News / Economy

    China Moves Against Key N. Korean Bank

    In this undated file photo, men in Guangzhou, southeastern Guangdong province, share a newspaper outside a branch of the state-run Bank of China, which recently halted business with North Korea's Foreign Trade Bank, in the latest sign of Beijing-Pyongyang tensions.
    In this undated file photo, men in Guangzhou, southeastern Guangdong province, share a newspaper outside a branch of the state-run Bank of China, which recently halted business with North Korea's Foreign Trade Bank, in the latest sign of Beijing-Pyongyang tensions.
    Reuters
    Bank of China Ltd has shut the account of North Korea's main foreign exchange bank, which was hit with U.S. sanctions in March after Washington accused it of helping finance Pyongyang's nuclear weapons program.
           
    The state-run Foreign Trade Bank was told its transactions had been halted and its account closed, Bank of China, the country's biggest foreign exchange bank, said in a brief statement on Tuesday. It gave no reason for the closure and the bank declined to comment further.
           
    The closure is the first significant, publicly announced step taken by a Chinese entity to curb dealings with North Korea in the wake of international pressure to punish Pyongyang over its banned nuclear and ballistic missile programmes.
           
    "I think it is indeed a very noteworthy action,'' said Zhang Liangui, a North Korea expert at China's Central Party School, adding that Bank of China was probably concerned about its reputation and thus closed the account.
           
    "In taking this action I think there are political considerations as well as considerations about its own interests.''
           
    The U.S. sanctions prohibit any transactions between U.S. entities or individuals and the Foreign Trade Bank.
           
    Japan has followed suit while Australia is expected to do the same soon. Washington has also urged the European Union to impose sanctions on the Foreign Trade Bank and has raised the issue with China, although Beijing has not commented publicly on the bank.
           
    "We welcome reports that banks throughout the world, including Bank of China, have announced that they have closed the accounts of North Korea's Foreign Trade Bank,'' a senior U.S. Treasury official said on Tuesday, adding that the Foreign Trade Bank has facilitated millions of dollars in transactions that have benefited North Korea's arms dealer.
           
    The official added that U.S. Treasury Secretary Jack Lew talked with Chinese officials about the matter during his visit to Beijing in March.
           
    Experts have said Washington's move was designed to make foreign banks that do business in the United States think twice about dealing with the Foreign Trade Bank, in much the same way that banks have become wary about having ties with financial institutions in sanctions-hit Iran.
           
    China is North Korea's traditional ally and its biggest trading partner. It is unclear how much of the $6 billion in annual bilateral trade goes through the Foreign Trade Bank.
           
    Among China's other large banks, a spokesman at China Construction Bank said the bank did not do any business with the Foreign Trade Bank.
           
    Industrial and Commercial Bank of China and Agricultural Bank of China were not immediately available for comment.
           
    China has become increasingly frustrated with North Korea in recent months. It agreed to new U.N. sanctions after Pyongyang conducted its third nuclear test in February.
           
    Those sanctions, announced on March 7, target the North's attempts to ship and receive cargo related to its nuclear and missile programmes and tighten financial curbs, including the illicit transfer of bulk cash.
           
    The U.N. measures did not address the Foreign Trade Bank. Washington imposed its own sanctions several days later.

    North Korean bank widely used

    Not much is known about the Foreign Trade Bank, whose assets and investments are a state secret. But foreign embassies, non-governmental organisations and U.N. agencies in Pyongyang all use it.
           
    Germany and France have expressed concern about the possible impact on aid groups as well as European embassies should the EU place sanctions on the bank, sources with knowledge of the matter have previously said.
           
    Washington has targeted North Korea's limited financial links to the global community before. In 2005, some $25 million in North Korean money was frozen in a U.S. Treasury-inspired raid on Macau-based Banco Delta Asia, which Washington alleged handled illicit funds for Pyongyang.
           
    Reuters reported in April that Chinese banks had to rate their clients' risk of criminal conduct on a scale of 1-5 as part of the central bank's moves to curb money laundering and fraudulent transactions estimated at hundreds of billions of dollars a year.
           
    The new rules come as some experts cite China as the world's biggest source of "dirty'' funds and as it faces growing foreign pressure to scrutinise its financial links with North Korea and block cash transfers tied to Pyongyang's nuclear ambitions.
           
    South Korea's Yonhap news agency in March said Beijing had warned North Korean banks to stay within the remit of their permitted operations in China or risk penalties. Chinese regulators have not commented on that report.
           
    China has said it wants the U.N. measures enforced, but few analysts believe Beijing will take steps that significantly hurt North Korea as it is committed to a policy of engagement with Pyongyang.
           
    China has stepped up checks on shipments to and from North Korea, but the flow of goods in and out of the reclusive state appears largely unaffected, according to more than a dozen trading firms Reuters spoke to recently.

    You May Like

    Video Rubio Looks to Surge in New Hampshire

    Republican presidential candidate has moved into second place in several recent surveys and appears to be gaining ground on longtime frontrunner Donald Trump

    UN Calls for Global Ban on Female Genital Mutilation

    Recent UNICEF report finds at least 200 million girls and women alive today have undergone female genital mutilation in 30 countries

    UN Pilots New Peace Approach in CAR

    Approach launched in northern town of Kaga Bandoro, where former combatants of mainly Muslim Seleka armed group and Christian and animist anti-Balaka movement are being paid to do community work

    Featured Videos

    Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
    German Artists to Memorialize Refugees With Life Jacket Exhibiti
    X
    Hamada Elsaram
    February 05, 2016 4:30 PM
    Sold in every kind of shop in some Turkish port towns, life jackets have become a symbol of the refugee crisis that brought a million people to Europe in 2015.  On the shores of Lesbos, Greece, German artists collect discarded life jackets as they prepare an art installation they plan to display in Germany.  For VOA, Hamada Elrasam has this report from Lesbos, Greece.
    Video

    Video German Artists to Memorialize Refugees With Life Jacket Exhibit

    Sold in every kind of shop in some Turkish port towns, life jackets have become a symbol of the refugee crisis that brought a million people to Europe in 2015.  On the shores of Lesbos, Greece, German artists collect discarded life jackets as they prepare an art installation they plan to display in Germany.  For VOA, Hamada Elrasam has this report from Lesbos, Greece.
    Video

    Video E-readers Help Ease Africa's Book Shortage

    Millions of people in Africa can't read, and there's a chronic shortage of books. A non-profit organization called Worldreader is trying to help change all that one e-reader at a time. VOA’s Deborah Block tells us about a girls' school in Nairobi, Kenya where Worldreader is making a difference.
    Video

    Video Genius Lets World Share Its Knowledge

    Inspired by crowdsourcing companies like Wikipedia, Genius allows anyone to edit anything on the web, using its web annotation tool
    Video

    Video Former Drug CEO Martin Shkreli Angers US Lawmakers

    A former U.S. pharmaceutical business executive has angered lawmakers by refusing to explain why he raised the price of a life-saving pill by 5,000 percent. Martin Shkreli was removed from a congressional hearing on Thursday after citing his Fifth Amendment right to stay silent. Zlatica Hoke has more.
    Video

    Video Super Bowl TV Commercials are Super Business for Advertisers

    The Super Bowl, the championship clash between the two top teams in American Football, is the most-watched sporting event of the year, and advertisers are lining up and paying big bucks to get their commercials on the air. In fact, the TV commercials during the Super Bowl have become one of the most anticipated and popular features of the event. VOA's Brian Allen has a sneak peek of what you can expect to see when the big game goes to commercial break, and the real entertainment begins.
    Video

    Video In Philippines, Mixed Feelings About Greater US Military Presence

    In the Philippines, some who will be directly affected by a recent Supreme Court decision clearing the way for more United States troop visits are having mixed reactions.  The increased rotations come at a time when the Philippines is trying to build up its military in the face of growing maritime assertiveness from China.  From Bahile, Palawan on the coast of the South China Sea, Simone Orendain has this story.
    Video

    Video Microcephaly's Connection to Zika: Guilty Until Proven Innocent

    The Zika virus rarely causes problems for the people who get it, but it seems to be having a devastating impact on babies whose mothers are infected with Zika. VOA's Carol Pearson has more.
    Video

    Video Solar Innovation Provides Cheap, Clean Energy to Kenya Residents

    In Kenya, a company called M-Kopa Solar is providing clean energy to more than 300,000 homes across East Africa by allowing customers to "pay-as-you-go" via their cell phones. As Lenny Ruvaga reports from Kangemi, customers pay a small deposit for a solar unit and then pay less than a dollar a day to get clean energy to light up their homes or businesses.
    Video

    Video Stunning Artworks Attract Record Crowds, Thanks to Social Media

    A new exhibit at the oldest art museum in America is shattering attendance records. Thousands of visitors are lining up to see nine giant works of art that have gotten a much-deserved shot of viral marketing. The 150-year-old Smithsonian American Art Museum has never had a response quite like this. VOA's Julie Taboh reports.
    Video

    Video Apprenticeships Put Americans on Path Back to Work

    Trying to get more people into the U.S. workforce, the Obama administration last year announced $175 million in grants towards apprenticeship programs. VOA White House correspondent Aru Pande went inside one training center outside of Washington that has gained national recognition for helping put people on the path to employment.
    Video

    Video New Material May Reduce Concussion Effects

    As the 2016 National Football League season reaches its summit at the Super Bowl this coming Sunday (2/7), scientists are trying to learn how to more effectively protect football players from dangerous and damaging concussions. Researchers at Cardiff and Cambridge Universities say their origami-based material may solve the problem. VOA’s George Putic reports.
    Video

    Video Saudi Arabian Women's Sports Chip Away at Stereotypes

    Saudi Arabian female athletes say that sports are on the front line of busting traditions that quash women’s voices, both locally and internationally. In their hometown of Jeddah, a group of basketball players say that by connecting sports to health issues, they are encouraging women and girls to get out of their homes and participate in public life. VOA’s Heather Murdock reports.
    Video

    Video A Year Later, Fortunes Mixed for Syrians Forging New Lives in Berlin

    In April of last year, VOA followed the progress of six young Syrian refugees -- four brothers and their two friends -- as they made their way from Libya to Italy by boat, and eventually to Germany. Reporter Henry Ridgwell caught up with the refugees again in Berlin, as they struggle to forge new lives amid the turmoil of Europe's refugee crisis.
    Video

    Video Zika Virus May be Hard to Stop

    With the Zika virus spreading rapidly, the World Health Organization Monday declared Zika a global health emergency. As Alberto Pimienta reports, for many governments and experts, the worst is yet to come.

    World Currencies

    EUR
    USD
    0.8926
    JPY
    USD
    116.68
    GBP
    USD
    0.6871
    CAD
    USD
    1.3751
    INR
    USD
    67.653

    Rates may not be current.