SEOUL, The U.S. Treasury Department has called on South Korean banks to comply with sanctions on North Korea, financial sources said Friday, in a thinly veiled warning against doing business with Pyongyang.

They said the Treasury Department e-mailed several commercial and policy banks and had conference calls on Sept. 20 and 21, just after the inter-Korean summit in Pyongyang.

The state-run Korea Development Bank and the Industrial Bank of Korea received the call from the Treasury Department, along with Kookmin Bank, Shinhan Bank and Nonghyup Bank.

During the telephone meetings, U.S. officials asked South Korean banks not to violate the Washington-led sanctions against North Korea, after hearing about their business schemes for the North.

Officials of the South Korean banks said they are aware of the sanctions and are in compliance with them.

North Korea has been under tightened U.N. sanctions, as well as separate U.S. sanctions, over its nuclear tests and its long-range rocket launches. The U.N. sanctions ban, among other things, transfers of bulk cash to Pyongyang.

The U.S. has also “secondary boycott” measures that penalize entities doing business with North Korea so as to cut off the money that it believes fudns North Korea’s weapons programs.

Pyongyang has sought to win sanctions relief as part of a denuclearization deal with Washington. But the U.S. has said there will be no sanctions relief until Pyongyang has taken credible steps toward denuclearization.

The Treasury’s move fanned growing controversy between the two allies about the South weakening on North Korea sanctions, sparked by South Korean Foreign Minister Kang Kyung-wha’s remarks earlier this week.

She said South Korea is reviewing whether to lift its own sanctions that were put in place to punish the North for a deadly torpedo attack on a South Korean naval ship in 2010.

The next day, U.S. President Donald Trump said that Seoul will not lift sanctions on Pyongyang without U.S. “approval.”

Kang tried to water down her statement, but the situation worsened.

Kang said U.S. Secretary of State Mike Pompeo has expressed his dissatisfaction about a recent inter-Korean military agreement.

The agreement — adopted after last month’s summit between the leaders of the two Koreas in Pyongyang — calls for, among other things, halting military drills near the military demarcation line and withdrawing some border guard posts as part of efforts to reduce military tensions, prevent accidental clashes and build trust.

Critics say South Korea is going too fast in dealing with North Korean issues without sufficient consultation with the U.S. government.

Source: Yonhap News Agency