The U.S. has every right and responsibility to make sure that bad actors are not included in the dollar-based financial system. The dollar isn't the world's currency, it belongs the to U.S. and the structure behind it is ours to choose.
There are other financial systems that places like Iran and North Korea can choose - there are efforts to develop a Muslim banking system and N.K. can always embed itself in the Chinese system. If neither of these options seem appealing, that's really just too bad for North Korea and Iran. They are appalling regimes and nobody should do business with them. And when you do business with people in Iran and especially North Korea, you are doing business with the regime.
We have to examine why it is that relatively peaceful countries (these days, anyway) like those in Europe can develop a multi-national currency system that people trust and use and yet the Muslim nations cannot. At the end of the day there are objective standards of financial trustworthiness here. Do you pay your debts? Does your legal system provide recourse when your people don't pay their debts.
Say what you want about the U.S. (and I'll probably agree) but if a US financial actor doesn't pay a debt he gets sued, no matter how powerful that actor is, whereas in other countries there are systems with effectively (sometimes overtly) give powerful institutions immunity from civil claims. The civil court system here in the U.S. may not be a democracy as such, but it is certainly about as democratic as they come, especially in its treatment of foreign plaintiffs. I am not suggesting that it is a paragon of virtue and of course it exists to keep the peace among capitalists, not regular citizens, still the people of the U.S. invest a lot of money and resources into keeping our financial system open and accessible and regimes like Tehran and Pyongyang certainly do not deserve access to such a system.
I would be happy if MORE restrictions were placed on the U.S. financial system when it comes to foreign regimes. And if the U.S. system goes too far, well, that forces nations to consider how to come to terms with a multi-national currency system like the Euro. And North Korea and Iran would NEVER be accepted into such a system, as they are now constituted.
Boddi
On 10/12/06, Marvin Gandall <marvgandall at videotron.ca> wrote:
> Given its uncertain military options, the US is relying on its financial
> power - based on the role of the USD as the world's reserve currency - to
> isolate Iran and North Korea from world markets.
>
> The US already prohibits the export of capital and equipment to the two
> countries by its own nationals. (It isn't true, as asserted below, that
> sanctions on North Korea were "effectively lifted" in 2000). US Treasury
> officials are now aggressively "asking" foreign banks and governments to
> follow suit - on the understanding, of course, that their own access to
> American capital markets could be jeopardized if they don't comply. The
> sanctions are also designed to provoke splits within the Iranian bourgeoisie
> and ruling clergy and within the North Korean ruling party and armed forces
> and a turn away from confrontation with the US.
>
> If you can get past the shrill propaganda in the column by the Washington
> Post's Jim Hoagland below, it's a good window on the current strategy being
> pursued by the US in relation to these foreign policy crises.
> =========================================
>
> The Squeeze on North Korea
> By Jim Hoagland
> Washington Post
> Thursday, October 12, 2006
>
> North Korea has, in its own inimitable fashion, paid tribute to a
> little-noticed U.S. push to get the world's bankers to isolate regimes that
> promote nuclear proliferation and terrorism. Who else would claim to have
> conducted a nuclear weapons test and then threaten more blasts to get their
> way in a $24 million banking dispute?
>
> Don't they have any good lawyers in Pyongyang?
>
> North Korea's efforts to blame its crossing of the nuclear-testing threshold
> on U.S. "economic hostility" would be laughable if the regime weren't led by
> world-class paranoids and fantasists capable of believing their own odious
> propaganda. Americans do not have to believe it, however.
>
> Such a regime may be beyond reasoning with or, even worse, deterring in a
> conventional sense, as the Bush administration seems to believe.
>
> But Pyongyang's threats -- if not its excuses -- must be taken seriously and
> met with new forms of containment and pressure. The same is true of Iran,
> the other major target of the Treasury Department's efforts "to isolate bad
> actors from the global financial system" by calling attention to their use
> of banks for rogue operations.
>
> That description comes from Stuart Levey, Treasury undersecretary for
> terrorism and financial intelligence. I happened to call on him yesterday a
> few hours after Pyongyang had threatened more nuclear and verbal blasts if
> the United States continued its "sanctions" policy.
>
> "If the objective was to put pressure on North Korea, well, we succeeded,"
> said Levey, who has joined Deputy Treasury Secretary Robert Kimmitt in
> traveling the globe to persuade other governments to examine and, where
> appropriate, cut financial links to the two remaining members of President
> Bush's "axis of evil."
>
> But the purpose of this effective new effort at using soft power as pressure
> is much broader. According to Levey, Treasury is targeting people who are
> eminently deterrable: "People who are in business are very concerned about
> their reputations and do not want to get involved in illicit activity that
> is under scrutiny. They will make the decisions about whether they continue
> doing business or not. We don't make the decision for them."
>
> So Levey disputes North Korea's characterization of U.S. policy as being one
> of politically driven "sanctions." Treasury's efforts are targeted at
> specific illicit transactions, such as the counterfeiting of U.S. currency;
> the transfer of funds involved in the smuggling of drugs, arms or even
> nuclear-weapons components; and the financing of terrorist operations.
>
> "The United States effectively lifted sanctions against North Korea in 2000,
> and the Bush administration has not reimposed them," Levey asserted. "What
> we are doing is calling attention to the risks involved in being involved in
> these transactions."
>
> The first use of the heavy U.S. financial hammer was against the Macao-based
> Banco Delta Asia, which Treasury identified last year as a "primary
> money-laundering concern" for Pyongyang. The bank, which operates under the
> control of the Chinese government, froze an estimated $24 million in North
> Korean assets rather than risk losing U.S. and other business. Pyongyang is
> still boiling over this perceived affront, as its angry statements this week
> indicated.
>
> "It is important to look beyond this week's developments," Levey said, after
> asking rhetorically if he now needs a security detail. "Look at the
> receptivity of the world's finance ministers to accepting that they have a
> major role to play in the area of global security and intelligence. That is
> the future."
>
> However much its self-imposed isolation might seem to protect it from them,
> North Korea clearly takes these financial pressures seriously. So must Iran.
> Squeezing the regime financially is probably the only hope (however forlorn
> it may turn out to be) of keeping Tehran from going nuclear in a few years.
>
> Iran was forced to announce in August that its oil production will soon
> begin to decline because of a lack of new investment in the oil industry and
> the difficulty of getting new technology from abroad for its aging fields.
>
> Access to foreign capital and advanced equipment will not have been helped
> by the U.S. decision last month to exclude Bank Saderat, one of Iran's
> largest state-owned banks, from buying or selling dollars and other
> financial instruments from U.S. banks. This is in response to Bank Saderat's
> role in transferring millions of dollars to terrorist groups.
>
> In the early days of the Soviet Union, Lenin predicted that capitalists
> would eagerly sell him the rope he would use to hang them. He lost the bet
> when Moscow proved unable to pay for ruling an empire. Treasury's
> sophisticated efforts to deny gangsters in North Korea and Iran access to
> global capital should not be abandoned because of the nuclear bluster from
> Pyongyang and Tehran.
>
>
>
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