WASHINGTON • The United States said it had sanctioned a Chinese industrial machinery and equipment wholesaler, a new step in tightening the financial noose around North Korea's nuclear programme after its fifth nuclear test this month.

The US Treasury said on Monday it was sanctioning Dandong Hongxiang Industrial Development and four of its executives, including the company's founder Ma Xiaohong, under US regulations targeting proliferators of weapons of mass destruction.

It accused the company of acting on behalf of North Korea's Korea Kwangson Banking Corp (KKBC), which has been under US and United Nations sanctions for supporting proliferation of such weapons.

The US Department of Justice said it had filed criminal charges against the Chinese company and its executives for using front companies to evade sanctions on North Korea's nuclear weapons and ballistic missile programmes.

The charges accuse the company and the individuals of conspiring to violate sanctions rules and engaging in international money laundering.

The Justice Department said bank accounts associated with the company and front companies received hundreds of millions of dollars that transited through the US.

"Today's action exposes a key illicit network supporting North Korea's weapons proliferation," Mr Adam Szubin, the Treasury Department's acting Undersecretary for terrorism and financial intelligence, said in a statement.

"Hongxiang and its employees sought to evade US and UN sanctions, facilitating access to the US financial system by a designated entity."

The announcement came after the White House said last week that President Barack Obama and Chinese Premier Li Keqiang agreed in New York on Sept 20 to step up cooperation in the UN Security Council and in law enforcement channels after North Korea's latest and largest nuclear test on Sept 9.

China's Foreign Ministry said last week Hongxiang was under investigation following the provisions of UN resolution 2270, which imposed tighter sanctions on North Korea in March.

Chinese embassy spokesman Fang Hong said Hongxiang was being investigated for "illegal behaviour" and "economic crimes".

She said China had a "clear and consistent" position of opposing North Korea's development of nuclear weapons.

On Monday, South Korea's Joongang Daily newspaper reported that China was investigating a top official of the KKBC at its branch in the Chinese border city of Dandong.

South Korea said yesterday it "highly valued" Washington's action against the Chinese company. "By exposing the risks of trade with North Korea, we expect this measure to raise the alarm for individuals and entities in third countries as well as China that are trading with North Korea," South Korea's foreign ministry said in a statement.

REUTERS