The United States blacklisted a Chinese bank as a "primary money laundering concern" Thursday for helping North Korea access the U.S. and the international financial system, Treasury Secretary Steven Mnuchin said.
The designation of the Bank of Dandong can have powerful effects in efforts to cut the North off from the international banking system as seen in the case of a similar 2005 U.S. financial sanction on Banco Delta Asia, a bank in the Chinese territory of Macau.
The blacklisting at the time scared away other financial institutions from dealing with Pyongyang for fear they would also be sanctioned. The measure has been considered one of the most effective sanctions on the North, though it was later lifted in exchange for denuclearization promises.
"This bank has served as a gateway for North Korea to access the U.S. and international financial systems -- facilitating millions of dollars of transactions for companies involved in North Korea's nuclear and ballistic missile programs. The United States will not stand for such actions," Mnuchin said of the Bank of Dandong.
"This proposed rule will require U.S. banks to ensure that the Bank of Dandong does not access the U.S. financial system directly or indirectly through other foreign banks. This action reaffirms the Treasury Department's commitment to ensure that North Korea is cut off from the U.S. financial system," he said.
The Treasury Department blacklisted two Chinese individuals Sun Wei and Li Hong Ri as well as shipping firm Dalian Global Unity Shipping Co. for their links to the North. Specifically, Sun was linked the North's Foreign Trade Bank and Li to North Korean banking executive Ri Song-hyok, the department said.
The sanctions came on the eve of the first summit talks between U.S. President Donald Trump and South Korean President Moon Jae-in, where one of the biggest topics is expected to be how to reconcile Trump's "maximum pressure" strategy and Moon's softer approach to Pyongyang.
The measures are the latest in a series of signs that the U.S. has begun to take action to pressure China after months of fruitless efforts to persuade Beijing to exercise more of its influence with the North as its main food and energy provider.
Earlier this week, the U.S. also downgraded China's status in its annual human trafficking report and put it on par with North Korea as among the world's worst offenders, saying Beijing failed to end its complicity in Pyongyang's export of forced labor.
Last week, U.S. President Donald Trump also complained about China's work in pressuring the North, saying in a Tweet, "While I greatly appreciate the efforts of President Xi & China to help with North Korea, it has not worked out."
Mnuchin insisted, however, that the U.S. isn't targeting China.
"While today's actions are directed at Chinese individuals and entities, we look forward to continuing to work closely with the Government of China to stop illicit financing involving North Korea. We are in no way targeting China with these actions. We will be meeting with China and other countries at the G-20 next week to further our efforts to cut off North Korea's illicit activities," he said.
"North Korea's provocative, destabilizing, and inhumane behavior will not be tolerated. We are committed to targeting North Korea's external enablers and maximizing economic pressure on the regime until it ceases its nuclear and ballistic missile programs," he added.
Rep. Ed Royce (R-CA), chairman of the House Foreign Affairs Committee, welcomed the sanctions.
"I have long called for sanctions on companies and banks that provide hard currency to sustain Kim Jong-un's rule and grow his illicit nuclear and ballistic missiles programs. This is a big step. The administration is right to target any around the world who act as financial lifelines to Kim Jong-un, and to give them a clear choice: You can do business with North Korea or with the U.S., but not both," he said.
"To cut off more cash to North Korea, the U.S. Senate needs to pass my bill to give the U.S. additional financial tools -- including the ability to stop the North Korean regime's export of slave labor," he said.
South Korea said that the latest action by the U.S. government is a move expected to complement U.N. resolutions in blocking the North's nuclear and missile activities, and eventually contribute to its denuclearization.
"Our government will continue to pursue global coordination, holding a position that we will use all possible means, including sanctions and talks to induce the North toward the path of denuclearization," Seoul's foreign ministry said.