Published On: Wed, Sep 13th, 2017

North Korea latest: China cracks down on Kim Jung-un after nuclear missiles | City & Business | Finance

Beijing has reportedly cracked down on North Korea, after concerns from world leaders, including Theresa May and Donald Trump, that China was not putting enough pressure on the dictatorship amid growing fears World War 3 could break out.

It comes after North Korea latest nuclear missile and the most powerful test to date, pushed the United Nations Security Council to impose further sanctions on the state.

Chinese banks have come under spotlight as a means for North Korea to receive and send funds.

Now China Construction Bank (CCB) has “completely prohibited business with North Korea” after a ban started on August 28, bank staff have told reporters.

And the Industrial and Commercial Bank of China Ltd (ICBC), has reportedly stopped opening accounts for North Koreans and Iranians since July 16.

The Bank of China Ltd (BoC) and Agricultural Bank of China Ltd have also stopped allowing North Koreans to open individual or business accounts.

Tensions between Kim Jong-un and the US have been growing as Pyongyang continues to carry out nuclear and missile tests.

And Mr Trump’s administration has also considered actions against Chinese banks and other firms doing business with North Korea.

In June, the United States accused the Bank of Dandong, a small lender, of laundering money for Pyongyang.

The US also sanctioned a Chinese industrial machinery wholesaler, accused of acting on behalf of a Pyongyang bank already sanctioned by the United Nations for supporting the proliferation of weapons of mass destruction.

It comes as United Nations sanctions on North Korea’s important textiles industry are expected to disrupt a business largely based in China and pose compliance headaches for clothing retailers around the world.

The UN security council imposed a ban on North Korea textile exports and a ceiling on the country’s imports of crude oil on Monday, ratcheting up sanctions that are likely to hit the country’s ordinary citizens.

Textiles were North Korea’s second-biggest export after coal and other minerals in 2016, totalling $752 million, according to data from the Korea Trade-Investment Promotion Agency. Nearly 80 percent went to China.

Enforcement of the textile ban along North Korea’s 1,400-km (870 mile) border with China – where goods are sometimes smuggled across, often on boats at night – could be challenging and could depend on Chinese co-operation.

Paul Tjia, an outsourcing specialist who regularly visits North Korea, said: “Enforcement will depend a lot on China. So far, a lot of the North Korean textiles trade to Europe and other places goes via China.

“It will be up to Chinese companies that deal in the North Korean textile trade to take action and up to the Chinese government to ensure the Chinese companies are taking action.”

On a recent visit to the Chinese border with North Korea, several Chinese traders told Reuters the Chinese government is strictly enforcing UN sanctions to the point that some businesses that rely on trade with North Korea have already gone bankrupt or traders have had to start trading in non-sanctioned goods.

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