letter to its South Korean counterpart to propose a meeting between late July to early August in Shenyang, China, they said.

"Celebrating the ninth anniversary of the June 15 joint declaration, we propose a working-level meeting to discuss solidarity issues aimed at implementing North-South statements at an agreed date," the North Korean committee said in the letter.

The offer came as a rare gesture from the North, but it remains to be seen whether the South Korean government will approve the trip. Seoul issued restrictions on civic and humanitarian aid organizations visiting or communicating with North Korea after the North's long-range rocket test in April.

The first summit between then President Kim Tae-chung [Kim Dae-jung] and North Korean leader Kim Jong Il [Kim Cho'ng-il] paved the way for a flurry of diplomatic, economic and cultural exchanges between the two countries that technically remain at war. South Korea bolstered its economic assistance pledges in the second summit in 2007 between then President No Mu-hyo'n [Roh Moo-hyun] and Kim, promising to build roads, factories and modernize North Korea's dilapidated industrial infrastructure

Taking a tougher stance on the communist neighbor, President Lee Myung-bak [Yi Myo'ng-pak] has said he supports the summit accords but emphasized that the two sides should first review whether they are economically viable.

The South Korean committee said it is an "unconventional case" that the North first offered a meeting, even as the conflict between two sides seems to be escalating.

"Considering the strained inter-Korea relations, we cannot guarantee that meeting with North Koreans will be approved, but it is worth trying to talk to each other," a leading member of the committee said, requesting anonymity.

"The government has not received approval request from the (South Korean committee), but it will be reviewed as soon as it arrives," said an official at the Unification Ministry.

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N. Korean Fishing Boat Returns After Intrusion Into S. Korean Waters (Yonhap)

SEOUL -- A North Korean fishing boat crossed into the South Korean side of the western sea border due to poor visibility Tuesday, staying more than two hours before being towed back to the North Korean side, South Korea's Joint Chiefs of Staff said.

The intrusion took place at 0:45 p.m. about 12.6km northeast of the South Korean island of Daecheong in the Yellow Sea, the officials said.

The 5-ton North Korean boat strayed about 3.6km into the South Korean side of the Northern Limit Line (NLL) and developed mechanical trouble as it was hit by poor visibility in dense fog.

A North Korean patrol boat crossed into the southern side and towed the troubled boat back to the North's side at 3:00 p.m., according to the officials.

The South Korean navy informed the North Korean army of the intrusion three times, but the North stopped short of responding to the notification.

"It appears that the North Korean fishing vessel trespassed over the NLL as the range of visibility was a mere 45 meters at the time of intrusion," an official said.

North Korea insists the NLL, drawn unilaterally by the U.N. Command at the end of the 1950-53 Korean War, is illegitimate and the border should be drawn farther south.

Deadly naval skirmishes erupted between the two Koreas near the NLL in 1999 and 2002.

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S. Korea to Send New Destroyer to Somali Anti-Piracy Campaign (Yonhap)

SEOUL -- South Korea announced Tuesday it will deploy a 4,500-ton destroyer to Somali waters in mid-July to replace one that has operated there under a U.S.-led multinational anti-piracy campaign since April.

The Dae Jo Yeong will depart on July 16 and is expected to join the Combined Task Force on Aug. 22, the Ministry of National Defense said in a report to the National Assembly.

The Munmu the Great left for the Gulf of Aden in March, and has since convoyed 28 South Korean commercial vessels and conducted six rescue operations, including one that involved a North Korean ship.

The Dae Jo Yeong belongs to the same class as the Munmu the Great. It was commissioned in 2003 and can travel at a maximum speed of 29 knots.

The Munmu the Great was deployed mainly to protect South Korean vessels in the region where approximately 500 such ships ply the route each year. About 150 of them are vulnerable to pirate attacks because of their low speed, according to the ministry.

Somalia has not had a functional government since its dictator was overthrown by warlords in 1991. Poverty has driven a large number of locals to piracy, while black market sales of weapons run rampant.

Over 710 South Korean soldiers are operating either as peacekeepers under a U.N. mandate or as part of multinational security campaigns across the world, the report said.