HomeInternationalSome Chinese banks stop dealing with N.Korea

Some Chinese banks stop dealing with N.Korea

BEIJING- Some Chinese banks have stopped business dealings with North Korea, banking sources said on Friday, while the The New York Times reported that Beijing may reduce oil shipments to Pyongyang over its nuclear defiance.

China is communist North

Korea’s only significant point of contact with the outside world and Pyongyang has long used its neighbour’s banking system to ease what little trade it does with other countries.

But it has voiced unusual criticism for the impoverished country’s Oct. 9 nuclear test, and last weekend it voted for a U.N. resolution authorising sanctions on Pyongyang’s finances and weapons programmes.

China’s Foreign Ministry has side-stepped questions on whether the government has told banks not to deal with North Korea, saying only that as a permanent member of the U.N. Security Council China always strictly enforces its resolutions.

However, a source close to Pudong Development Bank said the bank had recently issued an internal notice making the point that there should be “no deals of any sort with companies or financial institutions in North Korea”.

An executive at Citic Bank said its head office had given instructions to have nothing to do with North Korea “at this sensitive moment”.

The executive said the bank had looked into its records but could find no evidence of any North Korean-related deals or business having ever been done.

Spokesmen for China Construction Bank, Bank of China, Pudong, Industrial and Commercial Bank of China and Citic Bank all declined immediate comment.

China’s banking regulator also declined to comment.


Some business people in the Chinese border city of Dandong said this week that they had been having a hard time transferring money to North Korea.

However, an official at the international settlement department of Bank of China’s Dandong branch would not confirm whether money transfers to or from North Korea had been stopped.

“Actually we have almost no business with North Korea, so even if we freeze this business, it will not have a big impact on our bank’s operations,” he said by telephone.

Another official at a Dandong branch of Industrial and Commercial Bank of China said it had never been possible to send money to North Korea.

“If you want to transfer money to North Korea, you can’t do so directly but only through a third country, because North Korea has a bad reputation,” he said, without elaborating.

However, a South Korean newspaper this week suggested Chinese banks had started thwarting flows to and from North Korea earlier in the year, before the nuclear test.

It said this was in response to a U.S. crackdown on North Korean finances abroad, most notably by demanding Macau-based Banco Delta Asia freeze Pyongyang-linked accounts.

The New York Times, quoting scholars told about the Chinese leadership’s planning, said on its Web site that Beijing officials had discussed staged cuts in oil shipments if North Korea ignored international pressure over its nuclear programme.

China provides 80 to 90 percent of North Korea’s oil imports, shipped by pipeline at prices Chinese officials say are sharply lower than the world market price, the Times said.

The officials would likely hold off on such action if North Korean leader Kim Jong-il agreed to return to moribund six-party negotiations on ending his nuclear arms programme, the paper said. — Reuter 

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