Bank of Dandong

The US Treasury department has severed a smallChinese bank`s ties with the US financial system overits alleged support for North Korea`s nuclear weaponsprogramme.

The measures against Bank of Dandong come daysbefore Donald Trump`s first official visit to China andindicate that questions over China`s relationshipwith North Korea will continue to dog the relationshipbetween the US president and his Chinesecounterpart Xi Jinping.

The Treasury`s financial crimes unit said in astatement late on Thursday that the bank in Dandong, on China`s border with North Korea,had acted [as a conduit for illicit North Korean financial activity".

It accused the bank of performing millions of dollars of transactions for companies connected toNorth Korea`s ballistic missile and nuclear weapons programmes, as well as other companiesthat have been sanctioned by the UN.

While the White House proposed the measures in June, theimplementation comes as MrTrump prepares for his first visit to China as head of state.

The new sanctions will bar any bank doing business in the US from conducting transactions withBank of Dandong.

[Today`s actions will better protect the US financial system from illicitschemes used by NorthKorea to evade sanctions and finance its weapons programmes," Steven Mnuchin, Treasurysecretary, said in astatement. [Banks and businesses worldwide should take note that theymust be vigilant against attempts by North Korea to conduct illicitfinancing and trade."

Documents provided by the Treasury claim that Bank of Dandong facilitated $786m intransactions through correspondent banks in the US between May 2012 and May 2015. About17 per cent of those transactions, it says, were with companies linked to North Korean entitiesunder sanctions from the US and UN.

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