March 21, 2019 / 6:06 PM / 2 months ago

U.S. imposes first new North Korea sanctions since failed summit

WASHINGTON (Reuters) - The United States imposed sanctions on Thursday on two Chinese shipping companies it says helped North Korea evade sanctions over its nuclear weapons programme, the first such steps since a U.S.-North Korean summit collapsed last month.

FILE PHOTO: U.S. Treasury Secretary Steven Mnuchin at the White House in Washington, U.S., February 6, 2019. REUTERS/Jim Young/File Photo

The U.S. Treasury Department also issued an updated advisory that listed 67 vessels that it said had engaged in illicit transfers of refined petroleum with North Korean tankers or were believed to have exported North Korean coal.

The department identified the newly sanctioned firms as Dalian Haibo International Freight Co Ltd and Liaoning Danxing International Forwarding Co Ltd, which it said had helped North Korea dodge U.S. and international sanctions.

Reuters was unable to locate contact details for either company to seek comment.

The U.S. sanctions prohibit U.S. dealings with the designated companies and freezes any assets they have in the United States.

The United States has led international efforts to press North Korea through sanctions to give up its nuclear and ballistic missile programs.

Washington announced the sanctions three weeks after a second meeting between President Donald Trump and North Korean leader Kim Jong Un broke down over conflicting demands by North Korea for relief from sanctions and from the U.S. side for Pyongyang to give up its nuclear weapons.

“The United States and our like-minded partners remain committed to achieving the final, fully verified denuclearisation of North Korea and believe that the full implementation of North Korea-related U.N. Security Council resolutions is crucial to a successful outcome,” Treasury Secretary Steven Mnuchin said in a statement.

“Treasury will continue to enforce our sanctions, and we are making it explicitly clear that shipping companies employing deceptive tactics to mask illicit trade with North Korea expose themselves to great risk,” he said.

The latest sanctions showed there was some “leakage” in North Korea sanctions enforcement by China, but it was mostly abiding by U.N. resolutions, a senior U.S. official told reporters, speaking on condition of anonymity.

The official said that financial as well as shipping companies risked U.S. action if they were found to be in violation of sanctions.

The official insisted, however, that Thursday’s announcement was meant to maintain sanctions enforcement on North Korea rather than intensify pressure.

While declining to say whether Washington was trying to send a post-summit message to Pyongyang, the official said Trump “has made clear that the door is wide open to continuing the dialogue with North Korea.”

LIMBO

U.S.-North Korean engagement has appeared to be in limbo since the Feb. 27-28 summit in Hanoi, despite U.S. Secretary of State Mike Pompeo saying on March 4 he was hopeful he could send a team to North Korea “in the next couple of weeks.”

Washington has said it aims to re-engage with Kim, but North Korea has warned it is considering suspending talks and may rethink a freeze on missile and nuclear tests, in place since 2017, unless Washington makes concessions.

On Monday, two senior U.S. senators called for the Trump administration to correct a slowing pace of American sanctions designations on North Korea, saying there had been a marked decline in such actions during the past year of U.S. diplomatic engagement with Pyongyang.

They pointed to a recent U.N. report that found that North Korea continued to defy U.N. sanctions with an increase in smuggling of petroleum products and coal and violation of bans on arms sales.

A U.N. panel on sanctions said in the report Liaoning Danxing had been suspected of illicitly shipping Mercedes-Benz limousines to North Korea. Last July, the Netherlands seized cargo of Belarusian vodka, also banned as a luxury good, en route to North Korea via the company, it said.

Liaoning Danxing described itself on its now-defunct website as a North Korean shipping agency that established the “first container shipping line” between the Dalian in China and the western North Korean port of Nampo, the panel said.

The Treasury said Dalian Haibo was targeted for dealings with Paeksol Trading Corp, a company previously designated by U.S. sanctions on North Korea.

It said Dalian Haibo shipped cargo from Dalian, China, to Paeksol in Nampo, North Korea, in early 2018 aboard North Korean-flagged vessels.

The statement said Liaoning Danxing had “routinely used deceptive practices” to enable the work of North Korean procurement officials based in the European Union.

The Treasury Department said evasion tactics employed by North Korea included disabling or manipulating automated identification systems, physically altering vessels, transferring cargoes between ships and falsifying cargo documentation.

It said ports visited by vessels involved in ship-to-ship transfers included those in Taiwan, China, Russia and for the first time, South Korea.

The Treasury Department said that in 2018, North Korean ports received at least 263 tanker deliveries of refined petroleum via U.N.-prohibited ship-to-ship transfers.

FILE PHOTO: The flag of North Korea flutters in front of its embassy in Rome, Italy, January 3, 2019. REUTERS/Alessandro Bianchi

It said that if the tankers were fully laden, North Korea would have imported 3.78 million barrels - more than 7-1/2 times the 500,000 barrels a year allowed under a U.N. resolution.

One of the 67 vessels mentioned by the United States is South Korea and its foreign ministry said on Friday the ship was on a watch list and it would thoroughly investigated for any breach of sanctions.

Reporting by David Brunnstrom, Matt Spetalnick and Doina Chiacu in Washington; Additional reporting by Gao Liangping and Ben Blanchard in BEIJING and Hyonhee Shin in SEOUL; Editing by Grant McCool and Peter Cooney

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