News photo
Shigeru and Sakie Yokota address a news conference Tuesday in Kawasaki after the government announced it would impose financial sanctions against North Korea.

Finance Ministry officials and international financial experts say a ban on financial transactions involving North Korea is an effective way to curb Pyongyang’s efforts to build missiles and weapons of mass destruction.
The financial sanctions have pleased relatives of Japanese who were kidnapped to North Korea in the 1970s and 1980s, who are hoping the new sanctions will get Pyongyang to give them more information on their kin, and people in Niigata who oppose visits from the North Korean ferry Mangyongbong-92, which is suspected of smuggling cash. Japan banned port calls by the ferry for six months in July after North Korea conducted a battery of missile tests.
Although both groups had long been pressing for a remittance ban, some say the financial sanctions are still not enough to halt the flow of money into the reclusive state.
“It’s a good first step, but it needs to be expanded and separate legislation is needed to stop the flow of goods from Japan to North Korea,” said Kazuyuki Matsuo, general secretary of the Fukuoka branch of the National Association to Rescue Japanese Kidnapped by North Korea.
Experts say the financial sanctions are too narrow and that the targeted organizations can simply change their tactics to evade authorities.
One problem is that North Korea’s closest neighbors, China and Russia, have not yet imposed financial sanctions. A U.N. Security Council resolution urges U.N. member states to stop cash flows they believe will be used to fund the North’s weapons programs.
“Japan will have to work even closer with the international intelligence community to keep an eye on attempts by those on the list to set up accounts elsewhere and under different names,” said one commentator on a local Fukuoka television station Tuesday evening. “It will also have to work closely with Chinese officials to keep an eye on major Japanese firms and individuals doing business in China to ensure that they don’t send money to North Korea.”
While electronic transfers are being closely monitored here, cash can still be smuggled out of Japan.
In the 1970s and 1980s, tales of shoe boxes stuffed with cash from North Korean-owned pachinko parlors being sent to the North aboard the Mangyongbong-92 were legend.
Former members of the pro-Pyongyang General Association of Korean Residents – have testified that billions of yen in cash have been sent to North Korea in this manner.

One Japanese man living in Osaka, who worked for two decades at a North Korean-funded trading company in Japan, said Tuesday’s ban will have only a short-term effect.

“Much of the money that reaches North Korea, especially the North Korean military program, comes via China and Chinese banks. Until China agrees to crack down on these banks and institutions, lots of money will still reach the North Korean military,” said the man, who asked not be named.

Now that the government has banned the transmission of funds to some organizations, the next step is to monitor the sales of products, especially electronics, that might end up in North Korean weapons production.

Japanese firms are not allowed to send certain types of equipment to North Korea, Iran, Iraq or Libya. The Ministry of Economy, Trade, and Industry is considering revising its regulations to require all firms to tell METI where these products are going, regardless of where they are being shipped, to try to stop them from being routed into the banned countries.

Executives at precision instruments maker Mitutoyo Corp. were arrested last month for exporting two sensitive measuring devices to Malaysia in 2001 that could be used to produce nuclear weapons. One of them was found in a nuclear facility in Libya during 2003 to 2004 weapons inspections. It is believed that others may have ended up in Iran and North Korea.

In another incident, Japanese radar and sonar technology was discovered in a North Korean submarine captured by the South Korean Navy in 1997. Japanese and South Korean officials have speculated that the technology was first exported to other countries and sent on to North Korea.

But there are still firms to be caught here trying to export directly.

Two years ago, in the city of Dazaifu, Fukuoka Prefectural Police caught a local trading company attempting to export more than 1,500 electronic devices to North Korea.

“The incident made many people realize just how easy it would be to export goods to North Korea from Fukuoka that might be used for military purposes,” said Matsuo of the group to rescue the abductees.

“But Chongryun has a lot of political influence, and local politicians have done little to crack down on goods being exported to North Korea. They have also been reluctant to take the lead in barring North Korean ships from visiting Fukuoka harbor.”

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