The United States on Thursday imposed sanctions on two Chinese citizens and a shipping company for helping North Korea's nuclear and missile programmes and accused a Chinese bank of laundering money for Pyongyang.
US Treasury Secretary Steve Mnuchin said at a press conference that the actions were designed to cut off funds that North Korea uses to build its weapons program. "We will follow the money and cut off the money," he said.
A Treasury statement named the bank as the Bank of Dandong and the firm as Dalian Global Unity Shipping Co Ltd. It named the two individuals as Sun Wei and Li Hong Ri.
The sanctions imposed on the two Chinese citizens and the shipping company blacklists them from doing business with US-tied companies and people.
Mnuchin said US officials were continuing to look at other companies that may be helping North Korea and may roll out additional sanctions.
US foreign policy experts say Chinese companies have long had a key role in financing Pyongyang. But Mnuchin said the action was not being done to send China a message.
The Trump effect
US officials said this week that President Donald Trump was growing increasingly frustrated with China over its inaction on North Korea and bilateral trade issues, and is now considering possible trade actions against Beijing.
On Wednesday, a senior White House official told reporters China was "falling far short of what it could bring to bear on North Korea in terms of pressure."
The United States will discuss efforts to choke off funding for North Korea's nuclear and missile programmes with China and other countries at next week's Group of 20 summit in Germany, US Treasury Secretary Steven Mnuchin said on Thursday.
The US move came as US President Donald Trump was due to meet South Korean President Moon Jae-in at the White House on Thursday to discuss steps to push North Korean to abandon its weapons programs, which have become an increasing threat to the United States.
In a notice published online Thursday, the US Treasury Department said the Bank of Dandong had served as a gateway for North Korea to access the US financial system. Authorities said 17 percent of Dandong's customer transactions in the bank's US accounts had ties to North Korea.
Anthony Ruggiero a former senior Treasury official in the Office of Terrorist Financing and Financial Crimes, said the action against Bank of Dandong is the first time US authorities sought to punish a Chinese bank accused of helping North Korea.
The action would immediately cause western firms to cut off any transactions with Bank of Dandong, he said. And it may also cause financial institutions in Western Europe and the United States to further scrutinize whether their Chinese business could have links to North Korea.
"The designation will make reputable Western banks ask questions about larger financial institutions in China," said Ruggiero, now a senior fellow at the non-profit Foundation for Defense of Democracies.