US Announces Sanctions On Chinese Firms Over N. Korea Trade

By Vince Morkri

     BEIJING (MNI) - The U.S. Treasury Department announced Tuesday that it had

imposed sanctions on six Chinese firms and individuals for conducting business

with North Korea, in line with U.N. resolutions targeting North Korea's nuclear

missile and weapons program.

     The Treasury Department's Office of Foreign Assets Control (OFAC) said in a

statement that it was sanctioning Dandong Rich Earth Trading Company for buying

vanadium ore from a company with links to North Korea's General Bureau of Atomic

Energy, which is responsible for North Korea's nuclear program, and Mingzheng

International Trading for helping finance transactions by North Korean firms.

Three Chinese coal companies were also sanctioned for importing coal from North

Korea between 2013 and 2016.

     OFAC pointedly added that U.N. Security Council resolutions prohibit North

Korea's export of vanadium, a steel additive, "and requires member states like

China" to prohibit its procurement. 

     OFAC said Mingzheng International had acted as a "front company" for the

North Korea-based Foreign Trade Bank -- the country's primary foreign-exchange

bank -- and had conducted U.S. dollar transactions for the bank. 

     The three coal companies sanctioned by OFAC -- Dandong Zhicheng Metallic

Materials, JinHou International Holding Co. and Dandong Tianfu Trade Co. -- were

collectively responsible for importing nearly $500 million worth of North Korean

coal between 2013 and 2016. Revenue from the trade, OFAC said, may have

benefitted North Korean leader Kim Jong Un's nuclear or ballistic missile

programs. 

     Zhicheng's owner, Chi Yupeng, was also sanctioned for using "a network of

companies" on behalf of North Korean interests, OFAC said. 

     The sanctions on the companies mean their properties and funds in the

United States will be frozen, and American citizens are prohibited from dealing

with them. 

     In announcing the sanctions, Treasury Secretary Steven Mnuchin said

"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."

     China has said it opposes the imposition of unilateral sanctions over

Chinese firms, insisting it will deal with any Chinese entities or individuals

suspected of violating U.N. resolutions on its own.

     Even as the Treasury Department announced the sanctions, though, U.S.

Secretary of State Rex Tillerson took a conciliatory step toward Pyongyang,

saying at a press conference in Washington that the Trump administration "saw a

pathway to sometime in the near future having some dialogue" with North Korea,

based on the recent restraint it had shown in not conducting any missile or

weapons tests since U.N. sanctions on it were announced Aug. 5. "We hope that

this is the beginning of this signal that we've been looking for," Tillerson

said. "That they are ready to restrain their level of tensions, they're ready to

restrain their provocative acts."

--MNI Beijing Bureau; +86 (10) 8532-5998; email: vince.morkri@marketnews.com

--MNI BEIJING Bureau; +1 202-371-2121; email: john.carter@mni-news.com

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