SWIFT, the global banking communications service, announced on March 8 that it recently suspended the North Korean banks’ access to its vast network, which connects more than 11,000 entities around the world.
As reported by CNN, financial firms use SWIFT for millions of transactions each day, such as transferring money and settling trades.
What is not clear is why the North Korean banks were still able to operate in a mainstream part of the global financial system even though they had been blacklisted under UN sanctions since January 2013.
In a separate report, Bloomberg noted that seven blacklisted North Korean banks had continued to use the SWIFT network in recent years.
Meanwhile, the impact of the move to suspend North Korean banks will be blunted by Pyongyang’s limited trade and financial ties with countries other than China. According to Andrei Lankov, a North Korean expert at Kookmin University in Seoul, the banks will get around this if the Chinese allow North Koreans to move cash through China”.
“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.