Chinese banks cease all business with North Korea


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China’s central bank has ordered all Chinese banks to stop all business with North Korea.

Chinese banks have come under scrutiny for their role as a conduit for funds flowing to and from China’s increasingly isolated neighbor. The sources said banks were told to stop providing financial services to new North Korean customers and to wind down loans with existing customers, following tighter sanctions against Pyongyang by the United Nations. The sources said lenders were asked to fully implement United Nations sanctions against North Korea and were warned of the economic losses and reputational risks if they did not do so.

Chinese banks received the document on Monday, the sources said.

It appears that this order only effects new business with North Koreans, which means it can be gotten around, and is somewhat meaningless. At the same time, it appears that China’s is slowly stepping up its pressure on North Korea, which is a good thing.

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One comment

  • Garry

    I’m not sure that this only affects new business; I read “wind down loans with existing customers” to mean to continue receiving loan payments, but don’t issue any new loans.

    Of course, the devil is in the details, and this article doesn’t give a whole lot of detail.

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