WASHINGTON: The US Treasury Department on Thursday slapped sanctions on a Chinese bank over illicit activities in North Korea, including facilitating the production of weapons of mass destruction.
Bank of Dandong which "acts as a conduit for illicit North Korean financial activity, is a foreign bank of primary money laundering concern," and will be severed from the US financial system, the Treasury said in a statement.
The announcement comes just a week before President Donald Trump is due to meet with his Chinese counterpart at the Group of 20 leaders summit next week in Germany.
However, Treasury Secretary Steven Mnuchin said the move was not targeted at the Chinese government.
"This is not directed at China, this is directed at a bank, as well as individuals and entities in China," he told reporters.
But he warned that Treasury will "follow the money" and take action where needed to cut off illegal finance.
"If we find other activity, we will sanction other entities. Nobody's off limits."
The US Treasury said North Korea continues to try to evade international sanctions in pursuit of its weapons programme.
Dandong "acts as a conduit for North Korea to access the US and international financial systems, including by facilitating millions of dollars of transactions for companies involved in North Korea's WMD and ballistic missile programs," Treasury said.
The Treasury's move will prevent the bank from having accounts or doing business with US financial institutions.
The department also sanctioned two Chinese individuals who established front companies to facilitate financial transactions for North Korea, and one Chinese company, Dalian Global Unity Shipping Co., Ltd. which helped to smuggle banned luxury goods into the country.
Dalian Global Unity is reported to transport 700,000 tonnes of freight annually, including coal and steel products, between China and North Korea, the Treasury said.