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China closes down North Korean bank account

May 07, 2013|By Barbara Demick
  • A South Korean elementary school student covers her head with a school bag at an underground shelter Tuesday during a drill for a possible airstrike at Sohwa elementary school in Paju near the border with North Korea.
A South Korean elementary school student covers her head with a school bag… (Ahn Young-joon / Associated…)

BEIJING -- China’s largest state-owned bank has closed the account of a North Korean bank accused of funding the North's weapons programs in an apparent sign of Beijing’s growing frustration with its ally.

The Bank of China announced Tuesday that it suspended all transactions by the North Korean Foreign Trade Bank. It did not say how much money was in the accounts or when the action had taken place.

The U.S. Treasury this year called the Foreign Trade Bank a “key financial node” in helping the North Korean regime finance its development of missiles and nuclear weapons.

For years, North Korea has done most of its banking through neighboring China. The suspension of its accounts by Bank of China could lead other banks in the region to reconsider their relationship with the increasingly isolated regime in Pyongyang.

“Bank of China, of all the Chinese banks, has to adhere to international sanctions because they have a reputation to uphold,’’ said John Park, an expert in Chinese-North Korean relations at Harvard University’s Belfer Center.

He added, however, that Bank of China had reduced its dealings with North Korea years earlier and that it is unlikely the closure alone will have a significant impact.

“What would be more substantive is if China revokes the work authorization documents for the North Korea state trading companies in China.’’

For months now, North Korea has been unnerving its neighbors with a stream of explicit threats to launch nuclear attacks against the U.S. and South Korea, including fresh warnings Tuesday over joint naval drills being conducted by the two allies. The North Korean statement came as President Obama was preparing to meet in Washington later in the day with new South Korean President Park Geun-hye.

Under the helm of its own new leader, 30-year-old Kim Jong Un, North Korea conducted its third nuclear test in February. Military analysts have been warning of plans for a fourth test as well as another missile test.

However, the North apparently disassembled and moved two medium-range Musudan missiles that had been poised for a test off the east coast, U.S. and South Korean sources reported Tuesday. 

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