China bank barred from US financial system over North Korea tiesHeat Profit
The US Treasury department has severed a small Chinese bank’s ties with the US financial system over its alleged support for North Korea’s nuclear weapons programme.
The measures against Bank of Dandong come days before Donald Trump’s first official visit to China and indicate that questions over China’s relationship with North Korea will continue to dog the relationship between the US president and his Chinese counterpart Xi Jinping.
In the run-up to Mr Trump’s tour of Asia, US bombers flew near North Korea on Thursday, provoking the latest threats of nuclear war from the Kim Jong Un regime and highlighting the tensions between Washington and Pyongyang that have rippled through the region.
The Treasury’s financial crimes unit said in a statement late on Thursday that the bank in Dandong, on China’s border with North Korea, had acted “as a conduit for illicit North Korean financial activity”.
It accused the bank of performing millions of dollars of transactions for companies connected to North Korea’s ballistic missile and nuclear weapons programmes, as well as other companies that have been sanctioned by the UN.
While the White House proposed the measures in June, the implementation comes as Mr Trump prepares for his first visit to China as head of state.
The new sanctions will bar any bank doing business in the US from conducting transactions with Bank of Dandong.
“Today’s actions will better protect the US financial system from illicit schemes used by North Korea to evade sanctions and finance its weapons programmes,” Steven Mnuchin, Treasury secretary, said in a statement. “Banks and businesses worldwide should take note that they must be vigilant against attempts by North Korea to conduct illicit financing and trade.”
Documents provided by the Treasury claim that Bank of Dandong facilitated $786m in transactions through correspondent banks in the US between May 2012 and May 2015. About 17 per cent of those transactions, it says, were with companies linked to North Korean entities under sanctions from the US and UN.
The move against the Chinese bank comes as the US increases its focus on the companies and individuals that have supported Mr Kim and his weapons programme.
Swift, the Brussels-based system that supports most of the world’s financial transactions, said in March it was cutting all ties to North Korea’s banking system amid criticism of international entities that continued to facilitate payments for banks in the country.
Swift said at the time that the North Korean banks that remained on its system were “no longer compliant with Swift’s membership criteria” and would be dropped.
Hong Kong’s role as a hub for shipping companies that do business with North Korea has also recently come into focus, with numerous ships used to trade with the country registered in the semi-autonomous Chinese territory.