The United States is set to apply significantly tougher sanctions on North Korea, after Congress passed legislation this week that would intensify financial pressure on the regime.
Speaking to members of his staff on Wednesday, Secretary of State Rex Tillerson signalled potential third-party sanctions, saying: "We're at about dial setting five or six right now, with a strong call (to) countries all over the world to fully implement the UN Security Council resolutions regarding sanctions, because no one has ever fully implemented those.
"If you can't take care of it or you simply don't want to take care of it for your own internal political reasons, we will. We'll sanction them through third-country sanctions."
The sanctions aim to sever North Korea from the international financial system, step up interception of North Korean ships, target countries dealing with North Korea in weapons, and restrict its hard currency earnings from forced labour abroad.
The legislation also requires the Trump administration to decide within 90 days whether North Korea should be redesignated as a state sponsor of terrorism.
Ms Sue Mi Terry, a North Korea expert at consultancy Bower Group Asia, told The Straits Times: "The Justice and Treasury departments are currently working to find and list Chinese nationals and banks that facilitate North Korea's illicit businesses.
"The most likely candidates for the secondary sanctions are, first, mid-sized Chinese banks that aid North Korean front companies, leaving the larger ones for later, if the situation escalates."
Next, would be a ban on an estimated 50,000 North Koreans the regime sends to work mostly in China and Russia in mining, logging, textile and construction, to earn Pyongyang hard currency of up to US$2 billion (S$2.8 billion) annually.
According to the United Nations' Panel of Experts reviewing compliance with UN Security Council resolutions sanctioning North Korea, Pyongyang has been "flouting sanctions through trade in prohibited goods, with evasion techniques that are increasing in scale, scope and sophistication".
Said Mr Joshua Stanton, a Washington-based attorney who has assisted the US Congress in drafting sanctions legislation: "North Korea is much more connected to the international economy than is widely assumed. China's violations of the sanctions have been so flagrant they could not be anything but deliberate."
Professor Jia Qingguo, dean of the School of International Studies at Peking University, told ST: "We have our own judgment and we are doing what we can; it's not simply following the US' orders."
• Additional reporting by Lim Yan Liang in Beijing.
