U.S. Weighs Its Own Sanctions On N. Korea

The United States said Friday it is considering slapping its own financial sanctions on North Korea in addition to whatever punishment the United Nations imposes for the North's recent nuclear test.

State Department spokesman P.J. Crowley told reporters that U.S. action "within the banking sector certainly did get North Korea's attention previously, and if we can find ways that we can do that, we will do so."

In 2005, nuclear talks reached a crisis when the United States blacklisted a bank in the Chinese territory of Macau accused of helping North Korean money laundering and other illicit activities. The U.S. crackdown is believed to have severely hurt North Korean financial dealings, effectively severing the North from the international financial system as worried banks quit dealing with Pyongyang.

The U.S. search for "financial levers" is meant to push North Korea back to stalled nuclear disarmament talks, Crowley said. "That's our ultimate objective, and we will continue to use whatever levers that we see available and we think will be effective," he said.

He did not provide specific details of possible U.S. sanctions.

"The Obama Administration is essentially reimposing financial santions that were rolled back by President Bush, in order to pressure Kim Jung Il to return to the Six-Party Talks," said CBS News foreign affairs analyst Pamela Falk from the U.N.

"The unilateral sanctions, including the freezing of funds of several North Korean leaders, did bring the government of Pyongyang back to the bargaining table in the past," Falk reports, "but the problem is that the North Korean government keeps breaking the deal and the price goes up each time."

A Western diplomat tells CBS News that after the U.S. and China met on the ambassadorial level earlier this week, Security Council members are getting closer to circulating a new and stern draft resolution to condemn North Korea for its nuclear and missile tests.

A South Korean newspaper reported Friday that U.S. Deputy Secretary of State James Steinberg briefed South Korea's president on possible U.S. sanctions, calling for blacklisting foreign financial institutions that help the North launder money.

Steinberg was accompanied during recent meetings in Asia by Stuart Levey, a senior Treasury Department official who oversaw the Macau bank's blacklisting in 2005.

After the blacklisting, six-nation nuclear talks reached an impasse after the North refused to move on its pledge to shut down its nuclear reactor until it received $25 million in frozen funds in accounts at Banco Delta Asia in Macau.

Crowley said Levey's presence on Steinberg's trip indicates that the United States is "looking at other ways that we can bilaterally put pressure on North Korea to return to a negotiating process."

His comments came as the North appeared to be preparing to test a missile that could reach the United States. Last week, Pyongyang conducted a barrage of missile launches and an underground nuclear test that violated previous U.N. Security Council sanctions.

Diplomats at the United Nations are trying to reach an agreement on new sanctions against North Korea for defying the Security Council and conducting a second nuclear test.

Separately, Crowley had little information about another tense matter with the North: two American journalists were believed to be on trial in North Korea's top court on allegations they entered the country illegally and engaged in "hostile acts." The North's official news agency said the proceedings were to begin Thursday but no further details were available on Friday.

Crowley said he had no independent confirmation that the trial of Laura Ling and Euna Lee was going on. The United States relies on Sweden for diplomatic dealings in the North, but Crowley said the Swedish ambassador in Pyongyang has had no contact with the two journalists since Monday. At that time, Crowley said, the ambassador found the women "to be, under the circumstances, in reasonably good health."

He said the women, who were working for former Vice President Al Gore's California-based Current TV, had North Korean defense lawyers.