+ A

U.S. blacklists Chinese bank for helping North

Establishment had been laundering money for the regime
July 01,2017
The U.S. Trump administration on Thursday blacklisted a Chinese bank accused of doing illicit business with North Korea as a “primary money laundering concern.”

The U.S. Treasury Department accused the Bank of Dandong of being a “foreign financial institution of primary money laundering concern,” and called it a “gateway for North Korea to access the U.S. and international financial systems, facilitating millions of dollars of transactions for companies involved in North Korea’s nuclear and ballistic missile programs.”

With the designation, the Bank of Dandong, considered a marginal Chinese bank, will not be able to access the U.S. financial system directly or indirectly through third parties. It marked the first time that U.S. authorities punished a Chinese bank for laundering money to the North, which continues its nuclear and ballistic missile program despite United Nations resolutions.

“We will follow the money and cut off the money,” said Treasury Secretary Steve Mnuchin during a press briefing. “This action reaffirms the Treasury Department’s commitment to ensure that North Korea is cut off from the U.S. financial system.”

The United States also identified a shipping Chinese firm, Dalian Global Unity Shipping Co Ltd, and two Chinese individuals for doing business with the Kim Jong-un regime, barring the U.S. financial institutions from doing business with the three.

The Treasury Department’s move on Thursday occurred as President Donald Trump was about to host a White House dinner with President Moon Jae-in and first lady Kim Jung-sook. The timing of the sanctions against the Chinese institutions and individuals was seen as Trump’s message to the Chinese that he was not happy with Beijing’s efforts to press the North. Trump expressed his frustration toward Beijing in a message on Twitter last week by saying, “While I greatly appreciate the efforts of President Xi and China to help with North Korea, it has not worked out.”

The U.S. government could target other Chinese individuals and financial institutions suspected of laundering money for the regime, a move that would put additional pressure on Beijing to cut off money channel to the North. The Thursday measure was the first such punitive measure in 12 years, since the George W. Bush administration went after the Macao-based Banco Delta Asia (BDA), accusing it of money laundering activities for the Kim Jong-il regime.

The measure proved to be an effective tool for Washington, creating a run on the bank. Alarmed, the BDA placed a freeze on deposit withdrawals, thereby freezing Kim Jong-il’s slush funds deposited there. The United States, however, has refrained from doing the same for other Chinese entities since 2005 in consideration of its relationship with China, until Thursday.

BY KANG JIN-KYU [kang.jinkyu@joongang.co.kr]