Treasury targets China with sanctions over North Korea missile help

NEWS AND ANALYSIS:

The Treasury Department on Wednesday imposed financial sanctions on Chinese companies and their executives for supplying missile- and space-related goods to North Korea. Critics say the action is a rare and belated acknowledgment by the U.S. government that the North Korean nuclear missiles threatening U.S. cities were built with Chinese technology and components.

The sanctions announced by Treasury’s Office of Foreign Assets Control are largely symbolic since they block all property and funds of the Chinese entities in the United States. Most of the companies and people linked to the missile proliferation are unlikely to have assets here. Financial institutions are also blocked from doing business with those designated under the new sanctions.

“The ultimate goal of sanctions is not to punish, but to bring about a positive change in behavior,” the Treasury statement said, targeting six individuals and five companies in China.

North Korea has repeatedly violated United Nations resolutions with missile launches, including a recent failed attempt to orbit a military satellite, the Treasury statement added.

The Biden administration accuses Pyongyang of also supplying ballistic missiles to Russia for use in the war in Ukraine. Russia recently vetoed the renewal of a U.N. panel of experts on North Korea devoted to uncovering violations of U.N. resolutions. The veto has made it easier for North Korea to evade sanctions, the statement said.

Brian E. Nelson, the Treasury Department’s undersecretary for terrorism and financial intelligence, said North Korea’s continued missile development and proliferation are “irresponsible and destabilizing for both the region and the international community.”

China affairs specialist Richard Fisher said the action against the Chinese follows at least 12 years of public and internal reporting on Beijing’s support for North Korea’s large and growing arsenal of long-range missiles.

“This is both an overdue warning and a stunning illustration of U.S. government dysfunction,” said Mr. Fisher, a senior fellow at the International Assessment and Strategy Center.

American intelligence satellites in 2012 first detected China’s transfer of large, 16-wheel transporter-erector launchers now used for North Korean mobile intercontinental ballistic missiles and shown on state television. The mobile missile launchers were produced by the China Aerospace Science and Industry Corp., a large, state-owned missile manufacturer.

“Now, 13 years later the Treasury Department has at last tracked down the China-based support network for North Korea’s missiles, 13 years in which Pyongyang has developed and is now manufacturing ICBMs — the liquid fueled Hwasong-17 that could carry up to seven nuclear warheads, and the solid fuel Hwasong-18 that can carry three nuclear warheads,” Mr. Fisher said.

Mr. Fisher said it appears the Treasury Department and the U.S. intelligence community failed to act for years and that they could have sanctioned China as early as 2012.

“Why have three administrations, and a very well-funded intelligence community, taken 13 years to begin to uncover the truth of China’s support for North Korean nuclear weapons that could kill millions of Americans, when it was revealed on North Korean state television over a decade ago?” Mr. Fisher said.

Earlier, the Treasury Department sanctioned North Korea’s procurement agent in Beijing, Choe Chol Min, and the North Korean Second Academy of Natural Sciences engaged in military technology procurement.

North Korea’s missile and space programs rely on foreign technology and components, and Pyongyang has created an extensive network of overseas procurement agents, including Chinese nationals. Chinese companies also sell missile-related goods that are disguised in shipments to North Korea.

One of those identified by Treasury as a key facilitator for the North Koreans is Shi Quanpei, a Chinese national who helped supply sensitive electronics and metal sheets used in North Korean missiles. Two associates of Mr. Shi, Du Jiaxin and Wang Dongliang, and Mr. Shi’s wife, Chen Tianxin, were also identified as key players in the missile procurement network.

“As late as 2023, Shi Qianpei fulfilled procurement requests from Choe Chol Min for electronic devices, including the acquisition of items likely intended to support the [North Korean] space and satellite program,” the Treasury statement said. Mr. Shi also sought to provide financial support to the network, U.S. officials asserted.

Treasury also identified the companies believed to be part of the missile procurement network: Beijing Sanshunda Electronics Science and Technology Co. Ltd.; Qidong Hengcheng Electronics Factory; Shenzhen City Mean Well Electronics Co. Ltd.; Beijing Jinghua Qidi Electronic Technology Co. Ltd.; and Yidatong Tianjin Metal Materials Co. Ltd.

W.H. aide defends ’name and shame’ strategy on China military exports

White House national security adviser Jake Sullivan last week defended the Biden administration policy of naming Chinese companies engaged in supporting the Russian military, although it has so far failed to curb the flow of sales to Russian defense firms.

Asked whether the U.S. sanctions imposed on the Chinese “lack teeth,” Mr. Sullivan said Chinese officials have responded when U.S. officials identified a bank engaged in questionable dealings with Russia as its pursues its war in Ukraine. But he acknowledged that problems remain.

“But writ large, the picture is not pretty,” Mr. Sullivan said in remarks to the Aspen Security Forum. “China continues to be a major supplier of dual-use items to Russia’s war machine.”

The dual-use goods Beijing supplies are used to build weapons that are killing Ukrainians, he said.

“We think China should stop because we think it is profoundly outside of the bounds of decent conduct by nation states,” Mr. Sullivan said. “China should not be on Team Russia when it comes to the war in Ukraine. … The larger picture continues to travel in the wrong direction, from my perspective.”

Asked about the record for the current “name and shame” policy toward China’s suppliers, Mr. Sullivan said the administration is prepared to “tighten the screws” on China and other countries helping the Russian military.

He did not announce any new measures in his remarks Friday, but added, “I think you can expect to see additional sanctions measures as we watch this picture continue to evolve in the coming weeks.”

In April, the administration threatened to sanction Chinese banks involved in the Russia military trade by cutting them off from the U.S. financial system.

No Chinese banks have been sanctioned so far, however.

U.S. intel agencies blocked disclosure of spy balloon gear

The Biden administration went along with U.S. intelligence agencies that recommended against releasing details to the public of a Chinese surveillance balloon that transited the United States unimpeded in early 2023 before being shot down by an Air Force jet fighter over the South Carolina coast.

U.S. military divers recovered a large amount of intelligence-collection gear in an underwater salvage operation. But all information about the balloon is being kept secret, said White House national security adviser Jake Sullivan.

Mr. Sullivan said the administration decided to down the balloon over water rather than land to better gain access to the spying components. The downing by an air-to-air missile over the ocean allowed U.S. recovery divers “to take critical components off the ocean floor, look at the technology, look at the capabilities and learn from that,” Mr. Sullivan said.

As a result, U.S. intelligence agencies learned about “basically what is China up to with this thing, what capabilities do they have,” he said, describing the recovered equipment as “pretty sensitive.”

“So this was not a White House-directed decision” to withhold details from the public, he said, “but the intelligence community, the FBI, made a judgment that the best way forward would be for us to take those lessons, apply them, share them as necessary with others, but not make a big public show of it.”

Asked if the Chinese spying equipment was more sensitive than initially assessed, Mr. Sullivan declined to comment, saying only that the technology was “interesting.” China has denied the balloon was spying and insisted the craft was an errant weather balloon.

The incident in February 2023 caused a sharp but temporary disruption in U.S.-China relations.

• Contact Bill Gertz on X @BillGertz.