Alleging that the banks' funds have been funneled to north Korea, police seized documents of the General Association of Korean Residents, or Chongryon, a network of credit unions used by working-class families of Korean descent. Cops used batons against a crowd of hundreds of people who protested the raid. Earlier in the week seven Korean-Japanese people associated with the organization were arrested.

Taku Yamasaki, an official of Japan's ruling Liberal Democratic Party, described the Chongryon as a "diplomatic channel to north Korea, until now." With the raid, he said, "this function will be significantly hampered." The two countries do not maintain formal relations. Like Washington and the neocolonial regime in Seoul, Tokyo, the former colonial master of Korea, maintains a hostile stance toward the workers state in the north.

Japanese government officials say they are investigating allegations that losses by the credit unions correspond to money sent to Korea. Defenders of the banks note that the entire Japanese banking system is in deep crisis, with many billions of dollars in bad loans filling up the books of major banks. "This financial investigation is just a pretext for the Japanese police to investigate what is a virtual embassy," said Kim Myong Chul, a supporter of normalization of relations between the two countries.

In a statement released on November 29, Chongryon's Central Standing Committee said the police action was part of a "repressive campaign" in which authorities had carried out numerous searches at different locations and interrogated more than 100 people. The crackdown was prompted by "national discrimination" against Koreans in Japan, it added.  
 
Infringement on DPRK sovereignty
The government of north Korea described the raid as an "infringement upon the sovereignty of the DPRK." Calling for the release of those who have been arrested, and rejecting any charge of "illegal transactions" by the bank, it noted that "a large number of businesses of Japan and the south Korean residents association in Japan are now undergoing a financial crisis." The Foreign Affairs statement said that Japan is "taking advantage of the anti-terror war" in Afghanistan to further its "design for overseas expansion."

The credit unions were originally set up to cater to Korean workers who remained in Japan after World War II. Some 635,000 workers of Korean descent live in Japan today, forming the largest immigrant group in the country. Despite the discrimination they face, many have become integrated into the Japanese working class.

Meanwhile, statements by U.S. president Bush and other White House officials linking their threats against Pyongyang to the "war against terrorism" continue to cause unease in Seoul. "Some South Korean officials fear Washington's recent rhetoric will provoke a security crisis like that of 1993–94, when north Korea's refusal to allow inspections of its nuclear facilities brought it to a tense standoff with the U.S.," reported the December 6 Wall Street Journal.

A senior South Korean Foreign Ministry official said that Bush "is not sensitive to north Korea's possible responses." Washington's stance, said the official, has "created unnecessary concern not only for the South Korean public, but also in North Korea that the Korean Peninsula can be a battleground again" as it was in the 1950–53 Korean war.  
 
 
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