Crackdown Begins: Chinese Banks Are Suspending North Korean Transactions

In what may be a major breakthrough in the diplomatic and political stalemate over North Korea if confirmed officially, Japan's Kyodo newspaper reported overnight that Chinese state banks have started suspending transactions through accounts held by North Koreans, making it nearly impossible to do business between the two countries. Furthermore, Kyodo News has confirmed that branch offices of at least three major state banks - the Bank of China, China Construction Bank and Agricultural Bank of China - in the northeastern border city of Yanji have also banned North Koreans from opening accounts.

The Chinese banks have yet to freeze the accounts, meaning that North Koreans can still withdraw money from them - similar to bitcoins held in Chinese exchanges - but they are now prevented from making deposits or remittances, according to the sources quoted by Kyodo.

"This is being influenced by international sanctions against North Korea," an employee of one bank said.

The bank restrictions, which the sources said from April were also starting to be put in force in Liaoning Province - the main region of trade between China and North Korea - suggest that China may have become more serious about curbing its nuclear ambitions, something we hinted at last week in "It Looks Like North Korea Is No Longer Playing To The Chinese Script". The restrictions also appear to be intended to help major Chinese banks avoid being hit by sanctions imposed by the United States and other countries.

In late June, the administration of U.S. President Donald Trump labeled a regional bank based in the northeastern border city of Dandong "a foreign bank of primary money laundering concern," and unilaterally sanctioned another Chinese firm and two Chinese individuals for links to Pyongyang's arms development; China's reaction was understandably angry, which is why it is even more surprising that Beijing has volunteered to proceed with such a unilateral crackdown on its own.

On Monday, the United States will seek to impose the toughest U.N. sanctions possible on North Korea in the wake of its sixth nuclear test a week ago and calling on China to do more to rein in its defiant neighbor, although according to overnight reports by Reuters, the sanction proposed by the US will be watered down to exclude oil trade with China and a freeze of Kim Jong Un's assets (more details here).

China, which accounts for about 90 percent of North Korea's official trade and is its major oil supplier, has long opposed taking excessively strict measures against the country, out of fear of triggering a refugee crisis on the border. China's official data show that its exports to North Korea of petroleum products, including gasoline and light oil but excluding crude oil, fell 75 percent in three months through July from a year earlier to about 19,700 tons.

One source said the main reason for the decline was that North Koreans were having difficulty paying for petroleum product imports because of the banking restrictions. As reported at the time, In North Korea gasoline prices shot up in April and remain high.

North Korean officials told Kyodo News in July that economic activity was not in a state of confusion and prices were not rising continuously. But they said the government had encouraged North Koreans to use public transportation and bicycles to conserve fuel.

If China is now aggressively pushing to cut off North Korea, it will accelerate the denouement: either Kim will crack, and submit to US and Chinese "parental supervision", or having nothing left to lose, he will proceed with more launches and nuclear tests in hopes that the final provocation drags him, and his country down in flames.


Kotzbomber747 (not verified) tmosley Mon, 09/11/2017 - 12:26 Permalink

The Chinese are just 'playing along' because they have an important communist party meeting in October and they don't want anything or anybody (read: the US) to disturb that.… is falling for it again, just like with all the drama surrounding hurricane Irma.Just wait until november, then it'll be business as usual again between China and it's geopolitical proxy agent, North Korea.

In reply to by tmosley

Ramesees Creepy_Azz_Crackaah (not verified) Mon, 09/11/2017 - 10:50 Permalink

I think Trump's real victory here may be against China (which I infer you are also saying).  China was using its proxy state, NK, to goad the US into a conflict.  Trump has handled it well and cozied up to SK and Japan, now China has been spending all these resources building islands in the South Pacific while the US is about to get the greenlight to put a shitload of munitions and bombers within range of Beijing, all the while feinting that they cared about some ridiculous pieces of concrete in the South Pacific that will fall into the sea when hit by a torpedo from a Virginia Class.  Starting to respect Trump more and more. Although if he fucks us by not building the Wall, I will vote Democrat in 2018/2020.  Ok, I won't be that stupid, but I will vote 3rd party.  

In reply to by Creepy_Azz_Crackaah (not verified)

Mr.BlingBling Ramesees Mon, 09/11/2017 - 11:16 Permalink

"Although if he fucks us by not building the Wall, I will vote Democrat in 2018/2020.  Ok, I won't be that stupid, but I will vote 3rd party."We’re too broke to piss away money on some stupid wall that won’t solve the illegal immigration problem.  Here’s how to solve the illegal immigration problem for free. 1.     Establish a mandatory fine of $100,000 for each month that someone employed an illegal immigrant.2.    Set up an 800-number for people to snitch on those employers.   3.    Require each snitch to pay a $100 fee for each person they report, to separate the wheat from the chaff.4.    If the tip pans out, the snitch is paid, say, $80,000 of the mandatory fine, the rest goes to admin costs.5.    If the government doesn’t follow up on the tip within a month, the snitch still gets the $80,000, with the funds pulled from the budget of the government agency that didn’t do its job.I'd bet that would solve about 80% of the illegal immigration problem.  For free.

In reply to by Ramesees

Megaton Jim Mon, 09/11/2017 - 10:23 Permalink

Keep in mind the estimated $3-6 trillion in minerals they have sitting in the ground, including gold, mangesite, rare earths and especially heavy rare earths. I wonder who will end up controlling those resources? It sure as hell won't be the Norks!

richsob Mon, 09/11/2017 - 10:30 Permalink

So North Korea just uses Russian banks instead.  And they wash the payments to Chinese accounts through the Russian accounts.  Done deal.  There's always a way if you just think about it for a minute.

Grandad Grumps Mon, 09/11/2017 - 10:40 Permalink

That might not be a Chinese government action, but a banking empire action ... which would mean the banks have no fear of China.

All major banks appear to be money laundering criminals and counterfeiting criminals and fraud criminals and engaged in theft, conspiracy and racketeering.

While what happens in the so called physical world is only scripted to make this world interesting and challenging for us, one does wonder where the balance will come from!?!

Maybe from the spiritual world?

Stinkytofu (not verified) Grandad Grumps Mon, 09/11/2017 - 10:48 Permalink

definitely a chinese action. this explains the live-fire exercises last week in bohai sea, the wee tiny gulfseparating northern china from north korea.....800km between beijingand pyongyang (where latest missiles were fired from) exercise was to defend against a surprise low-altitude attack....something like,oh, i dunno, intermediate range missiles fired off by a naughty fat boy, NOTb-52's and b-1's and j-35's

In reply to by Grandad Grumps

richCat Mon, 09/11/2017 - 11:04 Permalink

Suspending transactions.....this is just a balking act, just to make believe....wait a couple of weeks or less and normality will occur. Has anyone from the NK leadership dared to bark at the Chinese over the issue ? Nup.

scatha Mon, 09/11/2017 - 11:22 Permalink

It is all smoke and mirrors. Japanese banks launder NK money with impunity so Chinese, Russian and US.

NK fishermen cooperate with Japanese fishing corporations while coast Guard is watching, get bribed and transfer fish at seas for gold or cash or are used for parallel transactions for other commodity.

Another thing is ban of coal imports from NK while in fact it is ban of NK government own coal export company not coal itself that is being bought by Namibian (Chinese fronts) companies at border's no mans land and let into China as import from Namibia.

Trade with NK. Is so profitable that established corporation will not pass such opportunity.
And hence trade with NK is increasing since sanctions and that includes China, Russia,France, UK and other western countries.

Everybody wants to make a buck but on backs of enslaved N.Koreans.

Atomizer scatha Mon, 09/11/2017 - 11:33 Permalink

+100. Bravo. Yet the MSM will spin off a CFR version. Get are slave peasants to back us. Dangerous people that we sold nuclear reactors to through Donald Rumsfeld. This shit needs to stop. Round them up. I'm talking about the bastards in Wash-ing, DC. Yes money laundering. Why is RICO being ignored? 

In reply to by scatha