UPDATE 1-US sanctions N.Korea bank on proliferation concerns

* Bank said to transfer missile sale proceeds

* Faces fund freeze, ban on dealings with U.S.

* Any business with North may be illicit, U.S. says

WASHINGTON, Aug 11 - The United States on Tuesday slapped sanctions North Korea's Korea Kwangson Banking Corp for its role in helping Pyongyang-linked firms accused of proliferating missiles and weapons of mass destruction.

The U.S. Treasury Department said KKBC had provided financial services to three firms already sanctioned under U.N. Security Council Resolution 1718. The bank would face a freeze of any assets in the United States and be banned from doing business with U.S. financial institutions, it said.

"North Korea's use of a little-known bank, KKBC, to mask the international financial business of sanctioned proliferators demonstrates the lengths to which the regime will go to continue its proliferation activities and the high risk that any business with North Korea may well be illicit," said Stuart Levey, undersecretary or Terrorism and Financial Intelligence said in a statement.

KKBC had facilitated fund transfers for North Korean firms Tanchon Commercial Bank, and Korea Ryonbong General Corporation and Ryonbong's subordinate Korea Hyoksin Trading Company. All three entities are already under sanctions for illicit weapons proliferation.

North Korea came under a fresh tranche of U.N. Security Council Sanctions after it tested a nuclear weapon in May, the isolated communist state's second test since 2006, in a nuclear arms program the United States and its allies have been trying to halt since the early 1990s.