(Adds quotes from Treasury's Cohen)
By Paige Gance
WASHINGTON, June 27 The Obama administration
said on Thursday it was sanctioning North Korea's Daedong Credit
Bank for its role in supporting Pyongyang's weapons of mass
The U.S. Treasury said Daedong Credit Bank has been
providing financial services to the Korea Mining Developing
Trading Corp, or KOMID, which it said was Pyongyang's premier
arms dealer, and the Tanchon Commercial Bank, or TCB, its main
"Since at least 2007, Daedong Credit Bank has facilitated
hundreds of financial transactions worth millions of dollars on
behalf of KOMID and TCB," the Treasury said. "In some cases,
(it) had knowingly facilitated transactions by using deceptive
The Treasury said it was also sanctioning a Daedong front
company called DCB Financial Limited, that company's
representative, Kim Chol Sam, and Son Mun San, the external
affairs bureau chief of North Korea's Bureau of Atomic Energy.
It said the front company had carried out international
financial transactions as a way to avoid scrutiny by
institutions trying to avoid doing business with North Korea.
The action generally prohibits U.S. citizens from engaging
in any transactions with the entities or persons targeted, and
freezes any assets they might have in the United States.
The fresh set of sanctions follows a decision by the United
States in March to target North Korean's Foreign Trade Bank, its
main foreign exchange institution, to try to choke off cash to
the government in Pyongyang.
Banks in the European Union have been reluctant to do
business with FTB in the wake of the U.S. sanctions, and China's
biggest foreign exchange bank, the Bank of China, closed FTB's
Treasury Under Secretary David Cohen told reporters on a
conference call that he expects banks outside the United States
to continue to limit or terminate their dealings with the
sanctioned banks. "Being exposed to a financial institution like
Daedong Credit Bank exposes those financial institutions to real
risk, in particular reputational risk," he said.
Cohen said previous sanctions had increased the North Korean
regime's financial isolation and that these latest designations
would ratchet the pressure up further.
The United Nations said in May that increasingly tough
financial sanctions, an arms embargo and other international
restrictions on trade had significantly delayed expansion of
North Korea's nuclear arms program. The report did not cover the
effects of the sanctions imposed in March.
(Reporting by Paige Gance; Editing by Vicki Allen)