U.S. sanctions Chinese and Russian companies and individuals for conducting business with North Korea

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As part of a broad effort to further isolate North Korea, the Treasury Department on Tuesday placed sanctions on Chinese and Russian individuals and firms it said had conducted business with the country in ways that advanced its missile and nuclear weapons program.

The sanctions against 10 companies and six individuals are designed to disrupt the economic ties that have allowed Pyongyang to continue funding its missile and nuclear program despite strict United Nations sanctions prohibiting it.

U.S. sanctions, even though they are imposed by just one country, have an outsize influence because most international banking is conducted in U.S. dollars. The measures prohibit U.S. citizens and companies from doing business with the sanctioned companies.

The Trump administration has been trying to strengthen the economic vise on North Korea in an effort to persuade it to negotiate an end to its nuclear weapons development. Last month, it pushed a new round of sanctions against North Korea at the U.N. Security Council. In response, North Korea vowed retaliation “a thousand times over,” and Foreign Minister Ri Yong Ho declared that it would never relinquish its ballistic missile and nuclear programs.

“The sanctions send a strong message to Beijing and Moscow to stop facilitating North Korea’s sanctions evasion,” said Anthony Ruggiero, a fellow with the Foundation for Defense of Democracies, which favors tougher sanctions on Russia and China over North Korea. “The action is one element of a pressure campaign that also includes targeting illicit financial transactions and pressuring U.S. allies to choose between business with the United States or North Korea.”

But others argue that the sanctions are illegal and provocative.

Andrei Klimov, a senior legislator in Russia’s upper house of parliament, said U.S. sanctions “run counter not only to international law but also to common sense.” Russia, Klimov said, “must react in principle to this insane and confrontational policy.”

“These sanctions per se are illegal because the only thing that is recognized by international law are the UN Security Council sanctions,” Klimov told the Interfax news agency. “The rest is just made up illegally.”

Though U.S. military officials and President Donald Trump have said that the United States is prepared to take some sort of military action against North Korea if provoked, Secretary of State Rex Tillerson has pointedly called for Pyongyang to negotiate and said repeatedly that the United States does not seek regime change.

Despite the diplomatic push, China in particular has been a sore point in making existing sanctions stick. Beijing has largely gone along with restrictions, at least for a time, and supported an escalating series of U.N. sanctions. But many Chinese companies have continued to do business with the North Korean regime by supplying technology and hardware for its missiles. China is believed to be responsible for 90 percent of North Korea’s international trade.

The sanctions announced Tuesday by the Office of Foreign Assets Control were predominantly against Chinese companies that have dealt with North Korea by purchasing and selling coal, oil and mineral resources, or have provided banking services that made the transactions possible.

The sanctions also hit two companies that arranged for North Korean laborers to build statues in foreign countries. Tillerson has been urging countries that have relations with North Korea to downsize Pyongyang’s diplomatic presence and refuse to hire North Korean labor. Overseas labor is a source of revenue for the North Korean government, and the Treasury Department contends that some of the laborers’ income helped finance ballistic missile testing.

“Treasury will continue to increase pressure on North Korea by targeting those who support the advancement of nuclear and ballistic missile programs, and isolating them from the American financial system,” Treasury Secretary Steven Mnuchin said.

He added: “It is unacceptable for individuals and companies in China, Russia and elsewhere to enable North Korea to generate income used to develop weapons of mass destruction and destabilize the region.”

The sanctions hit three types of business dealings that provide a window into how North Korea uses companies in other countries to evade sanctions.

China-based Dandong Rich Earth Trading Co. was sanctioned for buying vanadium ore from a company tied to North Korea’s atomic energy agency. The Russian firm Gefest-M, which trades in a wide range of consumer goods as well construction and industrial equipment, allegedly procured metals for a North Korean mining company with a Moscow office. The Chinese company Mingzheng International Trading was accused of facilitating dollar transactions on behalf of North Korea’s proliferation network.

In addition, three Chinese coal companies were sanctioned for importing nearly $500 million of North Korean coal between 2013 and 2016. The Treasury Department said coal trade generates more than $1 billion a year for North Korea, an activity that was targeted in U.N. sanctions imposed in November.

One company sold North Korean anthracite coal and allegedly used the proceeds to buy goods it shipped to North Korea, including nuclear and missile components. Three Russians working in Singapore were accused of helping North Korea purchase millions’ worth of fuel oil.

In a blow to North Korea’s revenue from overseas labor, the Treasury Department sanctioned Mansudae Overseas Projects for helping North Korean laborers work abroad, usually in countries with authoritarian rulers, to build statues that immortalize the dictators.

According to Treasury, Kim Tong Chol, Mansudae’s managing director, arranged for Qingdao Construction, a Namibia-based subsidiary of a Chinese company, to take over four Namibian government-sponsored construction projects as well as the employees and materials associated with the work.