After Trump criticism, China says no illicit oil sales to North Korea

China on Fridaydenied reports it has been illicitly selling oil products toNorth Korea, after U.S. President Donald Trump said he was nothappy that China had allowed oil to reach the isolated nation.

Trump said on Twitter the previous day that China had been"caught" allowing oil into North Korea and that would prevent "afriendly solution" to the crisis over North Korea's nuclearprogram.

"I have been soft on China because the only thing moreimportant to me than trade is war," Trump said in a separate interview with the New York Times.

South Korea's Chosun Ilbo newspaper this week quoted SouthKorean government sources as saying that U.S. spy satellites haddetected Chinese ships transferring oil to North Korean vesselsabout 30 times since October.

U.S. officials have not confirmed details of this report.

Chinese Foreign Ministry spokespersonHua Chunying toldreporters she had noted recent media reports including suggestions a Chinese vessel was suspected of transporting oilto a North Korean vessel on Oct. 19.

"The Chinese side has conducted immediate investigation. Inreality, the ship in question has, since August, not docked at aChinese port and there is no record of it entering or leaving aChinese port," Hua said.

She said she was not aware if the vessel had docked at the port in other countries but the relevant media reports "did not accord with facts."

"China has always implemented UN Security Councilresolutions pertaining to North Korea in their entirety andfulfils its international obligations. We never allow Chinesecompanies and citizens to violate the resolutions," Hua said.

"If, through investigation, it's confirmed there areviolations of the UNSecurity Council resolutions, China will deal with them seriously in accordance with laws andregulations."

In the Times interview, Trump explicitly tied hisadministration's trade policy with China to its perceived co-operation in resolving the North Korea nuclear crisis.

"When I campaigned, I was very tough on China in terms oftrade. They madelast year, we had a trade deficit with Chinaof $350 billion, minimum. That doesn't include the theft ofintellectual property, OK, which is another $300 billion," Trump said, according to a transcript of the interview.

"If they're helping me with North Korea, I can look at tradea little bit differently, at least for a period of time. And that's what I've been doing. But when oil is going in, I'm nothappy about that."

An official of the U.S. State Department said the U.S. government was aware of vessels engaged in such activity involving refined petroleum and coal.

"We have evidence that some of the vessels engaged in theseactivities are owned by companies in several countries, including China," the official said, speaking on condition ofanonymity.

The United States saidthe full co-operation of China, NorthKorea's neighbour and main trading partner, is vital to the success of efforts to rein in North Korea, while warning that all options are on the table, including military ones, in dealing with it.

China has repeatedly said it is fully enforcing allresolutions against North Korea, despite suspicion inWashington, Seoul and Tokyo that loopholes still exist.

'Evading sanctions'

South Korea said Friday it had seized a Hong Kong-flaggedship suspected of transferring oil to North Korea in defiance ofthe sanctions.

A senior South Korean foreign ministry official said theship, the Lighthouse Winmore, was seized when it arrived at a South Korean port in late November.

"It's unclear how much oil the ship had transferred to NorthKorea for how long and on how many occasions, but it clearlyshowed North Korea is engaged in evading the sanctions," theofficial told Reuters.

South Korea's customs service concluded that the LighthouseWinmore had loaded about12,700 tonnesof Japanese refinedpetroleum products in South Korea on Oct. 11, reportedly boundfor Taiwan, the official said.

But instead, it transferred as much as 544 tonnes to the North Korea-flagged Sam Jong 2 on Oct. 19 in international waters between China and the Korean peninsula, on the order of its charterer, Billions Bunker Group Corp., based in Taiwan, theministry official said.

It was not immediately possible to find contact informationfor the company.

The Hong Kong government said it was "liaising with theKorean parties concerned to obtain further information about theincident, and will take appropriate actions as necessary."

Employees at the office of Lighthouse Ship Management, theship's registered manager, in the Chinese port city of Guangzhou, declined to comment and said they had no knowledge ofthe situation.

China's Foreign Ministry spokespersonsaid she did not haveany information about the matter.

Both ships were among 10 vessels that the United States hadproposed the UNSecurity Council should blacklist for transporting banned items from North Korea, documents seen byReuters this month showed.

China and Russia subsequently asked for more time toconsider the U.S. proposal.

Ship tracking data in Thomson Reuters Eikon showedthat theLighthouse Winmore has mainly been doing supply runs betweenChina and Taiwan since August.

Prior to that, it was active between India and the UnitedArab Emirates. In October, when it allegedly transferred petroleum products to the North Korean ship, the LighthouseWinmore had its tracking transponder switched off.

The Trump administration has led a drive to step up globalsanctions on North Korea in response to its efforts to develop nuclear-tipped missiles capable of hitting the United States.

The UNSecurity Council last week unanimously imposed newsanctions on North Korea for a recent intercontinental ballisticmissile (ICBM) test, seeking to further limit its access torefined petroleum products and crude oil.

The U.S.-drafted UNresolution seeks to ban nearly 90per cent of refined petroleum exports to North Korea by capping them at 500,000 barrels a year.It also caps crude oil supplies to North Korea at fourmillionbarrels a year and commits the Security Council to further cutsif North Korea conducts another nuclear or intercontinentalballistic missile test.

In September, the Security Council put a cap of two millionbarrels a year on refined petroleum products exports to North Korea.