The South Korean government is considering sanctioning Dandong Hongxiang Industrial Development Company suspected of facilitating illegal transactions with North Korea.

Multiple sources said on Tuesday that the government is reviewing the possibility of adding the Chinese company to its list of sanctioned entities and people associated with the North.

If the company, along with its executives, is put on the list, it will be banned from making financial transactions with South Koreans and their assets in South Korea will be frozen.

Seoul is likely to decide on the level and timing of the sanction depending on whether China will join in limiting the North’s exports of coal in connection with a new resolution being discussed by the UN Security Council following the regime’s fifth nuclear test in September.

The U.S. already sanctioned Hongxiang in September while Japan also said last month that it was considering implementing a secondary boycott and sanctioning Chinese companies.

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