Exclusive: U.S., allies urge sanctions for North Korea firms; China resists

The United States, European Union, South Korea and Japan have submitted a list of about 40 North Korean companies to the U.N. Security Council's sanctions committee for possible blacklisting due to Pyongyang's recent rocket launch, envoys said on Tuesday.

The committee, which includes all 15 Security Council members, received an initial response from China that it would only consent to adding two entities to the U.N. list of banned North Korean firms, which the United States and its allies see as too few, envoys told Reuters on the condition of anonymity.

"The U.S., Europeans, Japan and ROK (South Korea) have together produced a list of around 40 entities to be designated by the 1718 Committee," a senior diplomat told Reuters. "The challenge remains as usual squarely on PRC (China)."

The United States was continuing to press China to allow more North Korean firms to be sanctioned, envoys said.

The North Korea sanctions panel is known at the United Nations as the "1718 committee." It refers to the first sanctions resolution on North Korea, council resolution number 1718, which the council adopted in 2006 after Pyongyang's first nuclear test.

It passed another, more stringent sanctions resolution in 2009 after North Korea's second nuclear test.

Last month, the council in a "presidential statement," strongly condemned North Korea's April 13 rocket launch, called for adding names to the list of those hit by existing U.N. sanctions and warned Pyongyang of further consequences if it carried out another missile launch or nuclear test.

It was not immediately clear which firms the council would blacklist.

The United States, European council members, Japan and South Korea have also proposed expanding the U.N. list of goods that North Korea is forbidden to import, diplomats said. They said the proposed banned goods related to missile technology.

China, North Korea's protector on the Security Council and a permanent veto-wielding member, also backed the council's presidential statement from two weeks ago, ensuring its unanimous adoption. The statement gave the council's North Korea sanctions committee 15 days to propose new sanctions listings.

The 15-day deadline expires at midnight EDT on Tuesday (0400 GMT on Wednesday), although council diplomats said they would likely give China a few more days to consider consenting to more than two of the proposed additions to the U.N. blacklist.

"It looks as if China won't stand in the way of an agreement (on expanding the sanctions list), though they won't necessarily accept adding all the proposed ... entities," a diplomat said. Several other envoys said they also expected China would agree to some kind of expansion of the U.N. blacklist.

Sanctions committees work on the basis of consensus, which means any individual council member can block agreement.

The U.N. North Korea blacklist includes individuals facing international travel bans and asset freezes, companies whose assets are to be frozen and goods that North Korea is not allowed to export or import.

The proposed addition of 40 entities would significantly expand the list of North Korean firms that are not allowed to engage in international business.

The current list of sanctions firms includes eight companies and five individuals. North Korea is barred from importing nuclear and ballistic-missile technology, as well as luxury goods.