June 10 (Bloomberg) -- China and Russia will back a United Nations draft resolution that would seek to curb loans and money transfers to North Korea as punishment for its nuclear-bomb test and missile launches, U.S. and Japanese diplomats said.

The U.S., Japan, China, Russia, Britain, France and South Korea agreed on the text during negotiations after North Korea detonated a nuclear bomb on May 25, U.S. Ambassador Susan Rice said. Support from China and Russia, which have resisted tighter sanctions on North Korea, makes it likely the draft resolution will be adopted unanimously this week.

The text calls for the interdiction at seaports, airports or in international waters of any cargo suspected of containing nuclear or missile-related materials going to or from North Korea. It would prohibit the refueling or servicing of such vessels at sea, and would require any ship to proceed to a convenient port for inspection in the event consent for boarding is refused.

“This sanctions regime, if passed by the Security Council, will bite, and bite in a meaningful way,” Rice said. “It will be the strongest sanctions regime in place. There is no guarantee, but it is important for the international community to speak with one voice.”

Lending Curbs

The UN’s previously adopted embargo on tanks, artillery and other heavy weapons would be expanded to all arms, and member nations would be urged “not to enter into new commitments for grants, financial assistance, or concessional loans” or to “provide public financial support for trade” with North Korea.

“It is a very strong resolution, but the question now is implementation,” Scott Snyder of the New York-based Council on Foreign Relations said. “The provisions on financial transactions ultimately depend on what China does. This offers an umbrella under which, if China implements it, could have a direct effect on North Korea.”

Tensions have remained high since North Korea detonated a nuclear bomb, said the 1953 armistice ending the Korean War no longer applies and tested several missiles in a show of defiance. South Korea has deployed a combat ship to its maritime border with the North and vowed last week to send F-15K fighter jets in the event of a clash.

Missiles Fired

North Korea fired six short-range missiles last month, two within hours of the atomic test, three more the following day and one on May 29.

The communist nation may be readying as many as three medium-range missiles in a region northeast of the capital, Pyongyang, South Korea’s Yonhap News reported June 2. There are signs the North may also be taking steps to test-fire its second longer-range, ballistic missile since April, U.S. Defense Secretary Robert Gates said June 1.

The draft resolution “condemns in the strongest terms” the May 25 detonation, and demands that North Korea conduct no further such tests and halt its nuclear and ballistic missile programs. The government in Pyongyang also would be told to retract its withdrawal from the Nuclear Non-Proliferation Treaty and rejoin the six-party talks with China, Russia, Japan, South Korea and the U.S.

The Chinese mission to the UN had no comment on the agreement.

Russian Ambassador Vitaly Churkin called the draft “adequate and balanced.”

Next Steps

It asks UN members to report within 45 days on steps they are taking to implement the sanctions and for UN Secretary- General Ban Ki-moon to name a group of experts to monitor their enforcement.

The Security Council’s committee on North Korean sanctions would be instructed to agree within 30 days on further entities, material and individuals to be subject to the travel ban and asset freeze imposed after the 2006 nuclear test. Only two North Korean companies and a bank have been so designated; no individuals have been subjected to the sanctions.

The U.S. and Japan, which led the effort to tighten sanctions on North Korea, agreed in the final days of negotiations to soften the language on the cargo inspections.

The draft resolution “calls upon” UN member nations to conduct checks when appropriate instead of requiring inspections.

Stopping Ships

“This resolution gives the U.S. and its allies UN coverage to interdict ships suspected of carrying North Korean missiles,” said Abraham Kim of the Eurasia Group, a New York- based political-risk analysis firm. “The next step is that North Korea will test this by sending out suspicious-looking ships.”

North Korea has said it would consider boarding of its ships at sea as an act of war.

Kim said that while the draft is tougher than the UN resolution adopted in 2006, the lack of requirements for severance of financial ties with North Korea is likely to weaken its impact.

“There are lots of parts where discretion is left to nations,” Kim said. “So while the language is tough, it leaves a lot of back doors open.”

To contact the reporter on this story: Bill Varner at the United Nations at wvarner@bloomberg.net

Last Updated: June 10, 2009 14:24 EDT