China Moves on N.Korean Money Laundering

      March 20, 2013 12:35

      China is making tentative moves in the direction of curbing the illegal activities of North Korean banks, North Korean sources in Beijing said on Tuesday.

      According to the sources, Chinese authorities put the brakes on illegal operations by the representative offices of Tanchon Commercial Bank, Korea Daesong Bank and Korea Kwangson Banking Corp. in Beijing and Dandong.

      These representative offices are not licensed to engage in business operations such as currency exchange and remittances of money in China because they are not full branches. But in fact they have engaged in money laundering by making payments for trade transactions on North Korean traders' behalf through borrowed-name bank accounts in China, or by receiving payments on traders' behalf and asking their headquarters in North Korea to pay the traders.

      No North Korean bank has a formal branch in China.

      Chinese authorities are apparently trying a little harder than in the past to enforce UN sanctions against North Korea.

      A diplomatic source in Beijing said, "This doesn't mean that China has taken a new initiative on its own to enforce sanctions on the North, but rather that it is treating North Korea-related transactions by the book."

      Another source said just cracking down on fake accounts used by North Korean banks will cause havoc for the North Korean regime.

      Until recently China has turned a blind eye to such violations.

      Beijing has also banned North Korean restaurants from selling North Korean agricultural produce including ginseng, and is cracking down on illegal migrant workers from the North.

      A North Korean source in Dandong said Beijing is trying to clamp down on North Koreans who come to China on student or tourist visas or simple entry permits and then work there illegally.

      To work legally in China, North Koreans need a six-month "industrial trainee" visa, which can be extended for up to a year.

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