The United States has sanctioned a Chinese industrial machinery and equipment wholesaler, a new step in tightening the financial noose around North Korea’s nuclear program after its fifth nuclear test this month.
The US Treasury said it was sanctioning Dandong Hongxiang Industrial Development Co. (DHID) and four of its executives, including the firm’s founder Ma Xiaohong, under US regulations targeting proliferators of weapons of mass destruction, Reuters reports.
It accused the firm of acting on behalf of North Korea’s Korea Kwangson Banking Corp. (KKBC), which has been under US and UN sanctions for supporting the proliferation of weapons of mass destruction.
The US Department of Justice said it has filed criminal charges against the Chinese firm and the executives for using front companies to evade sanctions on North Korea’s nuclear weapons and ballistic missile programs.
The charges accuse the firm and the individuals of conspiring to violate sanctions rules and engaging in international money laundering.
The Justice Department said bank accounts associated with the firm and front companies received hundreds of millions of dollars that transited through the US.
“Today’s action exposes a key illicit network supporting North Korea’s weapons proliferation,” Adam Szubin, the Treasury Department’s acting under secretary for terrorism and financial intelligence, said in a statement on Monday.
“DHID and its employees sought to evade US and UN sanctions, facilitating access to the US financial system by a designated entity.”
The announcement came after the White House said last week that President Barack Obama and Chinese Premier Li Keqiang agreed in New York on Sept. 20 to step up cooperation in the UN Security Council and in law-enforcement channels after North Korea’s latest and largest nuclear test on Sept. 9.
China’s Foreign Ministry said last week Hongxiang was under investigation following the provisions of UN resolution 2270, which imposed tighter sanctions on North Korea in March.
Chinese embassy spokeswoman Fang Hong said Hongxiang Industrial Development Co. is being investigated for “illegal behavior” and “economic crimes”.
She said China has a “clear and consistent” position of opposing North Korea’s development of nuclear weapons.
“We have been earnestly and faithfully implementing Security Council resolutions related to [North Korea] in their entirety and fulfilling our international obligations in non-proliferation export controls,” she said.
On Monday, South Korea’s JoongAng Daily newspaper reported that China was investigating a top official of the KKBC at its branch in the Chinese border city of Dandong.
While China is North Korea’s sole major ally, it disapproves of Pyongyang’s nuclear and missile programs and was angered by its latest nuclear test.
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