Yes, North Korea has a bank. It's easy to forget that even a tightly controlled economy needs to manage its currency, especially when so much of that currency comes from a variety of dubious sources.
Well, the Korea Kwangson Banking Corp. has landed in the sights of the U.S. Treasury Department, which has said it is going to freeze the bank's assets. The latest transgression involves providing "financial assistance" to companies that the U.S. government has noted as spreading weapons of mass destruction.
"North Korea's use of a little-known bank, KKBC, to mask the international financial business of sanctioned proliferators demonstrates the lengths to which the regime will go to continue its proliferation activities and the high risk that any business with North Korea may well be illicit," said Under Secretary for Terrorism and Financial Intelligence Stuart Levey.
KKBC has at least one branch outside North Korea -- in Dandong, China. This branch interacted with Tanchon Commercial Bank and Korea Hyoksin Trading Corp. The three banks have been identified by the UN Security Council as being involved in "WMD and missile programs."
Tanchon's relationship with KKBC stretches back to last year, when it began using the North Korean bank to move what is believed to be millions of dollars pertaining to the Korea Mining Development Trading Corp. (KOMID), which is said to be North Korea's go-to institution for trading in weapons. This includes moving money from Burma to China this year. Tanchon is the financial arm of KOMID.
The other, Hyoksin, was sanctioned by the Treasury Department less than two weeks ago and has been identified as seeking KKBC's assistance with the purchase of dual-use equipment in 2008. Hyoskin has been linked by the UN to the development of weapons of mass destruction.
Of course, none of this should come as a surprise. North Korean financial institutions involvement in illegal transactions run the spectrum, including counterfeiting, money laundering and the global narcotics trade. Much of this activity is used to bring hard currency into the beleaguered country, as it has virtually no trading relationships aside from China and to a lesser extent the Chongryon, a community of Koreans living in Japan that owns and operates pachinko parlors. Some of the proceeds of these businesses are sent back to North Korea.
The Korea Central News Agency, Kim Jong Il's official mouthpiece to the outside world, had no statement regarding the Treasury Department's decision. The only proliferation to which it admitted was that of the white pine nut tree in North Hwanghae Province.