NEW YORK – The U.S. is investigating a chain of financial transactions involving three big Chinese banks that allegedly helped finance North Korea’s nuclear weapons program, according to an appeals court opinion unsealed Tuesday.
The July 30 opinion upholds an order by a Washington district court judge compelling the three banks to comply with subpoenas for information about the transactions in question. The court said prosecutors don’t “currently suspect” the Chinese banks of wrongdoing.
The banks, which haven’t been identified in court papers, appear to be China Merchants Bank Co., Bank of Communications Co. and Shanghai Pudong Development Bank Co., three of China’s top 10 banks by assets, based on a related asset seizure case. All three have issued statements saying they aren’t under investigation for sanctions violations.
The case had proceeded in secret for at least two years, and though it had been publicly hinted at in cryptic court rulings, the nature of the inquiry wasn’t confirmed until the opinion unsealed Tuesday morning by the District of Columbia circuit court.
The case was argued last month, but the ruling had remained under seal. Portions of the decision remain redacted.
In declining to comply with the subpoenas, the banks in the case have said Chinese law prohibits them from producing client records in response to foreign government investigations.
The district court judge imposed a fine of $50,000 a day against each bank for failing to comply with the subpoena, but the fines have been suspended while the case is appealed.
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