North Korea is pressing ahead with its preparation to launch a long-range rocket this month, placing the second stage of the launch vehicle in position on Tuesday, a Seoul government source said.
It is now in the process of installing the last and third stage of the rocket in the Dongchang-ri launch site in Cheolsan, North Pyongan Province, the official added, declining to be named.
Pyongyang is expected to finish the assembly work by as early as today to carry out the launch slated for between December 10 and 22. Seoul and Washington believe that it is a missile test disguised as a satellite launch.
After assembling the rocket, other components such as power supply and fuel injection cables will be put together—the final process, which is expected to take an additional week, experts said.
With the liftoff impending, Seoul and Washington are now focusing on mapping out new, tougher sanctions.
Since last week, the allies have discussed the scope and content of additional punishment based on a shared recognition that the previous measures taken in response to its failed launch in April were not effective.
Seoul's chief nuclear envoy Lim Sung-nam left yesterday for Washington where he is to meet US officials including Glyn Davies, US special envoy for North Korea policy, and Robert Einhorn, US special adviser for nonproliferation and arms control.
"In line with our government policy to respond to North Korea’s missile launch in a calm yet stern manner, [I] plan to have a consultation with the US side with a focus on intensifying diplomacy to block the launch and expanding bilateral cooperation with the US," Lim told media before departing for the US.
Seoul's Foreign Ministry spokesperson Cho Tai-young said that Pyongyang would face "due consequences" should it go ahead with the launch, as it would constitute a "grave" breach of UN Security Council Resolutions 1718 and 1874.
The allies appear to be considering a set of tougher sanctions.
They include adopting a UN Security Council statement containing stronger international denunciation; freezing North Korea's financial assets deposited at foreign banks; and expanding an existing sanction to block the passage of North Korean ships carrying military exports.
Pyongyang announced last Saturday it would launch a long-range rocket carrying a "polar-orbiting working satellite" between December 10 and 22.
The North has notified the International Maritime Organisation and the International Civil Aviation Organisation of its launch plan. It said that the first-stage propellant is to fall in waters some 140 kilometres from Gyeokpo Port in South Korea's North Jeolla Province while the second-stage propellant should drop in waters some 136 kilometres east of the Philippines.
For possible financial sanctions, Seoul and Washington are mulling the "Banco Delta Asia" model. It is to ban US banks' transactions with foreign financial institutions that manage funds associated with North Korea's illicit activities, including money laundering.
In 2005, Washington sanctioned the Macau-based Banco Delta Asia (BDA), which managed some US$25 million for Pyongyang, for purportedly helping the North launder illegally earned money.
To apply this type of sanction, observers say China's help would be critical.
North Korea is thought to have its foreign financial assets under some Chinese-based bank accounts. In addition to this, Pyongyang has already altered the way it manages financial assets, so as to avoid possible BDA-style sanctions, analysts said.
"North Korea currently has no official financial dealings with foreign banks as it had done in the past before the BDA sanctions. It appears to have some accounts at Chinese banks. But if these banks are sanctioned, diplomatic tension could flare up with China," an observer was quoted as saying in the media.
China's Foreign Ministry urged "all sides" to avoid any action that "worsens the problem."
"China believes that maintaining peace and stability on the Korean Peninsula and in Northeast Asia accords with the interests of all sides and is the joint responsibility of all sides," ministry spokesman Hong Lei told reporters.
Some others argued that all talks about anti-Pyongyang sanctions could prompt the North to conduct a third nuclear test or launch another set of provocations, which could destabilise the region.
Because of this, some experts argue that China would not actively apply sanctions against its impoverished ally.
For China's new leadership, the top priority may be to maintain regional stability as it should first focus on tackling domestic challenges such as income disparities, regional imbalances, corruption and a slowing economy to name a few, they noted.
In addition to deepening cooperation with its ally the US, Seoul has been beefing up diplomacy to secure cooperation from other participants in the six-party denuclearisation talks including Japan and Russia. Japan has ordered its Self-Defence Forces to be ready to shoot down any incoming rocket from the North.