The US is optimistic China will take strong action against North Korea by increasing scrutiny of financial transactions with Pyongyang that could contravene fresh UN sanctions, a senior US official said on Friday.
US Treasury Undersecretary for Terrorism and Financial Intelligence David Cohen said he was confident Chinese banks and regulators would pay attention to the new UN Security Council resolution.
Stopping illicit money flows to North Korea is a key part of the sanctions imposed in response to Pyongyang’s Feb. 12 nuclear test. China is North Korea’s sole diplomatic ally and its major trading partner, although it negotiated the latest sanctions with Washington and has said it wants them implemented.
“We’ve heard nothing but the strong intention to implement the Security Council resolution, and we fully expect to work very cooperatively with the Chinese in the robust implementation of that resolution,” Cohen told reporters in Beijing.
China has become increasingly frustrated with North Korea, Chinese experts have said.
Besides the latest nuclear test, North Korea tested a long-range missile in December last year and has stepped up its rhetoric against the US and South Korea.
“From the perspective of China, we’ll always attach importance to North Korea, and we also have a lot of respect for them [North Koreans],” said Jin Canrong (金燦榮), associate dean of the School of International Studies at Renmin University in Beijing.
“But China has its own interests and the third nuclear test has damaged China’s interests. Therefore, China has to show its dissatisfaction,” he added.
The measures announced on March 7 tighten financial restrictions on North Korea, including the illicit transfer of bulk cash, and crack down on its attempts to ship and receive banned cargo. The aim is to curtail the North’s nuclear and ballistic missile programs.
The success of the measures depends to a large extent on China, UN diplomats have said.
Cohen, visiting Beijing after meetings with officials in South Korea and Japan, said he asked China for enhanced scrutiny of Chinese financial institutions in North Korea.
“It’s no secret that there is a fair amount of financial relationship between China and North Korea and Chinese financial institutions in North Korea,” Cohen said.
“We are hopeful that Chinese banks and Chinese regulators will take heed of the Security Council resolution. I have every confidence that they will,” he said.
Chinese Ministry of Foreign Affairs spokesman Hong Lei (洪磊) said the government had not changed its position on North Korea despite signing up to the new sanctions, adding that dialogue was the best way forward.
“All parties should work to reduce tensions and bring about a turnaround on the Korean Peninsula,” he told reporters.
One of the challenges for the international community is stopping the transfer of bulk cash to North Korea, which UN diplomats say is one of Pyongyang’s preferred methods of moving money — often in briefcases carried by its diplomats.
Asked about South Korean media reports that North Korean leader Kim Jong-un had millions of dollars stashed in secret bank accounts in China, another US official said he was aware of the reports, but did not comment on whether he thought they were true.
“We are well aware of the past habits of the Kim family, especially with respect to luxury goods,” Dan Fried, the State Department’s new coordinator of sanctions policy, told reporters.