May 1, 2009: In response to North Korea's recent ballistic missile tests, the UN has, for the first time, imposed sanctions on individual firms for arms embargo violations. In this case, it's North Korean companies (owned by the state) associated with North Korea's missile program. The three firms, Korea Mining Development Trading Corp., Tanchon Commercial Bank and Korea Ryongbong General Corp., had already been sanctioned by the United States. This was particularly troublesome for the North Koreans, as the U.S. has been using its ability to enforce its will on the world banking system, to make it more difficult for these three firms to operate internationally.
North Korea always responds that these sanctions and legal bans do little damage. But that is not true. At the very least, the North Koreans have to pay additional fees and bribes to move money internationally. The scrutiny is also unwelcome, since it has, in the past, uncovered illegal operations (like drug smuggling, and smuggling in general, currency counterfeiting and so on) that the North Koreans would rather keep quiet. It's gotten so bad that, recent negotiations over halting North Korean nuclear and missile programs, usually involve demands that North Korea be freed from many of the banking restrictions.
