WASHINGTON (Yonhap) ― A new financial sanctions bill for North Korea, which has just passed the U.S. House of Representatives, will be as painful to Pyongyang as the banking restrictions that hit the communist regime hard in 2005, the House Foreign Affairs Committee chairman said.

Rep. Ed Royce (R-California), who initiated the North Korea Sanctions Enforcement Act, made the remark in an interview with Yonhap, stressing that the only time Pyongyang paid serious attention to what the U.S. said was when the regime was under the 2005 financial sanctions.

Those restrictions, known as BDA sanctions, are considered the most effective sanctions on the North ever.

“We have tried every approach to engage North Korea and the only time that we’ve ever really had their attention was when we’ve used some leverage on the regime itself,” Royce said in the interview in his office shortly after the bill’s passage on Monday, referring to the BDA sanctions.

The new legislation will have such powerful effects as it will also target “institutions controlled by Kim Jong-un,” Royce said, referring to the North Korean leader.

By blacklisting a bank in the Chinese territory of Macau in 2005, the U.S. not only froze North Korean money held in Banco Delta Asia, but also scared away other financial institutions from dealing with Pyongyang for fear they would also be blacklisted.

The measure hit Pyongyang hard, and reports at the time said North Korean officials had to carry around bags of cash for financial transactions because they were not able to use the international banking system. The sanctions were later lifted in exchange for a denuclearization agreement that later fell apart.

At the time, the U.S. Department of Treasury applied sanctions after catching the North counterfeiting $100 bills, Royce said. The consequences were that the North’s missile production lines stopped because the regime did not have hard currency as it was cut off from the international financial system.

“Illicit activities is actually half the economy of money that comes into the regime,” Royce said. “So once you freeze that up with sanctions, he couldn’t pay his generals.”

That is why the North Korean leader Kim Jong-il pressed hard on the State Department to override the Treasury Department and to lift those sanctions, he said.

The new legislation denies sanctioned North Koreans and their enablers access to all U.S. property and the U.S. financial system, and allows the U.S. government to sanction third-country persons and banks that facilitate North Korean proliferation, smuggling, money laundering and human rights abuses.

It also calls for sanctioning banks and foreign governments that facilitate the financial restrictions of U.N. Security Council Resolution 2094, which was adopted to punish Pyongyang after the regime carried out its third nuclear test last year.

The bill passed the House on Monday needs to pass the Senate in order to become law.

Royce said that chances of the bill passing through the Senate are “very good.”

“There’s a lot of bipartisan support for this legislation,” he said. “I know the feelings of many of the senators I’ve talked with. The senators feel as we feel that this is a step that we need to take.”

But the chairman stressed the bill won’t affect humanitarian aid to the North.

“What we are looking at doing is ― instead of cutting off the aid to the regime itself ― cutting off the institutions that the regime uses, not only to consolidate its power over the people of North Korea and violate their rights but also the institutions they use to build up, continue to build up their nuclear weapons program and their ICBM program,” he said.

Joshua Stanton, a former congressional staffer involved in writing the legislation, also said that the bill would be “very powerful” in pressuring the North, compared with existing U.S. sanctions on North Korea that “are trade sanctions, which historically haven’t been very effective.”

The new legislation “is based on financial sanctions, which have been devastating when enforced aggressively against Iran, Burma, Sudan, and yes, against North Korea,” Stanton said.

The bill will also help U.N. sanctions work, he said.

“Some member states, specifically China, are not enforcing the U.N. sanctions. The U.N. is not an enforcement body. It relies on member states to help enforce its resolutions,” he said. “The U.S. Treasury Department’s cooperation is essential to making U.N. sanctions work, because Treasury alone has the power to cut off a bad actor’s access to the global financial system.”

Royce said sanctions are the best way to deal with the North, stressing that in order to “change the equilibrium in the country and move the regime away from hostility, you need enough leverage to make it clear to the family in power that there will be consequences.”

In this sense, Royce said, it would be “very counterproductive” for Japan to lift sanctions on North Korea and allow financial relief to come from Tokyo to North Korea and to the institutions of the North because it would remove a lot of pressure.

Japan announced earlier this month that it would lift some of its own sanctions on Pyongyang in exchange for the North’s launch of a reinvestigation of the issue of Japanese nationals abducted to the communist nation in the 1970s and 1980s.

“My advice would be for Japan not to do that,” Royce said. “I understand their concern about the abductee issue but, again, the one way to make sure that all the abductees are returned ― not just the Japanese abductees ― is for the international community all to work in concert, because that gives us the greatest chance of moving toward human rights and change inside the country.”

Royce also urged Japan to admit its wartime wrongdoings, such as its sexual slavery of Korean and other Asian women. The so-called “comfort women” issue has been a key hurdle in the long-frayed relations between South Korea and Japan.

“It is important from my standpoint that the government in Japan also admit what happened not just with respect to the comfort women issue but the occupation of Korea,” he said. “The younger generation should understand what has happened throughout history. It is hard to get the future right if you get the past wrong and you don’t admit to it.”