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Chinese banks stop taking North Korean money fearing US sanctions

Source: INDEPENDENT

By: Ben Chapman

China’s banks are reportedly beginning to take heed of US sanctions on North Korea. Several workers at branches of major Chinese banks close to the North Korean border told the BBC that they are no longer opening accounts for citizens of the country.

One Bank of China staff member said, “all bank activities related to North Korea are suspended now because it is a sanctioned country”.

Other workers at Industrial and Commercial Bank of China said they had stopped opening North Korean accounts months ago, with one reportedly saying the change followed an order from the People’s Bank Of China, the country’s central bank.

Chinese banks have attracted the ire of Washington, which has accused them of facilitating the Pyongyang regime’s nuclear missile programme by providing financial services and laundering North Korean money.

In June, President Donald Trump hardened his administration’s approach on the issue, blacklisting a small Chinese bank over dealings with North Korea. Any companies that do business with banks on the US sanctions list face major penalties.

At the time, the US Treasury said: “The Bank of Dandong acts as a conduit for North Korea to access the US and international financial systems, including by facilitating millions of dollars of transactions for companies involved in North Korea’s WMD and ballistic missile programmes.”

To blacklist any of the major Chinese banks would be far more serious, however.

Since China is home to many of the world’s largest banks, any such sanctions would have major repercussions for the global financial system.

Until recently, however, many Chinese banks are widely believed to have been taking that risk, opening accounts for North Koreans despite increasing tensions between Pyongyang and Washington.

Neither side is likely to want to risk escalating economic tensions too far however, with trade between the two nations last year totalling $648.2bn, according to US government figures.

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