Chinese firm sanctioned by US over links to North Korea claims it sells garden products

Wednesday, 23 August, 2017

Company accused of helping bolster Pyongyang’s nuclear programme has not dealt with reclusive state for two years, manager says

One of the five Chinese firms targeted for sanctions by the United States for their alleged links to North Korea said on Wednesday its core business is supplying gardening products.

Dandong Rich Earth Trading Co was accused by the US Treasury Department of importing vanadium ore from Korea Kumsan Trading Corporation, which is controlled by the General Bureau of Atomic Energy in Pyongyang.

Li Xiaoguang, a manager at the Chinese company said he was “surprised” to hear it had been sanctioned.

“We stopped trading with North Korea two years ago. We only sell gardening products now [in the Chinese market],” he said.

Li said that the company used to export building materials to North Korea and imported products made of vanadium from there, but got out of the business two years ago because of the rising tensions. He was keen to clarify that the metal products the company bought were all perfectly legal.

“What we imported were vanadium products, not vanadium ore,” Li said. “We only imported the products after going through customs clearance.”

The US on Tuesday announced it would sanction five Chinese companies and one individual – as well as two Singapore-based companies and three Russian citizens – that it accused of supporting North Korea’s nuclear weapons development.

China’s Foreign Ministry on Wednesday demanded Washington drop the sanctions, saying its action was not conducive to building trust between the two countries.

Three of the Chinese companies on the sanctions list – Jinhou International Holding Co, Dandong Zhicheng Metallic Materials and Dandong Tianfu Trade Co – were accused by the US Treasury of importing nearly US$500 million worth of North Korean coal.

A manager surnamed Lan at Jinhou was reluctant to discuss the issue, but said he was unaware that the company had been sanctioned.

According to its website, the company mostly trades in coal, hard coke, rubber and other minerals, but is also involved in shipping, storage and investment.

The only Chinese individual named on the sanctions list was Zhicheng’s director Chi Yupeng, whom the US described as “using a network of companies to engage in bulk purchases, wire transfers, and other transactions on behalf of North Korean interests”.

A 2015 document from quarantine and inspection authorities in Korla, a city in western China’s Xinjiang province, showed Zhicheng, which is registered both in the Chinese mainland and Hong Kong, was a recipient of North Korean coal.

Calls to Zhicheng and Tianfu went unanswered on Wednesday.

The fifth Chinese company facing sanctions was Mingzheng International Trading, which was accused of acting as a front for North Korea’s Foreign Trade Bank to facilitate transactions in US dollars.

The company is registered in Hong Kong, but its contact details were unavailable on Wednesday.

The sanctions announced by the US on Tuesday were the second against Chinese companies accused of having business relations with North Korea and sponsoring its nuclear programme since President Donald Trump came to power.

In June, the US Treasury sanctioned Bank of Dandong, Dalian Global Unity Shipping Co and two Chinese nationals for their alleged links to the North Korean government.

In a press briefing on Wednesday, Chinese Foreign Ministry spokesman Hua Chunying slammed Washington’s latest move.

“The US action will not help find a solution to the problem … We urge the US side to stop this wrongdoing and correct it,” she said.