U.S. slaps new sanctions on Chinese firms

The U.S. government on Thursday imposed new sanctions on two Chinese shipping companies it said helped North Korea evade sanctions, nearly three weeks after the second U.S.-North Korea summit collapsed due to disagreements over Washington’s pressure campaign.

A South Korea-flagged ship named Lunis was also added to a list of vessels that the U.S. government believes engaged in ship-to-ship transfers with North Korean tankers, though the U.S. Treasury Department said the ship has not been sanctioned. Local analysts saw it as a warning for Seoul, which has been trying to receive an exemption from sanctions to restart economic projects with the North.

The Treasury Department said in a press release that the latest sanctions highlight the deceptive methods Pyongyang uses to circumvent international and U.S. sanctions as well as Washington’s commitment to implement existing United Nations Security Council resolutions.

U.S. Treasury Secretary Steven Mnuchin stressed that the U.S. government will continue to enforce sanctions on North Korea and warned other countries to stay on the same page.

The last time the Treasury Department imposed a sanction linked to the regime was December 2018, when Washington accused three North Korean officials of human rights abuses or censorship.

“The United States and our like-minded partners remain committed to achieving the final, fully verified denuclearization of North Korea and believe that the full implementation of North Korea-related UN Security Council resolutions is crucial to a successful outcome,” said Mnuchin.

“Treasury will continue to enforce our sanctions, and we are making it explicitly clear that shipping companies employing deceptive tactics to mask illicit trade with North Korea expose themselves to great risk.”

The added sanctions come at a precarious time in North Korea-U.S. relations, less than three weeks after the second summit between U.S. President Donald Trump and North Korean leader Kim Jong-un collapsed in Hanoi, Vietnam, without a deal.

Pyongyang wanted some sanctions removed in exchange for the scrapping of its Yongbyon nuclear complex, but Washington remained steadfast that sanctions would only be eased after North Korea carries out final, fully verified denuclearization, also known as FFVD.

Trump’s national security adviser John Bolton tweeted Thursday that “everyone” should take notice of the Treasury Department’s “important actions” and review their own activities to ensure they are not involved in North Korea’s sanctions evasion.

With Thursday’s designation, the two Chinese shipping companies will have their assets in the United States frozen and Americans will be prohibited from engaging in transactions with them.

The Treasury Department also said it was updating its North Korea shipping advisory and adding dozens of vessels that allegedly engaged in ship-to-ship transfers with North Korean tankers or exported North Korean coal.

Despite the sanctions imposed on North Korea, the advisory said Pyongyang continues to evade sanctions, particularly through illicit ship-to-ship transfers of refined petroleum and coal. In 2018, the North was said to have received at least 263 tanker deliveries of refined petroleum via the shady maritime transactions.

If the tankers were full during their deliveries, the North would’ve imported 3.78 million barrels, which is more than 7.5 times the allowable amount of refined petroleum allowed under UN Security Council Resolution 2397.

One of the two Chinese companies sanctioned on Thursday was Dalian Haibo International Freight Company, which is believed to have provided goods and services to or in support of the U.S.-designated Paeksol Trading Corporation. Paeksol is a subordinate of the UN- and U.S.-sanctioned North Korean Reconnaissance General Bureau, the Treasury Department pointed out.

The other newly sanctioned Chinese company was Liaoning Danxing International Forwarding Company, which American authorities think operated in North Korea’s transportation industry by routinely using deceptive practices that enabled EU-based North Korean procurement officials to operate and purchase goods for the North Korean regime.

Washington’s added pressure on Pyongyang comes as Seoul is trying to work around sanctions blocking the country from resuming two economic projects with the North: Mount Kumgang tour programs and the Kaesong Industrial Complex.

Neither the Blue House nor South Korean government made any official response to Washington’s most recent sanctions, but Andrew Kim, who retired last year as the head of the CIA’s Korea Mission Center, is said to have met with Blue House National Security Council Director Chung Eui-yong on Thursday to discuss denuclearization talks on North Korea.

Local media reported that Kim said that Seoul and Washington had polarized views of the North during a meeting on Wednesday with academics.

BY LEE SUNG-EUN [lee.sungeun@joongang.co.kr]