Test firings linked to closure of foreign banking channels

The Australian
Jul. 06, 2006

YESTERDAY'S North Korean missile launches could be linked to successful moves by Washington to shut off Pyongyang's access to Macau-based foreign currency accounts, according to one of Australia's leading experts on the Stalinist state.

Ron Huisken, senior fellow at the Strategic and Defence Studies Centre at the Australian National University in Canberra, said he understood the US had put pressure on Macau-based banks to enforce due diligence aimed at tightening disclosure requirements on new accounts.

In February, Banco Delta Asia announced it had terminated all business with North Korean entities and was implementing new "enhanced money-laundering policies".

However, Dr Huisken said that while the test firings were not a "happy development in any sense", there was no need for Australians to panic.

The firings were likely to cause as much offence to China - an important North Korean interlocutor - as to the West or Japan.

John Howard, while condemning the missile launches, said he would not support military action against North Korea and called instead for the problem to be "settled diplomatically", a message echoed by Japan and the US.

Foreign Minister Alexander Downer branded the tests a "provocative act".

He called on North Korea to halt its missile program and return to stalled six-party talks to resolve Pyongyang's nuclear development plans.

Opposition foreign affairs spokesman Kevin Rudd called the missile tests "reckless actions by a reckless regime".

The Japanese Government yesterday banned North Korean diplomats from entering the country and blocked charter flights from Pyongyang from landing in Japan.

"The cabinet decided as ad-hoc measures that Japan will ban the entry of North Korean officials to Japan and refuse chartered flights from North Korea at Japanese airports," an official from the Cabinet Office said.

The cabinet also agreed to ban the entry of a North Korean ferry that provides a vital economic link for the isolated communist state, sparking protests from North Koreans in Japan.

The ferry, Man Gyong Bong-92, which had been scheduled to dock at the northern Japanese port of Niigata yesterday morning, was anchored off the Japanese coast last night as activists on the wharf staged protests against its entry.

The ship was expected to be allowed to dock to unload its passengers, many of whom are North Korean students who were born in Japan and are returning from a school trip to North Korea.

Japan stiffened inspections aboard the ferry after a North Korean defector and scientist told a US congressional hearing in 2003 that most of the missile parts he used were smuggled from Japan on the ship.

Earlier, Foreign Minister Taro Aso said Japan was also considering cutting off remittances from Koreans living in Japan.

Additional reporting: AFP