North Korea

List of Chinese financial firms facing possible sanctions over North Korea’s nuclear programme demanded by US congressional panel

  • The US-China Economic and Security Review Commission wants the US Treasury to provide a report within 180 days
  • Recommendation comes with China and Russia at odds with the US over easing sanctions on North Korea
PUBLISHED : Wednesday, 14 November, 2018, 10:19pm
UPDATED : Thursday, 15 November, 2018, 12:54am

Within the next six months, the US Treasury should give Congress a list of Chinese financial companies and officials that could be sanctioned because of their ties to North Korea's nuclear weapon programmes, a US congressional advisory committee said in a report released on Wednesday. 

The US-China Economic and Security Review Commission (USCC) recommended in its latest report that Congress should “direct the US Department of the Treasury to provide a report within 180 days on the current state of Chinese enforcement of sanctions on North Korea”.

US report warning of ‘economic and security risk’ fuels China hawks

“A classified annex should provide a list of Chinese financial institutions, businesses and officials involved in trading with North Korea that could be subject to future sanctions,” the committee said. The list, it said, should “explain the potential broader impacts of sanctioning those entities”.

The recommendation comes as China and Russia, two of the five permanent members of the UN Security Council, are at odds with the US over easing sanctions on North Korea.

“The pressure campaign will continue, and sanctions will remain in full force until we achieve the final, fully verified denuclearisation of North Korea,” US Vice-President Mike Pence tweeted on Tuesday during his visit to Japan. “The US, Japan and the world will accept nothing less.”

North Korea hiding bases that could launch nuclear missiles at US

US Secretary of State Mike Pompeo also told reporters after a US-China diplomatic security dialogue last Friday in Washington that he had emphasised to the visiting Chinese delegation “the importance of remaining united in the pursuit of the final, fully verified denuclearisation of North Korea”.

“This means maintaining pressure through the continued strict enforcement of all UN Security Council resolutions,” Pompeo said he told the delegation, which was led by Politburo member Yang Jiechi and Minister of National Defence Wei Fenghe.

Watch: When the US offered to lift sanctions on North Korea

Yang, China's highest ranking diplomat, responded that “China will continue to enforce strictly relevant UN Security Council resolutions”.

He said China hoped that Washington and Pyongyang would “meet each other halfway, accommodate each other’s legitimate concerns, build trust and advance the denuclearisation process and the establishment of a peace mechanism in tandem”.

Trump expects another meeting with Kim ‘sometime early next year’

In October, Chinese and Russian deputy foreign ministers met their North Korean counterpart in Moscow seeking to coordinate a trilateral approach to the denuclearisation process on the Korean peninsula. They called on the UN Security Council to “adjust” the current sanctions regime against Pyongyang.

Chinese and Russian foreign ministers Wang Yi and Sergey Lavrov also clashed with Pompeo in New York in late September over North Korea sanctions during Security Council talks.

Wang, backed by Lavrov, urged the UN body to consider easing the tough measures because of “positive developments” in the wake of the US-North Korea presidential summit in Singapore. But Pompeo urged council members to “set the example” for the world by enforcing sanctions “without fail”.

North Korea threatens continued nuclear development if sanctions not eased

The congressional committee suggested in its latest report that if China were to drop sanctions or revert to “providing a relief valve for Chairman Kim [Jong-un] through lacklustre enforcement”, US policymakers could “begin to consider a mix of incentives and pressure on Beijing to entice China to strengthen sanctions enforcement to support a ‘maximum pressure’ strategy”.

Some influential US lawmakers had tried to push the US government to impose sanctions on major Chinese banks. China has long opposed Washington’s policy of “unilateral sanctions and long-arm jurisdictions” related to Chinese entities and nationals.

In August 2017, the chair and a member of the House Foreign Affairs Committee sent a letter to the Trump administration with the names of 12 large Chinese banks that had allegedly provided bank accounts for a company conducting illicit trade with North Korea, The Washington Post reported.

North Korean workers and imports continue to cross into China

“We must target major Chinese banks doing business with North Korea, such as China Merchants Bank and even big state-owned banks like the Agricultural Bank of China,” House Foreign Affairs Committee Chairman Ed Royce told a House hearing in September 2017, days after the UN passed a resolution to ban North Korea’s textile exports and cap its crude oil imports.

“China’s biggest banks, even state-owned banks, still do business in North Korea,” said Royce, who will retire from Congress in January. “That’s got to end completely.”

Democratic Representative Brad Sherman, who co-wrote the letter to the administration, said the US Treasury had “aggressive sanctions ready to go against major Chinese banks”.

 North Korea calls on US to ‘immediately lift’ sanctions

The US Treasury last year imposed unilateral sanctions on Chinese and Russian trade companies such as coal importers and individuals, accusing them of supporting Pyongyang’s nuclear weapon programmes. But Treasury held off on punishing major Chinese banks to avoid risking worldwide financial woes.