Chinese banks may have closed North Korean accounts

China may have asked banks to suspend accounts held by North Koreans, a move that would hamper bilateral trade.

North Korean and Chinese flags outside a North Korean restaurant in Zhejiang province, China. Photo: Reuters.

Branches of at least three major banks, including Bank of China, China Construction Bank and Agricultural Bank of China, in the border city of Yanji, Jilin province, have suspended transactions through accounts owned by North Koreans, Japanese news agency Kyodo reported late last week.

The branches also prohibit North Koreans from opening new accounts, making deposits or transferring remittances. However, their accounts are not frozen and withdrawals can still be made.

According to the South Korean-based news agency DailyNK, four major Chinese banks, the Industrial and Commercial Bank of China (ICBC), Bank of China, China Construction Bank and Agricultural Bank of China, have banned North Koreans living in China from opening new accounts and closing existing ones.

The ban applies to all North Koreans in China, from consular officials to workers and traders. However, Chinese analysts say North Korean traders may still find loopholes to circumvent the ban. Beijing's decision will partly affect trade with its neighbor.

This is not the first time China has imposed financial sanctions on North Korea. In 2016, an ICBC branch in the border city of Dandong froze North Korean accounts. In 2013, several Chinese banks, including Bank of China, stopped doing business with the International Commercial Bank, North Korea’s sole foreign exchange bank.

The decision comes after North Korea conducted its sixth nuclear test earlier this month, putting China in a difficult position. China is facing pressure from the US, which is calling on it to do more to rein in North Korea. The US has also threatened to impose "indirect sanctions" on Chinese banks that hold money for companies doing business with North Korea.

The United Nations Security Council will vote today on a new package of sanctions against North Korea. The US is pushing for an oil embargo on North Korea, a ban on North Korean textile exports, an assets freeze on leader Kim Jong-un and a ban on countries hiring North Korean laborers.

According to VNE