Hong Kong banks need more support from the government to reduce their exposure to sanctioned North Korean entities via the Chinese firms they work with, a United Nations sanctions expert said on Tuesday, 8 November.
Chinese entities remain the key conduit through which sanctioned North Korean companies gain access to the outside world, Stephanie Kleine-Ahlbrandt, a member of the United Nations Panel of Experts on North Korea, told the Thomson Reuters Pan Asian Regulatory Summit.
"North Koreans have become very adept at utilising these types of mechanisms, aliases and front companies ... and we’ve seen a lot of exposure for Hong Kong banks, a lot of transactions originating here," Kleine-Ahlbrandt said.
"The problem is the indirect exposure you get by offering your services to Chinese customers that do engage with North Korean transactions for which you are now being held accountable."
Hong Kong banks need help from the Hong Kong government and law enforcement to determine that they are indirectly providing services to sanctioned North Korean companies through their Chinese customers, she said.
"You need to go back to government and ask for support," she said.