Bank Regulation

American Banks Blocked From Doing Business With North Korea

A new sanctions order bans banks doing business in North Korea to also operate in the United States. Reuters reported that the new international finance order is aimed at obstructing Pyongyang’s nuclear and missiles program.

“No bank in any country should be used to facilitate Kim Jong Un’s destructive behavior,” U.S. Treasury Secretary Steven Mnuchin told reporters. “Foreign financial institutions are now on notice that going forward, they can choose to do business with the United States or with North Korea, but not both.”

Mnuchin said any sanctions issued under the new executive order signed by U.S. President Donald Trump this week would be forward-looking and would not target past behavior.

In addition to the controversy over the country’s nuclear and missile testing, North Korea has been linked to series of cyberattacks on global banks after hacks were able to tap into the SWIFT messaging system, which had been considered the world’s most secure payment message system. Earlier this year, internationally sanctioned North Korean banks were banned from using SWIFT.

The country has also been accused of carrying out recent hacks to secure bitcoin and other cryptocurrencies, which could help it avoid trade restrictions. Recent sanctions approved by the United Nations Security Council would cut the country’s textile exports by 90 percent, restricting its ability to get hard currency.

“We definitely see sanctions being a big lever driving this sort of activity,” said Luke McNamara, an analyst FireEye and author of the new report. “They probably see it as a very low-cost solution to bring in hard cash.”

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