02 July, 2017
Chinese national Li Hong Ri, said to have established several front companies that end up benefiting Koryo Bank, a US -sanctioned conduct for financial transactions on behalf of North Korea.
The announcement comes just a week before President Donald Trump is due to meet with his Chinese counterpart at the Group of 20 leaders summit next week in Germany.
"This is not directed at China, this is directed at a bank, as well as individuals and entities in China", Mnuchin told reporters.
"If we find other activity, we will sanction other entities". "North Korea's provocative, destabilizing and inhumane behavior will not be tolerated".
China, which borders North Korea and is considered its only major ally, argues that negotiations are the best way to persuade Pyongyang to halt its nuclear and missile activities. It is proposing to prohibit USA institutions from maintaining accounts for or on behalf of the Bank of Dandong.
"This bank has served as a gateway for North Korea to access the US and global financial systems, facilitating millions of dollars in transactions for companies involved in North Korea's nuclear and ballistic missile programs", Mnuchin explained.
The U.S. action is likely to anger China, which handles about 90 percent of North Korea's external trade, and whose banks and companies are said to provide Pyongyang access to the U.S. -dominated the worldwide financial system.
"We are committed to targeting North Korea's external enablers and maximizing economic pressure on the regime until it ceases its nuclear and ballistic missile programs", Mnuchin said during a White House press briefing. However, Mnuchin said the action was not being taken to send China a message.
China's Foreign Ministry said in the same month Hongxiang was under investigation for "illegal behavior" and "economic crimes" following the provisions of United Nations Resolution 2270, which imposed tighter sanctions on North Korea in March. Authorities said 17 percent of Dandong's customer transactions in the bank's US accounts had ties to North Korea.
The Trump administration has blacklisted a Chinese bank accused of illicit dealings with North Korea.
"I don't think the president is giving up in any sense".
It would immediately cause Western firms to cut off any transactions with Bank of Dandong, he said.
"The designation will make reputable Western banks ask questions about larger financial institutions in China", said Ruggiero, who is now a senior fellow at the non-profit Foundation for Defense of Democracies.