Saturday, October 03, 2009

Obama Admin banking on North Korea banking

The Obama administration's push to settle the tense nuclear standoff with North Korea is being spearheaded not by soldiers on a battlefield or big-name diplomats but by government officials knocking on the doors of banks throughout Asia.

The Democratic White House's effort borrows a page from former President George W. Bush's Republican playbook: Bypass messy international diplomacy and hit the North where it hurts: its foreign bank accounts.

American officials are traveling around Asia, targeting private banks that might have North Korean ties. The officials tell bankers that North Korea uses its accounts to hide counterfeiting of U.S. currency, to launder money, to smuggle cigarettes and drugs. The banks could face potentially dire consequences if they are seen as helping illicit activities.

Juan Zarate, a senior counterterrorism adviser to Bush who helped develop the strategy, said in an interview that the U.S. effort to "harness the financial furies" is "making it very uncomfortable for the North Koreans to do business at all beyond their borders."

Some, however, question whether the strategy is counterproductive and could cause North Korea to lash out or become more entrenched.

"Financial sanctions used in the service of regime change is a very, very dangerous weapon, which could lead them to military retaliation," said Selig Harrison, a North Korea specialist at the Center for International Policy.

Obama has few alternatives: Military force against the huge North Korean army would be catastrophic; diplomatic efforts are unsure. Coincidence or not, as the United States steps up financial pressure, the North has begun making conciliatory moves, showing a new willingness to resume nuclear talks.

[The Guardian]

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