The United States on Monday slapped sanctions on North Korea’s primary foreign exchange bank, as it bids to force the isolated nation to abandon its nuclear programme.

The Treasury Department will impose sanctions on the Foreign Trade Bank (FTB) of North Korea after Pyongyang flouted international resolutions and conducted its third nuclear test last month, US national security adviser Tom Donilon said.

The US will “continue to work with allies and partners to tighten national and international sanctions to impede North Korea’s nuclear and missile programmes,” Donilon told the Asia Society in New York.

The Treasury also placed sanctions on Paek Se-Bong, Chairman of North Korea’s Second Economic Committee, responsible for the production of ballistic missiles and for other bodies which support Pyongyang’s nuclear effort.

“North Korea’s nuclear and missile proliferation activities violate the UN Security Council regime ... destabilise the region and undermine the global non-proliferation regime,” the Treasury said.

US Treasury sanctions forbid any US individual, business or organisation from any transactions with the people or groups named.

The announcement came as South Korea and the US launched joint drills on Monday involving thousands of troops, defying North Korea’s apocalyptic threat to repudiate the 60-year-old Korean War armistice in retaliation.

The start of the two-week “Key Resolve” exercise follows a week of escalating tensions on the Korean peninsula, with Pyongyang also threatening nuclear war over UN sanctions.

Donilon called such statements “highly provocative” but reaffirmed that Washington was “committed to the defence of our homeland and our allies”.

He also reiterated that Washington was willing to hold “authentic negotiations with North Korea,” but said it “refuses to reward bad North Korean behaviour”.

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