Japan Rejects Sanctions on N. Korea in Nuclear Dispute : Asia: But it will monitor the reported flow of technology, cash to Pyongyang, official says.

Foreign Minister Tsutomu Hata ruled out Japanese economic sanctions against North Korea to dissuade it from building a nuclear bomb, but he pledged Tuesday to monitor the reported flow of technology and cash to Pyongyang from Korean residents in Japan.

Hata, in an appearance before the Japan National Press Club, disclosed that as much as $1.8 billion is sent annually from Japan to North Korea, according to estimates by the government Cabinet Information Research Office. The sum is believed to include banking remittances from the pro-Pyongyang group in Japan, Chosensoren.

He also expressed concern about reports that Japanese high technology is being smuggled into Pyongyang to help develop the nation’s military program in violation of international export restrictions under COCOM (the Coordinating Committee for Multilateral Export Controls).

But Hata said that Japanese pressure on Pyongyang could cause North Korea to “erupt violently” and, therefore, ruled out economic sanctions against the isolated Communist regime of Kim Il Sung, barring a decision on the issue by the U.N. Security Council.

“The important thing is that we continue to negotiate,” he said.

Hata’s remarks were the first public statement on the issue by the coalition government of Prime Minister Morihiro Hosokawa. The clandestine conduit of money and materiel between Japan and North Korea, which has attracted growing international concern, presents a sensitive situation here.

The Socialist Party, the coalition’s single largest group, officially supports Pyongyang over Seoul. In addition, former Liberal Democratic Party kingmaker Shin Kanemaru was a strong backer of Kim’s regime. Several top politicians in other parties also harbor friendly ties.

With such political connections, as well as the large pro-Pyongyang constituency in Japan, the government would be unable to crack down on the money flow to Pyongyang in the absence of international sanctions, one Japanese official said.

Katsumi Sato, director of the Modern Korean Institute in Tokyo, said such official neglect has allowed Pyongyang to acquire the capital and high-technology needed for its military buildup, including a nuclear bomb.

Last month, the institute interviewed North Korean defector Lim Song Son, a first army lieutenant, who said that Chosensoren was routinely violating COCOM restrictions and shipping Japanese communications equipment, microchips and other high-tech equipment to Pyongyang.

Sato, a former Communist and North Korean supporter, has urged economic sanctions against Pyongyang, saying the regime understands only force.

Meanwhile, South Korean President Kim Young Sam on Tuesday played down U.S. intelligence reports that North Korea has developed a nuclear bomb.

“North Korea has strong intentions to develop nuclear weapons. But (I) cannot say North Korea possesses any nuclear arms at the moment,” Kim was quoted as saying by the Yonhap news agency in Seoul.