European banks stop sending money to N.Korea

PanARMENIAN.Net - European aid groups said their banks in Europe had stopped sending money to North Korea in the wake of U.S. sanctions on Pyongyang's main foreign exchange bank, leaving them scrambling for a solution short of hand-carrying cash into the impoverished country, Reuters reported.

Aid groups said if it became impossible to send enough money to operate, donors might withdraw support for their programs.

"This could eventually reduce our ability to carry out projects or even force a complete close down," Mathias Mogge, director of programs for German aid group Welthungerhilfe, told the Thomson Reuters Foundation.

"If all the agencies had to pull out, it would affect millions of people," said Mogge, who has just returned from the reclusive state.

The biggest problem had been the Bank of China's recent decision to shut the account of the North's Foreign Trade Bank, EU officials and non-governmental organizations said. Money to North Korea was routed through China's biggest foreign exchange bank, they said.

Chinese firms doing business in North Korea said they were also finding it difficult because Chinese banks were becoming increasingly reluctant to deal with their North Korean counterparts, whether it was the Foreign Trade Bank or other banks.

Washington imposed sanctions on the Foreign Trade Bank in March after accusing it of helping fund Pyongyang's banned nuclear weapons program. The measures prohibit any transactions between U.S. entities or individuals and the bank.

The Bank of China announced it was shutting the Foreign Trade Bank account earlier this month. It gave no reason for the move.