The Trump administration on Tuesday threatened to cutoff from the U.S. financial system Chinese and Russian companies helping North Korea smuggle coal overseas to circumvent international sanctions on Pyongyang's nuclear activities.
Marshall Billingslea, the Treasury Department's assistant secretary for terrorist financing, provided Congress with intelligence images mapping North Korea's illicit shipping networks used to mask the origin of exported coal to China and Russia.
The images appear to expose China and Russia's covert hand in undermining international pressure on the Kim Jong Un regime to give up its nuclear ambitions, despite the two nations voting publicly on several occasions at the United Nations Security Council to strengthen sanctions.
"North Korea has been living under United Nations sanctions for over a decade and it has nevertheless made significant strides toward its goal of building a nuclear tipped ICBM," Billingslea testified before the House Foreign Affairs Committee, referring to the regime's pursuit of an intercontinental ballistic missile capable of reaching the United States mainland.
"I urge anyone in the financial services industry who might be implicated in the establishment of shell or front companies for [North Korea], and anyone who is aware of such entities, to come forward with that information now, before they find themselves swept up in our net," he said.
The Treasury Department estimates North Korean coal shipments bring in more than $1 billion in annual revenue for the regime, in part enabling Kim Jong Un to generate income used to fund ballistic missile and nuclear programs. Though the UN Security Council over the past month has passed two separate sanctions packages targeting North Korea's coal industry, illicit coal-smuggling networks through China and Russia have watered down the impact, according to the Trump administration.
Citing the intelligence images provided to Congress on Tuesday, Billingslea said North Korean shipping vessels routinely shut off their transponders in violation of international maritime law to avoid detection as they move from North Korea into Chinese or Russian ports to offload sanctioned coal.
The Treasury Department is also tracking North Korea's effort to penetrate the international financial system through shell companies based in China and Russia to help conceal the regime's overseas footprint. Billingslea warned the Trump administration will punish any company in violation of UN sanctions by choking it off from the U.S. financial market.
Though he lauded China for supporting a recent round of UN sanctions, he said Beijing has not yet shown it is serious about cutting off North Korean funding.
"Unfortunately, I cannot tell the committee today that we've seen sufficient evidence of China's willingness to truly shutdown North Korea's revenue flows, to expunge North Korean illicit actors from its banking system, or to expel the various North Korean middlemen and brokers who are continuing to establish webs of front companies," he said.