South Korea and the U.S. agreed Wednesday to push for stern punishment of North Korea but leave the door open for dialogue, as Seoul continued to send conciliatory signals toward Pyongyang despite its increasing threats.

Lim Sung-nam, Seoul’s special representative for Korean Peninsula peace and security affairs, and David Cohen, U.S. Under Secretary of the Treasury for Terrorism and Financial Intelligence, met in Seoul to discuss country-level sanctions over the North’s nuclear test on Dec. 12.

“The U.S. side explained about the background and significance of the unilateral measures and we agreed to continue consultations,” a senior Foreign Ministry official told reporters on customary condition of anonymity.

“We shared the view that the two countries will sternly respond to North Korea’s nuclear test or other provocations but leave open the door for dialogue. The two-track approach also falls in line with the ‘peninsula trust process.’” 

Cohen also met with Vice Minister Kim Kyou-hyun and Deputy Finance Minister Choi Jong-ku. Cohen was in Seoul on the second leg of a three-nation Asia tour including Japan and China and accompanied by Dan Fried, the State Department’s coordinator for sanctions policy.

He was expected to request Seoul to join Washington’s new sanctions last week on Pyongyang’s Foreign Trade Bank and four individuals “directly tied to” nuclear activities.

Japanese Chief Cabinet Secretary Yoshihide Suga said after Cohen’s visit Tuesday that Tokyo was considering imposing the same bans.

But Seoul officials remained cautious possibly in light of future inter-Korean economic cooperation envisioned by President Park Geun-hye’s “peninsular trust process” policy, which calls for reengagement with the North while bolstering security against its provocations.

The two Koreas have no banking transactions at present but the South in the past offered the Pyongyang-based bank loans worth up to 1 trillion won ($900 million) for food, rail, road and other industrial exchanges.

The newly sanctioned four officials are Pak To-chun, head of the ruling Workers Party’s Munitions Industry Department; Chu Kyu-chang, who directs that branch; O Kuk-ryol, vice chairman of the National Defense Commission; and Paek Se-bong, chairman of the Second Economic Committee in charge of ballistic missile production.

The measures came days after the U.N. Security Council imposed its fourth, more comprehensive bunch of sanctions including asset freezes, travel bans and clampdowns on illegal sea cargo, luxury buys and “bulk cash” transfers.

Cohen said Resolution 2094 laid a “very strong foundation for the international community to work together to address the North Korean illicit missile and nuclear programs.”

In Beijing on Thursday, he is also predicted to request the Chinese government’s cooperation in curbing the two rogue states’ illicit financial dealings.

China’s role is essential in enforcing sanctions as it is deemed the North’s sole major ally and biggest economic patron.

In a related development, Chinese regulators have apparently warned four North Korean banks against unlawful operations, Yonhap News reported Tuesday, citing Beijing-based sources.

Foreign Minister Yun Byung-se called on his new Chinese counterpart Wang Yi to work together to implement the U.N. sanctions during their first, 40-minuted phone conversation late Tuesday.

Wang in response stressed the importance of inter-Korean dialogue and expressed Beijing’s “high interest” in President Park Geun-hye’s “trust-building process” policy aimed at making way for reconciliation, the Foreign Ministry said in a statement.

Tension remains high on the peninsula as Pyongyang has threatened to exit from the 1953 armistice, launch “diversified precision nuclear strikes” on Seoul and attack South Korean border islands since South Korea and the U.S. began their annual joint military drills this month.

In its latest round of threats, the North warned of military action should the U.S. again fly its nuclear-capable B-52 bombers over the Korean Peninsula during the exercises.

By Shin Hyon-hee (heeshin@heraldcorp.com)