Japan eyes sanctions on NKorea this month -paper

TOKYO, Sep 14 (Reuters) Japan may freeze as soon as this month the financial assets of groups and individuals it suspects of links to North Korea's development of weapons of mass destruction, a newspaper said today.

The freezing of bank assets would be in line with a United Nations resolution passed after Pyongyang stunned the region with a barrage of missile tests in July, the Mainichi Shimbun said.

With the North showing no willingness to return to six-way talks on its nuclear programme, the Japanese government has decided further action is necessary, possibly before Prime Minister Junichiro Koizumi steps down on September 26, the report said.

North Korea has said it would treat Japanese sanctions as a declaration of war.

Japanese officials said no decision had yet been made.

''The UN resolution allows for restrictions on financial assets.

We want to use this appropriately and government officials are making preparations, but no concrete decision has been made on the timing,'' Deputy Chief Cabinet Secretary Jinen Nagase told reporters at the prime minister's residence.

Koizumi reiterated this, telling reporters: ''It's essential to cooperate and stay in contact with the United States and South Korea.'' He also said no decision had been made on the timing of such an action.

The financial sanctions would likely affect more than 10 groups and individuals, preventing them from withdrawing funds or sending money abroad from accounts with banks and other financial institutions in Japan, the paper said.

The groups include ten already subject to US sanctions, mostly North Korean trading companies and financial institutions, the report said.

The restrictions would likely have limited direct impact on North Korea, but would put pressure on other countries to step up their own sanctions, the Mainichi said.

Japan has already banned from its ports for six months a North Korean ferry that provides the only direct passenger link between the two countries and barred the entry of government officials from the communist state.

North Korea pulled out of the synchronised swimming World Cup competition in Japan after Tokyo barred three team members from entering the country under the sanctions, a spokesman for Chongryon, a group representing North Koreans in Japan, said today.

Koizumi's heir apparent, Shinzo Abe, has become a popular figure at home thanks to his hard line on North Korea and support for relatives of Japanese abducted by Pyongyang agents in the 1970s and 1980s.

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