Calling it a "clear violation" of 2018 agreement, South Korea said none of the shells crossed the Northern Limit Line, the de facto maritime border between the two countries.
Former national security chief Suh Hoon was arrested over his suspected manipulation of a 2020 case where a fisheries official was killed at sea by North Korean troops.
The punitive measures targeting North Korean officials and companies follow Pyongyang's latest missile launches, including the test of long-range ICBMs.
President Yoon Suk-yeol said it would be extremely unwise for North Korea to conduct a seventh nuclear test.
Kim Jong-un says his country's ultimate goal is to "possess the world's most powerful strategic force" as he promotes scientists and officers behind recent test of "monster missile."
Kim Yo-jong accused South Korean President Yoon Suk-yeol of creating a "dangerous situation" after Seoul said that it was reviewing additional sanctions on North Korea over its recent barrage of missile tests.
The UN chief's statement, North Korea's top diplomat said, was "oblivious of the purpose and principles of the UN Charter and its proper mission which is to maintain impartiality, objectivity and equity in all matters."
If the US continues to make threats, Pyongyang "will resolutely react to nukes with nuclear weapons and to total confrontation with all-out confrontation," state media quotes leader Kim Jong-un as saying.
Ballistic missile launch comes hours after Pyongyang threatened "fiercer" military responses against US moves to bolster its military presence in the region.
US President Joe Biden held talks with allies Japan and South Korea as fears mount North Korea would soon conduct its seventh nuclear test amid a record-breaking recent spate of missile tests.
President Biden will tell his Chinese counterpart Xi that Pyongyang's missile and nuclear build-up will prompt "enhanced American military” in the region, says National Security Advisor Jake Sullivan.
Seoul confirms talks are going on over an unspecified number of 155-millimetre artillery shells but says Washington would be the "end user" of the lethal weapons.
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