U.S. Sanctions on Chinese Companies Doing Business With North Korea Are About to Get More Serious

By Paul Huang
Paul Huang
Paul Huang
November 21, 2017 Updated: November 21, 2017

More than a dozen business entities have been newly added to the list of companies targeted by U.S. sanctions against North Korea, one of which is a Chinese company accused of helping the North Korean regime develop weapons of mass destruction. The move is the latest in a string of actions taken by the Trump administration to crackdown on Chinese companies known for assisting the Kim Jong Un regime.

U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced on Tuesday that one individual, 12 shipping companies, and 20 vessels “with long-standing commercial ties to North Korea” have been added to the U.S. sanction efforts against the totalitarian regime.

Most of the newly added shipping companies are alleged to have engaged in significant importation from or exportation of goods to North Korea. Others are alleged to have involved in the exportation of overseas workers from North Korea, a system that has been described as modern day slave labor by an earlier State Department report released in June.

Four Chinese shipping companies and one executive have been named by the announcement as responsible for having cumulatively exported approximately $650 million worth of goods to North Korea, and cumulatively imported more than $100 million worth of goods from North Korea. These goods have included computers and various raw materials.

Of particular note is the Chinese company Dandong Dongyuan Industrial Co., Ltd (Dongyuan) and its owner Sun Sidong, which the OFAC said have been “associated with front companies for weapons of mass destruction-related North Korean organizations”.

According to OFAC, Dongyuan exported over $28 million worth of goods to North Korea over several years, including motor vehicles, electrical machinery, radio navigational items, aluminum, iron, pipes, and items associated with nuclear reactors.

“As North Korea continues to threaten international peace and security, we are steadfast in our determination to maximize economic pressure to isolate it from outside sources of trade and revenue while exposing its evasive tactics,” said Treasury Secretary Steven T. Mnuchin.  “We are also sanctioning the shipping and transportation companies, and their vessels, that facilitate North Korea’s trade and its deceptive maneuvers.”

Other newly added targets include two North Korean government agencies and six North Korean shipping and trading companies that the OFAC said have violated sanctions. These entities used “deceptive shipping practices” including ship-to-ship transfers to evade sanctions, a practice that OFAC said is prohibited by United Nations Security Council resolution.

Paul Huang