The U.S. Department of the Treasury announced a new set of actions Thursday aimed at increasing pressure on North Korea, including cutting off a Chinese bank that is accused of laundering money and providing financing to North Korea in violation of international sanctions.
The United States will also impose sanctions on two Chinese people and a Chinese shipping company that are believed to have assisted North Korea with its nuclear and missile programs. Mnuchin made clear that the United States is “in no way targeting China with these actions” and that U.S. officials “look forward to continuing to work closely with the government of China to stop the illicit financing in North Korea.” Mnuchin added that this “very significant action” sends the message to those around the world that the United States will follow the money trail leading to North Korea and continue to crack down on those assisting the country.
The announcement comes ahead of a scheduled visit from South Korean President Moon Jae-in.
In a statement, the Treasury Department accused the China-based Bank of Dandong of “facilitating millions of dollars of transactions for companies involved in North Korea’s [weapons of mass destruction] and ballistic missile programs.” The Treasury's Financial Crimes Enforcement Network has proposed prohibiting U.S. financial institutions from directly or indirectly maintaining correspondent accounts for the Bank of Dandong, cutting the bank off from the U.S. financial system.
The Treasury also announced that U.S. citizens will be generally prohibited from doing business with two Chinese citizens — Sun Wei and Ri Song Hyok, who are accused of establishing and running front companies on behalf of North Korea — and Dalian Global Unity Shipping Co., which is accused of transporting 700,000 tons of freight annually, including coal and steel products, between China and North Korea.
The Trump administration is also expected to announce on Thursday a significant new $1.4 billion arms package for Taiwan that includes advanced rocket and anti–ship missile systems, said U.S. officials.
The package is slightly larger than one that was put on hold at the end of the Obama administration, but includes largely the same weapons capabilities.
The sale is considered relatively modest compared to past arms packages. Still, the package is certain to frustrate China, which views the self-ruled island as part of China and opposes any weapons sales.
As president-elect, Trump broke with protocol and accepted a congratulatory phone call from Taiwanese President Tsai Ing-wen in December. But as president, Trump has courted China and sought its help to curb North Korea’s nuclear weapons and ballistic missile program. Earlier this month, the president tweeted that he appreciated China’s help with North Korea, but conceded, “it has not worked out... At least I know China tried!”
Lt. Gen. H.R. McMaster, Trump’s national security adviser, said on Wednesday that China had significant economic leverage over North Korea and suggested that it could put more pressure on Pyongyang. The Trump administration had long signaled that it wanted to move forward with an arms sale to Taiwan, but held off because officials worried the sale would make it harder to secure China’s cooperation on North Korea.
The likely announcement of the sale on Thursday suggests that senior administration officials are convinced that China is currently unwilling to increase economic pressure on North Korea.
Greg Jaffe contributed to this report.