"Our legislation will target these intermediaries and facilitators imposing mandatory sanctions and fines on the banks, companies and financiers that conduct business with North Korea."
Van Hollen pointed out Pyongyang has been evading international sanctions for years and getting access to the global financial system through its partners.
Under the new law, companies would have to make a choice whether they prefer to conduct business with the United States or with North Korea, Van Hollen stressed.
The measure would also authorize US president to sanction foreign governments that try to avoid international restrictions on North Korea.
The legislation was modeled after the Iran sanctions bill, which was approved in 2010.
On Tuesday, State Department Spokesperson Heather Nauert said China has unique leverage with North Korea, considering about 90% of the trade that Pyongyang conducts is with Beijing. Nauert added that the United States has made it clear that they want China to apply more pressure on North Korea to adhere to security council resolutions regarding nuclear development.