Internationally sanctioned North Korean banks have now been banned by Swift — meaning said banks are now barred from using the global financial messaging service, according to a statement from the Belgium-based Society for Worldwide Interbank Financial Telecommunication.
The ban comes as Belgian authorities informed Swift that that going forward they would no longer provide “necessary authorizations” to allow continued services to North Korean banks currently under UN sanctions.
“As a result, Swift suspended access of UN-designated North Korean entities to the Swift financial messaging service,” the statement said.
North Korea has recently found itself at the center of international controversy over its decision to test fire four ballistic missiles into the sea near Japan. The U.S. has since reaffirmed its military alliance with Japan. The U.S. has also announced the coming deployment of its THAAD missile-defense system in South Korea.
According to Wall Street Journal reports, the ban owes to the fact that UN investigators uncovered evidence that the North Korean banks are using Swift’s services despite being subjected to UN sanctions. All in all, there were seven North Korean banks found to be illegally using Swift in recent years — though four voluntarily withdrew. Three, however — the Bank of East Land, Korea Daesong Bank and Korea Kwangson Banking Corp. — were still using Swift as of last year, according to the WSJ.
As for how big an affect that change will have — that is a bit of a question mark. North Korea has a limited trading and financial relationship with the rest of the world to start with — with the exception of China.
“They will get around this if the Chinese are willing to allow North Koreans to move cash through China as they have done in the past,” noted Andrei Lankov, a North Korean expert at Kookmin University in Seoul. “It’s a lesser blow than it would be for nearly every other country in the world, but it’s still a blow,” he added.