North Korea Sanctions are Finally Getting Serious

The Treasury Department sanctioned 10 firms and six individuals this week for facilitating North Korea’s proliferation activities, illicit financial transactions, and sanctions evasion. The list included five Chinese firms and one Chinese individual as well as a Russian firm and four Russian nationals. These new sanctions send a strong message to Beijing and Moscow that there will be consequences for their failure to enforce the sanctions they claim to support.

The new U.S. designations complement the UN sanctions adopted two weeks ago with support from China and Russia. In the past, Beijing and Moscow have supported UN actions in order to deter unilateral sanctions by the U.S., only to undercut UN measures as soon as American pressure diminished. The tactic apparently failed this time. Instead, Washington should complement robust U.S. sanctions with a diplomatic effort to build a coalition of likeminded countries (including South Korea, Japan, Australia, the United Kingdom, France, and Germany) to squeeze North Korea’s revenue.

A crucial element of the Trump administration’s “peaceful pressure” strategy is the shift from hoping for Beijing’s cooperation to sanctioning Chinese companies, individuals, and banks that facilitate North Korea’s sanctions evasion. In June, the Treasury Department identified Bank of Dandong as a conduit for illicit transactions with North Korea and a primary money laundering concern—the first time the U.S. charged a mainland Chinese bank with laundering funds for Pyongyang. On the same day, Treasury sanctioned two Chinese individuals and a Chinese company for establishing front companies, conducting financial transactions, and shipping illicit luxury goods. 

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