Chinese businesses risk U.S. sanctions to do business in North Korea

On August 22, the U.S. Treasury sanctioned several Chinese companies that it said were assisting North Korean leader Kim Jong Un's development of nuclear arms and ballistic missiles.
By Leon Clarke | Aug 30, 2017
China may be one of the United States' top two trading partners, but it can still incur U.S. sanctions over business transactions with North Korea. U.S. officials have begun instituting punitive measures against Chinese firms that are operating in the Stalinist state in defiance of U.S.-led UN sanctions against commerce with North Korea.

On August 22, the U.S. Treasury sanctioned several Chinese companies that it said were assisting North Korean leader Kim Jong Un's development of nuclear arms and ballistic missiles. One company, Dandong Chengtai, is on the list for suspect money-laundering on behalf of North Korean clients.

U.S. prosecutors also said that they will attempt to recover $11 million from China- and Singapore-based companies that they accuse of conspiring with North Korea to evade sanctions. And Derek Scissors, resident scholar at the American Enterprise Institute, a conservative-leaning think tank in Washington, DC., told Bloomberg that U.S. action against large state-owned Chinese banks and businesses, such as China National Petroleum Corp., might be next.
"We have the ability to say, 'Any Chinese state-owned enterprise that we consider relevant is fair game,"' said Scissors. "We haven't even gotten close to the economic coercion we're capable of."
China conducts a limited but growing amount of trade with North Korea and thereby provides the North Korean regime with an economic lifeline. Two-way trade between China and North Korea grew 11% in the first half of 2017 to reach $2.55 billion, even while regional tensions flared over North Korea's weapons programs. China also provides the North Korean regime with a million tons of crude oil every year, amounting to almost all of North Korea's oil supply.
U.S. officials have historically been wary of targeting Chinese institutions over North Korean trade, however, since it would put Chinese-U.S. economic activity at risk. Gary Samore, former coordinator for arms control and weapons of mass destruction in the Obama White House, warned that imposing penalties on large Chinese financial institutions would have "major economic consequences on the U.S."

---

Have something to say? Let us know in the comments section or send an email to the author. You can share ideas for stories by contacting us here.

Comments
Comments should take into account that readers may hold different opinions. With that in mind, please make sure comments are respectful, insightful, and remain focused on the article topic.