The U.S. just slapped sanctions on Chinese companies for selling booze to North Korea

The United States slapped new sanctions on Russian and Chinese companies Wednesday for breaching trade restrictions on North Korea, accusing them of providing port services to Pyongyang’s ships and illicitly selling more than $1 billion in alcohol and cigarettes to the regime.

The sanctions drew an angry response, with China’s Foreign Ministry protesting that its companies observed the restrictions on trade, and Russia’s Deputy Foreign Minister Sergei Ryabkov saying his government was weighing retaliatory measures.

The U.S. Treasury said it was applying the sanctions to Chinese logistics company Dalian Sun Moon Star and its Singapore-based affiliate SINSMS, for using falsified papers to import alcohol and tobacco products into North Korea in violation of U.S. and U.N. sanctions.

It also placed measures on Russian-based Profinet Pte Ltd and its director general, Vasili Kolchanov, for providing port services to North Korean-flagged ships.

READ: South Korea is still being super nice to Kim — and it could undermine U.S. pressure

The sanctions order that no U.S. citizen can deal with the companies.

“Treasury will continue to implement existing sanctions on North Korea, and will take action to block and designate companies, ports, and vessels that facilitate illicit shipments and provide revenue streams to the DPRK,” Treasury Secretary Steven Mnuchin said in a statement.

Kolchanov told Reuters that while he had worked as a transport agent for North Korean ships, he was not involved in trading anything and considered the sanctions against him illegal.

China’s Foreign Ministry said in a statement that Chinese companies strictly observed U.N. sanctions on North Korea, but that it opposed unilateral U.S. sanctions.

An editorial in China’s state-run news agency said the U.S. needed to ease off its pressure on North Korea if it wanted to work towards denuclearizing the 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,” read the commentary.

The sanctions came after the U.S. Ambassador to the United Nations, Nikki Haley, directly called out Russia and China last month for failing to do enough to push for North Korea’s denuclearization.

While restricting oil imports to North Korea is the main focus of U.S. sanctions, the illicit cigarette trade has also been a valuable source of income for the regime. According to the Treasury, the trade earns North Korea more than $1 billion per year.

Cover image: Steven Mnuchin, U.S. Treasury secretary, speaks during the SelectUSA Investment Summit in National Harbor, Maryland, U.S., on Thursday, June 21, 2018. (Andrew Harrer/Bloomberg via Getty Images)