June 03, 2016 09:50
The U.S. Treasury on Wednesday put North Korea back on a blacklist of "primary money laundering concerns," which places third-country banks at risk of sanctions if they do business with Pyongyang.
Banks in the U.S. and several other countries are already banned from dealing with North Korea.
But due to the blacklisting, banks in third countries that deal with North Korea would now be barred from dealing with U.S. banks, which would be a much greater loss.
It effectively blocks North Korea's access to SWIFT, the global financial network that banks use to transfer billions of dollars every day.
The only other option is clandestine cash transports, but they are also subject to U.S. restrictions.
The move is aimed at closing loopholes in countries like China and Middle Eastern nations where North Korean laborers toil under slavery-like conditions.
It affects some 60,000 North Korean laborers overseas whose valuta remittances to the regime may no longer go through.
The Financial Times said the move will put added pressure on Chinese banks to sever ties with North Korea.
Chinese banks are already barred from certain transactions with North Korea, but the move ups the pressure.
One diplomatic source said, "There were some small banks operating in China's three northeastern provinces that handled remittances by North Korea using accounts opened by Chinese citizens, but they will now have to tread carefully."
China slammed the announcement. Foreign Ministry spokeswoman Hua Chunying told reporters, "China opposes any country's unilateral sanctions."
Beijing has cut banking ties with the North except in certain areas it considers legitimate, like payment for imports not affected by recent UN sanctions.
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