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(2nd LD) U.S. imposes first-ever sanctions on Chinese firm for assisting N. Korea with WMD programs

2016/09/27 02:13

(ATTN: RAISES context, analysis, quotes; ADDS details of research report in last 3 paras, photo)

By Chang Jae-soon

WASHINGTON, Sept. 26 (Yonhap) -- The United States on Monday blacklisted a Chinese firm and four company officials and filed criminal charges against them for assisting North Korea with its nuclear and missile programs, a landmark move representing the first-ever sanctions on a Chinese entity over Pyongyang's weapons programs.

The sanctions on Dandong Hongxiang Industrial Development Company Ltd and its officials followed recent revelations that the firm exported aluminum oxide, which can be used in enriching uranium, a nuclear bomb ingredient, to the North at least twice in recent years.

The company has also been accused of selling other "dual-use" items that can be used for both civilian and military purposes, such as aluminum ingots, ammonium paratungstate and tungsten trioxide, all of which can be used in the North's missile or nuclear programs.

Monday's measure marks the first time that the U.S. has imposed sanctions on a Chinese company in connection with the North's nuclear and missile programs. The decision shows Washington's commitment to cracking down on those assisting with Pyongyang's weapons programs in the wake of its fifth nuclear test.

The sanctions could have powerful impacts on the North as they are expected to scare other Chinese firms away from dealings with the North for fear that they could also be blacklisted by the U.S. Pyongyang has long used Chinese firms to skirt international sanctions.

"Today's action exposes a key illicit network supporting North Korea's weapons proliferation," Adam Szubin, acting under secretary of treasury for terrorism and financial intelligence, said in a statement.

The Chinese firm and its employees "sought to evade U.S. and U.N. sanctions, facilitating access to the U.S. financial system by a designated entity. Treasury will take forceful action to pressure North Korea's proliferation network and to protect the U.S. financial system from abuse," he said.

The Treasury Department said it blacklisted the Chinese firm for "acting for or on behalf of (the North's) Korea Kwangson Banking Corporation" that has been blacklisted by the U.S. and the U.N. for providing financial services for weapons of mass destruction programs.

It also blacklisted four company officials -- Ma Xiaohong, Zhou Jianshu, Hong Jinhua, and Luo Chuanxu -- for similar charges. Under the sanctions, any assets in the U.S. of the company and the four officials are blocked and U.S. citizens are banned from dealings with them, the Treasury said.

In addition, the Justice Department "unsealed criminal charges against" the Chinese firm and the officials for "conspiring to evade U.S. economic sanctions," violating U.S. regulations on sanctions against WMD proliferators as well as for "conspiracy to launder money instruments."

   Moreover, the Justice Department announced the filing of "a civil forfeiture action for all funds contained in 25 bank accounts belonging to" the Chinese firm and its front companies and "a request for a restraining order to be sent to China for all of the funds," the Treasury statement said.

Allegations about the Chinese firm's illicit dealings with the North were first raised last week in a joint research report by South Korean and U.S. think tanks -- Seoul's Asan Institute for Policy Studies and Washington's U.S. Center for Advanced Defense Studies.

The report said that the Chinese company, which is one of six subsidiaries of China's Liaoning Hongxiang Group, engaged in US$532 million worth of trade with the North between 2011-2015, importing some US$360 million of goods from the North and exporting the rest.

It also said that the six subsidiaries have also transacted with sanctioned North Korean entities, have been associated with North Korean cyber operators, and have traded in various goods and services that raise proliferation concern.