2018-12-01

North Korean Economy Watch » Australia

North Korean Economy Watch » Australia

Archive for the ‘Australia’ Category

Austria claims it is owed $200m by DPRK

Wednesday, May 28th, 2014
According to the Korea Times:
North Korea currently is $200 million (2.5 billion won) in debt to Austria, Voice of America (VOA) reported Wednesday.
Austria’s annual financial report indicates unpaid debt from foreign countries had reached approximately $1.26 billion (1.2 trillion won). Among them, North Korea has not paid anything back for 20 years, said Die Presse, an Austrian daily.
After a debt settlement between two countries in 1987, in which Austria received $7.6 million from the North, all payments stopped in 1992, the VOA said.
Die Presse added it is uncertain if the rest will be redeemed after inactive efforts for 20 years. It also explained the North took out loans from 30 western European countries in the late 1960s and inefficient management resulted in the indebted situation.
A source familiar with the issue speculated North Korea owes $18 billion (18.4 trillion won) in external debt.
Russia waived 90 percent of a $10.1 billion debt owed by the North, while the rest could be repaid over 20 years and be reinvested in North Korea.
Read the full story here:
NK owes Austria $200 million
Korea Times
2014-5-28

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Choson Exchange Update

Sunday, March 6th, 2011
From the Choson Exchange web page:
We are looking to build our knowledge pool in the areas of contract negotiations, microfinance and bond markets as there have been requests for knowledge assistance in these areas from Pyongyang. We are told that North Korean firms need to negotiate more effectively with their Chinese counterparts, and require legal training to do so. The fundamentals of micro-finance and bond markets are also of interest to some financial organizations.  We expect initial programs for these areas to take place in April to May this year.
The executive director of Choson Exchange, Geoffrey See, also wrote the following article in the East Asia Forum:
Choson Exchange recently prepared a program for North Korean students to learn business, finance and economics overseas through university courses and internships.
They consulted a range of North Koreans on how it should structure such a program and ‘the Australia National University’ often came back as the model to follow. Up until 2006, ANU hosted North Korean trainees studying economics under programs supported by international and Australian aid agencies. The Australian exchange program was clearly well-regarded by outward-looking North Koreans.
But what would Australia gain from such programs?
A resolution to the constant series of crises on the Korean peninsula is obviously in Australia’s interest. Conflict on the Korean peninsula can destabilize the region and in a worst-case scenario draw China and the United States into a military conflict involving Australian troops. This would cause incalculable harm to the Asia-Pacific economy because of its impact on all the major Northeast Asian economies, not to mention the human cost of conflict. Australia also has long and particular historical interests in commerce with North Korea.
There are some things that Australia can facilitate for North Korea which is in their mutual interest, but which neither the United States nor South Korea can provide anytime soon. The opportunity for North Korean students to study economics, business or law in Australia in long-term university programs is one such crucial shared interest. Yet such programs are currently impossible because of autonomous sanctions in place since 2006 that deny visas to visiting North Koreans. This policy is counter-productive. It trades off the ability to shape longer-term outcomes on the Korean peninsula for short-term public displays of opprobrium. The only countries whose sanctions can hurt North Korea are the countries that actually trade with it. This policy is also unusually harsh of Australia. The United States takes a more nuanced stance by allowing visits by North Koreans for some purposes while publicly preventing political delegations to express its political support for US allies, chiefly South Korea. Similarly, Australia can publicly express its disapproval of current North Korean activities alongside efforts to develop exchanges that shape a future that goes beyond the present stalemate.
These educational exchanges provide Australia with an effective way to shape longer-term dynamics on the Korean peninsula. One way the Korean crisis will end peacefully is when North Korean elites calculate that benefits of economic integration with the rest of the world are great enough to make the costs of confrontation unsustainable. Overseas education can shift this cost-benefit calculus because it equips a new generation of North Korean leaders with the knowledge and the networks to benefit from international trade and integration.
Choson Exchange recently placed a North Korean student in an internship with an international consulting firm. Without such networks, the opportunity would not have materialized. The student also needed coaching on how to explain why his prospective-employer might find value in taking him on. He assumed that a good score on an international English test was the qualification he needed even though most selective employers see fluency as a minimum threshold, rather than a core selling point. This experience helped us see things from the North Korean perspective: there are hardly any commercial benefits to speak of when one lacks knowledge and networks to realize those benefits.
Now is the time to help build this knowledge and network base. North Korea has been active over the past year setting up institutions to promote economic development. This includes the State General Bureau of Economic Development, the Daepung Group, and the State Development Bank. Choson Exchange has led finance workshops with the State Development Bank, and Bank managers agree that training is needed and appreciated. By helping to educate the next generation of North Korean businessmen, economists, financiers or lawyers who will eventually fill these institutions, Australia can play a role in shaping these emerging institutions in North Korea, institutions that could have important ramifications for how North Korea interacts with the rest of the world in the future.
Australia has the opportunity to redefine how such exchanges are conducted. To maximize impact in developing institutions in Pyongyang, we need to think in terms of a “talent pipeline.” We need interlinked programs targeted at different age-groups: training workshops targeting senior or middle management at these institutions, overseas scholarships targeted at university students or recent graduates, and a way to bring both groups together to help maximize opportunities for scholarship recipients to move into the emerging institutions.
Australia has the base from which to take initiatives with North Korea. The North Korean institutions that are looking outwards explicitly seek to build on what has been done with Australia, and specifically through the Australian National University program for training in economics. A comprehensive settlement of the Korean problem is much more likely if we begin again to put this infrastructure in place and help with institutional development in North Korea.
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Australia’s ANL cited in DPRK weapons smuggling

Monday, January 10th, 2011
According to The Australian:
The use of an Australian-owned cargo ship to smuggle weapons from North Korea to Iran has been highlighted in a report to the UN.
It was one of several breaches of UN sanctions against Kim Jong-il’s regime detailed in a report to the Security Council.
The report, which was submitted to the council recently after months of obstruction from China, found the North was making $US100 million a year through illegal arms sales to Syria, Iran and Burma.
Pyongyang used shadowy webs of front companies, false manifests and complex routes to try to get around sanctions aimed at stopping its arms proliferation, the investigation found.
The report flags the 2009 interception of the ANL Australia in Sharjah as one of at least four occasions that North Korea was caught out exporting arms or defence equipment.
The report said weapons were seized from the ANL Australia in the United Arab Emirates on July 22, 2009.
The cargo is thought to have included up to 10 containers of arms, including rocket-propelled grenades and trigger mechanisms and propellant, although this is not detailed in the report.
The cargo was packed and sealed in North Korea and shipped to China, where it was loaded aboard the ANL Australia en route to Iran.
The Bahamas-flagged vessel was owned by ANL Container Line at the time.
ANL, once Australia’s national shipping line, was taken over by French company CMA CGM.
Despite the breach of sanctions, an Australian government investigation found ANL was not responsible because the ship was chartered by a foreign company at the time.
“The Australian government’s inquiries into this matter indicated that at all relevant times the vessel was not under the operational control of its owner, but was rather being chartered by a non-Australian company,” a Department of Foreign Affairs and Trade spokesman said.
“No conduct relevant to the shipment can be attributed to an Australian person or body corporate,” he said.
ANL declined to comment.
The report found that while no ballistic missile or nuclear-related materials emanating from North Korea had been intercepted since sanctions were applied, evidence suggested “continuing DPRK (North Korea) involvement in nuclear and ballistic missile-related activities in certain countries, including Iran, Syria and Myanmar (Burma)”.
“To supplement its foreign earnings, the DPRK has long been involved in illicit and questionable international transactions (including) the surreptitious transfer of nuclear and ballistic missile-related equipment, know-how and technology,” it says.
The panel received government reports suggesting North Korea had helped build Syria’s Dair Alzour nuclear facility (destroyed in 2007 by an Israeli attack) along with details of Japan’s arrest in June 2009 of three individuals trying to illegally export a magnetometer, a device with potential missile-related uses, to Burma.
The report cited in the story is the “Panel of Experts” report to the UNSC.  You can read (and search) it here (PDF).
Read the full story here:
UN cites ANL in N Korea arms smuggling
The AustralianRick Wallace
1/10/2011

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DPRK emigration data

Monday, March 1st, 2010
Josh points out this table from the UNHCR (originally published by RFA):
refugee_table-800.jpg
Click image for larger version.
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UAE Seizes North Korean Weapons Shipment to Iran

Thursday, September 10th, 2009
UPDATE: According to Yonhap, Chinese and Australian ships were shipping the arms:
North Korean cargo carrying arms exports to Iran left a western port five days after Pyongyang’s nuclear test in May and was transferred aboard Chinese and Australian freighters before being seized by the United Arab Emirates (UAE) in July, according to an Italian company that handled the delivery.
Mario Carniglia, head of the international freight-forwarding firm Otim, said the containers, reportedly loaded with rocket launchers, detonators, and munitions, were shipped via the Chinese cities of Dalian and Shanghai and were transferred to an Australian vessel just after the U.N. Security Council adopted Resolution 1874 which bans the North from engaging in arms trade.
“(The containers) left the Nampo Port on May 30,” he said in a recent interview with Yonhap News Agency in Rome on Wednesday. A North Korean ship carrying the 10 containers arrived in Dalian two days later and a Chinese cargo ship moved them to Shanghai on June 13, he said.
“The containers were placed on (the Australian freighter) ANL-Australia in Shanghai,” he said, flipping through related documents.
The cargo was on its scheduled course until the UAE intercepted the ANL-Australia on July 22. The U.S. Navy had been focusing on trailing another North Korean vessel, the Kangnam 1, which appeared to be headed to Myanmar also carrying weapons exports.
The seizure was the first made under Resolution 1874 that calls upon all states to inspect cargo to and from North Korea if they have “information that provides reasonable grounds to believe the cargo contains” illicit weapons.
The Australian government said earlier, based on its own probe, that there were rocket-propelled grenades and other weapons in the seized containers, though Carniglia said his firm did not know the contents of the cargo.
He said North Korea provided documents identifying the content as “Oil Pumping Equipment.”
“We couldn’t see the contents as the containers were sealed when shipped from Nampo,” he said in the interview conducted in Italian. He refused to identify the exporter in North Korea, citing business ethics.
“All we were responsible for was handling the shipping from China to Iran,” Carniglia said.
He added that North Korea has not filed a complaint or asked for the return of the cargo, held at the UAE now for more than 50 days.
The UAE is reportedly in consultation with the U.N. sanctions committee on how to handle the seized shipment.
In a related move, the U.N. committee demanded an explanation from North Korea last month for the apparent arms export attempt.
The head of the North’s mission to the U.N., Sin Son-ho, sent a reply letter reiterating his country’s position that it is not bound by any U.N. resolution.
Sin also said that North Korea’s experimental uranium enrichment program is in a “completion phase,” claiming the country has made advancements in mastering an alternative route to producing nuclear weapons apart from its plutonium-based program.
ORIGINAL POST: According to Bloomberg:
The United Arab Emirates has seized a ship carrying North Korean-manufactured munitions, detonators, explosives and rocket-propelled grenades bound for Iran in violation of United Nations sanctions, diplomats said.
The UAE two weeks ago notified the UN Security Council of the seizure, according to the diplomats, who spoke on condition they aren’t named because the communication hasn’t been made public. They said the ship, owned by an Australian subsidiary of a French company and sailing under a Bahamian flag, was carrying 10 containers of arms disguised as oil equipment.
The council committee that monitors enforcement of UN sanctions against North Korea wrote letters to Iran and the government in Pyongyang asking for explanations of the violation, and one to the UAE expressing appreciation for the cooperation, the envoys said. No response has been received and the UAE has unloaded the cargo, they said.

he Security Council voted on June 12 to adopt a resolution that punishes North Korea for its recent nuclear-bomb test and missile launches through cargo inspections and enforcement of restrictions on financial transactions. The measure calls for the interdiction at seaports, airports or in international waters of any cargo suspected of containing arms or nuclear or missile-related materials going to or from North Korea.
According to the Wall Street Journal:
According to the Security Council diplomat, the weapons were carried on an Australian vessel, the ANL-Australia, which was flying under a Bahamian flag. According to an Aug. 14 letter sent to the U.N. sanctions committee, the exporting company was an Italian shipper, Otim, which exported the items from its Shanghai office.
“The cargo manifest said the shipment contained oil-boring machines, but then you opened it up and there were these items,” the diplomat said. ANL and Otim officials couldn’t immediately be reached to comment.

A spokeswoman for the Australian Department of Foreign Affairs and Trade said the Australian government is aware of the incident and is investigating to determine whether any Australian laws may have been broken.
The seizure could also raise fresh questions about North Korea’s intentions. After taking an aggressive stance against the West earlier this year, Pyongyang appears to have softened its rhetoric, releasing two captive American journalists and sending a delegation to meet with South Korea’s president.
Read more here:
UAE Seizes North Korean Weapons Shipment to Iran
Bloomberg
Bill Varner
8/28/2009

Cargo of North Korea Matériel Is Seized en Route to Iran
Wall Street Journal
Peter Spiegel and Chip Cummins
8/29/2009

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Australia grants aid to DPRK

Tuesday, January 13th, 2009
According to the AAP via The Age (Australia):
Australia has granted $3.75 million in humanitarian aid to North Korea.
Foreign Affairs Minister Stephen Smith said the funds comprised $2 million for the World Food Program for emergency food for North Korea, $1 million for Unicef for emergency water and water sanitation supplies and $750,000 for the Red Cross.
Read the full story here:
Australia grants $3.75m aid to N Korea
The Age 
1/13/2009

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Petrov on DPRK-Australian relations

Wednesday, September 24th, 2008
The Nautilus Institute has published an aritcle by Leonid Petrov on 60 years of Australian/DPRK relations.
Topics covered: on again/off agian diplomatic history, Australian foreign policy, bilateral relations, DPRK engagement with Australia, Pong Su (drug smuggling), denuclearization, economic sanctions, DPRK canberra embassy closing.
You may read the article on line here.
You may download a PDF of the article here: petrov-australia-dprk.pdf
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North to close embassy in Australia next month

Thursday, January 31st, 2008
Unlike most other nations’ embassies, North Korean offices must not only self-finance their operations but they must also send money back home.  It looks like they were finding it hard to make a living in Canberra.  Though an enjoyable town, Canberra is so far from most of the economic action in Australia that they were probably unable to close any deals.  In the future, they should consider opening a consulate in Sydney–if they can afford the rent.
Joong Ang Daily
1/23/2008

North Korea can’t afford the bills anymore, so it will close its embassy here, Australia’s foreign ministry said yesterday.
North Korean diplomats informed Australian officials in November that the four-person embassy, located in a diplomatic quarter of Australia’s capital Canberra, would shut in February.
“The embassy advised that they plan to continue with non-resident diplomatic accreditation from Jakarta,” a foreign ministry spokesman told Reuters. The mission said in a letter it was closing due to “financial reasons.”
“The DPRK said it would consider reopening if its financial situation improves,” the spokesman said, referring to the North’s official name, the Democratic People’s Republic of Korea.
Australia is one of few Western countries to have diplomatic ties with the reclusive state. Pyongyang opened its embassy in May 2002.
In September 2006, Australia announced sanctions against 12 companies and one person connected with financing Pyongyang’s nuclear weapons program, including a visa ban on North Korean nationals and on North Korean shipping.
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25 pct of Kaesong-made goods exported this year, ministry says

Sunday, June 10th, 2007
Yonhap6/10/2007
Products made in an inter-Korean industrial park in the first four months of the year were valued at US$48.1 million, about 24 percent of which, or $11.3 million worth of products, were exported, South Korea’s unification ministry said Sunday.
Last year’s comparable figure during the cited period was 18.4 percent, or $2.3 million, according to the ministry.
The industrial complex, located in the North Korean border city of Kaesong, is one of two flagship projects the South operates with the North in the spirit of reconciliation that developed following the historic inter-Korean summit in 2000.
Over 13,000 North Korean workers are currently employed by 22 South Korean companies there. They produce garments, utensils and other labor-intensive goods.
The biggest importer of Kaesong-made goods was the European Union (EU), followed by China, Russia and Australia.
The ministry did not give figures on how many goods made in the industrial park the countries imported.
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Australia to provide $4m aid to N Korea

Friday, April 27th, 2007
Austrailian Associated Press
4/27/2007

Australia will provide almost $4 million in humanitarian aid to a hungry and malnourished North Korea.
Millions of the 23 million people in the communist country are living in poverty.
Foreign Minister Alexander Downer said Australia’s $4 million commitment will focus on improving the health, hygiene and nutrition of North Koreans.
“Thirty-seven per cent of North Koreans suffer from chronic malnutrition, and two-thirds of North Korean children do not receive enough food because of a one million tonne food shortfall,” Mr Downer said in a statement.
“Many North Koreans also lack access to clean water and sanitation.”
Mr Downer said Australia’s assistance will be provided through a number of United Nations agencies and the International Red Cross.
About $1.5 million will go towards UNICEF’s water and sanitation program.
A further $1.5 million will provide food for 1.9 million people through the World Food Program.
The rest of the money will be spent on emergency health and essential medicines, disaster management, water supply and sanitation.
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Australia to send diplomatic team to N.K.

Monday, February 26th, 2007
Korea Herald
Yoav Cerralbo
2/26/2007

Last week, the Australian government announced that it would be sending a diplomatic team to North Korea to help strengthen bilateral ties.
In Seoul, Australian Ambassador Peter Rowe spoke about this news with The Korea Herald, explaining that the Australian team will be looking at ways they can help in energy, aid and safeguards expertise.
“These are things that Australia can contribute,” he said.
Rowe said that Australia, a strong proponent of the Nuclear Nonproliferation Treaty, would be “happy” to provide expertise and training in nuclear safeguards as part of North Korea’s dismantling process.
This bilateral exchange is not new to both countries. After the 1994 framework agreement, Australia helped to train and install safeguards in North Korea.
“That was when we started to develop the bilateral relationship,” he said. “It was only as the North Koreans were doing things like missile and nuclear tests that we had to run backwards.”
He added that Australia wants to see North Korea as a constructive, positive member of the international community.
“If North Korea wants to join the international community in this process, that is return enough for us because it contributes to regional security and stability,” the ambassador said.
The diplomatic mission would be coordinated with the other members of the six-party talks and as the secretive and unpredictable regime fulfills the benchmarks that were set up in the deal, Australia would be there in support and would reciprocally increase the relationship.
The idea of this mission, Rowe said, is to urge North Korea to fulfill the obligations they’ve undertaken in this most recent agreement. “That will be its main task.”
At the six-party talks recently, fueled-starved North Korea agreed to start the process of shutting down their Yongbyon nuclear reactor within 60 days in return for initial aid equal to 50,000 tons of heavy fuel oil after international inspectors have confirmed the shutdown.
“I’m reasonably confident that North Korea will go with the commitments they made for the first 60 days,” he said.
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Australia to ban N Korean ships

Monday, October 16th, 2006
BBC
10/16/2006

Australia is to ban North Korean ships from entering its ports in response to its claimed nuclear bomb test, the foreign minister has announced.
Alexander Downer told Parliament the move would help Australia make a “quite clear contribution” to other sanctions agreed by the UN on Saturday.
The UN resolution imposes both weapons and financial sanctions on the North, but despite the unanimous vote, disagreements have emerged between the members of the council.
Beijing has indicated that it still has reservations about carrying out the extensive cargo inspections that Washington says are called for in the resolution.
Ship inspections
Australia is one of the few countries to have diplomatic relations with North Korea, but its trade ties are limited. In 2005, imports amounted to A$16m ($12m).
“If we are to ban North Korean vessels from visiting Australian ports then I think that will help Australia make a quite clear contribution to the United Nations sanctions regime.”
Japan, which banned North Korean ships from its ports last week, is looking at whether it can provide logistical support for US vessels if they start trying to inspect cargo ships going to or from North Korea.
The restrictions imposed by Japan’s pacifist constitution may require the government to pass new laws to allow that to happen.
In a further diplomatic drive, US Secretary of State Condoleezza Rice is due to arrive in Japan on Wednesday.
She reportedly intends to reassure the country that Washington will provide adequate protection in the event that North Korea obtains a viable nuclear weapon – a message she will later take to South Korea.
‘Heavy responsibility’
The UN resolution against North Korea was agreed after lengthy negotiations.
It imposes tough weapons restrictions, targets luxury goods and imposes a travel ban on some North Korean officials.
It also allows the inspection of cargo vessels going in and out of North Korea for banned materials, although the resolution was weakened slightly at China and Russia’s insistence, to make this provision less mandatory.
Beijing’s UN envoy, Wang Guangya, said immediately after the vote that China urged countries to “refrain from taking any provocative steps that may intensify the tension”.
Both Russia and China are concerned that inspections could spark naval confrontations with North Korean boats.
But the US ambassador to the UN, John Bolton, told American television that China had voted for the sanctions and therefore “China itself now has an obligation to make sure that it complies.”
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Australia, Japan roll out curbs on Pyongyang

Tuesday, September 19th, 2006
Joong Ang Daily
Ser Myo-ja, Lee Sang-il
9/20/2006

Japan and Australia yesterday announced new sanctions against North Korea in another sign of increased financial pressure on the communist state, which has declared it possesses nuclear arms.
The announced purpose of the sanctions was to push Pyongyang back to six-party talks in Beijing to disarm the country in return for diplomatic recognition and financial aid.
In Washington, U.S. officials also signaled that additional sanctions against the North may be in store.
In Tokyo, the cabinet approved a partial freeze on North Korean assets in Japan, imposing restrictions on 15 North Korean agencies or companies and one individual.
“This shows the resolve of the international community and Japan,” said Shinzo Abe, the chief cabinet secretary and heir-apparent to Prime Minister Junichiro Koizumi.
The restrictions on financial transactions were directed, Tokyo said, at figures related to North Korea’s missile and nuclear programs.
After North Korea test-launched a barrage of missiles in early July, Tokyo barred the entry of a North Korean ship to its ports for six months and forbade the entry of North Korean government officials into Japan.
Australia, one of the few Western countries that had diplomatic relations with North Korea, acted the same day, imposing similar bans on financial transactions by people and companies it said were involved in North Korean arms programs.
Foreign Minister Alexander Downer told the press, “This supports and complements similar action taken by Japan today and previous actions taken by the United States, and sends a strong message to North Korea.”
In Washington, a State Department official told Korean journalists in a background briefing that the United States might reimpose sanctions lifted after an accord in 1994, which temporarily reduced tensions over the North’s nuclear programs. He said a proposal to restore the sanctions existing before 1994 was being studied. The relaxation was modest; U.S. companies were allowed to offer telephone service to North Korea and import some raw materials.
In Seoul, Song Min-soon, the Blue House senior security advisor, reacted cautiously to the announcements, saying it would be “inappropriate” to comment on sanctions imposed by other governments. He said the matter was one for capitals to decide, based on a United Nations Security Council resolution critical of North Korea’s missile and nuclear programs and those nations’ own laws.
Separately, Beijing rebuffed a U.S. invitation to a meeting Thursday of financial ministers in New York to discuss North Korea.
From the BBC:
New sanctions target North Korea

Japan and Australia have announced new financial sanctions against North Korea, stepping up pressure on the secretive state over missile tests.
The sanctions will freeze the transfer of money to North Korea by groups suspected of having links to its nuclear or missile programmes.
The move, which follows similar action by the US, comes after Pyongyang launched several missiles in July.
South Korea has urged other countries not to push the North into a corner.
The South is worried that the North may retaliate by carrying out a nuclear test, which would destroy any remaining hope of a diplomatic solution to the stand-off.
Japanese government spokesman Shinzo Abe said the new sanctions were in line with a United Nations resolution which denounced the missile tests.
The Japanese measures affect 15 groups and one individual, and will come into effect later on Tuesday, according to Japanese media.
The Australian measures applied to 12 companies and one person, according to Foreign Minister Alexander Downer, who said the sanctions were “consistent with our strong international stand against the proliferation of weapons of mass destruction.”
Media reports said the two lists were almost identical.
Tough stance
North Korea’s decision to test-fire seven missiles in July – including a long-range Taepodong-2 which is believed to be capable of reaching Alaska – angered the international community.
A UN resolution demanded that North Korea suspend its ballistic missile programme, and barred all UN member states from supplying North Korea with material related to missiles or weapons of mass destruction.
In the immediate aftermath, Japan imposed limited sanctions, including a decision to ban a North Korean trade ferry from Japanese ports and a moratorium on charter flights from Pyongyang.
The new measures also called for closer scrutiny of those wanting to send money or transfer financial assets to North Korea.
“By taking these measures, we have demonstrated the resolve of the international community and Japan,” said Chief Cabinet Secretary Shinzo Abe.
“I do not know how North Korea will respond, but I hope North Korea will accept the UN Security Council resolution in a sincere manner.”
The BBC correspondent in Tokyo, Chris Hogg, says there is still some doubt about how effective these sanctions will be.
Although Japan looks to be clamping down on North Korea, other countries that exert a strong influence on the country – notably China and South Korea – are reluctant to impose similar measures.
Following the Japanese announcement, China restated its opposition to sanctions and called for further dialogue.
Nuclear fears
In addition to fears over North Korea’s missile programmes, the international community is also worried about its nuclear intentions.
The United States, China, Japan, Russia and South Korea have repeatedly tried to persuade the North to abandon its nuclear programme.
But the so-called six-party talks have been on hold since November 2005, because North Korea refuses to attend until Washington lifted economic restrictions against it.
Exactly a year ago, North Korea agreed in principle to give up its nuclear weapons programme in return for economic help and security guarantees.
The move was greeted by surprise and relief, but a joint statement issued at the time failed to bridge the wide gulf between North Korea and the US. One year on, the North remains as isolated as ever.
The region remains on alert in case Pyongyang decides to follow up on the July ballistic missile tests with a nuclear test.
Analysts say the North has enough plutonium for several bombs, but has yet to prove it can build a reliable weapon.
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N Korean report raises Pong Su compo claim

Wednesday, March 29th, 2006
Australia Broadcasting Corporation (Reuters)
3/29/2006

North Korea hinted at seeking compensation from Australia for seizing and sinking the Pong Su, that was used to transport drugs, according to a state media report.
Last week, two Australian fighter jets bombed and sank the impounded North Korean cargo ship in what Foreign Minister Alexander Downer said was a strong message to Pyongyang about its suspected involvement in drug running.
The official KCNA news agency cited a relatively obscure pro-North Korean group as saying Australia needs to compensate North Korea.
“The Australian authorities should make an honest apology to it according to the results of the trial and compensate to the ship and its crewmen for the human, material and mental damage done to them,” KCNA reported the Federation of Koreans in the United States as saying in a commentary.
There was no official demand for compensation from North Korea but analysts have noted that since the government controls the media, it only permits approved comments to appear.
The 4,000-tonne ship the Pong Su had been impounded since 2003, when it led the Australian navy on a 1,100 kilometre chase off the south-eastern coast after being spotted unloading part of a 150 kilogram shipment of heroin at a secluded beach.
Eight crew members were charged with drug smuggling.
The captain and three officers were sent back to North Korea earlier this month after being found not guilty of aiding the drug operation. Four other men have been found guilty of drugs charges relate to the case.
The United States has said it suspects North Korea of engaging in illicit activities such as counterfeiting and drug trafficking as a way to secure funds for its anaemic economy.
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N Korean heroin ship sunk by jet

Thursday, March 23rd, 2006
BBC
3/23/2006

Video of the ship’s destruction on Youtube
A North Korean cargo ship that was used to smuggle heroin into Australia has been sunk by an Australian fighter jet.
An F-111 aircraft bombed the Pong Su during target practice on Thursday at a secret location offshore, police said.
Australian troops seized the ship in 2003 after spotting it unloading part of a huge heroin shipment at a beach.
The Australian government said the bombing was a warning to North Korea to halt its involvement in drug smuggling – an allegation Pyongyang rejects.
“It is appropriate that we publicly demonstrate our outrage at what has happened by sinking this ship,” Foreign Minister Alexander Downer said.
Captain cleared
“We are concerned about possible links between the North Korean ship and the North Korean government.”
The Pong Su’s cargo of heroin, worth about US$115 million (£66 million), would have provided four million hits of the drug on Australian streets, Mr Downer said.
Earlier this month, an Australian jury cleared the captain of the Pong Su and three officers of involvement in an international drug ring.
But four crew members who were involved in transporting the heroin from ship to shore pleaded guilty to drug charges.
Two have been sentenced to 22 and 23 years in prison and the other two are awaiting sentence.
The 3,500-tonne Pong Su was used to smuggle in more than 125 kilograms of heroin.
High-sea chase
It had anchored off the town of Lorne in Victoria state while the cargo was carried ashore by dinghy.
It was seized in April 2003 after a four-day chase by the Australian navy.
Earlier this week, the freighter was towed out of Sydney Harbour to a location 140km (90 miles) off the coast of eastern Australia, the Australian Federal Police said.
The fighter jet then dropped the bomb that sank the ship, the police added.
Although North Korea has denied any link to the smuggling operation, Mr Downer said it was hard to imagine a shipping company acting on its own in Pyongyang’s Stalinist-style economy.
“I mean this isn’t, after all, a private sector economy where private companies are doing things on their own accord,” Mr Downer said.
“North Korea has been involved in illicit drug trade, North Korea has been involved in illicit financial dealings, and North Korea has been involved in the illicit trade in WMD (weapons of mass destruction) technology over quite some years,” he added.
Australia and the United States have said the case of the Pong Su strengthens their suspicions that Pyongyang deals in drugs to help support its failing economy.
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