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Bank of China cuts off North Korean bank

The Bank of China has closed the account of a North Korean bank the US has accused of funding weapons of mass destruction.

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A statue of former North Korean leader Kim Il Sung in the North Korean border town of Siniuju, across from China's northeastern city of Dandong. (Wang Zhao/AFP/Getty Images)

The state-owned Bank of China has cut off all business with a North Korean bank, which was recently accused by the US of helping to fund the North's nuclear and missile programs. 

All accounts attached to the Foreign Trade Bank of North Korea and administered by the Bank of China have been shuttered, according to the Associated Press, and all financial transactions have been suspended — a move that may present real economic problems to the DPRK regime, which is economically quite dependent on China. 

Read more from GlobalPost: North Korea moves 2 missiles away from launch site

The Bank of China hasn't explained its reasoning behind the move and has also declined to comment further on its choice, wrote the Asahi Shimbun. The move has sparked speculation that it's a sign of increasing lack of patience in China with its long-time ally, which has engaged in belligerent behavior in recent months.

US entities and individuals aren't allowed to deal with the Foreign Trade Bank as per US sanctions, while Japan has done the same and Australia should follow suit soon, added the Asahi Shimbun.

Foreign embassies, NGOs, and United Nations agencies that are based out of Pyongyang all use the Foreign Trade Bank, observed the Asahi Shimbun. 

In March, the US government accused the North Korean bank of facilitating "millions of dollars in transactions” to weapons dealers according to Bloomberg sources, and froze the bank's American assets. 

According to Bloomberg, the Bank of China is the Asian nation's fourth-largest lender by assets, and also served as China's sole foreign exchange dealer until 1994. 

On Monday, North Korea appeared to have moved two medium-range missiles away from a launch site, easing some worries that the DPRK was planning another internationally unpopular weapons launch. US officials confirmed that the move took place Tuesday. 

http://www.globalpost.com/dispatch/news/regions/asia-pacific/north-korea/130507/bank-china-cuts-north-korean-bank