August 15, 2018 / 3:26 PM / in 3 months

U.S. hits Chinese and Russian firms over North Korea sanctions breach

WASHINGTON (Reuters) - The United States imposed sanctions on a Russian port service agency and Chinese firms for aiding North Korean ships and selling alcohol and tobacco to Pyongyang in breach of U.S. sanctions.

FILE PHOTO: The North Korea flag flutters next to concertina wire at the North Korean embassy in Kuala Lumpur, Malaysia March 9, 2017. REUTERS/Edgar Su/File photo

The U.S. Treasury said in a statement on Wednesday that China-based Dalian Sun Moon Star International Logistics Trading Co. Ltd and its Singapore-based affiliate SINSMS Pte. Ltd had netted more than $1 billion a year by exporting alcohol and cigarette products to North Korea.

The department also sanctioned Russian-based Profinet Pte Ltd and its director general, Vasili Aleksandrovich Kolchanov, for providing port services on at least six occasions to North Korean-flagged ships.

Kolchanov was personally involved in North Korea-related deals and interacted directly with North Korean representatives in Russia, the department said.

“The tactics that these entities based in China, Singapore, and Russia are using to attempt to evade sanctions are prohibited under U.S. law, and all facets of the shipping industry have a responsibility to abide by them or expose themselves to serious risks,” U.S. Treasury Secretary Steven Mnuchin said in the statement.

The sanctions mandate that no U.S. citizen can deal with any of those designated in the order, and any of their properties in the United States “must be blocked”, the Treasury said.

The United States has been pressuring North Korea via sanctions to give up its nuclear weapons program.

BEIJING AND MOSCOW PROTEST

China’s Foreign Ministry said in a statement that Beijing has always strictly enforced United Nations Security Council resolutions on North Korea and did not allow Chinese firms or individuals to engage in activities that violated them.

“At the same time, China’s position on opposing countries enacting unilateral sanctions on other countries and ‘long-armed jurisdiction’ is consistent and clear,” it added, without elaborating.

When asked for comment, Liang Ye, a legal representative of Dalian Sun Moon Star International Logistics Trading, said the matter was still unclear and that the Chinese company had not received any notification.

China’s official Xinhua news agency said the United States needed to back off pressuring North Korea if it was serious about wanting lasting peace on the Korean Peninsula.

“Washington should be reminded that the ‘maximum pressure’ approach on Pyongyang is not in keeping with the current situation on the Korean Peninsula and it needs to consider easing sanctions,” Xinhua said in a commentary.

Such commentaries are not statements or official positions, but can be read as a reflection of government thinking.

Though China has repeatedly said it enforces U.N. resolutions on North Korea, it has also said it has the right to conduct what it calls “normal trade” with the country in areas that fall outside the scope of the sanctions.

It has been angered in the past by unilateral U.S. sanctions on Chinese firms and individuals.

Russian Deputy Foreign Minister Sergei Ryabkov said on Thursday that the United States had acted without evidence on the basis of groundless accusations when imposing sanctions on the Russian company.

Moscow was working on retaliatory measures, added Ryabkov, saying the Russian leadership would decide whether to hit back.

Vasili Kolchanov, the head of the port services agency affected, told Reuters he had worked with North Korean vessels as a transport agent, but said the sanctions against him and his firm were illegal.

He only helped prepare documents for the vessels, he said, and was not involved in trading anything.

“It’s not our concern who fuels the vessels, who sells that fuel, who they buy the cargo and oil products from,” he said. “We do not load vessels. As an agent, I only need to check that they have permission from customs.”

Reporting by Tim Ahmann and Lesley Wroughton; Additional reporting by Liangping Gao, Ben Blanchard and Ryan Woo in BEIJING, Polina Nikolskaya in MOSCOW; Editing by Catherine Evans

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