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US sanctions Chinese, Russian companies, individuals over North Korea

A photo distributed by the North Korean government shows what was said to be the launch of a Hwasong-14 intercontinental ballistic missile at an undisclosed location in North Korea. Photo: AP

The US Treasury Department on Tuesday placed sanctions on Chinese and Russian individuals and firms that it said had conducted business with North Korea in ways that advanced the country's missile and nuclear program.

The sanctions are designed to disrupt the economic ties that have allowed Pyongyang to continue funding its missile and nuclear program despite strict United Nations sanctions prohibiting it. It was the fifth set of US sanctions related to North Korea this year, and the largest.

The measures announced on Tuesday come just weeks after the UN Security Council imposed tough new sanctions on North Korea in response to the country's first two tests of a functioning intercontinental ballistic missile.

They also come after an unprecedented war of words between Donald Trump and his North Korean counterpart, Kim Jong Un, in which the US president promised "fire and fury like the world has never seen" if Pyongyang threatened the US. This was followed by a North Korean threat to fire missiles at US-controlled Guam.

"As a result of today's action, any property or interests in property of the designated persons in the possession or control of US persons or within the United States must be blocked, and US persons are generally prohibited from dealing with them," the US Treasury Department said in a statement.

Specifically, the sanctions are aimed at 10 companies and six individuals that assist "already designated persons who support North Korea's nuclear and ballistic missile programs, deal in the North Korean energy trade, facilitate its exportation of workers, and enable sanctioned North Korean entities to access the US and international financial systems," the US Treasury Department 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," US Treasury Secretary Steve Mnuchin said.

Chinese and Russian entities -- including energy companies, coal and oil traders, labor exporters and facilitators of sanctions evasion -- were listed as the primary targets of Tuesday's sanctions.

Like the UN resolution passed earlier this month, the US Treasury Department identified shutting down elements of North Korea's coal trade as a priority. The coal industry generates more than $1 billion in revenue per year for Kim's regime, according to the US Treasury Department, and represents a significant part of the funding for Pyongyang's missile and nuclear programs.

The latest round of US sanctions singles out three Chinese coal companies -- Dandong Zhicheng Metallic Materials Co., Ltd. ("Zhicheng"), JinHou International Holding Co., Ltd. and Dandong Tianfu Trade Co., Ltd. -- which were collectively responsible for importing nearly half a billion dollars' worth of North Korean coal between 2013 and 2016.

The US Treasury Department concluded that these companies "have sold, supplied, transferred, or purchased coal or metal, directly or indirectly, from North Korea, and the revenue may have benefited the nuclear or ballistic missile programs."

"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 and destabilize the region," Mnuchin said. "We are taking actions consistent with UN sanctions to show that there are consequences for defying sanctions and providing support to North Korea and to deter this activity in the future."

In June, the US Treasury Department sanctioned the Bank of Dandong, a small Chinese financial institution based near the border with North Korea, for helping Pyongyang to engage in money laundering. The move prompted an angry reaction from Beijing.

"The sanctions send a strong message to Beijing and Moscow to stop facilitating North Korea's sanctions evasion," said Anthony Ruggiero, a fellow with the Foundation for Defense of Democracies, which favors tougher sanctions on Russia and China over North Korea. "The action is one element of a pressure campaign that also includes targeting illicit financial transactions and pressuring US allies to choose between business with the United States or North Korea."

But in a display of the Kremlin's anger over sanctions placed on four Russian individuals and one Russian company, Russian Deputy Foreign Minister Sergei Ryabkov said that the United States had again "stepped on the same rake." He called the new sanctions the latest example of the United States damaging its relationship with Russia.

"In recent years, Washington 'in theory' should have learned that for us the language of sanctions is unacceptable," Ryabkov said in a statement. "The solution of real problems is only hindered by such actions. So far, however, it does not seem that they have come to an understanding of such obvious truths."

Ryabkov promised that Russia was "beginning to work out a response that is inevitable in this situation."

The Chinese Embassy in Washington, in a statement carried by the China Daily newspaper, said, "China opposes unilateral sanctions out of the UN Security Council framework, especially the 'long-arm jurisdiction' over Chinese entities and individuals exercised by any country in accordance with its domestic laws."

It said that China faithfully implements Security Council resolutions on North Korea in their entirety and fully observes its international obligations. "If there are any Chinese companies or individuals suspected of violating Security Council resolutions, they will be investigated and treated in accordance with China's domestic laws and regulations," it said. "We strongly urge the US to immediately correct its mistake, so as not to impact bilateral cooperation on relevant issues."

Whether these sanctions can help slow Pyongyang's rapidly developing nuclear and missile programs or help pressure North Korea to the negotiating table remains to be seen -- especially in light of the rogue nation's recent claims that it has successfully miniaturized a nuclear weapon.

The Trump administration has been trying to strengthen the economic vise on North Korea in an effort to persuade it to negotiate an end to its nuclear weapons development. Last month, the administration pushed a new round of sanctions against North Korea at the United Nations Security Council. In response, North Korea vowed retaliation "a thousand times over," and Foreign Minister Ri Yong Ho declared that North Korea would never relinquish its ballistic missile and nuclear programs.

While the White House and US military officials still insist that all options are on the table when it comes to North Korea, US Secretary of State Rex Tillerson on Tuesday made a gesture of appreciation to Pyongyang, welcoming its apparent restraint in not conducting any new weapons tests since the latest UN sanctions were adopted on August 5.

"We hope that this is the beginning of this signal that we've been looking for," Tillerson said at a news conference that otherwise focused on Afghanistan, "that they are ready to restrain their level of tensions, they're ready to restrain their provocative acts and that, perhaps, we are seeing our pathway to sometime in the near future having some dialogue."

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