In news that initially did not receive much prominence, on Monday a US judge found three large Chinese banks - reportedly the state-owned Bank of Communications, China Merchants Bank, and Shanghai Pudong Development Bank - in contempt for refusing to comply with subpoenas in an investigation into North Korean sanctions violations.
The stunning development follows a May district judge order that three Chinese banks comply with U.S. investigators' demands that they hand over records connected to the alleged movement of tens of millions of dollars in violation of international sanctions on North Korea.
As the WaPo adds, according to a 2017 ruling by the US DOJ, the banks were accused of working with a Hong Kong company, which allegedly laundered more than $100 million for North Korea's sanctioned Foreign Trade Bank.
Bank of Communications, China's fifth-largest bank, said the case involved U.S. courts seeking to obtain customer information that is stored outside the United States from Chinese commercial banks.
Needless to say, the stock prices of all three Chinese banks - which are listed on the Shanghai Stock Exchange - tumbles with shares of China Merchants Bank closed down 4.82%, after being off 8.5% earlier in the day, while Shanghai Pudong Development Bank declined 3.08% and Bank of Communications dropped 3.02%. China Merchants Bank, Bank of Communications & Shanghai Pudong Development Bank said they complies with UN resolutions and Chinese laws, not involved in any investigations related to possible violations of sanctions.
Currently, there's no conclusive information that Chinese banks will be sanctioned, PBOC publication Financial News reported on Tuesday, citing an unnamed industry veteran.
Chinese banks will not lose their U.S. dollar clearance qualifications, and the market should not over-interpret this, the same person was quoted as saying.
https://www.zerohedge.com/news/2019-06-25/chinese-banks-tumble-after-us-threatens-cut-them-us-financial-system
The stunning development follows a May district judge order that three Chinese banks comply with U.S. investigators' demands that they hand over records connected to the alleged movement of tens of millions of dollars in violation of international sanctions on North Korea.
As the WaPo adds, according to a 2017 ruling by the US DOJ, the banks were accused of working with a Hong Kong company, which allegedly laundered more than $100 million for North Korea's sanctioned Foreign Trade Bank.
Bank of Communications, China's fifth-largest bank, said the case involved U.S. courts seeking to obtain customer information that is stored outside the United States from Chinese commercial banks.
Needless to say, the stock prices of all three Chinese banks - which are listed on the Shanghai Stock Exchange - tumbles with shares of China Merchants Bank closed down 4.82%, after being off 8.5% earlier in the day, while Shanghai Pudong Development Bank declined 3.08% and Bank of Communications dropped 3.02%. China Merchants Bank, Bank of Communications & Shanghai Pudong Development Bank said they complies with UN resolutions and Chinese laws, not involved in any investigations related to possible violations of sanctions.
Currently, there's no conclusive information that Chinese banks will be sanctioned, PBOC publication Financial News reported on Tuesday, citing an unnamed industry veteran.
Chinese banks will not lose their U.S. dollar clearance qualifications, and the market should not over-interpret this, the same person was quoted as saying.
https://www.zerohedge.com/news/2019-06-25/chinese-banks-tumble-after-us-threatens-cut-them-us-financial-system
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