Archive for the ‘UN’ Category

Russia rejects new sanctions on North Korea

Friday, August 10th, 2018

Benjamin Katzeff Silberstein

Full comment here by the Russian Foreign Ministry:

Russia has blocked the US application to the UN Security Council Sanctions Committee on North Korea (1718) on introducing international sanctions against one individual and several legal entities, including the Russian commercial bank Agrosoyuz that are allegedly involved in illegal activities that are violating the sanctions regime against that country.

The US-presented evidence in support of this proposal is totally unconvincing.  We cannot accept the pressure exerted by the US delegation in the UN Security Council and its subsidiary bodies, which has already become a norm. By means of an artificially tightened deadline, it is trying to push through its own decisions without taking into account the opinion of the other members. The Americans are also obviously trying to use the prestige of UN Security Council Committee 1718 for justifying similar unilateral restrictions that they have just introduced under far-fetched pretexts.

Far from improving the atmosphere of Russia-US relations, the new US sanctions contradict the logic of easing tension around the DPRK. Clearly, Washington is trying to keep Pyongyang under maximum pressure as long as possible, in effect, up to the completion of the denuclearisation process. This policy is destructive for settling the issues of the Korean Peninsula and evokes extreme resentment.

Source:

Comment by the Information and Press Department on the US application to the UN Security Council Sanctions Committee on North Korea (1718) on expanding sanctions
Information and Press Department of the Ministry of Foreign Affairs of Russia
2018-08-10

Share

North Korea warns of humanitarian disaster following heat wave

Thursday, August 2nd, 2018

Benjamin Katzeff Silberstein

Reuters:

North Korea on Thursday called for an “all-out battle” against record temperatures that threaten crops in a country already grappling with tough international sanctions over its nuclear weapons program.

North Korea on Thursday called for an “all-out battle” against record temperatures that threaten crops in a country already grappling with tough international sanctions over its nuclear weapons program.

Similar past warnings in state media have served to drum up foreign assistance and boost domestic unity.

“I think the message was a precautionary one to minimize any impact on daily life,” said Dong Yong-seung, who runs Good Farmers, a group based in Seoul, capital of neighboring South Korea, that explores farm projects with the North.

But the mention of unprecedented weather, and a series of related articles, suggest the heat wave could further strain its capacity to respond to natural disasters, said Kim Young-hee, a defector from North Korea and an expert on its economy at Korea Finance Corp in Seoul.

The warning comes after North Korean leader Kim Jong Un announced in April a shift in focus from nuclear programs to the economy, and held an unprecedented June summit with U.S. President Donald Trump in Singapore.

Since then, the young leader has toured industrial facilities and special economic zones near the North’s border with China, a move experts saw as a bid to spur economic development nationwide.

“He has been highlighting his people-loving image and priority on the economy but the reality is he doesn’t have the institutions to take a proper response to heat, other than opening underground shelters,” added Kim, the economist.

GOOD CROP CONDITIONS

Drought and floods have long been a seasonal threat in North Korea, which lacks irrigation systems and other infrastructure to ward off natural disasters.

Last year, the U.N. Food and Agriculture Organisation warned of the North’s worst drought in 16 years, but late summer rains and privately produced crops helped avert acute shortages.

There appear to be no immediate signs of major suffering in the North, with rice prices stable around 62 U.S. cents per kg through the year to Tuesday, a Reuters analysis of data compiled by the Daily NK website showed.

The website is run by defectors who gather prices through telephone calls to traders in the North, gaining a rare glimpse into the lives of ordinary citizens.

Crops are good this year because there was little flooding to disrupt the early spring planting season, said Kang Mi-jin of the Daily NK, based in Seoul.

“They say nothing remains where water flowed away, but there is something to harvest after the heat,” Kang said, citing defectors. “Market prices are mainly determined by Chinese supplies and private produce, rather than crop conditions.”

The October harvest would reveal any havoc wreaked by the weather, Kim Young-hee added.

Full article and source:
Sanctions-hit North Korea warns of natural disaster brought by heat wave
Hyonhee Shin
Reuters
2018-08-02

Share

Thousands of North Korean workers enter Russia despite UN ban

Thursday, August 2nd, 2018

Benjamin Katzeff Silberstein

Reports Wall Street Journal:

Russia is letting thousands of new North Korean laborers enter the country and issuing fresh work permits—actions U.S. officials say potentially violate United Nations sanctions aimed at cutting cash flows to Pyongyang and pressing it to give up nuclear weapons.

The U.N. Security Council in September barred governments from issuing new work permits to North Koreans, though some existing labor contracts were allowed to continue.

Since the ban, more than 10,000 new North Korean workers have registered in Russia, according to Russian Interior Ministry records reviewed by The Wall Street Journal. Meanwhile, at least 700 new work permits have been issued to North Koreans this year, according to Labor Ministry records.

[…]

North Korean laborers have helped feed the construction boom in St. Petersburg, according to local businessmen.

“They work till they drop,” said a contractor who hires North Koreans across the city. Workers arrive at construction sites at 7 a.m. and work until 10 p.m. or even midnight, taking just two half-hour breaks for meals of rice and dried fish, he said.

Local developers say they pay companies that hire out North Korean workers—firms they say often represent North Korean institutions such as the military or state conglomerates—about 100,000 rubles ($1,600) a month per worker. In government filings and job advertisements, such companies list monthly worker salaries of 16,000 to 20,000 rubles.

That 80% difference is in line with U.S. assessments that North Korea’s government takes the bulk of earnings.

U.N. sanctions mean these laborers should be gone by September, a year after they went into effect, because the workers are required to leave once their permits expire, usually within a year. Even workers with multiyear permits must be out by the end of 2019 under the sanctions.

Yet many firms contracting out laborers—Russian companies owned and run by North Koreans, according to corporate documents and researchers—are investing in new offices, applying for new work permits and negotiating new projects.

“The Kim regime continues to dispatch citizens abroad,” said C4ADS, a nonprofit that advises the U.S. government on security risks, in a report released Thursday. “In doing so, it continues to flout international sanctions to generate foreign currency.”

About 100,000 or more North Korean laborers have been working overseas in recent years, the U.S. State Department said. Pyongyang’s labor exports earned as much as $2 billion a year for the Kim regime, analysts say.

According to Russian government data, around 24,000 North Koreans were officially working in the country at the end of last year.

Full article and source:
Thousands of North Korean Workers Enter Russia Despite U.N. Ban
Ian Talley and Anatoly Kurmanev
Wall Street Journal
2018-08-02

Share

North Korea likely did 89 illegal ship-to-ship transfers in 2018, says U.S. data

Friday, July 13th, 2018

Benjamin Katzeff Silberstein

Reports Chad O’Carroll over at NK News:

North Korea likely conducted at least 89 ship-to-ship transfers to illicitly obtain refined petroleum products between January 1 and May 30, U.S. data provided to the United Nations and seen by NK News on Friday claims.

Pyongyang may have illegally imported up to 1,367,628 barrels of refined petroleum as a result of the transfers, upper-end estimates suggested, over double the 500,000 barrels authorized for export to North Korea each year by current UN sanctions.

Consequently, the U.S. recommended that the UN 1718 sanctions committee issue a “public note verbale to all UN Member States to inform them that the DPRK has breached the UNSCR 2397 OP5 refined petroleum product quota for 2018,” and that all countries should “order an immediate halt to all transfers of refined petroleum products to the DPRK.”

Since the May 30 data cut-off, the Japanese government has revealed details surrounding three extra cases of North Korean vessels caught conducting likely ship-to-ship transfers, with two on June 21 and June 22, and one on June 29.

North Korean skippers are thought to be conducting the at-sea transfers of fuel products to circumvent UN sanctions designed to limit how much Pyongyang can import each year.

Two countries were also flagged in the U.S. report for their role in provisioning on-the-books exports of petrol products supplementary to the barrels illicitly acquired through ship-to-ship transfers.

“As China and Russia have reported to the UN 1718 Committee in 2018, both member states continue to sell refined petroleum products to the DPRK,” the report said.

“These sales and any other transfer must immediately stop since the United States believes the DPRK has breached the UNSCR 2397 refined petroleum products quota for 2018.”

To evidence its claims, the U.S. included satellite imagery of four vessels described as either “likely in the process of delivering” or “delivering refined petrol products” that were “procured via illicit ship-to-ship transfer” at Nampo Port on the DPRK’s west coast.

Full article and source:

N. Korea likely conducted 89 illicit ship-to-ship transfers in 2018: U.S. data
Chad O’Carroll
NK News
2018-07-13

Share

China reportedly incentivized Kim Jong-un to visit

Friday, March 30th, 2018

UPDATE 1 (2018-4-4): The Donga Ilbo reports that China is marginally easing up on sanctions following the unofficial meeting that took place with the two country’s respective leaders. According to the article:

Some Chinese enterprises in Dandong, a city in northeastern Liaoning province bordering North Korea, stopped sending back North Korean workers to their home country, South Korea’s intelligence sources said on Monday.


It is reported that the Chinese authorities, however, have not taken any action regarding employing North Korean workers. Rather, a source quoted Chinese government officials as saying “refrain from any action that could upset North Korean people for the time being.”

South Korean government said it is identifying intelligence that the average daily traffic volume between Dandong and North Korea surged to 50 trucks, from 20 to 30 trucks earlier this year. The traffic in this region is one of the key indicators that show bilateral trade flows. More than 100 trucks a day would come and go before the international community strengthened sanctions against the North.

According to data released by China’s customs agency, North Korean exports to China amounted to 1.72 billion dollars, a 33 percent down from 2016. However, Beijing is likely to give some breathing space to its ally as Chinese President Xi expressed his willingness to expand mutual exchanges in a meeting with Kim.

ORIGINAL POST (2018-3-30): I am still of the opinion that “maximum pressure” has not been the primary cause of North Korea’s newfound desire to hold talks with the US and South Korea. However, this article in the FT argues that China has enforced trade restrictions on North Korea in excess of the UNSC resolution requirements, and perhaps this policy played a role in bringing Kim Jong-un to Beijing.

According to the Financial Times:

Official Chinese statistics show that the monthly average of refined petroleum exports to North Korea in January and February was 175.2 tons, just 1.3 per cent of the monthly average of 13,552.6 tons shipped in the first half of 2017.

The level of reduction went far beyond the 89 per cent cut in petroleum product exports stipulated by the UN sanctions.

Chinese coal exports to North Korea were also cut to zero in the three months to the end of February, after running at a monthly average of 8,627 tons in the first half of 2017. Exports of steel ran at a monthly average of 257 tons in the first two months of this year, down from a monthly average of 15,110 tons in the first half of 2017.

Shipments of motor vehicles also dried up, with just one unit being exported in the month of February, official Chinese statistics show. Concerns over the accuracy of China’s statistics are common, but analysts said that such consistent and bold drops in export volumes are unlikely to have been the result of official massaging.

Bonnie Glaser points out a rumor that these stringent trade caps will be lifted to the point that China is still in compliance with UNSC resolutions.

Share

Sanctioned Foreign Trade Bank can’t pay North Korea’s UN dues…

Tuesday, February 13th, 2018

Reuters reports that North Korea cannot pay its UN dues owing to sanctions on its official hard currency repository, the Foreign Trade Bank (FTB). According to the article:

North Korea’s U.N. Ambassador Ja Song Nam met with U.N. management chief Jan Beagle on Friday to ask the world body to help secure a bank transaction channel so Pyongyang could pay the nearly $184,000 it says it owes for 2018.

U.N. member states are required to pay assessed contributions to the world body’s regular and peacekeeping budgets, as well as a budget for international tribunals.

U.S. and U.N. sanctions on the Foreign Trade Bank, North Korea’s primary foreign exchange bank, were preventing the country ”from honoring its obligation as a U.N. member state by hindering even normal activities such as payment of the U.N. contribution,” the North Korean mission said in a statement late on Friday.

The United States sanctioned the Foreign Trade Bank in 2013, while the U.N. Security Council blacklisted the bank last August.

The 15-member U.N. Security Council has unanimously boosted sanctions on North Korea since 2006 in a bid to choke funding for Pyongyang’s nuclear and ballistic missile programs.

According to the U.N. Charter, countries in arrears in an amount that equals or exceeds the contributions due for two preceding years can lose their vote in the 193-member U.N. General Assembly. The General Assembly can grant an exception if a country can show that conditions beyond its control contributed to the inability to pay.

The U.N. website said that as of Jan. 28 there 12 countries in arrears of more than two years. Apart from its 2018 dues, North Korea said it is up to date with its payments.

I know that many in the diplomatic and NGO communities have been physically bringing in cash to fund their operations in Pyongyang since the FTB was sanctioned.

There was a Russian Bank, Bank Sputnik, that had maintained a financial link to the FTB to service the diplomatic community. However, this banking link was severed in September 2017 and apparently remains closed.

UPDATE (2018-2-21): A news site I was previously unaware of has some interesting information on the relationship between the DPRK’s Foreign Trade Bank and the Russian bank, Sputnik. According to Inner City News:

In the face of North Korea sanctions, the UN in December 2017 used the sanctioned Foreign Trade Bank and Russia’s Sputnik Bank to transfer EUR 3,974,920.62 into the country, documents obtained by Inner City Press show. A letter from Sputnik Bank states that “unauthorized person (I.V. Tonkih) led negotiations with Korean party on interbank correspondent relationship.” Photos here.

NK News did a better job reporting on the relationship between Sputnik and the FTB.

Read the full story here:
North Korea says unable to pay U.N. dues, blames sanctions
Reuters
2018-2-10

Share

The August 5th UNSC sanctions on North Korea: new scope, but same old tools. Will this time be any different?

Sunday, August 6th, 2017

By Benjamin Katzeff Silberstein

On Saturday August 5th, the UN Security Council passed yet another resolution, 2371, following North Korea’s missile tests. Like resolution 2270 that was passed in March 2016, 2371 also takes aim at North Korea’s mineral exports. The new resolution also bans imports of seafood products from North Korea, and bans member states from hiring new North Korean laborers, but they do not need to fire ones already hired, so it is questionable whether this source of income will decrease and/or disappear, or merely stop increasing.

Unlike 2270 last year, it does not appear to contain a humanitarian exemption or any other loophole for mineral imports. In sum, the new resolution appears much more holistic than its predecessors in fully cutting off North Korea’s most central export revenues.

But while the content of the resolution is different, the tools remain the same. Its efficacy still hinges upon implementation by UN member states, and of course, above all, by China, and it is difficult to see why such implementation would be more likely this time. Both President Trump and the US ambassador to the UN, Nikki Haley, have made a big number of China’s and Russia’s vote in favor of the resolution. WSJ reports:

U.S. Ambassador Nikki Haley praised the councils solidarity, saying more days like this one were needed at the United Nations. She also personally thanked China for helping move the resolution from talk to action. The U.S., which had drafted and put forward the resolution, negotiated for more than a month with China over the text and final measures targeting Pyongyang.

This resolution is the single largest economic sanctions package ever leveled against the North Korean regime, said Ms. Haley, adding the council had put the country and its leadership on notice and what happens next is up to North Korea.

President Donald Trumpsaid on Twitter, The United Nations Security Council just voted 15-0 to sanction North Korea. China and Russia voted with us. Very big financial impact!

However,both China and Russia voted in favor of UNSC 2270 as well, and there are still abundantly clear signs that China did little to implement the ban on imports of North Korean minerals. Had UNSC 2270 been implemented in full, North Korea’s export revenues would already have been badly hit.

Meanwhile, South Korea’s Bank of Korea announced a few weeks ago its estimate that the North Korean economy grew by close to four percent last year. One should read those numbers with a very,veryhefty dose of skepticism, given the difficulty in estimating anything relating to the North Korean economy, but at the very least, we can safely conclude that the North Korean economy is not in dire straits. Its foreign trade increased by close to five percent last year, according to KOTRA. Though there have been several reports suggesting difficulties for companies involved in cross-border trade between China and North Korea over the past year, there are no indications that China has implemented the near-blanket-ban in minerals trade that the UNSC resolution from March last year mandates.

So why would this time be any different? My guess is that it won’t be. It is very difficult to imagine that China would have voted in favor of a resolution that would hit North Korea’s economy so badly if it would really have believed that such a resolution would be fully implemented. The basic political dynamics remain: China does not want North Korea to crumble, and China craves geopolitical stability above everything else.

As always, only time will tell. But those who applaud this resolution as a new and radical turn on the global stage in the North Korea issue may want to look back at historical precedent, and moderate their expectations.

Share

UN security council adopts sanctions banning imports of wide range of North Korean goods

Saturday, August 5th, 2017

Benjamin Katzeff Silberstein:

On Saturday August 5th, the United Nations Security Council approved a resolution banning member states from importing North Korean export goods such as minerals and seafood products, and from hiring North Korean laborers. Wall Street Journal:

U.S. Ambassador Nikki Haley praised the councils solidarity, saying more days like this one were needed at the United Nations. She also personally thanked China for helping move the resolution from talk to action. The U.S., which had drafted and put forward the resolution, negotiated for more than a month with China over the text and final measures targeting Pyongyang.

This resolution is the single largest economic sanctions package ever leveled against the North Korean regime, said Ms. Haley, adding the council had put the country and its leadership on notice and what happens next is up to North Korea.

President Donald Trumpsaid on Twitter, The United Nations Security Council just voted 15-0 to sanction North Korea. China and Russia voted with us. Very big financial impact!

Both China and Russia urged a return to talks with North Korea and told the Security Council that the U.S. must abandonits military exercises with South Koreaand dismantlethe missile-defense system in South Korea known as Thaadbecause North Korea perceived that as a threat and it undermined the security of the region.

We stress that additional restrictions cannot be an end to themselves, they need to be a tool to engage in dialogue, said Russias new ambassador to the U.N., Vassily Nebenzia.

The nine-page resolution steps up trade restrictions with Pyongyang by aiming to cut off a third of its $3 billion annual export revenue. It bans North Korea from trading coal, iron, lead, iron and lead ore, and seafood.

The resolution also prohibits countries from hiring North Korean laborers and bans countries from entering or investing into new joint ventures with Pyongyang.

Diplomats and sanctions experts have long warned that export revenues, even remittances from foreign workers, are cycled back to North Koreas military and nuclear programs.

A Security Council diplomat offered this estimate on North Koreas foreign revenue earnings in 2017: $295 million from seafood; $251 million from iron and iron ore, and $400 million from coal trade.

North Koreans work in China, Russia and the Arab countries in the Persian Gulf in a variety of businesses ranging from factories to restaurants and nightclubs and are estimated to send home several billion dollars in revenue, a large portion of which the government claims, according to U.N. sanctions experts.

The new resolution restricts North Koreas technology trade and tightens enforcement of sanctions on North Korean vessels by banning violators from entering ports around the world.

Under the resolution, North Koreas Foreign Trade Bank, which handles foreign exchange, will be added the U.N.s sanctions list that freezes the assets of targeted entities.

It remains to be seen whether the new sanctions will deter North Koreas pursuit of advanced ballistic missiles and nuclear weapons or bring its leader Kim Jong Un to the negotiating table.

North Koreas economy has managed to stay afloat largely because China, its main trade partner, and Russia and some African nations havent fully enforced existing U.N. sanctions. The U.S. Treasury in June sanctioned Chinese entitiesprimarily banks and shipping companiesand individuals for violating sanctions and conducting trade that contributed to North Koreas military and nuclear program.

Chinas Ambassador Liu Jieyi said his country denounced unilateral sanctions by the U.S. and said action against North Korea must be through the U.N. mechanism. Mr. Liu told the council he welcomed the U.S. position that it wasntseeking regime change in North Korea.

China has always been firmly opposed to chaos and conflict in the [Korean] peninsula, Mr. Liu said.

Although China and Russia have pushed for a resumption of the six-party talks with North Korea, disagreement remains on how to bring Washington and Pyongyang to the table. China and Russia have called for a freeze-for-freeze plan under which North Korea would halt any more military or nuclear action and the U.S. would end its military exercises with South Korea.

Full article here:
North Korea Hit by $1 Billion Sanctions After Missile
Farnaz Fassihi
Wall Street Journal
2017-08-5

 

The UN summary of the resolution reads as follows:

The Security Council today further strengthened its sanctions regime against the Democratic Peoples Republic of Korea, condemning in the strongest terms that countrys ballistic missile launches and reaffirming its decision that Pyongyang shall abandon all nuclear weapons and existing nuclear programmes in a complete, verifiable and irreversible manner.

Unanimously adopting resolution2371(2017) under Article41, ChapterVII of the United Nations Charter, the 15-nation Council decided that the Democratic Peoples Republic of Korea shall not supply, sell or transfer coal, iron, iron ore, seafood, lead and lead ore to other countries.

Expressing concern that Democratic Peoples Republic of Korea nationals working abroad were generating foreign export earnings to support the countrys nuclear and ballistic missile programmes, it also decided that all Member States shall not increase the total number of work authorizations for such persons in their jurisdictions, unless approved by the Security Council Committee established pursuant to resolution1718(2006).

Through the text, the Council decided that States shall prohibit the opening of new joint ventures or cooperative entities with the Democratic Peoples Republic of Korea entities and individuals, or expand existing joint ventures through additional investments. In addition, it decided that Pyongyang shall not deploy or use chemical weapons and urgently called for it to accede to the Convention on the Prohibition of the Development, Production, Stockpiling and Use of Chemical Weapons and Their Destruction.

Also through the resolution, the Council named nine individuals and four entities to be subject to a travel ban and asset freeze already in place, as well as to request that the International Criminal Police Organization (INTERPOL) issue special notices with respect to designated individuals.

In addition, it reaffirmed that its provisions were not intended to have adverse humanitarian consequences for the civilian population of the Democratic Peoples Republic of Korea, and that the Security Council Committee established pursuant to resolution1718 (2006), on a case-by-case basis, exempt from sanctions those activities that would facilitate the work of international and non?governmental organizations engaged in assistance and relief activities for civilian benefit.

Furthermore, through the text, the Council called for the resumption of the Six-Party Talks between China, Democratic Peoples Republic of Korea, Japan, Republic of Korea, Russian Federation and the United States towards the goal of a verifiable and peaceful denuclearization of the Korean Peninsula.

Speaking after the resolutions adoption, the representative of the United States said the Council had put the Democratic Peoples Republic of Koreas dictator on notice by increasing the penalty of its ballistic missile activity to a whole new level. All Member States must do more to put more pressure on that country, she said, adding that the United States would take defensive measures to protect itself and its allies, including through joint military exercises.

Chinas representative said that, while todays resolution had imposed further sanctions, it did not intend to negatively impact such non-military goods as food and humanitarian aid. Calling on all parties to implement the resolutions provisions fully and earnestly, he recalled that China and the Russian Federation on 4July had put forward a road map to resolve the issue through two parallel tracks denuclearization and the establishment of a peace mechanism. Recalling that the United States had recently indicated that it was not pushing for regime change or for the Korean Peninsulas reunification, he said an escalation of military activities would be detrimental to all countries of the region.

Japans delegate said the sheer number and frequency of the Democratic Peoples Republic of Koreas nuclear and ballistic missile tests show how unprecedented and unacceptable these provocations are. Not only was the quantity outrageous, but the qualitative advancements were alarming. Noting that todays resolution would reduce the Democratic Peoples Republic of Koreas revenue by approximately $1billion, he said all Member States must demonstrate renewed commitment to implement the Councils decisions.

The Russian Federations representative, while calling on the Democratic Peoples Republic of Korea to end its banned programmes, said progress would be difficult so long as it perceived a direct threat to its security. Emphasizing that military misadventures risked creating a disaster, he said sanctions must be a tool for engaging Pyongyang in constructive talks rather than to seek the countrys economic asphyxiation.

The Republic of Koreas delegate said that Pyongyangs missile provocations on 4and 28July, together with its nuclear programme, posed a grave threat to international peace and security. Indeed, such reckless acts of defiance should be met with stronger measures, he said, adding that additional sanctions contained in resolution2371(2017) would significantly cut off the inflow of hard currency that would otherwise have been diverted to illicit weapons programmes.

Full article:
Security Council Toughens Sanctions Against Democratic Peoples Republic of Korea,Unanimously Adopting Resolution 2371 (2017)
United Nations Meetings Coverage
2017-08-05

Share

What about the Chinese companies that depend on trade with North Korea?

Sunday, July 9th, 2017

Benjamin Katzeff Silberstein

Domestic conditions within China are often underestimated as a factor when it comes to the country’s enforcement of sanctions against North Korea. In the grand scheme of things, they may not be a major constituency, but it is difficult to imagine that for a government that values economic growth and social stability as much as China does, it would not factor in the sentiments and demands of domestic businesses who depend on trade with North Korea.

Indeed, when one travels to Dandong, the border town most central to trade between China and North Korea, one can begin to appreciate the magnitude of the trade ties between local businesses and their neighbors on the other side of the Yalu river. I have posted some pictures here. Parts of the city are almost wholly dominated by businesses and stores that cater to North Korean customers, some that are clearly tailored for private and large-scale buyers of goods like cars, machinery, kitchen items such as refrigerators, et cetera. Many companies along the border deal in export-import with North Korea.Southern China Morning Posthas an interesting story out today about some of these businesses, often an underestimated constituency in the sanctions analyses:

Su Nan, atrader along the China-North Korea border, used to be a busy man. He used to wake early in the morning, fill his schedule with endless phone calls, and in a good year close deals worth millions of US dollars. But now, all of that has gone.

We have no revenue so far this year, Su toldThis Week in Asia. In fact, we have been struggling since 2016, with fewer and fewer orders coming.

Although his company hasnt lowered his salary or laid off workers, Su said he cant help but worry. After all, we just sit in the office and do nothing, he said.

Su works at Dandong Sevsuns Trading, an export firm located in Dandong, a stones throw fromNorth Korea. Chinas 1,420km-long border with North Korea has fostered many cross-border businesses Dandong alone hosts 600 such firms by some estimates.

[…]

Since attempts to halt North Koreas nuclear tests through diplomacy have fallen flat and Beijing doesnt want a war near its soil, curbing North Koreas nuclear ambition through tougher economic sanctions has become the only choice, Cheng said.

But that worries the many Chinese whose livelihoods rely on trade with North Korea. For Su, the trader in Dandong, such a move could be a killer blow.

Sus firm helps international organisations purchase and deliver supplies of humanitarian aid to North Korea. International relief to North Korea has almost dried up in recent months, and Su said his company had likewise been struggling to stay in business.

If China suspends more trade activities, then we will have no choice but to shut down, he said.

Other Chinese traders share his concern.

Selling fruit to North Korea is the only source of income for my family. What shall we do for a living if China will no longer trade with North Korea? said Wu Xiuhua, a middle-aged Chinese woman in Tumen, a border city an hours drive from North Korea.

Like other traders, Wu used to drive her produce straight over the Tumen River; now all must apply for permits to take their goods across the border.

Since the summer months are traditionally a low season for fruit sales, Wu is able to cope with the financial losses for now. But other Tumen traders recently took to the street, she said, angry about the costly and time-consuming change.

The local authority in Tumen declined to comment.

It is unclear how many Chinese traders living along the border have been, or will be, affected by the sanctions, but Wu is not optimistic.

Many people here are running cross-border businesses, she said, adding that some of her friends had even invested in North Korea, building warehouses equipped with industrial cooling systems to store imported seafood.

All these investments will go down the drain if China cuts off economic ties with North Korea, she said.

Besides traders, any business that deals with North Korea, however indirectly, is also at risk.

At a garment factory in Fengcheng, another city near Dandong, an executive toldThis Week in Asiathat although his company did not sell to North Korea, it had hired at least 100 North Korean workers to make clothes ironically for customers in Europe and the US.

If Beijing expands its sanctions to include the hiring of North Korean workers, that would have a negative impact on our business, said the executive.

North Koreans work for a lower salary, he said. It is also hard to find enough Chinese workers, as Fengcheng, like many cities in China, faces a labour shortage.

Labour exports are considered a major source of income for North Korea.

Nearly 80,000 North Korean working overseas send up to US$2.3 billion back home annually, according to a report by the North Korean Strategy Centre, a defector group. The report said more than half of them work in China and Russia.

The factory has yet to receive any official notices that restrict hiring, but some residents say changes are already underway. A restaurant here used to have a lot of North Korean waitresses, but many have disappeared in the past few months. Nobody knows why they left or where they went, said one resident.

The only businesses that remain unaffected, and at least in some respects optimistic about the future, are Chinese companies that arrange cross-border trips to North Korea.

In fact, an agent at Dandong China International Travel Service said their business had been going so well that the company now ran the tour daily.

Many Chinese are curious about North Korea, said the travel agent, who gave only her surname, Wang. We now send more than 30 tourists to North Korea every day, with some clients coming all the way from Hong Kong and Macau.

Full article:
SANCTIONS ARE FINE, BUT WHAT ABOUT THE CHINESE WHO DEPEND ON TRADE WITH NORTH KOREA?
Coco Liu
South China Morning Post
2017-07-09

Share

Still too early to tell on Chinese imports of North Korean coal

Monday, March 27th, 2017

By Benjamin Katzeff Silberstein

It is still far too early to say anything of certainty or substance on Chinese compliance on the UN resolution cap of $400 million on coal imports from North Korea. A few figures have come out over the past week that are of interest on the issue. Altogether, the statistics suggest that two parallel processes are at play. While China certainly seems to have imposed the coal ban at least in part to comply with the UN-mandated $400 million import cap, it also continues to shift its consumption to domestic coal in the face of a drive to draw down on coal consumption altogether.

As UPI reports, one angle is that China instituted the ban to pre-emptively ensure compliance with the cap, knowing that deliveries early in 2017 would come close:

The official, who spoke to local news service Newsis on the condition of anonymity, said a Chinese decision announced Feb. 18 to suspend all North Korean coal imports included an accounting of “excess” North Korean coal that was delivered to China in late 2016, according to the report.

“China is of the mind to carry over the excess of December [imports] to this year’s upper limit,” the official said.

Resolution 2321 also bans North Korea sales of copper, nickel, silver, zinc and even statues.

China agreed to play a key role in the agreement. All exports of North Korea coal would not exceed $400 million per annum or 7.5 million tons yearly.

In 2017, China has so far imported about $126 million of coal in January and $100 million in February.

While the total number of coal imported appears to be well below the annual quota, when the December data is included China reaches the upper limit of coal restrictions, the South Korean official said.

Full article:
Report: China suspended North Korea coal imports to not exceed quota
Elizabeth Shim
2017-03-23
United Press International

Bloomberg reports the same figures, but give an added context. It is not only coal imports to China from North Korea that have fallen. Those from Australia and Mongolia have dropped, too:

China’s imports of North Korea anthracite coal in February fell 18.7 percent from a year ago to the lowest since January 2015, after a ban on imports as a result of the reclusive nation’s missile program. Imports of anthracite coal, a hard coal with a high energy content used in steel mills, dropped to 1.23 million tonnes in February from 1.45 million tonnes in January, data from the General Administration of Customs released on Thursday.

Waning shipments from North Korea follows Beijing’s decision in late February to ban coal imports entirely after Pyongyang tested an intermediate-range ballistic missile in a direct challenge to international efforts to stabilise the Korean peninsula.

The ban has also sent steel mills who use anthracite as a feed stock to find alternatives in the domestic market. Chinese anthracite prices gained more than 50 yuan($7.26) per tonne to around 780 yuan($113.26) in February, data provided by China Sublime Information Group showed. Imports from China’s top supplier Australia <COA-AUCN-IMP> in February plunged 29 percent from January to 5.16 million tonnes, the lowest since May. Still, Australian imports were 16.8 percent higher than a year ago, the data showed. The decline adds to speculation that China is trying to control coal imports to aid the country’s efforts to reduce overcapacity at domestic mines.

The head of China’s quality supervision agency vowed to crack down on low-quality coal import. Traders in southern Chinese ports also reported cases of cargoes delayed due to customs checks. Coal shipments from Mongolia <COA-MNCN-IMP> tumbled 37 percent from January to 1.97 million tonnes, though it more than doubled from the same period last year.

Full article:
China’s North Korean coal imports drop to two-year low on ban
Reuters
2017-03-23

In other words, it is not only imports of North Korean coal that have dropped. Imports from other countries have fallen too. The “import ban” and fall in imports, rather than being linked by direct causation, may stem from a combination of factors that were already at play. Any conclusions that “China is putting the squeeze on North Korea” or the like are still premature.

On a different note regarding China-North Korea-trade, NK Economy Watch editor Curtis Melvin notes on Radio Free Asia that the Nampo port oil terminal has been upgraded. Perhaps a sign of long-term expectations on the North Korean side of long-run trade ties with China…

Share