China reduces banking lifeline to North Korea #US Sanctions

The Bank of China has stopped doing business with a large North Korean bank, falling into line with a US-led sanctions push to restrict funding for Pyongyang’s nuclear programme.

The decision to close the bank account follows an increase in tensions on the Korean peninsula and may be a sign that Beijing is willing to place more pressure on Pyongyang.

The US Treasury hit the Foreign Trade Bank, North Korea’s main foreign exchange bank, with sanctions in March, saying it was “a key financial node” in North Korea’s nuclear and missile proliferation activities. The bank had not been named among the institutions targeted for asset freezes by expanded UN Security Council sanctions introduced in January and March.

Other countries such as Japan and Australia have since joined the US in applying sanctions against Foreign Trade Bank, but co-operation from banks in China, North Korea’s closest economic partner, is essential in the efforts to choke off cash flows. - Ft