The largest bank in China, Industrial and Commercial Bank of China (ICBC), along with several other banks in the country, has suspended cash deposit and transfer services for accounts held by North Koreans, a South Korean newspaper reported Monday.
The northeastern Chinese province of Liaoning borders North Korea and branches of banks in the border region have imposed the freeze on North Korean accounts, according to the Dong-A Ilbo newspaper. The report cited an employee of ICBC’s Dandong branch in Liaoning, who said the measures — started in late December — included suspending all deposits and transfers of foreign currencies, including the Chinese yuan, from and to those accounts.
“(The bank) had never told me why it was taking such measures, but it seems that they are related with the strained relations between North Korea and China,” the ICBC employee told Dong-A Ilbo.
The report cited the case of another Chinese bank, which informed a customer — a businessman from Liaoning with investments in North Korean mines —that it would not make any transactions into or out of North Korean accounts.
More than 70 percent of China-North Korea trade takes place in the city of Dandong, according to the newspaper.
A North Korea expert who spoke with the newspaper on the condition of anonymity said Beijing-Pyongyang relations worsened in December after the North’s Moranbang band cancelled a concert in Beijing. The newspaper speculated that China subsequently broadened the scope of its sanctions on North Korea.
Both the U.S. and South Korea have been seeking Chinese support for sanctions against North Korea. While China has criticized North Korea for its nuclear tests and missile launches, it has historically opposed harsh sanctions against its reclusive neighbor.
In the past, 70 percent to 80 percent of North Korea’s foreign earnings came through China, according to Kim Kwang Jin, who ran the Singapore branch of North Korea’s North East Asia Bank till his defection in 2003, Bloomberg reported.
William Newcomb, a former member of a panel of experts assisting the United Nations’ North Korea sanctions committee, said, “China is a very important piece in making sure that blockages work,” according to the Bloomberg report.