Washington’s decision earlier this week to sanction more than a dozen firms and individuals for facilitating North Korea’s illicit nuclear program ruffled more than a few feathers in Russia and China. But, warns one expert, there’s a much bigger problem lurking.
Anthony Ruggiero, a Senior Fellow at the Foundation for the Defense of Democracies with nearly two decades of government experience, said, "The one element missing from Tuesday’s action is the designation of Chinese banks that facilitate North Korea’s illicit financial transactions."
Ruggiero noted in his new opinion piece for FoxNews.com that the sanctions are "finally getting serious... [and] send a strong message to Beijing and Moscow." But, he argued, the U.S. needs to be doing even more.
"Chinese banks are integral to the operation of these illicit networks and the Trump administration will need to target them to move its pressure campaign to the next level," Ruggiero wrote. "This newest round of sanctions will not have a meaningful impact unless the White House presses forward, sidelining those who perennially counsel that Beijing and Moscow respond best to carrots not sticks."
Russian Deputy Foreign Minister Sergei Ryabkov reportedly suggested that the U.S. had again “stepped on the same rake,” and was further damaging its relationship with Moscow. China also expressed its displeasure over the decision, with foreign ministry spokeswoman Hua Chunying telling reporters earlier this week that Beijing opposes "the long-arm jurisdiction taken" by the U.S. Both countries had supported the new round of sanctions imposed on North Korea earlier this month, and their support was seen as a major victory for the White House.
North Korea claims pressure from its opponents only fuels the desire to continue its provocative quest for proliferation. According to the Associated Press, the Hermit Kingdom's envoy to U.N. disarmament talks suggested earlier this week that "military threats and pressure" from the United States only drive his country to further develop a nuclear deterrence.
The new foreign minister of Japan reportedly said this week that he supports the Trump administration's approach, and believes that continued pressure is the only way to get Pyongyang to drop its pursuit of nuclear weapons.
While targeting Chinese financial institutions is seen as the key by some, others warn of a slippery slope that could come back to hurt the U.S. almost as much as those on the receiving end of the sanctions.
"Once we go down the road of hitting a Chinese bank that is deeply connected to the U.S. financial system, things will begin to move very fast and be quite unpredictable," said Joseph DeThomas, a former State Department official who worked on Iran and North Korea sanctions, in an interview with The New York Times.
The economies of China and the United States are the world's largest, and they are intricately linked by both trade and financial relationships.
This summer, the privately owned Bank of Dandong became the first mainland Chinese financial institution to be accused by the U.S. of laundering funds for Pyongyang. The U.S. Treasury's Financial Crimes Enforcement Network (FinCEN) announced “a finding that Bank of Dandong, a Chinese bank that acts as a conduit for illicit North Korean financial activity... also facilitates financial activity for North Korean entities designated by the United States and listed by the United Nations for proliferation of WMDs, as well as for front companies acting on their behalf."
With the announcement of its findings, FinCEN also submitted a proposal laying out how to potentially deal with the Bank of Dandong situation. Congress is expected to address the issue when lawmakers return from summer recess.