US President Barack Obama broadened US financial sanctions on North Korea today and froze the US assets of four North Korean citizens and eight firms in part to punish it for the sinking of a South Korean warship.
Mr Obama signed an executive order that allows the United States to block the assets of North Korean entities that trade in conventional arms or luxury products, counterfeit currency or engage in money laundering, drug smuggling or other "illicit economic activity" that supports the government or its leaders.
The administration targeted one North Korean citizen and three entities under the new order, designed go after the North Korean leadership, and an additional three citizens and five state entities under existing US authority.
Perks and luxuries derived from North Korea's shadowy network of overseas interests are believed to be one of the main tools Pyongyang uses to ensure loyalty among top military and party leaders to North Korean leader Kim Jong-il.
It was unclear how the actions, which US Secretary of State Hillary Clinton previewed in July, might affect the odds of reviving multilateral talks on ending North Korea's nuclear programs.
Washington views the atomic capabilities of the North, which tested nuclear devices in 2006 and 2009, as a threat to its allies South Korea and Japan and a proliferation risk.
US-North Korean relations have deteriorated since Mr Obama took office, with his aides deeply unhappy about Pyongyang's decision to conduct nuclear and missile tests last year as well as the March 26th sinking of the South Korean corvette Cheonan.
Forty-six South Korean sailors were killed in the incident, which the United States, South Korea and other nations blame squarely on North Korea. Pyongyang denies responsibility.
In the executive order, posted on the US Treasury website, Mr Obama cited the Cheonan's sinking as well as the nuclear and missile tests as evidence North Korea poses "an unusual and extraordinary threat to the national security, foreign policy, and economy of the United States."
Existing authority allows the United States to go after entities involved in Pyongyang's weapons of mass destruction and ballistic missile programs but not trade in luxury goods and conventional arms.
The main purpose of the sanctions is not to actually freeze North Korean assets that might be in US banks - analysts say there are unlikely to be any - but rather to discourage other banks from dealing with North Korea, thereby cutting off its access to foreign currency and luxury imports.
It was unclear what had determined the timing of the executive order.
North Korea removed one irritant to its relationship with the United States on Friday when it released US citizen Aijalon Mahli Gomes, arrested in January and sentenced to eight years of hard labor for entering the country illegally.
North Korea's state media on Friday said the country's deputy leader had told former US president Jimmy Carter, who secured Mr Gomes' release, that Pyongyang was committed to denuclearising the Korean Peninsula and resuming talks.
The Obama administration has been sceptical about returning to so-called six-party negotiations with the two Koreas, China, Japan and Russia, arguing it does not want to talk for the sake of talking and North Korea must show some commitment to abandoning its nuclear programs.
While there have been reports the Obama administration is debating getting back into talks, several analysts said they were skeptical that this would happen anytime soon.
"I think what they are doing right now is focusing on the military exercises and the new financial sanctions," said Victor Cha, a former National Security Council official now at the Center for Strategic and International Studies think tank.
Alan Romberg, an analyst with the Henry L. Stimson Center think tank, said Mr Obama's moves were partly to punish the North for the Cheonan and partly to pressure Pyongyang to engage seriously on denuclearisation.
"It is also part of a continuing effort to put pressure on the North so that when we get back to denuclearization talks they will get serious," he said, suggesting the additional sanctions may give Washington more leverage in any talks.
The US Treasury posted the names of the North Korean citizens and entities that were sanctioned on its website.
Reuters