President Trump scored a major goal at the weekend when China instructed some of its banks to crack down on North Korean accounts. Beijing had until now shown very little appetite for putting pressure on Pyongyang to de-escalate tensions with the United States, South Korea and Japan.
China reportedly instructed four of its major domestic state banks as well as some of the country’s private banks including Pudong Bank to ban all North Korean citizens from opening new – or depositing cash into existing – bank accounts. The state institutions ordered to limit transactions are Industrial and Commercial Bank of China (ICBC), Bank of China, China Construction Bank (CCB) and Agricultural Bank of China (ABC). For the time being, North Koreans will still have access to the cash held in their accounts.
“The Chinese authorities have made no distinction between North Korean consular officials, laborers, or traders; all are banned from opening accounts. Previously, the banks were happy to open accounts for North Koreans living in China for personal reasons [such as] visiting relatives, provided they present[ed] their personal identity documents. This practice has ended as well,” a source with knowledge of the matter said at the weekend.
Following Pyongyang’s most powerful nuclear test on September 3, the president took to Twitter to warn that Washington was considering “stopping all trade with any country doing business with North Korea.”
Washington had already targeted one of China’s financial institutions. At the end of June, the Treasury Department accused Bank of Dandong, “a foreign bank of primary money laundering concern,” of acting “as a gateway for North Korea to access the U.S. and international financial systems despite U.S. and U.N. sanctions.”
The Trump administration’s decision to target Chinese financial institutions doing business with the rogue regime makes sense. Figures published by the Federal Reserve show that Chinese financial institutions had $144 billion of assets in the U.S. at the end of last year.
Beijing’s move came as Washington was pushing for the United Nations Security Council to impose tougher sanctions against North Korea. The U.S. wanted to bar crude oil shipments to the rogue regime as well as its textile exports. Washington also wished to prohibit North Korean citizens from working abroad, freeze Kim Jong-un’s assets and impose a travel ban upon the North Korean dictator.
However, on Monday morning the Trump administration decided to water down its sanctions resolution to try to prevent a Chinese or Russian veto after both countries stressed last week that they continued to favor dialogue with the rogue regime. Instead of an oil embargo, Washington now proposes a gradual reduction in oil exports. The new draft resolution also suggests that the U.S. has backed off from imposing an asset freeze on the North Korean leader.Share