Stiffer Pyongyang sanctions run risk of riling Beijing

WASHINGTON — With the Trump administration considering stiffer sanctions against North Korea, Washington could again act the way it did against a Chinese firm last year when it slapped charges on the company for allegedly supporting Pyongyang’s nuclear programme, drawing firm opposition from Beijing.

Last September, the United States announced criminal charges and economic sanctions against Dandong Hongxiang Industrial Development Company for alleged support of North Korea’s missile and nuclear weapons programme. The US Justice Department said the company and four company officials had conspired to evade US sanctions on North Korea. They had also violated US regulations against support for designated “weapons of mass destruction proliferators”, and engaged in money laundering.

The department seized 25 bank accounts controlled by the company, on the grounds they “represent property involved in money laundering”.

At a press conference last year, Chinese Foreign Ministry spokesman Geng Shuang said that China had been “consistent and clear” about its commitment to the denuclearisation of the Korean peninsula.

Beijing also hit out at the sanctions against Dandong Hongxiang. “We’re firmly opposed to any country trying to exercise ‘long-arm jurisdiction’ by enforcing its domestic laws over China’s enterprises and individuals,” Mr Geng said.

The US Treasury added Dandong Hongxiang and the four indicted officials to its sanctions blacklist, which bans American individuals or companies from doing business with them. US officials said the firm had acted on behalf of Korea Kwangson Banking Corporation, which has been blacklisted by the US and the United Nations for its support of North Korea’s nuclear and other weapons efforts.

The move came after the Chinese authorities announced they were investigating the company, which is in Dandong city in Liaoning province, on the border with North Korea. Up to 40 per cent of the North’s foreign currency comes from a network of about 600 Chinese companies, according to a recent study by Sayari Analytics, a Washington financial intelligence firm.

Mr Yang Xiyu, a veteran Chinese diplomat involved with North Korea, said the US could use the case of Dandong Hongxiang to persuade Beijing to do more against Chinese firms doing illicit business with Pyongyang.

While China was not happy about the case last year, it eventually accepted it. “It wasn’t easy, but it was the right way to push the issue to a solution,” Mr Yang said to the New York Times this week.

If the US presents evidence of illegal activities that contravene China’s responsibilities under UN sanctions, “there is a great deal of room for cooperation”, Mr Yang observed.

He also noted that China had published five executive orders, totalling more than 900 pages, listing items banned from export to North Korea.

Mr Yang added: “The US should say, ‘Let’s extend our cooperation to implementation of the UN resolutions on sanctions.’ They should say, ‘Starting with the Hongxiang case, let’s move forward’.” AGENCIES