WASHINGTON: The United States on Tuesday (Jan 14) imposed sanctions on two companies for exploiting North Korean overseas labour but joined allies Japan and South Korea in appealing for diplomacy to ease tensions with Pyongyang.

Showing a united front, Japan's defence and foreign ministers and South Korea's foreign minister all held talks with American counterparts Tuesday on both coasts, two weeks after North Korean leader Kim Jong Un threatened to launch a new weapon.

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In a UN-backed bid to curb North Korea's cash flow, the United States announced that it was freezing any US assets of the two companies and making any transactions with them a crime.

The Treasury Department targeted the Korea Namgang Trading Corporation, a North Korean firm which it said has maintained workers in Russia, Nigeria and the Middle East.

It also blacklisted Beijing Sukbakso, a Chinese company that has handled lodging and remittances for workers.

"The exportation of North Korean workers raises illicit revenue for the government of North Korea in violation of UN sanctions," Treasury Secretary Steven Mnuchin said in a statement.

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Under a UN resolution unanimously approved in 2017, countries had until Dec 22 last year to send back all workers from North Korea.

Human rights groups have charged that the workers live in virtually slavery-like conditions, with proceeds going to the cash-strapped regime in Pyongyang.

US officials said in 2017 that North Korea had some 100,000 overseas workers, bringing in US$500 million a year.

The vast majority work in China and Russia although some have been seen around the world including in Eastern Europe, according to a study by the East-West Center.

The North Koreans are most frequently seen on construction sites, performing labour for long hours and staying in isolated housing.

The 2017 resolution came after nuclear and missile tests by North Korea, but US President Donald Trump soon afterward opened talks with North Korea, holding three landmark meetings with Kim.

The regime had been pressing unsuccessfully for the United States to remove sanctions in return and had set a New Year's deadline.

GROWING UNITY AMONG ALLIES

In a Jan 1 speech, Kim warned that he will no longer abide by the moratorium on nuclear and intercontinental ballistic missile tests and said Pyongyang would test a destructive new weapon.

Asked Tuesday if North Korea had made an idle threat, Defense Secretary Mike Esper declined to speculate but said the United States was prepared.

"We'll see what happens. It's in Kim Jong Un's hands what he intends to do," Esper told a news conference at the Pentagon with his Japanese counterpart, Taro Kono.

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