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2017-06-30 02:25:03
U.S. Imposes New Sanctions Over North Korea Ties

WASHINGTON — The Trump administration has imposed sanctions on a Chinese bank, a Chinese company and two Chinese citizens in an effort to crack down on North Korea’s financing and development of weapons of mass destruction.

The sanctions follow the death of Otto F. Warmbier, an American student who was imprisoned by North Korea, and come as frustration grows in the United States government over the North’s missile tests.

The most significant action is directed at the Bank of Dandong, a Chinese lender that Treasury officials say acts as a conduit for illicit North Korean financial activity and money laundering. The department’s Financial Crimes Enforcement Network is moving to sever the bank from the American financial system, which would severely limit its ability to work with other banks around the world.

“We will follow the money and cut off the money,” Steven Mnuchin, the Treasury secretary, said Thursday during a briefing at the White House.

Michael S. Casey, an American sanctions expert at the law firm Ropes & Gray, said, “This is a severe penalty in light of the central role that the U.S. financial system plays in the world’s economy.”

Mr. Mnuchin would not say if the United States had warned China about the sanctions, but he said they were not meant as any sort of message to the Chinese government.

“The Department of the Treasury is committed to protecting the U.S. financial system from North Korean abuse and maximizing pressure on the government of North Korea until it abandons its nuclear and ballistic missile programs,” Mr. Mnuchin. “While we will continue to seek international cooperation on North Korea, the United States is sending an emphatic message across the globe that we will not hesitate to take action against persons, companies and financial institutions who enable this regime.”

By targeting the bank, the Trump administration is also hoping that China’s financial sector will pressure North Korea in ways that its government has failed or been unwilling to.

Anthony Ruggiero, a former official in the Treasury’s Office of Terrorist Financing and Financial Crimes, said that because of Thursday’s move, other Chinese banks would likely be getting calls from their American counterparts to make sure that they were not engaging in illicit transactions with North Korea. He said that similar actions against bigger Chinese banks could be in store.

“This is the tip of the iceberg,” Mr. Ruggiero said. “We know there are more Chinese banks that are either wittingly or unwittingly assisting North Korea.”

It is not the first time that the United States has targeted a Chinese bank to exert pressure on North Korea. In 2006, the Treasury Department designated Banco Delta Asia, an obscure, family-owned bank in the Chinese gambling enclave of Macao, as a “primary money laundering concern.” This started an informal financial embargo that has gradually tightened around Pyongyang and became a negotiating point in the six-nation talks over its nuclear program.

However, at the urging of the South Korean government, who feared it was impeding talks, President George W. Bush reluctantly lifted the sanctions. The talks failed and North Korea continued on with its efforts to build missiles and nuclear bombs.

Sanctions are also being imposed on Dalian Global Unity Shipping and two Chinese citizens who the Treasury said have business dealings with North Korea related to illicit financial transactions.

President Trump encouraged China, one of North Korea’s only allies and a major trading partner, to pressure the North to curb its nuclear ambitions.

Last week, Mr. Trump expressed his frustration on Twitter: “While I greatly appreciate the efforts of President Xi & China to help with North Korea, it has not worked out.”

He added, “At least I know China tried!”