These include counterfeiting US currency and other goods, drug smuggling and other "illicit and deceptive activities" in the international financial and banking systems, Robert Einhorn told a news conference.

Einhorn, the State Department's special adviser for non-proliferation and arms control, was speaking during a visit to South Korea aimed at tightening enforcement of sanctions on both the North and Iran.

Illicit activities earn hundreds of millions of dollars in hard currency which can be used to support North Korea's nuclear or missile programmes or buy luxury goods in violation of UN Security Council resolutions, he said.

Einhorn appealed to China, the North's sole major ally and economic lifeline, to back the sanctions on both countries and not to take advantage of restraint by other countries.

"We want China to be a responsible stakeholder in the international system," he said.

"That means co-operating with the UN Security Council resolutions and it means not backfilling or not taking advantage of responsible self-restraint of other countries."

The new measures on North Korea, announced last month in Seoul by Secretary of State Hillary Clinton, would let Washington designate entities and individuals and "block the property or assets they possess that are under the control of a US person or bank," Einhorn said.

"By publicly naming these entities, these measures can have the broader effect of isolating them from the international financial and commercial system," he said.

Einhorn was accompanied by Daniel Glaser, a senior Treasury official overseeing efforts to combat terrorist financing and financial crimes.

Glaser said the private sector had previously reacted powerfully to the exposure of entities which assisted illicit activities.

In 2005 the US publicly blacklisted a Macau bank for alleged links to North Korean counterfeiting. The move led to a freeze of 25 million dollars in the North's accounts there.

The measure reportedly hit the North hard after other financial institutions also cut ties to Pyongyang for fear of similar action.

Einhorn, who will leave Seoul for Tokyo on Tuesday, said that, apart from the new sanctions, Washington will be "aggressively implementing" existing measures in the months ahead.

More companies or individuals would be designated under an existing executive order for involvement in weapons of mass destruction and missile-related activities.

The new sanctions on the North are designed both to punish it for the alleged sinking of a South Korean warship and to pressure it to scrap its nuclear weapons programme.

Seoul and Washington accuse Pyongyang of torpedoing the ship earlier this year with the loss of 46 lives, a charge it vehemently denies.

South Korea and its US ally held a major naval and air exercise last week designed to deter cross-border aggression.

The North has reacted furiously, threatening unspecified "strong physical measures" against the new sanctions.

China has not backed the findings of international investigators, who said there was overwhelming evidence that Pyongyang sank the warship.

Einhorn described North Korea and Iran as "two of the greatest threats to the nuclear non-proliferation regime and to international security generally".

Glaser said new sanctions adopted by the United Nations, the US, Australia, Canada and the European Union were powerful tools "to increase the financial pressure on Iran and further protect the international financial system from Iranian abuse".

Six-party talks on North Korea's denuclearisation have been stalled since December 2008. In April last year the North quit the forum before staging its second nuclear weapons test a month later.

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