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US slaps new sanctions on North Korean, Chinese companies

Anti-war protesters march after a rally demanding peace on the Korean peninsula near the US Embassy in Seoul this month. Photo: AP

The United States on Tuesday imposed sanctions against 13 Chinese and North Korean organizations Washington accused of helping evade nuclear restrictions against Pyongyang and supporting the country through trade.

The action, coming one day after President Donald Trump put North Korea back on a list of state sponsors of terrorism, was announced by the US Treasury in a statement on its website.

The new sanctions demonstrate the Trump administration's focus on hurting trade between China and North Korea, which the administration has said is key to pressuring Pyongyang to back away from its ambition to develop a nuclear-tipped missile capable of hitting the United States.

Steven Mnuchin, Treasury secretary, said the US was "steadfast in our determination to maximize economic pressure to isolate it from outside sources of trade and revenue". He added that the latest sanctions targeted companies that engaged in hundreds of millions of dollars of trade with North Korea.

The sanctions included blacklisting three Chinese companies, Dandong Kehua Economy & Trade Co., Dandong Xianghe Trading Co., and Dandong Hongda Trade Co., which the Treasury Department said have done more than $750 million in combined trade with North Korea.

The sanctions also blacklisted Sun Sidong and his company Dandong Dongyuan Industrial Co. In a June report, Washington think tank C4ADS said Sun Sidong's firm was part of an interconnected network of Chinese companies that account for the vast proportion of trade with North Korea.

Those sanctioned are barred from holding US assets or doing business with Americans.

US authorities have repeatedly targeted companies and individuals from the Chinese city of Dandong, which borders North Korea, for alleged business ties to North Korea.

The new sanctions also hit several North Korean companies that send workers to countries such as Russia, Poland, Cambodia and China. United States authorities said they are seeking to cut off the money North Korea makes from the export of labor.

On Monday, Trump signalled that he was preparing to hit North Korea with more sanctions when he announced that he was putting the country back on the list of state sponsors of terrorism. His administration has been leading a global effort — dubbed the "maximum pressure" by the president — to encourage countries to halt trade and other financial transactions with the regime of Kim Jong-un.

Rex Tillerson, US secretary of state, on Monday said American intelligence reports and anecdotal evidence suggested that the pressure campaign was starting to hurt North Korea. But he said it was too early to say whether the economic pain had caused North Korea to temporarily halt missile testing.

China criticized the move to impose secondary sanctions on Chinese companies, a decision that came less than two weeks after Trump met Chinese president Xi Jinping in Beijing. "China firmly opposes unilateral sanctions out of the UN Security Council framework, especially the imposition of the so-called 'long-arm jurisdiction' by other countries in accordance with their domestic laws," said a spokesperson for the Chinese embassy in Washington.

China recently sent its highest-level envoy to North Korea in two years to discuss the tense state of affairs on the Korean Peninsula.

Anthony Ruggiero, a North Korea expert at the Foundation for Defense of Democracies, said China doesn't strictly enforce financial rules in the Dandong area. As a result, Dandong draws companies interested in making a profit by selling to North Korea, he said.

An editorial on Tuesday in North Korea's ruling party newspaper, Rodong Sinmun, called Trump a "heinous criminal" who had insulted the dignity of the country's supreme leadership and its socialist system during his recent visit to South Korea. The editorial, carried by the state-run news agency, threatened "merciless punishment." It did not mention the terror designation or the threat of new sanctions.

North Korea has this year stepped up its pace of missile tests, including launching intercontinental missiles for the first time, and conducted its sixth, and easily more powerful, nuclear test. However, the regime has not tested a missile in more than two months, leading to some speculation that it was either concerned about a possible US military strike, or wanted to provide an opening to start negotiations.

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