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My Profile Top News Reuters top ten news stories delivered to your inbox each day. Subscribe You are here: Home > News > International > Article Home Business & Finance News U.S. Politics International Technology Entertainment Sports Lifestyle Oddly Enough Health Science Special Coverage Video Pictures Your View The Great Debate Blogs Weather Reader Feedback Do More With Reuters RSS Widgets Mobile Podcasts Newsletters Your View Make Reuters My Homepage Partner Services CareerBuilder Affiliate Network Professional Products Support (Customer Zone) Reuters Media Financial Products About Thomson Reuters U.S. to impose financial sanctions on North Korea: report Thu Jun 4, 2009 9:57pm EDT Email | Print | Share | Reprints | Single Page [-] Text [+] By Jack Kim SEOUL (Reuters) - The United States has told South Korea it is preparing financial measures to punish North Korea for illicit weapons trade and counterfeit activities in the wake of its nuclear test last week, a newspaper report said on Friday. North Korea has been ratcheting up regional tensions since it fired a long-range rocket over Japan in April, and on Thursday the hermit state put two female U.S. journalists on trial accused of illegally entering its territory with "hostile intent." Analysts say the pair, who were working for the Current TV network co-founded by former U.S. Vice President Al Gore, have become bargaining chips in high-stakes negotiations with the United States, which has long sought to end the North's nuclear ambitions. U.S. Deputy Secretary of State James Steinberg, who was due to fly to China later, has been on a four-day visit to Seoul accompanied by a senior Treasury official who oversaw previous financial punishment of the North over counterfeiting, money laundering and drug-running. "The U.S. delegation led by Steinberg explained when visiting President Lee Myung-bak and others Washington's own sanctions against the North centered around financial sanctions," the Chosun Ilbo daily quoted a presidential Blue House official as saying. The delegation included Stuart Levey, undersecretary at the U.S. Treasury for terrorism and financial intelligence, who was in the same position in the previous U.S. administration that imposed sanctions on a Macau bank which effectively shut off the North's access to the international financial system. "If BDA (Banco Delta Asia in Macau) was against a single bank, this time it is about cutting off transactions with banks that are suspected of being involved in the North's WMD (weapons of mass destruction) trade," the newspaper report said. The 2005 crackdown on BDA froze $25 million in funds of Pyongyang's leadership. Most banks around the world steered clear of North Korean funds as a result, fearful of being snared themselves by U.S. financial authorities. Bankers at the time said that as a result North Korea was forced to move its money around in suitcases of cash. The North boycotted six-party nuclear disarmament talks, involving the two Koreas, the United States, Russia, Japan and China, until Washington executed an elaborate scheme to transfer the money to the North in 2007. SUPERNOTES South Korean media reports this week have said that so-called "supernotes" -- high quality counterfeit U.S. dollars from the North -- have surfaced recently in the southern port city of Busan. There has been no official comment. North Korea fired a long-range rocket in early April and conducted its second nuclear test last month, drawing international condemnation. The U.N. Security Council is discussing a new resolution over the nuclear test. Steinberg reportedly said while meeting Lee that Washington would not repeat the previous mistake of rewarding Pyongyang's leaders with negotiations for its military provocations. The Chosun Ilbo newspaper, quoting a diplomatic source, also said Gore may visit Pyongyang as early as this weekend in an effort to secure the release of the two journalists once a widely-expected guilty verdict has been delivered. Continued... View article on single page Share: Del.icio.us Digg Mixx Yahoo! Facebook LinkedIn Next Article: Philippine army kills 13 rebels in heavy fighting Afghanistan and Pakistan Fighting the Taliban A growing insurgency in Afghanistan is also spreading deep into Pakistan, making both countries crucial to U.S. war efforts in the region. Full Coverage More International News Obama seeks to change Muslim perceptions of U.S. | Video UK PM Brown battles to hold on in face of revolt Speed an issue in Air France crash, search goes on | Video Philippine army kills 13 rebels in heavy fighting China security tight in Tiananmen | Video More International News... Video U.S. journalists in N.Korea trial Play Video More Video... Related News FACTBOX: A look at North's Korea's international finances 04 Jun 2009 Featured Broker sponsored link Editor's Choice Slideshow A selection of our best photos from the past 24 hours. Slideshow Most Popular on Reuters Articles Video Thai coroner seeks cause of "Kung Fu" actor's death | Video UPDATE 6-Speed an issue in Air France crash, search goes on Angelo Mozilo, mortgage risk-taker charged with fraud Record turnout at Hong Kong Tiana UK PM Brown battles to hold on in face of revolt Speed an issue in Air France crash, search goes on | Video "Kung Fu" actor David Carradine found hanged in Thai hotel "Give it away, you'll enjoy it," Gates tells rich Five Features Bing Shouldn't Be Getting Credit For Carradine's "Americana" was one from the heart Most Popular Articles RSS Feed Video Gaming fans flock to E3 A blunt message for Arabs, Israel IATA: Air France crash "tragedy" David Carradine dead Obama visits the pyramids Leaving Sadr City No gas for this air-powered car Tiananmen vigil in Hong Kong China's Tiananmen anniversary Obama: Islam promotes peace Most Popular Videos RSS Feed The Great Debate Fearing the supermen of Guantanamo Bernd Debusmann The language used in the debate over plans to close the detention center has taken on a surreal quality and convey the impression that Guantanamo detainees will wander the streets, shopping for sandals and guns. 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