* Expert panel calls for sanctioning 3 entities, 12 individuals
* North Korea continues to try to skirt sanctions - UN panel
* Panel urges UN sanctions on Kazakh, Ukrainian nationals (Adds quotes, details)
By Louis Charbonneau and Michelle Nichols
UNITED NATIONS, May 14 (Reuters) - Increasingly tough financial sanctions, an arms embargo and other international restrictions on trade with North Korea have significantly delayed Pyongyang's illicit nuclear arms program, according to a confidential report by a U.N. panel of experts seen by Reuters on Tuesday.
"While the imposition of sanctions has not halted the development of nuclear and ballistic missile programs, it has in all likelihood considerably delayed (North Korea's) timetable and, through the imposition of financial sanctions and the bans on the trade in weapons, has choked off significant funding which would have been channeled into its prohibited activities," the 52-page report said.
In the report to the U.N. Security Council's North Korea sanctions committee, the panel also recommended sanctioning three North Korean entities and 12 individuals. It will be up to the 15-nation council whether or not it follows the recommendations.
The three entities the panel said should be blacklisted are the newly created Ministry of Atomic Energy Industry, the Munitions Industry Department of the Central Committee of the Korean Workers Party (KWP), and the State Space Development Bureau.
The individuals the panel wants sanctioned include the atomic energy industry minister, once he is nominated, and four senior officials at the KWP Munitions Industry Department.
It also recommends the blacklisting of one national from Kazakhstan, Aleksandr Viktorovich Zykov, and two from Ukraine, Iurii Lunov and Igor Karev-Popov, for their involvement in North Korea-related arms deals.
"The DPRK (North Korea) has continued to defy the international community in a series of actions which have heightened concern about its intentions," it said.
The panel listed North Korea's February nuclear test and its rocket launches as examples of violations that have increased international concerns about Pyongyang. It was North Korea's third nuclear test since 2006.
Pyongyang is under U.N., U.S., European Union and other sanctions, including a U.N. ban on all arms exports, due to its nuclear weapons program.
Among potential violations the panel listed were the seizure by a U.N. member state of aluminum alloys suspected to be nuclear-related in August 2012 and the seizure of missile-related items bound for Syria in May 2012.
Previous breaches included shipments of arms-related material to Syria in November 2010 and rocket fuses for Iran in 2008, the panel report said.
"The DPRK has continued its efforts to import and export items relevant to missile and nuclear programs and arms," it said. "There was no major change in either the number or nature of the incidents investigated by the panel over the reporting period." (Reporting by Louis Charbonneau and Michelle Nichols. Editing by Christopher Wilson and Xavier Briand)