( Financial Times ) -- The Bank of China has stopped doing business with a large North Korean bank , falling into line with a US-led sanctions push to restrict funding for Pyongyang 's nuclear programme . The decision to close the bank account follows an increase in tensions on the Korean peninsula and may be a sign that Beijing is willing to place more pressure on Pyongyang . The US Treasury hit the Foreign Trade Bank , North Korea 's main foreign exchange bank , with sanctions in March , saying it was `` a key financial node '' in North Korea 's nuclear and missile proliferation activities . The bank had not been named among the institutions targeted for asset freezes by expanded UN Security Council sanctions introduced in January and March . Other countries such as Japan and Australia have since joined the US in applying sanctions against Foreign Trade Bank , but co-operation from banks in China , North Korea 's closest economic partner , is essential in the efforts to choke off cash flows . A drive to `` put pressure on Beijing to pressure Pyongyang '' needs to be at the heart of Washington 's policy on North Korea , according to Kurt Campbell , until February the US assistant secretary of state for east Asia . `` Bank of China has sent North Korea 's Foreign Trade Bank a notice that it has closed its account and has also halted all fund transfers related to this account , '' Bank of China said on Tuesday . It declined to provide any details about how much money was affected or the timing of the move . Bank of China is the country 's biggest bank for foreign exchange transactions , so the account closure could hurt the North Korean institution . But the impact is likely to be minimal unless imposed across the board by all Chinese banks because other institutions , including small regional entities , are also capable of handling foreign currency deals . `` This is part of a ratcheting up of pressure but with very clear limits . This is part of making North Korea feel some limited pain in an attempt to get them back to talks , '' said Stephanie Kleine-Ahlbrandt , northeast Asia director at the International Crisis Group . The move by Bank of China may also reflect risk management by the bank itself rather than bigger diplomatic motives . The US Treasury had warned financial institutions around the world to be wary of the risks of doing business with Foreign Trade Bank . In 2006 after the US imposed sanctions on Banco Delta Asia , a Macau bank that held North Korean funds , Bank of China responded in similar fashion by freezing North Korean-related assets at its Macau branch . China is by far North Korea 's most important formal ally , and overwhelmingly its biggest trading partner . Yet the alliance , which dates back to the Korean war , has long been strained . Analysts say that Pyongyang has persistently refused Chinese attempts to encourage it to emulate Beijing 's sweeping economic reforms , and China has grown increasingly alarmed by the regional security implications of North Korea 's nuclear weapons programme . Earlier this year Beijing endorsed two sets of new UN Security Council sanctions against Pyongyang , following its long-range rocket launch in December and nuclear bomb test in February . Last month China 's President Xi Jinping said that `` no country should be allowed to throw a region and even the whole world into chaos for selfish gains '' -- a comment widely interpreted as a rebuke of North Korea . Many Chinese businesses maintain close trading relationships with North Korea , giving the country access to vital commodities and hard cash . © The Financial Times Limited 2013 .
Bank of China cut business with North Korea 's main foreign exchange ban . Comment: China is North Korea 's closest economic partner . Move may also reflect bank risk management rather than bigger diplomatic motive .