US optimistic about Chinese action on North Korea

BEIJING (REUTERS) - The United States is optimistic that China will take action against North Korea by increasing scrutiny of financial transactions to Pyongyang that could contravene fresh UN sanctions, a senior US envoy said on Friday.

Stopping illicit money flows are a key part of the sanctions imposed on North Korea in response to its Feb 12 nuclear test.

China is Pyongyang's sole diplomatic and economic ally, although it negotiated the latest sanctions with Washington and has said it wanted them implemented.

"We asked the Chinese for enhanced scrutiny of financial institutions in North Korea. It's no secret that there is a fair amount of financial relationship between China and North Korea and Chinese financial institutions in North Korea," Mr David Cohen, the US Treasury undersecretary for terrorism and financial intelligence, told reporters in Beijing.