'Underground' NKorean bank probed by China: report

By Alex Jensen

SEOUL (AA) – A North Korean bank branch in China is being investigated for secretly operating despite being ordered to shut up shop, according to sources cited by South Korean media Monday.

Executives and employees of Kwangson Banking Corporation's Dandong branch along with local trade officials are all reportedly under the scrutiny of Chinese authorities.

“The Dandong branch of Kwangson Bank in March was pinpointed as an entity to be closed down under the UN [United Nations] Security Council Resolution 2270 but until recently moved offices and continued to secretly operate without a signboard,” a source was quoted as revealing to the JoongAng Ilbo newspaper.

Kwangson is affiliated with North Korea’s state-run Foreign Trade Bank and was blacklisted after January's fourth ever nuclear test by the reclusive state -- the North conducted a fifth, even more powerful detonation earlier this month and is set to face yet stronger sanctions.

Bolstered punitive measures might include getting tougher on third parties who do business involving barred North Korean entities or commodities.

Having been accused for years of propping up the ailing North's regime, China is now being seen to be making moves against those thought to have flouted existing sanctions -- including Dandong conglomerate Hongxiang Group.

It is claimed that Kwangson's branch in Dandong was able to remain functional by effectively hiding within a Hongxiang building.

North Korea has been heavily criticized by the South Korean government for pouring resources into developing nuclear weapons despite the suffering of its people, which intensified this month following widespread flooding.