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Target Chinese firms over North Korea

Target Chinese firms over North Korea

SATURDAY, October 08, 2016

Loopholes must be closed in the international encirclement of North Korea, which has been accelerating its nuclear and missile development programme.

It is essential to exert effective pressure on China to change its reluctant stance toward strengthening sanctions against North Korea, as it continues to export crude oil to that country while importing coal and iron ore.
The US Treasury Department designated a trading company in Dandong, China, and four of its executives as subject to sanctions, including the freezing of assets, for their involvement in the North’s plans to develop weapons of mass destruction. The Chinese firm and the four executives are suspected of being involved in such illicit business practices as smuggling substances required for the production of enriched uranium, a material used in nuclear bombs.
The US Justice Department has filed criminal charges against the Chinese firm and the four executives for evading US economic sanctions. They are said to have engaged in money laundering by conducting financial transactions on behalf of a North Korean bank subject to sanctions.
In February, the Obama administration enacted sanctions against North Korea that would add individuals and organisations of third-party countries to a list subject to financial sanctions. This is the first time the US law has been invoked against a Chinese firm. The US action is highly significant in the effort to contain North Korea’s nuclear development activities.
Chinese public safety authorities are reportedly investigating the case after detaining the executives of the trading company, among others, in August. Perhaps they finally launched the probe – rather reluctantly – because the evidence proving the firm’s export of nuclear-related materials to North Korea was disclosed by the United States.
Beijing must cooperate
China accounts for 90 per cent of the value of North Korea’s total trade. Bilateral trade rebounded in June, following its decline in the aftermath of the UN sanctions resolution adopted in March following the North’s nuclear test in January.
The US State Department said it would continue to press China to exercise its influence over Pyongyang as its largest trade partner. It seems likely that the Chinese violation of sanctions resolutions is not limited to only this Chinese company. It is reasonable that the United States has demonstrated its policy to take action against such companies.
What cannot be ignored in this respect is that Beijing is not showing a positive interest in cooperating with Washington.
China has admitted the company executives’ suspected involvement in what it calls a serious economic crime but has not said whether their actions have assisted the North’s nuclear development programme. As long as Beijing asserts that it will take stern action if it is determined a violation has been committed, it has the responsibility for providing sufficient explanations about the case.
In the first place, China’s reluctance toward imposing sanctions that could lead to destabilising North Korea, as well as its attempt to sap the sanctions’ strength, can be regarded as major factors that have allowed Pyongyang to forge ahead with its nuclear and missile development programme.
Nearly one month has passed since the North’s nuclear test in September, but the UN Security Council has yet to adopt fresh sanctions. China gives more weight to opposing the deployment of a cutting-edge US missile defence system in South Korea than to restraining the North’s reckless actions.
China must not forget that it will be able to fulfil its responsibility as a permanent Security Council member only when it offers full cooperation to US investigations, which can be part of the international community’s pressure on Pyongyang.