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Victor Cha: U.S. sends 'secondary sanctions' warning to China through blacklisting of N.K. firm

All News 07:41 April 03, 2017

WASHINGTON, April 2 (Yonhap) -- The latest U.S. sanctions on North Korea could be a warning of "secondary sanctions" on Chinese firms doing business with the North ahead of U.S. President Donald Trump's summit with Chinese President Xi Jinping this week, a U.S. expert said.

The Treasury Department blacklisted one North Korean trading firm and 11 individuals Friday for their involvement in providing support to the North's nuclear and missile programs as Washington further tightens the financial screws on Pyongyang.

The trading firm, Paeksol Trading Corp., was sanctioned for having sold, supplied, transferred, or purchased metal or coal from North Korea, including exports to China, a key source of hard currency for the regime.

"The treasury's announcement today appears to explicitly refer to the coal trade between Chinese and North Korean entities with its designation of Paeksol Trading Corp.," said Victor Cha, a top expert on Korea at the Center for Strategic and International Studies.

"Although the U.S. has previously sanctioned DPRK trading companies and entities involved in the North Korean mining industry, this is the first mention of a direct Chinese connection in advance of the U.S.-China summit on April 6-7 at Mar-a-Lago, perhaps intimating the threat of secondary sanctions against China," he said.

Secondary sanctions, also known as a "secondary boycott," are considered one of the last-remaining sanctions tools against the North, and calls for penalizing companies doing business with Pyongyang. Chinese firms are expected to be subject to the measure as most of the North's dealings with the outside world are with China.

Former U.S. President Barack Obama was reluctant to impose secondary sanctions out of fear of souring relations with China. But his successor, Donald Trump, is widely expected to pursue those measures as he has been strongly critical of Beijing for not helping resolve the North Korea problem.

Of the 11 individuals blacklisted Friday, ten are based overseas, not only in China and Russia where North Korean business operations are active but also in Cuba and Vietnam. That could be a warning to other countries not to do business with the North.

"This could be a signal from the Trump administration that it intends to close down more procurement channels and funding sources for North Korea in third party countries, including China, Russia, Vietnam and Cuba," Cha said.

"The sanctioned persons have been facilitating the continued violation of U.N. Security Council Resolutions, and have provided financial support and procurement services for the North Korean WMD programs in third party countries."

Victor Cha: U.S. sends 'secondary sanctions' warning to China through blacklisting of N.K. firm - 1


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