Bank of China has closed the account of North Korea's main foreign exchange bank, which was hit with US sanctions in March after Washington accused it of helping finance Pyongyang's nuclear weapons program.

The state-run Foreign Trade Bank had been told of the closure and that its transactions had been halted, Bank of China, the country's biggest foreign exchange bank, said in a statement yesterday. It gave no reason for the closure and the bank declined to comment further.

The closure is the first significant, publicly announced step taken by a Chinese entity to curb its dealings with North Korea in the wake of international pressure to punish Pyongyang over its banned nuclear and ballistic missile programs.

The US sanctions prohibit any transactions between US entities or individuals and the Foreign Trade Bank.

Japan has followed suit while Australia is expected to do the same soon. Washington has also urged the European Union to impose sanctions on the Foreign Trade Bank and has raised the issue with China.

Experts have said Washington's move was designed to make foreign banks that do business in the United States think twice about dealing with the Foreign Trade Bank.

China is North Korea's biggest trading partner. It is unclear how much of the US$6 billion in annual bilateral trade goes through the Foreign Trade Bank.

Among China's other large banks, a spokesman at China Construction Bank said the bank did not do any business with the Foreign Trade Bank.

Industrial and Commercial Bank of China and Agricultural Bank of China were not immediately available for comment.

China agreed to new UN sanctions after Pyongyang conducted its third nuclear test in February.

Those sanctions, announced on March 7, target North Korea's attempts to ship and receive cargo related to its nuclear and missile programs and tighten financial curbs, including the illicit transfer of bulk cash.

The UN measures did not address the Foreign Trade Bank. Washington imposed its own sanctions several days later.

Not much is known about the North Korean bank, whose assets and investments are a state secret. But foreign embassies, non-governmental organizations and UN agencies in Pyongyang all use it.

Germany and France have expressed concern about the possible impact on aid groups as well as European embassies should the EU place sanctions on the bank, sources with knowledge of the matter have previously said.

Washington has targeted North Korea's limited financial links to the global community before. In 2005, some US$25 million in North Korean money was frozen in a US Treasury-inspired raid on Macau-based Banco Delta Asia, which Washington alleged had handled illicit funds for Pyongyang.