State official hints more Chinese firms being probed for N. Korean ties

The State Department’s chief sanctions official on Wednesday indicated that the U.S. is investigating more Chinese firms for ties to North Korea.

“Treasury and State are investigating a number of companies around the world,” Daniel Fried, the department’s coordinator for sanctions policy, told a Senate Foreign Relations Committee subpanel. “I’ll put it this way: there are no limits and there is no administration red line of exemptions for countries or companies. We go where the evidence takes us.”

{mosads}While Fried did not mention China specifically, Sen. Cory Gardner (R-Colo.) said he would take those remarks to mean more Chinese companies are under investigation.

Fried responded that he “wouldn’t argue with” Gardner.

His remarks come days after the administration imposed its first-ever sanctions on a Chinese company in connection with Pyongyang’s nuclear program.

Lawmakers have been pressing the Obama administration to target China with sanctions to pressure Beijing to use its leverage against North Korea.

Experts have long said China — Pyongyang’s closest ally — is the key to reining in North Korea, but that Beijing is reluctant to do so for fear of a unified Korea allied with the United States.

China’s reluctance has reportedly grown after the United States and South Korea agreed to deploy a missile defense system to the Korean peninsula, which Beijing fears could be used against China, as well.

On Monday, the Treasury Department sanctioned four Chinese nationals and a Chinese company for using a network of front companies, financial facilitators and trade representatives to facilitate transactions on behalf of North Korea’s Korea Kwangson Banking Corporation. The Justice Department also charged the individuals with conspiring to evade U.S. sanctions

It was the first time the United States sanctioned Chinese entities over ties to North Korea’s nuclear program.

The move came after Pyongyang carried out its fifth nuclear test earlier this month. The test was the second this year and the largest test to date.

Throughout Wednesday’s hearing, lawmakers from both parties pushed Fried and Assistant Secretary of State for East Asian and Pacific Affairs Daniel Russel on what more the United States could do to make China push North Korea to stop its nuclear activities.

“This is perplexing because China does not want to destabilize the Korean peninsula and does not want North Korea to have its nuclear arsenal that it has, and it’s growing,” said Sen. Ben Cardin (D-Md.). “And it could do so much more. It could. So what can the United States do to get China to take the steps it could take that would put the type of pressure on North Korea that they will change their behavior in regards to their nuclear program?”

Russel agreed that China could do more, but said that over the last 25 years Beijing has improved its cooperation with the United States on North Korea.

“China can and should for more to tighten sanctions,” he said. “This is a goal of U.S. diplomacy. This is only one facet, however, of China’s behavior vis-a-vis [North Korea], and there are significant improvements in China’s cooperation with the U.S. and the Republic of Korea in both implementing U.N. sanctions and pushing back against the risk of either provocations or proliferation.”

Russel also assured the subcommittee the United States is willing to take action that could anger China.

“We are not fully satisfied; there is much more that we believe China can and should do,” he said. “We look for ways to demonstrate that it is very much in China’s interest to do more. And have demonstrated, including through the decision to deploy the [missile defense] system, that the United States and our allies will take the steps necessary to protect us against the threat posed by [North Korea] even when those steps are unwelcome by the Chinese.”