China raps US sanctioning of bank over North Korea ties

BEIJING: Beijing on Friday hit back at a US decision to exclude a Chinese bank from the American financial system over its alleged ties to North Korea, slamming the move as "long-armed jurisdiction".

Washington had alerted other businesses in June that it planned to take the action, but it finally went into effect on Thursday, just as President Donald Trump was to set off on an Asian tour.

China "strongly opposes the long-armed jurisdiction imposed by any country," Chinese foreign ministry spokeswoman Hua Chunying told a regular press briefing. 

China has been "comprehensively, actively, meticulously and strictly" implementing UN sanctions, she added. 

Trump has demanded that Beijing do more to push its neighbour North Korea to stop efforts to build a nuclear-armed missile capable of reaching American cities.

He will bring this message to President Xi Jinping in Beijing next week, but China is reluctant to push too hard and risk destabilising Kim Jong-Un's North Korean regime.

Officials in Washington warn that, while they would prefer Kim to come to the table, Trump has not ruled out a pre-emptive strike to prevent him from crossing the missile threshold.

But, alongside this sabre-rattling, Washington is also slowly stepping up secondary sanctions on foreign institutions like the Bank of Dandong which it accuses of funnelling illicit funds.

This risks angering China, but hawkish commentators argue that it remains the only way short of war to force Pyongyang, and perhaps more importantly Beijing, to reconsider its strategy.

"Banks and businesses worldwide should take note that they must be vigilant against attempts by North Korea to conduct illicit financing and trade," Treasury Secretary Steven Mnuchin said.

Along with the ban on Bank of Dandong, the Treasury also issued new guidance to international banks' risk and compliance officers to help them spot North Korean attempts to infiltrate world finance.

Banks from China and around the world find it hard to operate if they are barred from the US financial system, which is a clearing house for most dollar-denominated transactions.

In addition to the financial measures, Washington may also decide to re-designate North Korea as a "state sponsor of terrorism" -- a formal blacklist that would add to sanctions pressure.

Warmbier death

Yet the Trump administration does not seem to be in a hurry, despite the president's anger over the death of US student Otto Warmbier after he was imprisoned during a visit to the North.

Warmbier died in June this year, just days after he was released from custody and sent home in a mysterious coma.

His parents said their son showed signs of torture, including teeth that appeared to have been "rearranged," and hands and feet that were disfigured. Trump then accused the North Korean regime of torturing the 22-year-old.

But the US coroner Lakshmi Sammarco, who examined Warmbier's body after his death, said there was no clear evidence of physical torture -- including no recently broken bones or damaged teeth. 

On August 2, Trump reluctantly enacted a law that was forced on him by the US Congress pressing for new economic and political sanctions against Iran, Russia and North Korea.

One clause of that act required the US State Department to state within 90 days whether North Korea should be named a terror sponsor -- a deadline lawmakers say expired on Tuesday.

The State Department said it had calculated the deadline differently and was working toward a Thursday announcement, but as office hours came to an end there was no news.

Congressman Ted Poe, chairman of the House subcommittee on Terrorism, Nonproliferation and Trade, was unimpressed and followed up with the State Department to ask about the delay. 

"To me, the very law is clear. The designation should have occurred by October 31," he said.

Earlier, at the White House, National Security Adviser HR McMaster had said the designation was still an option that is "under consideration" and that news would come "soon." 

He cited the murder of the North Korean leader's half-brother Kim Jong-Nam, who was attacked in February with VX nerve agent at a Malaysian airport, as one reason the regime might be deemed terrorist.