Chinese banks deny being probed for breaking North Korea sanctions

The Bank of Communications, China Merchants Bank, and the Shanghai Pudong Development Bank have each issued statements denying that they are being investigated for violations of United States sanctions against North Korea.

[File Photo: Chinanews.com]

The Washington Post reported that the three Chinese banks were found to be in contempt of court by an American judge for refusing to comply with subpoenas for an investigation into violations of sanctions on North Korea. The decision could cut off their access to the American financial system.

The Washington Post says the United States Justice Department accused the banks of working with a Hong Kong company that allegedly laundered more than 100 million U.S. dollars for the Foreign Trade Bank of North Korea, which is a sanctioned organization.

China Merchants Bank has issued a statement, saying it complies with China's laws and United Nations resolutions, and is not involved in any investigations related to possible violations of sanctions.

A statement from the Bank of Communications claims that the American court is trying to obtain customer information from the Chinese bank that is stored outside the United States.

And the Shanghai Pudong Development Bank says it can't provide client information to overseas authorities without authorization.

A spokesman for China's Ministry of Foreign Affairs, Geng Shuang, said at a regular briefing on Tuesday that the government asks overseas branches of Chinese financial institutions to obey local laws and rules in countries where they operate, and that they cooperate with local judicial and law enforcement authorities.

"We always oppose the so-called long-arm jurisdiction over Chinese businesses by the United States," said Geng. "We hope the United States will step up its bilateral cooperation with other countries in financial regulation and other fields, including the exchange of information in accordance with respective domestic law, and address the problem of cross-border information sharing through channels such as bilateral mutual legal assistance and regulation cooperation."