North Korean banks subject to international sanctions haverecently been banned by Swift from using its global financialmessaging service, according to a statement from the Belgium-basedSociety for Worldwide Interbank Financial Telecommunication.

Swift said it had recently been informed by Belgian authoritiesthat they would no longer provide the “necessary authorizations”for it to continue offering services to North Korean banks coveredby United Nations sanctions. “As a result, Swift suspended accessof UN-designated North Korean entities to the Swift financialmessaging service,” the statement said.

North Korea has further stoked regional tension by firing fourballistic missiles into the sea near Japan Monday. In response, theU.S. reaffirmed its military alliance with Japan and has announcedthe start of the deployment of its Thaad missile-defense system inSouth Korea.

The Wall Street Journal, which reported on the Swift moveearlier Wednesday, said the ban came as UN investigators uncoveredevidence that the North Korean banks had continued to use Swift'sservices despite being subjected to UN sanctions.

Blacklisted Banks

Seven blacklisted North Korean banks had continued to use theSwift network in recent years, the newspaper cited a UN report assaying. Later, four had voluntarily withdrawn, leaving three banks— identified as Bank of East Land, Korea Daesong Bank and KoreaKwangson Banking Corp. — continuing to use Swift during 2016,according to the Wall Street Journal.

The impact of the move by Swift will be blunted by Pyongyang'slimited trade and financial ties with countries other than China,said Andrei Lankov, a North Korean expert at Kookmin University inSeoul. But trade with other countries will become even harder.

“They will get around this if the Chinese are willing to allowNorth Koreans to move cash through China as they have done in thepast,” Lankov said.

“It's a lesser blow than it would be for nearly every othercountry in the world, but it's still a blow,” he added.

Bloomberg News

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