Beijing furious as US targets more Chinese firms over N.Korea sanctions busting

© Joseph Campbell
The United States is investigating more Chinese companies it suspects of breaking North Korean sanctions. Beijing has accused Washington of using its laws for "long-arm jurisdiction."

On Monday, the US imposed sanctions against China's Dandong Hongxiang Industrial Development Co, alleging the firm used front companies to bypass sanctions on North Korea's nuclear weapons and ballistic missile programs. It the first time the US has sanctioned a Chinese company.

The Justice Department indicted Chinese businesswoman Ma Xiaohong for providing material for Pyongyang’s nuclear and missile programs. Ma’s firm accounts for more than 20 percent of all trade between Beijing and Pyongyang.

The move came after North Korea conducted its fifth nuclear test this month. China is North Korea’s biggest trading partner, and Beijing’s cooperation is crucial for sanctions to work against the secretive Communist state.

Chinese Foreign Ministry spokesman Geng Shuang said on Thursday that Beijing is willing to cooperate, but is opposed to the US extending the jurisdiction of its domestic laws internationally.

"We will severely punish according to law any company or individual if there is verified evidence of violations," Geng said.

According to Daniel Fried, who is the sanctions policy coordinator at the US State Department, the sanctions imposed on Monday and the ongoing investigation are a warning to Beijing.

"Of course, the preferred option is for China to do more. It would also be useful if Chinese banks and companies understood that increasingly, dealing with North Korean companies, especially those that are sanctioned, is going to be risky; frankly not worth it," he said.