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Beijing orders banks to suspend accounts held by North Koreans

Beijing has reportedly ordered Chinese state banks to suspend accounts held by North Koreans, a move that could put a tighter stranglehold on trade between the two countries.

Branch offices of at least three major Chinese banks – Bank of China, China Construction Bank and Agricultural Bank of China – in the border city of Yanji, Jilin province, had suspended transactions through accounts held by North Koreans, Tokyo-based Kyodo News reported on the weekend.

The branch offices in Yanji had also banned North Koreans from opening new accounts, or making deposits or remittances, the report said.

But the accounts were not yet frozen, allowing the account holders to make withdrawals. South Korea-based news website DailyNK also said that four major Chinese state banks – Industrial and Commercial Bank of China (ICBC), Bank of China, China Construction Bank and Agricultural Bank of China – had banned North Koreans living in China from opening up new accounts and ordered existing accounts to be closed.

The ban affects all North Koreans on the mainland, from consular officials to laborers and traders.

The move signals that China may have been pushed beyond its limit of patience by North Korea's ongoing nuclear and missile programs, after the latest in the ongoing nuclear tests was conducted September 3.

North Korea has conducted a string of provocative missile tests, as well as a surprisingly powerful nuclear test. Since the start of the year, Pyongyang has launched short-, medium-, intermediate-, and long-range missiles for strikes throughout the region and across parts, if not most, of the continental US. In the wake of North Korea's second intercontinental ballistic missile test, the United Nations Security Council approved tough sanctions on the North, and China agreed to take the necessary steps to curb Pyongyang's ambitions.

In response to last week's test of a possible thermonuclear weapon, the US and its allies are pushing for tougher UN sanctions on North Korea.

China accounts for roughly 90 percent of North Korean trade, and for years, China has helped North Korea skirt international sanctions. But relations between Beijing and Pyongyang have significantly deteriorated as North Korea has become more of a liability than an asset.

China suspended North Korean coal imports early this year; Chinese exports of petroleum products to North Korea have fallen dramatically; Chinese factories are prohibiting North Korean labor imports; Chinese authorities are supposedly sealing some border crossings; and now, state banks are suspending transactions for North Koreans.

Chinese analysts said that traders might still be able to find loopholes to bypass the ban but China's decision would batter already weakened trade with its neighbor.

Zhang Liangui, a North Korea specialist at the Central Party School, said that big transactions, such as Chinese oil exports to North Korea, would be particularly hard hit because banks were integral to the trade.

But Lu Chao, director of the Border Study Institute at the Liaoning Academy of Social Sciences, said that there were other ways for North Koreans to dodge bank sanctions, including using cash and bartering goods.

"Though these transactions still appear in customs data, they require far less foreign currency," Lu said.

While China appears to be responding to the requirements of UN sanctions on North Korea, it is also possible that China is concerned about punitive actions by the Trump administration. which has been consistently pushing China to do more to rein in its nuclear neighbor.

The US Department of the Treasury identified a Chinese bank — the Bank of Dandong — as a money launderer for North Korea and sanctioned a handful of Chinese firms and nationals for conducting illegal business with North Korea. Recently, the Trump administration threatened to cut trade ties with any country that engaged in illicit cooperation with Pyongyang if the UN failed to approve the severe new sanctions in the latest draft resolution.

The UN Security Council is expected to vote on Monday a set of new sanctions against North Korea. The US has been pushing for a full ban on oil supplies to the country, North Korea textile exports, North Korean guest workers overseas, as well as an asset freeze.

China has shown its support for tougher action.

"Given the new developments on the Korean peninsula, China agrees that the UN Security Council should make a further response and take necessary measures," Chinese Foreign Minister Wang Yi said recently without elaborating.
 


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