Tensions in the region remain high as the North continues to defy international calls to dismantle its nuclear programme.

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Kim's remarks came as the UN Security Council moved closer to finalising a list of North Korean firms and individuals for addition to a sanctions blacklist for involvement in the country's nuclear and missile programmes.

Following Pyongyang's nuclear test on May 25, the 15-member council imposed sanctions on the North, banning all weapons shipments except small arms, and authorising cargo inspections.

It has since been discussing a list of entities, goods and individuals to be subject to the sanctions.

"Unlike before, the list they are working on will include North Korean individuals this time," a Seoul government official told AFP on condition of anonymity. "You may say sanctions are toughening."

Previous sanctions did not target individuals, but companies whose overseas assets were frozen.

The measure would prohibit companies and nations around the world from doing business with the listed firms and require them to freeze assets and impose travel bans on named individuals.

US warnings

US officials meanwhile said they are succeeding in increasing international awareness on methods they say North Korea uses to disguise its trade in illicit weapons as legal business transactions.

The UN Security Council is expanding a blacklist of North Korean interests [AFP]
A US team is travelling to key world capitals to warn governments and banks that North Korean practices make it "virtually impossible to distinguish between legitimate and illegitimate business", an unnamed official said in Washington.

The official added that firms and governments in China, Hong Kong and other places with business ties with North Korea were taking seriously the US warnings about Pyongyang's use of front companies and unusually large cash transactions.

Arms sales are a vital source of foreign currency for the impoverished North which has a broken economy that produces few other items for export.

The US-based Institute for Foreign Policy Analysis estimates that the North earns some $1.5bn a year from missile sales alone, while other studies say the figure may be in the hundreds of millions which prior sanctions have cut into.

"We're confident of an outcome which will be commensurate with [North Korea] actions and will be effective and will significantly improve the [sanctions] regime," said a Western diplomat, requesting anonymity.