updated 6/30/2009 9:46:55 PM ET 2009-07-01T01:46:55

A U.S. official says a North Korean ship has turned around and is headed back the way it came, after being tracked for days by American vessels on suspicion it was carrying illicit weapons.

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The official, who spoke on condition of anonymity to discuss intelligence, says it is unclear whether the Kang Nam is going back to its home port in North Korea or diverting elsewhere.

The ship left a North Korean port on June 17 and is the first vessel monitored under U.N. sanctions that ban the regime from selling arms and nuclear-related material.

It was suspected the Kang Nam was going to Myanmar. But the U.S. official says that after a week-and-a half at sea, it turned around on Sunday or Monday. It was off the coast of Vietnam on Tuesday.

U.S. cracks down on Iranian firm
The announcement of the ship's change of course came Tuesday, the same day the United States imposed financial sanctions on a company in Iran that is accused of involvement in North Korea's missile proliferation network.

The Treasury Department moved against Hong Kong Electronics, a company located in Kish Island, Iran. The action means that any bank accounts or other financial assets found in the United States belonging to the company must be frozen. Americans also are prohibited from doing business with the firm.

It's the latest move by the United States to keep pressure on Pyongyang, whose nuclear ambitions have ratcheted up global tensions.

The designation came as U.S. envoy Philip Goldberg, who is in charge of coordinating implementation of sanctions against North Korea, left for talks Thursday and Friday in China on ways to deal with the North. He was accompanied by senior officials from the Treasury and Defense Departments and the White House.

China's cooperation in enforcing sanctions against its neighbor is seen as crucial to increasing pressure meant to push North Korea to return to nuclear disarmament talks.

Specifically, Treasury alleged that Hong Kong Electronics "has transferred millions of dollars of proliferation-related funds" to North Korea's Tanchon Commercial Bank and Korea Mining Development Trading Corp. The United States has previously moved to financially isolate those two companies, alleging that they have supported the spread of weapons of mass destruction.

Hong Kong Electronics "has also facilitated the movement of money from Iran to North Korea" on behalf of Korea Mining, an arms dealer and main exporter of goods and equipment related to ballistic missiles and conventional weapons, Treasury said. Tanchon, a commercial bank based in Pyongyang, is the financial arm of Korea Mining, the department said.

"North Korea uses front companies like Hong Kong Electronics and a range of other deceptive practices to obscure the true nature of its financial dealings, making it nearly impossible for responsible banks and governments to distinguish legitimate from illegitimate North Korean transactions," said Stuart Levey, the department's undersecretary for terrorism and financial intelligence.

U.S. warns of 'deceptive practices'
Just a few weeks ago, the department's Financial Crimes Enforcement Network warned U.S. banks that North Korea might try to skirt financial sanctions by using various "deceptive practices."

The warning was aimed at making sure North Korea doesn't evade U.N. Security Council sanctions intended to prevent the financing of nuclear, ballistic missile and other weapons of mass destruction programs or activities.

Defense Secretary Robert Gates has said ordered the deployment of a ground-based, mobile missile intercept system and radar system to Hawaii amid concerns the North may fire a long-range missile toward the islands, about 4,500 miles away. North Korea launched a second nuclear test on May 25 that heightened global tensions.

Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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