Tag Archives: United States

North Korea says intercontinental ballistic missile test successful

A man watches a TV broadcast of a news report on North Korea's ballistic missile test, at a railway station in Seoul, South Korea, July 4, 2017. REUTERS/Kim Hong-Ji

By Christine Kim and Jack Kim

SEOUL (Reuters) – North Korea said on Tuesday it successfully test-launched an intercontinental ballistic missile (ICBM) for the first time, which flew a trajectory that experts said could allow a weapon to hit the U.S. state of Alaska.

The launch came days before leaders from the Group of 20 nations were due to discuss steps to rein in North Korea’s weapons program, which it has pursued in defiance of U.N. Security Council sanctions.

The launch, which North Korea’s state media said was ordered and supervised by leader Kim Jong Un, sent the rocket 933 km (580 miles) reaching an altitude of 2,802 km over a flight time of 39 minutes.

North Korea has said it wants to develop a missile mounted with a nuclear warhead capable of striking the U.S. mainland.

To do that it would need an ICBM with a range of 8,000 km (4,800 miles) or more, a warhead small enough to be mounted on it and technology to ensure its stable re-entry into the atmosphere.

Some analysts said the flight details on Tuesday suggested the new missile had a range of more than 8,000 km, underscoring major advances in its program. Other analysts said they believed its range was not so far.

Officials from South Korea, Japan and the United States said the missile landed in the sea in Japan’s Exclusive Economic Zone after being launched on a high trajectory from near an airfield northwest of the North’s capital, Pyongyang.

“The test launch was conducted at the sharpest angle possible and did not have any negative effect on neighboring countries,” North Korea’s state media said in a statement.

The North said its missiles were now capable of striking anywhere in the world.

“It appears the test was successful. If launched on a standard angle, the missile could have a range of more than 8,000 km,” said Kim Dong-yub, a military expert at Kyungnam University’s Institute of Far Eastern Studies in Seoul.

“But we have to see more details of the new missile to determine if North Korea has acquired ICBM technology.”

South Korean President Moon Jae-in, who convened a national security council meeting, said earlier the missile was believed to be an intermediate-range type, but the military was looking into the possibility it was an ICBM.

‘HEAVY MOVE’

U.S. President Donald Trump wrote on Twitter: “North Korea has just launched another missile. Does this guy have anything better to do with his life?” in an apparent reference to North Korean leader Kim Jong Un.

“Hard to believe South Korea and Japan will put up with this much longer. Perhaps China will put a heavy move on North Korea and end this nonsense once and for all!”, Trump said in a series of tweets.

Stock markets in both South Korea and Japan fell, with the Kospi ending down 0.6 percent and Japan’s Nikkei share average ending down 0.1 percent.

Japan’s Prime Minister Shinzo Abe said he would ask the presidents of China and Russia to play more constructive roles in efforts to stop Pyongyang’s arms program.

“Leaders of the world will gather at the G20 meeting. I would like to strongly call for solidarity of the international community on the North Korean issue,” Abe told reporters.

Japan said on Monday the United States, South Korea and Japan would have a trilateral summit on North Korea at the G20. Chinese President Xi Jinping will also be at the July 7-8 meeting in Hamburg, Germany.

Chinese Foreign Ministry spokesman Geng Shuang called for calm and restraint, and reiterated China’s opposition to North Korea’s violation of U.N. resolutions on missile tests.

Responding to Trump’s tweet, Geng said China had for a long time been working hard to resolve the North Korean nuclear issue.

“China’s contribution is obvious to all. China’s role is indispensable,” he told a daily news briefing.

China would continue to work hard and also hoped other parties would work hard too, Geng said.

“We hope all sides can meet each other half way.”

North Korea says it needs to develop its weapons in the face of what it sees as U.S. aggression.

It has conducted five nuclear tests, two since the beginning of last year, and numerous missile tests over the past year.

It often times its tests to show its defiance and to raise the stakes when it sees regional powers getting ready for talks or sanctions, analysts say.

The launch took place hours before the Independence Day celebrations in the United States. North Korea has in the past fired missiles around this time.

LAST CHANCE FOR TALKS?

Despite the unprecedented pace of tests since the start of last year, analysts have said they believed North Korea was years away from having a nuclear-tipped ICBM capable of hitting the United States.

North Korea is also trying to develop intermediate-range missiles capable of hitting U.S. bases in the Pacific. The last North Korean launches before Tuesday were of land-to-sea cruise missiles on June 8.

David Wright, co-director of the Global Security Program at the U.S.-based Union of Concerned Scientists, said the assessments of the Tuesday flight time and distance suggested the missile might was launched on a “very highly lofted” trajectory of more than 2,800 km.

The same missile could reach a maximum range of roughly 6,700 km on a standard trajectory, Wright said in a blog post.

“That range would not be enough to reach the lower 48 states or the large islands of Hawaii, but would allow it to reach all of Alaska,” he said.

South Korea’s Moon said on Monday North Korea now faced its “last opportunity” to engage in talks with the outside world.

North Korea has conducted four ballistic missile tests since Moon took office in May, vowing to use dialogue as well as pressure to bring Pyongyang’s nuclear and missile programs under control.

This week, North Korea was a major topic in phone calls between Trump and the leaders of China and Japan, both of whom reaffirmed their commitment to a denuclearized Korean Peninsula.

Trump has recently suggested he was running out of patience with China’s efforts to pressure North Korea.

(For an interactive package on North Korea’s missile capabilities, click http://tmsnrt.rs/2t6WEPL)

(Additional reporting by Soyoung Kim in SEOUL, Kiyoshi Takenaka and Elaine Lies in TOKYO, Ben Blanchard in BEIJING and Ayesha Rascoe in WASHINGTON; Editing by Bill Tarrant, Robert Birsel)

Details of first Putin-Trump meeting not yet settled: Kremlin

Russian President Vladimir Putin attends a news conference at the Kremlin in Moscow, Russia, on January 17, 2017 and U.S. President Donald Trump seen at a reception ceremony in Riyadh, Saudi Arabia, on May 20, 2017, as seen in this combination photo.

By Denis Dyomkin and Maria Tsvetkova

MOSCOW (Reuters) – Russia and the United States are still discussing the timing of the first face-to-face encounter between Donald Trump and Vladimir Putin, expected to take place at a G20 summit in Germany later this week, a Kremlin aide said on Monday.

Since Trump was elected U.S. president, Russian has been keenly anticipating his first meeting with Putin, hoping it would trigger a reset in U.S.-Russia relations that plunged to post-Cold War lows under Trump’s predecessor, Barack Obama.

But with Trump embroiled in a row at home over his associates’ links to Moscow, the encounter with Putin has become a minefield. Too warm a meeting would allow Trump’s domestic opponents to accuse him of being a Kremlin stooge.

Kremlin foreign policy aide Yuri Ushakov told reporters the Trump-Putin meeting would happen on the sidelines of the G20 summit, in Hamburg, but it was not yet finalised how it would fit into the summit’s schedule.

“We will be looking for certain breaks, windows to hold this, the most important, meeting,” Ushakov said.

“We have a lot of issues, which should be discussed at the highest level … That’s why this meeting, this first personal contact, is so important.”

Asked about the agenda for the meeting, Ushakov said: “I’ve heard the Americans want to raise the issues of terrorism and Syria. It seems to me that would be pretty reasonable.”

Ushakov said that ties between Russia and the United States were at “zero level.”

The Kremlin aide urged the United States “to save us from the need to retaliate” against Washington for expelling Russian diplomats and seizing two Russian diplomatic compounds on U.S. soil, one in Maryland and the other on Long Island.

Barack Obama ordered the expulsion of the 35 Russians in late December last year, seized the compounds, and imposed sanctions on two Russian intelligence agencies over what he said was their involvement in hacking political groups in the Nov. 8 U.S. presidential election.

Russian has denied interfering in the U.S. election. Putin said at the time he would not retaliate immediately, in the expectation that relations would improve under Trump.

With no thaw materializing yet, Russian officials have said this month that they may now have to take “symmetrical” steps in retaliation.

 

(Editing by Vladimir Soldatkin/Christian Lowe/Andrew Osborn)

 

Trump talks North Korea threat in calls with China, Japan leaders

U.S. President Donald Trump and China's President Xi Jinping chat as they walk along the front patio of the Mar-a-Lago estate after a bilateral meeting in Palm Beach, Florida, U.S., April 7,

By Jeff Mason

BRIDGEWATER, N.J. (Reuters) – The threat posed by North Korea was a key topic in phone calls between U.S. President Donald Trump and the leaders of China and Japan, along with trade issues, the White House said on Sunday.

Trump spoke with Chinese President Xi Jinping and Japanese Prime Minister Shinzo Abe ahead of expected meetings with the leaders of Asia’s two biggest economies at a Group of 20 nations summit in Germany later this week.

“Both leaders reaffirmed their commitment to a denuclearized Korean Peninsula,” the White House said of Trump’s call with Xi from his resort property in Bridgewater, New Jersey, where he is spending a long weekend.

“President Trump reiterated his determination to seek more balanced trade relations with America’s trading partners,” it added.

Trump has become increasingly frustrated with China’s inability to rein in North Korea, and the reference to trade was an indication the one-time New York businessman may be ready to return to his tougher-talking ways on business with Beijing after holding back in hopes it would put more pressure on Pyongyang.

Trump and Xi discussed the “peace and stability of the Korean peninsula”, China’s Foreign Ministry said, without elaborating.

Ministry spokesman Geng Shuang later told a daily briefing that the United States was “very clear” about China’s position on North Korea. Geng did not elaborate on what Xi told Trump about North Korea.

“Negative factors” have affected Sino-U.S. relations, and China has already expressed its position to the United States, Xi told Trump, according to a read-out of a telephone call between the leaders carried by the ministry.

 

ONE CHINA POLICY

The ministry said Trump told Xi the U.S. government would continue to follow a “one China” policy, under which Washington acknowledges the Chinese position that there is only one China and Taiwan is part of it, and that this position had not changed.

China pays great attention to that reiteration and hopes the United States can “appropriately handle” the Taiwan issue, Xi told Trump, according to the ministry.

On Thursday, the United States targeted a Chinese bank and sanctioned Chinese individuals and a firm for dealing with North Korea and approved a $1.42 billion arms deal with Taiwan – decisions that angered Beijing.

And on Sunday a U.S. warship sailed near a disputed island in the South China Sea claimed by China, drawing a rebuke from the Chinese Ministry of Foreign Affairs.

Trump’s separate conversations with the two Asian leaders followed White House talks with South Korea’s new president, Moon Jae-in, last week in which the U.S. leader called on Asian powers to implement sanctions and demand North Korea “choose a better path and do it quickly.”

 

TRILATERAL SUMMIT

Trump and Abe, in their call, reiterated their commitment to increase pressure on North Korea.

“They reaffirmed that the United States-Japan Alliance stands ready to defend and respond to any threat or action taken by North Korea,” the White House said in a statement.

Japan’s Chief Cabinet Secretary Yoshihide Suga told a news conference the two countries and South Korea will have a trilateral summit at the G20 meeting, but he didn’t want to speculate on what might be said there.

“It’s important for these three nations to show their strong unity and cooperation both within and without,” Suga said. “Things such as strengthening pressure on North Korea or urging China to fulfill even more of a role. Things like this have been agreed on before as well.”

Trump, who held talks with Abe earlier this year at the president’s Mar-a-Lago resort in Florida, has forged a united front with the Japanese leader on the need to exert pressure on North Korea to curb its nuclear and missile development.

During and after a Florida summit with Xi in April at Mar-a-Lago, Trump praised his Chinese counterpart for agreeing to work on the North Korea issue and has held back on attacking Chinese trade practices he railed against during the presidential campaign.

But Trump has recently suggested he was running out of patience with China’s modest steps to pressure North Korea, which is working to develop a nuclear-tipped missile capable of hitting the United States, and has been considering moving ahead on trade actions.

Trump has been weighing new quotas or tariffs on steel imports for national security reasons and plans to discuss his concerns at the G20. Washington sees excess global production capacity, particularly in China, administration officials say.

 

(Reporting by Jeff Mason in New Jersey, Matt Spetalnick in Washington, Ben Blanchard in Beijing and Takaya Yamaguchi in Tokyo; Editing by Bill Tarrant)

 

Trump calls for firm response to North Korea, targets Seoul on trade

U.S. President Donald Trump (L) welcomes South Korean President Moon Jae-in at the White House in Washington, U.S., June 30, 2017. REUTERS/Jim Bourg

By David Brunnstrom and Lisa Lambert

WASHINGTON (Reuters) – U.S. President Donald Trump called for a determined response to North Korea after talks with South Korea’s President Moon Jae-in on Friday where he stressed the importance of their alliance but took aim at Seoul over trade and sharing the cost of defense.

Trump said the United States was renegotiating what he characterized as a “rough” trade deal with South Korea agreed to five years ago by his predecessor, Barack Obama, and reiterated that an era of “strategic patience” over North Korea’s nuclear and ballistic missile programs had ended.

“Together we are facing the threat of the reckless and brutal regime in North Korea,” Trump said as he stood alongside Moon in the White House Rose Garden. “The nuclear and ballistic missile programs of that regime require a determined response.”

Despite the tough rhetoric, it remains unclear how Trump will find a way forward on North Korea, which is working to develop a nuclear-tipped missile capable of hitting the United States.

U.S. Defense Secretary Jim Mattis has warned the consequences of any military solution would be “tragic on an unbelievable scale.” Trump had pinned his hopes on persuading China, North Korea’s neighbor and main trading partner, to do more to rein in Pyongyang, although he has lately grown frustrated that Beijing has not taken stronger action.

Trump called on regional powers to implement sanctions and demand North Korea “choose a better path and do it quickly.”

Moon, who warned of a “stern response” to any provocations, urged Pyongyang to return promptly to talks.

“Our two leaders will employ both sanctions and dialogue in a phased and comprehensive approach,” Moon said of South Korea and the United States.

Trump and Moon have said they are open to renewed dialogue with North Korea but only under circumstances that would lead to Pyongyang giving up its weapons programs.

Moon told an event at the Center for Strategic and International Studies think tank that moves by North Korea that could create conditions for dialogue could include a freeze on its nuclear and missile tests, or the release of three Americans it is holding in the country.

To be successful, talks would have to involve North Korean leader Kim Jong Un and have as their ultimate aim the complete dismantling of North Korea’s nuclear program, he added.

Trump sought to woo China since a summit with Chinese President Xi Jinping in April but the honeymoon period appears to be over. On Thursday, the United States targeted a Chinese bank and sanctioned Chinese individuals and a firm for dealing with North Korea and approved a $1.42 billion arms deal with Taiwan – decisions that angered Beijing.

STEEL AND AUTOS

South Korea is a long-standing American ally but Trump has spoken harshly about U.S. trade imbalances and threatened to tear up the bilateral trade pact.

“We will do more to remove barriers to reciprocal trade and market access,” Trump said, adding that the two leaders had talked about the thorny trade areas of steel and autos.

Trump said he was encouraged by Moon’s assurances that he would seek a level playing field for American workers and businesses, particularly automakers.

A joint statement said the two sides had agreed to work together to reduce over supply of basic materials such as steel and non-tariff barriers. It also said Trump had accepted an invitation from Moon to visit South Korea this year.

Bonnie Glaser, senior adviser for Asia at the Center for Strategic and International Studies think tank, said it was unwise for Trump to air the trade issue so publicly.

“Public complaints by Trump about unfair trade and inadequate defense spending provide opportunities for China and North Korea to drive a wedge between the allies,” she said.

Trump also emphasized the need to ensure equitable sharing of costs for defense, returning to a theme he raised during his campaign and brought up with other allies, including NATO countries and Japan.

A senior U.S. official said in a briefing before the president’s meeting with Moon that South Korea was in many respects a “model ally,” given its spending of 2.7 percent of GDP on defense and Moon’s plan to grow capabilities.

“We shouldn’t view South Korea as somehow laggard on that front,” the official said on condition of anonymity.

The U.S. goods trade deficit with South Korea has more than doubled since the U.S.-Korea free trade pact known as KORUS took effect in 2012. The agreement was forecast to boost U.S. exports by $10 billion a year, but in 2016 they were $3 billion lower than in 2011.

At the start of Friday’s talks, U.S. Commerce Secretary Wilbur Ross said the largest component of the deficit was automotive trade and many non-tariff barriers to U.S. auto exports to South Korea remained.

“I think the way to address it is to deal product by product with what we can do to change the export side and what we can do to reduce the bad imports side,” he said.

Ross said later on Friday that some progress had been made in the talks.

The current pact was agreed to despite protests by supporters of Moon, who was then in opposition. But analysts have suggested that given the need to preserve a unified front in the face of a hostile North Korea, there could be compromise on both sides to resolve issues.

(Additional reporting by Fatima Bhojani, Roberta Rampton, Tim Ahmann, David Chance, David Lawder and Eric Beech; Editing by Bill Trott and Andrew Hay)

U.S. says ex-consultant set up meetings over Iran’s nuclear program

FILE PHOTO - Ahmad Sheikhzadeh (C), a consultant to the Iranian mission to the United Nation, leaves Brooklyn Federal Court in New York, March 23, 2016. REUTERS/Pearl Gabel/File Photo

By Brendan Pierson

NEW YORK (Reuters) – U.S. prosecutors said in a court filing on Friday that a former consultant to Iran’s mission to the United Nations recruited a United States-based atomic scientist to meet with Iranian officials about Iran’s nuclear program.

The filing regarding the former consultant, Ahmad Sheikhzadeh, does not contain criminal charges, but was made to support prosecutors’ request for a tough prison sentence for him for tax fraud and conspiracy to violate sanctions against Iran.

Sheikhzadeh pleaded guilty last November to the charges, which do not involve the Iranian nuclear program.

In the filing, prosecutors said that, starting around 2005, Sheikhzadeh helped arrange meetings between the scientist and Iran’s current president, Hassan Rouhani, previously the country’s chief negotiator on nuclear issues, and Foreign Minister Mohammad Javad Zarif, formerly Iran’s permanent representative to the United Nations.

Sheikhzadeh’s lawyer, Steve Zissou, said on Friday, “The only goal Dr. Sheikhzadeh has ever had was to improve relations between the two countries so that they could both live in peace.”

A spokesman for Iran’s mission to the United Nations did not immediately respond to a request for comment.

Prosecutors did not name the scientist, who they said was an Iranian national who had worked at a U.S. nuclear power plant.

They said the scientist, working with Sheikhzadeh, provided advice to help Iran negotiate with other countries over its nuclear program. For example, they said, he gave an estimate of how many gas centrifuges – devices used in enriching uranium – Iran would need to accomplish its nuclear goals.

The scientist also helped develop Iran’s public messaging around the nuclear program, prosecutors said.

Iran reached a deal with the United States and other nations in 2015 to limit its nuclear program in exchange for relief from international sanctions. U.S. President Donald Trump has criticized the deal and in April ordered that it be reviewed.

Federal guidelines call for a sentence of up to four years and nine months for the crimes Sheikhzadeh pleaded guilty to, but prosecutors on Friday said in their filing that his “brazen” conduct warranted more than that.

Sheikhzadeh is scheduled to be sentenced on July 17 by U.S. District Judge Pamela Chen in Brooklyn. Zissou asked in a letter filed with the court on Friday to postpone the sentencing in light of the new filing.

Authorities originally charged that Sheikhzadeh under-reported his U.N. income on his personal tax returns. They also said he used his bank account to help U.S.-based co-conspirators invest money in Iran, violating sanctions.

(Reporting by Brendan Pierson in New York; additional reporting by Nate Raymond; editing by Jonathan Oatis)

U.S. warns businesses of hacking campaign against nuclear, energy firms

Department of Homeland Security emblem is pictured at the National Cybersecurity & Communications Integration Center (NCCIC) located just outside Washington in Arlington, Virginia September 24, 2010. REUTERS/Hyungwon Kang/File Photo

By Jim Finkle

TORONTO (Reuters) – The U.S government warned industrial firms this week about a hacking campaign targeting the nuclear and energy sectors, the latest event to highlight the power industry’s vulnerability to cyber attacks.

Since at least May, hackers used tainted “phishing” emails to “harvest credentials” so they could gain access to networks of their targets, according to a joint report from the U.S. Department of Homeland Security and Federal Bureau of Investigation.

The report provided to the industrial firms was reviewed by Reuters on Friday. While disclosing attacks, and warning that in some cases hackers succeeded in compromising the networks of their targets, it did not identify any specific victims.

“Historically, cyber actors have strategically targeted the energy sector with various goals ranging from cyber espionage to the ability to disrupt energy systems in the event of a hostile conflict,” the report said.

Homeland Security and FBI officials could not be reached for comment on the report, which was dated June 28.

The report was released during a week of heavy hacking activity.

A virus dubbed “NotPetya” attacked on Tuesday, spreading from initial infections in Ukraine to businesses around the globe. It encrypted data on infected machines, rendering them inoperable and disrupting activity at ports, law firms and factories.

On Tuesday the energy-industry news site E&E News reported that U.S. investigators were looking into cyber intrusions this year at multiple nuclear power generators.

Reuters has not confirmed details of the E&E News report, which said there was no evidence safety systems had been compromised at affected plants.

The activity described in the U.S. government report comes at a time when industrial firms are particularly anxious about threat that hackers pose to their operations.

Industrial firms, including power providers and other utilities, have been particularly worried about the potential for destructive cyber attacks since December 2016, when hackers cut electricity in Ukraine.

U.S. nuclear power generators PSEG <PEG.N>, SCANA Corp <SCG.N> and Entergy Corp <ETR.N> said they were not impacted by the recent cyber attacks. SCANA’s V.C. Summer nuclear plant in South Carolina shut down on Thursday due to a problem with a valve in the non-nuclear portion of the plant, a spokesman said.

Another nuclear power generator, Dominion Energy <D.N>, said it does not comment on cyber security.

Two cyber security firms said on June 12 that they had identified the malicious software used in the Ukraine attack, which they dubbed Industroyer, warning that it could be easily modified to attack utilities in the United States and Europe.

Industroyer is only the second piece of malware uncovered to date that is capable of disrupting industrial processes without the need for hackers to manually intervene.

The first, Stuxnet, was discovered in 2010 and is widely believed by security researchers to have been used by the United States and Israel to attack Iran’s nuclear program.

The U.S. government report said attackers conducted reconnaissance to gain information about the individuals whose computers they sought to infect so that they create “decoy documents” on topics of interest to their targets.

In an analysis, it described 11 files used in the attacks, including malware downloaders and tools that allow the hackers to take remote control of victim’s computers and travel across their networks.

Chevron Corp <CVX.N>, Exxon Mobil Corp <XOM.N> and ConocoPhillips <COP.N>, the three largest U.S. oil producers, declined to comment on their network security.

(Reporting by Jim Finkle; Additional reporting by Timothy Gardner in Washington and Ernest Scheyder in Houston; editing by Grant McCool and Tom Brown)

U.S. targets Chinese bank, company, two individuals over North Korea

The flag of North Korea is seen in Geneva, Switzerland, June 20, 2017. REUTERS/Pierre Albouy

By Joel Schectman and David Brunnstrom

WASHINGTON (Reuters) – The United States imposed sanctions on two Chinese citizens and a shipping company on Thursday for helping North Korea’s nuclear and missile programs and accused a Chinese bank of laundering money for Pyongyang.

U.S. Treasury Secretary Steve Mnuchin said the actions were designed to cut off funds that North Korea uses to build its weapons programs in defiance of U.N. Security Council and unilateral sanctions.

“We will follow the money and cut off the money,” he told a news conference.

A Treasury statement identified the bank as the Bank of Dandong and the firm as Dalian Global Unity Shipping Co Ltd. It identified the two individuals as Sun Wei and Li Hong Ri.

The sanctions imposed on the two Chinese citizens and the shipping company blacklists them from doing business with U.S.-tied companies and people.

Bank of Dandong did not respond immediately to a request for comment. A staff member at Dalian Global Unity would not comment on the sanctions and subsequent calls to the firm’s office in Dalian went unanswered.

Mnuchin said U.S. officials were continuing to look at other companies that may be helping North Korea and may roll out additional sanctions.

U.S. foreign policy experts say Chinese companies have long had a key role in financing Pyongyang. However, Mnuchin said the action was not being taken to send China a message. “This wasn’t aimed at China. We continue to work with them,” he said.

Asked about the U.S. sanctions on Friday, Chinese Foreign Ministry Spokesman Lu Kang said that China consistently opposes unilateral sanctions imposed outside the U.N. framework.

“We strongly urge the United States to immediately correct its relevant wrong moves to avoid affecting bilateral cooperation on the relevant issue,” he said, without elaborating.

China’s ambassador to the United States, Cui Tiankai, said China opposed the United States using domestic laws to impose “long-arm jurisdiction” on Chinese companies or individuals, the official Xinhua news agency reported on Friday.

“If a Chinese company or individual has acted in a way that violates United Nations Security Council resolutions, then China will investigate and handle the issue in accordance with Chinese law,” he told an event in Washington on Thursday evening.

GROWING FRUSTRATION

U.S. officials told Reuters this week that President Donald Trump was growing increasingly frustrated with China over its inaction on North Korea and bilateral trade issues, and was now considering possible trade actions against Beijing.

A senior White House official told reporters on Wednesday China was “falling far short of what it could bring to bear on North Korea in terms of pressure.”

The U.S. move came as Trump was due to meet South Korean President Moon Jae-in at the White House on Thursday to discuss steps to push North Korea to abandon its weapons programs, which have become an increasing threat to the United States.

It also came after the United States sanctioned a Chinese industrial machinery wholesaler, Dandong Hongxiang Industrial Development Co, in September for its ties to North Korea’s nuclear program, the first time Washington had taken such a step against a Chinese firm.

China’s Foreign Ministry said in the same month Hongxiang was under investigation for “illegal behavior” and “economic crimes” following the provisions of U.N. resolution 2270, which imposed tighter sanctions on North Korea in March.

Mnuchin said the United States would discuss efforts to choke off funding for North Korea’s nuclear and missile programs with China and other countries at next week’s Group of 20 summit in Germany.

The U.S. Treasury Department said in an online notice published on Thursday the Bank of Dandong had served as a gateway for North Korea to access the U.S. financial system. Authorities said 17 percent of Dandong’s customer transactions in the bank’s U.S. accounts had ties to North Korea.

Anthony Ruggiero, a former senior Treasury official in the Office of Terrorist Financing and Financial Crimes, said the action against Bank of Dandong was the first time U.S. authorities had sought to punish a Chinese bank accused of helping North Korea.

It would immediately cause Western firms to cut off any transactions with Bank of Dandong, he said. It may also cause financial institutions in Western Europe and the United States to further scrutinize whether their Chinese business could have links to North Korea.

“The designation will make reputable Western banks ask questions about larger financial institutions in China,” said Ruggiero, who is now a senior fellow at the non-profit Foundation for Defense of Democracies.

(Reporting by David Brunnstrom and Joel Schectman; Additional reporting by Jeff Mason in WASHINGTON, and Meng Meng, Shu Zhang, Ben Blanchard and Christian Shepherd in BEIJING; Editing by Diane Craft and Paul Tait)

China ‘outraged’ by $1.42 billion planned U.S. arms sales to Taiwan

FILE PHOTO: U.S. President Donald Trump welcomes Chinese President Xi Jinping at Mar-a-Lago state in Palm Beach, Florida, U.S., April 6, 2017. REUTERS/Carlos Barria/File Photo

BEIJING (Reuters) – China urged the United States to revoke immediately its “wrong decision” to sell Taiwan $1.42 billion worth of arms, saying it contradicted a “consensus” President Xi Jinping reached with his counterpart, Donald Trump, in talks in April in Florida.

The sales would send a very wrong message to “Taiwan independence” forces, China’s embassy in Washington said in a statement. A U.S. State Department spokeswoman said on Thursday the administration had told Congress of seven proposed sales to Taiwan, the first under the Trump administration..

“The Chinese government and Chinese people have every right to be outraged,” the embassy said.

China regards self-ruled Taiwan as a wayward province and has never renounced the use of force to bring it under its control. China’s Nationalists fled to the island after losing the civil war with China’s Communists in 1949.

The United States is the sole arms supplier to Taiwan.

“The wrong move of the U.S. side runs counter to the consensus reached by the two presidents in and the positive development momentum of the China-U.S. relationship,” the embassy said.

China’s Defense Ministry said Taiwan was the “most important, most sensitive core issue in Sino-U.S. ties”, warning the United States to end such sales to avoid further damaging peace and stability in the Taiwan Strait.

Trump was critical of China during his successful 2016 presidential campaign but his meeting at his Mar-a-Lago resort in Florida with Xi raised hopes for warmer relations.

Trump later played up his personal relationship with Xi, calling him a “good man”, and stressed the need for China’s help in reining in a defiant North Korea’s development of nuclear weapons and missiles.

China’s anger over the U.S. plan to supply Taiwan with weapons risks undermining Trump’s attempts to press China to help on North Korea.

The proposed U.S. package for Taiwan includes technical support for early warning radar, high speed anti-radiation missiles, torpedoes and missile components.

Beijing’s relationship with Taiwan has been frosty since President Tsai Ing-wen took power in Taipei last year. Tsai leads an independence-leaning party that refuses to recognized Beijing’s “one China” policy.

Tsai’s office said on Friday the planned sales increased Taiwan’s confidence and ability to maintain peace and stability across the Taiwan Strait.

Asked about the sales at an event on Thursday evening in Washington, Chinese Ambassador Cui Tiankai said the United States was “incorrigible” when it came to Taiwan, the official Chinese Communist Party People’s Daily newspaper reported on its website.

“But we should still continue to instruct (them) and continue advancing on the right track of China-U.S. relations because this is what truly fits for both countries’ long term interests,” the paper quoted Cui as saying.

The sales, which require congressional approval, would be the first since a $1.83 billion sale that former President Barack Obama announced in December 2015, also to China’s dismay.

The previous package included two navy frigates in addition to anti-tank missiles and amphibious attack vehicles.

(Reporting by Christian Shepherd and Ben Blanchard; Editing by Paul Tait and Nick Macfie)

Despite hacking charges, U.S. tech industry fought to keep ties to Russia spy service

FILE PHOTO: Police guard the FSB headquarters during an opposition protest in Moscow, Russia, on March 5, 2012. REUTERS/Mikhail Voskresensky/File Photo

(Editors note: Attention to language in paragraph 22 that may be offensive to some readers.)

By Joel Schectman, Dustin Volz and Jack Stubbs

WASHINGTON/MOSCOW (Reuters) – As U.S. officials investigated in January the FSB’s alleged role in election cyber attacks, U.S. technology firms were quietly lobbying the government to soften a ban on dealing with the Russian spy agency, people with direct knowledge of the effort told Reuters.

New U.S. sanctions put in place by former President Barack Obama last December – part of a broad suite of actions taken in response to Russia’s alleged meddling in the 2016 presidential election – had made it a crime for American companies to have any business relationship with the FSB, or Federal Security Service.

U.S. authorities had accused the FSB, along with the GRU, Russia’s military intelligence agency, of orchestrating cyber attacks on the campaign of Democratic presidential candidate Hillary Clinton, a charge Moscow denies.

But the sanctions also threatened to imperil the Russian sales operations of Western tech companies. Under a little-understood arrangement, the FSB doubles as a regulator charged with approving the import to Russia of almost all technology that contains encryption, which is used in both sophisticated hardware as well as products like cellphones and laptops.

Worried about the sales impact, business industry groups, including the U.S.-Russia Business Council and the American Chamber of Commerce in Russia, contacted U.S. officials at the American embassy in Moscow and the Treasury, State and Commerce departments, according to five people with direct knowledge of the lobbying effort.

The campaign, which began in January and proved successful in a matter of weeks, has not been previously reported.

In recent years, Western technology companies have acceded to increasing demands by Moscow for access to closely guarded product security secrets, including source code, Reuters reported last week.[nL1N1JK1ZF] Russia’s information technology market is expected to reach $18.4 billion this year, according to market researcher International Data Corporation.

The sanctions would have meant the Russian market was “dead for U.S. electronics” said Alexis Rodzianko, president of the American Chamber of Commerce in Russia, who argued against the new restrictions. “Every second Russian has an iPhone, iPad, so they would all switch to Samsungs,” he said.

A spokesman for the U.S. Commerce Department Bureau of Industry and Security declined to comment. A State Department official said Washington considered a range of factors before amending the FSB sanction and regularly works with U.S. companies to assess the impact of such policies.

The lobbyists argued the sanction could have stopped the sale of cars, medical devices and heavy equipment, all of which also often contain encrypted software, according to a person involved in the lobbying effort. The goal of the sanctions was to sever U.S. business dealings with the FSB – not end American technology exports to Russia entirely, the industry groups argued.

“The sanction was against a government agency that has many functions, only one of them being hacking the U.S. elections,” said Rodzianko.

The lobbyists assembled representatives from the tech, automotive and manufacturing sectors to make the case to the U.S. Treasury Department, said the person involved in the lobbying effort.

The industry groups did not argue against the intent of the sanction but asked for a narrow exception that would allow them to continue to seek regulatory approvals from the FSB while still keeping in place the broader ban on doing business with the spy agency.

“PUNISHMENT FOR VERY BAD ACTS”

The industry groups represent a number of technology firms with a large presence in Russia, including Cisco and Microsoft.

Reuters was unable to determine which companies were directly involved in the lobbying. Microsoft said it did not ask for changes to the sanctions. In a statement, Cisco said it also did not seek any changes to the sanction but had asked the Treasury Department for clarification on how it applied.

In order to get encrypted technology into Russia, companies need to obtain the blessing of the FSB, a process that can sometimes take months or even years of negotiation. Before granting that approval, the agency can demand sensitive security data about the product, including source code – instructions that control the basic operations of computer equipment.

The United States has accused Russia of a growing number of cyber attacks against the West. U.S. officials say they are concerned that Moscow’s reviews of product secrets could be used to find vulnerabilities to hack into the products.

Some U.S. government officials rejected the industry groups’ arguments. They openly embraced the prospect of any ripple effect that cut further trade with Russia.

Kevin Wolf was assistant secretary at the Commerce Department and oversaw export control policy when the FSB sanction was put in place. Wolf said within days of the sanction taking effect, Commerce received numerous calls from industry groups and companies warning of the unintended consequences.

But for Wolf, who was “furious” with Moscow over the alleged cyber attacks, any additional curbs on trade with Russia was a bonus rather than an unintended downside.

“I said, ‘Great, terrific, fuck ’em … The whole point is to interfere with trade’,” recounted Wolf. “The sanction was meant to impose pain (on Russia) and send a signal as punishment for very bad acts.”

Wolf left the Commerce Department when President Donald Trump took office on Jan. 20.

Other officials felt that the impact on legitimate trade was too great. “The intention of the sanction was not to cut off tech trade with Russia,” said a U.S. official with direct knowledge of the process.

The lobbyists had also argued that since the sanctions only applied to U.S. technology makers, it would put them at a disadvantage to European and Asian companies who would still be able to interact with the FSB and sell products in Russia.

“We were asking for a narrow technical fix that would give a fair deal for American companies,” Dan Russell, CEO of the U.S.-Russia Business Council, said in an interview.

The advocacy worked. State and Treasury officials began working to tweak the sanction in January before Obama left office, according to people involved in the process.

On Feb. 2, the Treasury Department created an exception to the sanction, about two weeks after Trump took office, to allow tech companies to continue to obtain approvals from the FSB.

(Reporting by Joel Schectman and Dustin Volz in Washington and Jack Stubbs in Moscow; Editing by Ross Colvin)

U.S. envoy slams U.N. Security Council for inaction on Iran

U.S. Ambassador to the United Nations Nikki Haley testifies to the House Foreign Affairs Committee on "Advancing U.S. Interests at the United Nations" in Washington, U.S., June 28, 2017. REUTERS/Joshua Roberts

By Michelle Nichols

UNITED NATIONS (Reuters) – U.S. Ambassador to the United Nations Nikki Haley slammed the Security Council on Thursday for failing to take any action against Iran, which she said had “repeatedly and deliberately violated” sanctions imposed by the body.

“The Security Council has failed to even take minimal steps to respond to these violations,” Haley told a council briefing on Iran. “We must … show Iran that we will not tolerate their egregious flaunting of U.N. resolutions.”

Most U.N. sanctions were lifted 18 months ago under a deal Iran made with key world powers to curb its nuclear program. But Iran is still subject to an arms embargo and other restrictions, which are not technically part of the nuclear agreement.

U.N. political affairs chief Jeffrey Feltman briefed the council on Thursday on Secretary-General Antonio Guterres’ third six-monthly report on the implementation of the remaining sanctions and restrictions, enshrined in resolution 2231.

“The secretary-general’s report makes clear that Iran is in violation of the Security Council resolution 2231 and so the question becomes ‘what is the Security Council going to do about it?'” Haley said.

No council members have proposed taking any action against Iran. Diplomats say veto-powers Russia and China were unlikely to agree to more measures. Russia on Thursday questioned some of the findings of Guterres’ report.

Feltman told the council that in relation to a weapons seizure by the French Navy in the northern Indian Ocean in March 2016, the United Nations was “confident that the weapons seized are of Iranian origin and were shipped from Iran.”

The report also looked at Iran’s Jan. 29 launch of a ballistic missile and noted there was no consensus within the Security Council on how the launch related to resolution 2231.

“I call upon the Islamic Republic of Iran to avoid such ballistic missile launches, which have the potential to increase tensions,” Guterres said in the report.

A year ago Guterres’ predecessor Ban Ki-moon described ballistic missile launches by Iran as “not consistent with the constructive spirit” of the nuclear deal.

Under the U.N. resolution, Iran is “called upon” to refrain from work on ballistic missiles designed to deliver nuclear weapons for up to eight years. Some states argue that language does not make it obligatory.

U.S. President Donald Trump’s administration is reviewing the nuclear deal – agreed to under President Barack Obama – and Haley said that “until that review is completed we will comply with our commitments and we expect Iran to do the same.”

(Reporting by Michelle Nichols; Editing by Phil Berlowitz)