Japan may blacklist firms in China, elsewhere for aiding North Korea transactions

The government is considering blacklisting companies based in China or other countries known to be facilitating transactions with North Korea.

In the face of North Korea’s unyielding ballistic missile and nuclear arms development efforts, Japan hopes to take a more efficient approach to cutting off the country’s financial resources by targeting its biggest gateways of foreign income, a government official said Monday.

With China expected to protest the move, the government will carefully consider the timing and extent of newly imposed unilateral sanctions while monitoring talks toward the adoption of a new U.N. Security Council resolution approving additional sanctions, the official said.

The move would target companies involved in helping North Korea evade sanctions, as well as companies employing large numbers of North Korean workers. It would be aimed primarily at Chinese firms operating near China’s border with North Korea.

The sanctions would involve freezing the companies’ assets in Japan and forbidding Japanese firms from doing business with them.

According to the official, the government may draft a special law if needed to execute the sanctions.

The move would be in line with the United States, which is investigating several Chinese firms after sanctioning a trading company and four of its executives in September.

The trading company in the city of Dandong, Liaonang province, along China’s border with North Korea, is suspected of supporting Pyongyang’s development of nuclear arms.

The sanctioning of companies that employ North Korean workers reflects concern the practice is used to funnel foreign currency into North Korea to fund its nuclear arms and missile development efforts.

Since earlier this year, Japan has been working with the United States and South Korea to urge countries taking in North Korean workers to stop doing so.

North Korea conducted its fifth nuclear test — and second this year — on Sept. 9. It has also repeatedly launched or attempted to launch ballistic missiles despite U.N. prohibitions.

In response, Japan has sought to respond to what Prime Minister Shinzo Abe has dubbed “a new level of threat” with a strengthening of existing sanctions as well as novel measures.