US May Target Chinese Banks In Next Round Of North Korean Sanctions

REUTERS/Jacky Chen

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Ryan Pickrell China/Asia Pacific Reporter
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The next round of U.S. sanctions against North Korea could punish China for its behind-the-scenes support of the regime.

The U.S. is considering broad sanctions against North Korea for its illegal nuclear and ballistic missile activities, a senior U.S. official told Reuters Monday.

U.S. officials, including Secretary of State Rex Tillerson, have privately warned Beijing the U.S. may opt to use “secondary sanctions” against foreign banks and companies that do business with the reclusive regime, a move which could put certain Chinese entities in the cross hairs.

Over the weekend, Tillerson called for a “new approach” to North Korea. “The diplomatic and other efforts of the past 20 years to bring North Korea to a point of de-nuclearization have failed,” the secretary of state explained in Japan. “In the face of this ever escalating threat, it is clear that a different approach is required.”

During his recent tour of Asia, Tillerson indicated that military action could be used against North Korea if the country’s escalates, posing more serious threat to the U.S. and its allies, but while the use of military force is an option, the new U.S. administration appears interested in pursuing a less risky approach: sanctions.

China’s Ministry of Foreign Affairs said Tuesday, “China has been comprehensively and strictly implementing DPRK-related resolutions passed by the UN Security Council,” attempting to discredit claims that it is not fulfilling its obligations.

“The situation on the Korean Peninsula is very tense, almost approaching a tipping point,” foreign ministry spokeswoman Hua Chunying said. “At the current stage, the Peninsula situation is at another crossroads where are two prospects. One is that the relevant parties could continue with their assertive and escalatory moves, leading to conflict or even potential war. The other choice is that all sides can cool down and jointly pull the Korean nuclear issue back to a path of political and diplomatic resolution.”

If the U.S. does move to sanction Chinese entities, Beijing is unlikely to respond positively.

In September of last year, the U.S. Treasury announced that it was sanctioning Dandong Hongxiang Industrial Development Co. and four of its executives for conducting illegal business with North Korea and supporting the proliferation of weapons of mass destruction.

“I want to stress that we oppose any country enacting so-called long arm jurisdiction, using its own domestic laws against a Chinese entity or individual,” Chinese foreign ministry spokesman Geng Shuang.

It is unclear whether or not the new administration will actually move forward with sanctions. The Trump administration does not presently have a fully-formulated North Korea policy.

Following his meeting with Chinese Foreign Minister Wang Yi in Beijing, Tillerson said, “We renewed our determination to work together to convince North Korea to choose a better path and a different future for its people.”

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