Beijing - Chinese banks near the North Korean border say they have been instructed not to open any new accounts for that country's citizens and businesses, according to reports gathered by North-south News.
While this is not part of any United Nations sanctions regime, reports say it is an attempt to head off further US measures targeting Chinese banks which are accused of doing sanctions-busting business with North Korea. Apart from the UN, the US Treasury has its own sanctions regime blacklisting companies and people who are said to have assisted Pyongyang in developing nuclear weapons.
Once a person or a company is placed on the American list of prohibited entities, US (and even foreign) companies can face strict penalties within the US for having dealings with them. China's financial institutions have been accused of laundering funds used to facilitate North Korean intercontinental ballistic missile and nuclear warhead development. The government in Pyongyang is said to use front companies to move money around the world via Chinese banks. For this reason, officials in Washington DC have been threatening to place major Chinese banks on the blacklist: international sanctions against these enormous institutions could cause global economic shockwaves.
In recent months, the relatively small Bank of Dandong was blacklisted. Announcing that Americans would be barred from doing business with it, 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 programs."
China's big banks could not afford to face similar moves. Staff from at least seven branches from the Bank of China and the Industrial and Commercial Bank of China have confirmed to the BBC that new North Korean bank accounts will not be opened. They said the process started months ago.(FA)