Stopping illicit money flows are a key part of the sanctions imposed on North Korea in response to its February 12 nuclear test. China is Pyongyang’s sole diplomatic and economic ally, although it negotiated the latest sanctions with Washington and has said it wanted them implemented. It’s no secret that there is a fair amount of financial relationship between China and North Korea and Chinese financial institutions in North Korea

We encourage the Chinese regulatory authorities to inform the Chinese banking sector about Security Council Resolution 2094 to the provisions that call for preventing financial services to North Korea if they could contribute to nuclear/ballistic missile programs or North Korea’s conventional arms sales. Chinese banks and Chinese regulators will take heed of the Security Council resolution.

China has become increasingly frustrated with North Korea’s actions. Besides the February 12 nuclear test, North Korea tested a long-range missile in December and has stepped up its rhetoric against the United States and South Korea.

Chinese regulators appear to have issued a warning shot to North Korean banks, telling them to stay within the remit of their permitted operations in China or risk penalties. Beijing has joined every round of U.N. sanctions against North Korea although questions remain over how closely it imposes restraints on its neighbor.