China’s central bank has reportedly ordered the country’s other banks to stop conducting business with North Korea.
The People’s Bank of China has instructed banks to fully implement United Nations sanctions, four sources familiar with the situation told Reuters.
The United Nations Security Council recently approved a new sanctions resolution to punish the rogue North Korean regime for its earlier test of a suspected staged thermonuclear weapon, which the North intends to mount on its intercontinental ballistic missile.
Chinese banks are not allowed to provide financial transactions for new North Korean customers, and they are encouraged to begin severing ties with existing customers. The banks received a notice earlier this week warning them that a failure to properly implement sanctions would lead to economic losses and damage their reputation.
“Management of North Korea-related business has become an issue of national-level politics and national security,” the notice read. Banks are to tell North Korean customers that Chinese banks are “fulfilling our international obligations and implementing United Nations sanctions against North Korea. As such, we refuse to handle any individual loans connected to North Korea.”
Earlier this month, branches of three major banks — Bank of China, China Construction Bank and Agricultural Bank of China — in the border area reportedly suspended transactions for North Koreans.
“This is being influenced by international sanctions against North Korea,” one bank employee told Kyodo News reporters. Beijing has been stepping up pressure on China as the Trump administration threatens to punish China for any failures to follow through on punitive sanctions.
The Trump administration has already sanctioned Chinese banks for illicit cooperation with North Korea and warned that more sanctions could follow.
Since North Korea’s sixth nuclear test, China has supposedly closed certain border crossings, started cracking down on North Korean labor, and pressured its financial institutions.
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