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U.S. Slaps Chinese Firm With Sanctions And China’s Not Happy About It

REUTERS/Jacky Chen

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Ryan Pickrell China/Asia Pacific Reporter
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The U.S. sanctioned and filed charges against a Chinese firm for doing illegal business with North Korea, and China is not pleased, according to Reuters.

The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned China’s Dandong Hongxiang Industrial Development Company Ltd. (DHID) Monday. Criminal charges were brought against four executives, namely, Ma Xiaohong, Zhou Jianshu, Hong Jinhua, and Luo Chuanxu, for contributing to North Korean proliferation of weapons of mass destruction (WMD).

DHID is being charged with collaborating with Korea Kwangson Banking Corporation (KKBC), which is under U.S. and U.N. sanctions for providing financial services for North Korean WMD programs.

China’s Ministry of Foreign Affairs said Tuesday that it firmly opposes countries that try to “exercise ‘long-arm jurisdiction’ by enforcing its domestic laws over China’s enterprises and individuals.”

DHID initially brought China and the U.S. together, surprisingly. The U.S. Department of Justice made two trips to Beijing and informed the Chinese that DHID may have illegal ties to North Korea.

China investigated the allegations and then dropped the hammer on DHID; however, it appears that China was intending to take punitive actions against the firm and its executives unilaterally.

“As for the Hongxiang Industrial Development Company, relevant departments in China are investigating its illegal behavior, including economic crimes, in accordance with the law and have released relevant information,” Foreign Ministry spokesman Geng Shuang said Monday.

During the press conference Tuesday, Foreign Minister Geng was asked about the 20 percent year-on-year increase in bilateral trade between North Korea and China.

Without going into details, Geng explained, “After the passage of the UNSCR 2270, relevant departments in China have issued notices, requesting Chinese institutions and enterprises to strictly abide by the provisions of the resolution. Trade between China and the DPRK falls in line with Chinese laws and regulations as well as the provisions of relevant UN resolutions.”

The latest turn in the DHID case suggests that cooperation between the U.S. and China on Chinese firms in bed with North Korea may be a nonstarter.

Divergent views on how to deal with North Korea are already resurfacing.

Responding to Trump’s call during the first presidential debate for China to solve the North Korean nuclear crisis, Geng said, “It is not China that caused the Korean nuclear issue in the first place, and it is not China that holds the key to the settlement of this issue.” His statements reflect Foreign Minister Hua Chunying’s claims that the U.S. is the “cause and crux” of the crisis.

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