China’s Big Banks Halt Services for North Koreans

SHANGHAI (Reuters) – China’s Big Four state-owned banks have stopped providing financial services to new North Korean clients, according to branch staff, amid U.S. concerns that Beijing has not been tough enough over Pyongyang’s repeated nuclear tests.

Tensions between the United States and North Korea have ratcheted up after the sixth and most powerful nuclear test conducted by Pyongyang on Sept. 3 prompted the United Nations Security Council to impose further sanctions on Tuesday.

Chinese banks have come under scrutiny for their role as a conduit for funds flowing to and from China’s increasingly isolated neighbor.

China Construction Bank (CCB) (601939.SS) has “completely prohibited business with North Korea”, said a bank teller at a branch in the northeastern province of Liaoning. The ban started on Aug. 28, the teller said.

Frustrated that China had not done more to rein in North Korea, the Trump administration was mulling new sanctions in July on small Chinese banks and other firms doing business with Pyongyang, two senior U.S. officials told Reuters.

A person answering the customer hotline at the world’s largest lender, Industrial and Commercial Bank of China Ltd (ICBC) (601398.SS), said the bank had stopped opening accounts for North Koreans and Iranians since July 16. The person did not explain why or answer further questions.

The measures taken by the largest Chinese banks began as early as the end of last year, when the Dandong city branch of China’s most international lender, Bank of China Ltd (BoC) (601988.SS), stopped allowing North Koreans to open individual or business accounts, said a BoC bank teller who declined to be identified.

Existing North Korean account holders could not deposit or remove money from their accounts, the BoC bank teller said.

At Agricultural Bank of China Ltd (AgBank) (601288.SS), a teller at a branch in Dandong, a northeastern Chinese city that borders North Korea, said North Koreans could not open accounts. The teller did not provide further details.

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