China responds to US-initiated action action North Korea.
SCMP: “Bank of China has shut the account of North Korea’s main foreign exchange bank, which was hit with US sanctions in March after Washington accused it of helping finance Pyongyang’s nuclear weapons programme.
Chinese Bank of China (Photo credit: epSos.de)
The state-run Foreign Trade Bank had been told its transactions had been halted and its account closed, Bank of China, the country’s biggest foreign exchange bank, said in a brief statement on Tuesday. It gave no reason for the closure and the bank declined to comment further.
The closure is the first significant, publicly announced step taken by a Chinese entity to curb its dealings with North Korea in the wake of international pressure to punish Pyongyang over its banned nuclear and ballistic missile programmes.
“I think it is indeed a very noteworthy action,” said Zhang Liangui, a North Korea expert at China’s Central Party School, adding Bank of China was probably concerned about its reputation and thus closed the account.
“In taking this action I think there are political considerations as well as considerations about its own interests.”
The US sanctions prohibit any transactions between US entities or individuals and the Foreign Trade Bank.
Japan has followed suit while Australia is expected to do the same soon. Washington has also urged the European Union to impose sanctions on the Foreign Trade Bank and has raised the issue with China, although Beijing has not commented publicly on the bank.
Experts have said Washington’s move was designed to make foreign banks that do business in the United States think twice about dealing with the Foreign Trade Bank, in much the same way that banks have become wary about having ties with financial institutions in sanctions-hit Iran.
China is North Korea’s traditional ally and its biggest trading partner. It is unclear how much of the US$6 billion in annual bilateral trade goes through the Foreign Trade Bank.
Among China’s other large banks, a spokesman at China Construction Bank said the bank did not do any business with the Foreign Trade Bank. Industrial and Commercial Bank of China and Agricultural Bank of China were not immediately available for comment.
China has become increasingly frustrated with North Korea in recent months. It agreed to new UN sanctions after Pyongyang conducted its third nuclear test in February.
Those sanctions, announced on March 7, target the North’s attempts to ship and receive cargo related to its nuclear and missile programmes and tighten financial curbs, including the illicit transfer of bulk cash.
The UN measures did not address the Foreign Trade Bank. Washington imposed its own sanctions several days later.”
via Bank of China closes account of key North Korean bank | South China Morning Post.
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