US targets Chinese and Russia entities over North Korea

US officials and UN diplomats say the threat of US "secondary sanctions" against Chinese firms with North Korean ties and trade pressure helped persuade China to drop opposition to the UN sanctions.

By: Reuters | Washington | Published: August 22, 2017 11:32:29 pm
us north korea, north korea sanctions, donald trump, north korea missiles, russia china north korea, russia north korea, china north korea, world news The Trump administration is still hoping China will pressure North Korea.(Source: AP Photo)

The United States is imposing new North Korea-related sanctions, targeting Chinese and Russian firms and individuals for supporting Pyongyang’s weapons programs, US officials announced on Tuesday, but stopped short of an anticipated focus on Chinese banks.

The Office of Foreign Assets Control designated six Chinese-owned entities, one Russian, one North Korean and two based in Singapore. They included a Namibia-based subsidiary of a Chinese company and a North Korean entity operating in Namibia. Six individuals including four Russians, one Chinese and one North Korean were targeted, the Treasury Department said.

The move follows toughened United Nations sanctions agreed this month after North Korea tested its first two intercontinental ballistic missiles in July. The Treasury Department said the new sanctions targeted those helping already-designated individuals supporting North Korea’s nuclear and ballistic missile programs and its energy trade. They included three Chinese coal importers.

The steps also targeted those helping North Korea send workers abroad and enabling sanctioned North Korea entities to get access to the US and international financial system. “Treasury will continue to increase pressure on North Korea by targeting those who support the advancement of nuclear and ballistic missile programs, and isolating them from the American financial system,” Treasury Secretary Steven T. Mnuchin said in a statement.

“It is unacceptable for individuals and companies in China, Russia, and elsewhere to enable North Korea to generate income used to develop weapons of mass destruction.” A new round of US sanctions had been expected, but Washington appeared to delay them while securing Chinese and Russian support for tougher UN steps.

US officials and UN diplomats say the threat of US “secondary sanctions” against Chinese firms with North Korean ties and trade pressure helped persuade China to drop opposition to the UN sanctions. The latest steps stopped short of targeting Chinese financial institutions dealing with North Korea, a step that would have greatly angered Beijing. The Trump administration is still hoping China will pressure Pyongyang.

“The sanctions target a range of North Korea’s illicit activities and the focus on Chinese facilitators is another message to Beijing,” said Anthony Ruggiero, a Foundation for Defense of Democracies senior fellow and former US Treasury official. “However, there are missing elements. There’s no focus on the efforts of Chinese banks that facilitate these transactions. In addition, these Chinese networks likely have additional front companies operating on behalf of the network and those were not sanctioned.”

China is North Korea’s neighbor and main trading partner and US foreign policy experts say Chinese companies have long had a key role in financing Pyongyang. The Chinese and Russians embassies in Washington did not respond to requests for comment. China has said in the past it is strongly opposed to unilateral sanctions outside the U.N. framework, and has accused the United States of using “long-arm” jurisdiction in targeting Chinese entities.

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