Archive for the ‘UN Security Council’ Category

Pyongyang under UN Sanctions

Tuesday, August 30th, 2016

Institute for Far Eastern Studies (IFES)

There has been much interest in Kyodo’s (a Japanese wire service) reports on the atmosphere in Pyongyang following the imposition of sanctions on North Korea back in March by the UN Security Council. According to Kyodo’s ‘current report’ on the subject from August 21, ‘200 Day Speed Battles’ and ‘Mallima Speed Creation’ slogans can be seen in many of Pyongyang’s streets.

While surprisingly Pyongyang appears unchanged following UN sanctions, the entire nation is subject to a general labor mobilization. The 200 day speed battle began in June and aims to raise food production. Mallima Speed Creation is a slogan created to inspire workers to engage in productive activities at the same speed as a horse that can cover 10,000 li (around 3,927 km) in a day.

Construction of the frame for a 70-storey apartment block on Ryomyong Street, which began after the announcement that the block would henceforth be a site to house educators, has almost been completed. There are large tour groups to be seen at the Nature Museum and Central Zoo (the construction of both was completed last month). The Nature Museum, with its models of dinosaurs and taxidermied animals, is particularly popular, with a member of staff reportedly saying “there is a daily limit of 6,000 on the number of visitors admitted, and we have to turn people away every day.”

The Mirae Shop, a department store refurbished and reopened in April, has a tidy display of imported cosmetics and electrical appliances, but is largely devoid of visitors. A member of staff explained that “because people are busy with the 200 day speed battle, there are not many customers.” The Kyodo report thus argues that the effect of sanctions on Pyongyang is as yet limited.

The Kyodo report also includes an interview with Kim Cheol (43), the head of the Economic Research Centre in North Korea’s Academy of Social Sciences. In the interview, Kim Cheol asserts that “the North has hewed to a line of constructing a self-sufficient economy, and therefore the [UN and other] sanctions have very little impact.” Kim offered an optimistic vision: “struggles to increase the proportion of facilities and raw materials sourced domestically continue. . . . With or without sanctions, with our energy and technology we shall construct an economy with a high degree of self-sufficiency.”

With respect to last year’s food production figures, he said that “though they have not been released, the price of rice remains the same as last year, while other cereals are around 65~70% the price they were last year. . . . Given price fluctuations, it is estimated that food production has increased.”

Regarding the supply of and demand for electricity, he stated that “while we cannot fully satisfy demand, the development and introduction of coal additives in coal-fired power stations has dramatically increased production. . . . Many hydroelectric power stations making use of rich hydropower resources have been constructed.” Hence it can be inferred that while electricity supplies remain insufficient, they continue to increase.

Moreover, with respect to effect of coal export bans, Kim said that “the development of the economy is on an upward trajectory, so actually coal resources are needed more inside the country. . . . Improvements are aimed at raising the proportion of domestic production [in all areas] thus raising the proportion of resources used within the country.” At the same time though, he acknowledged that “because of a reliance on imported oil products like kerosene and airplane fuel, there certainly has been some impact.”

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North Korean market condition since new international sanctions

Wednesday, March 23rd, 2016

Institute for Far Eastern Studies (IFES)

It has been almost two weeks since the enforcement of new sanctions imposed by the United Nations Security Council (UNSC), and so far North Korea’s domestic economy seems calm. Following the sanctions, North Korea has been preparing for the 7th Party Congress in May with its 70-day campaign (or ‘speed battle’). In order for the people to focus on the preparation, the government has reduced the business hours of markets and has begun controlling the street markets (i.e., ‘grasshopper’ markets).

In particular, it was expected that the sanctions would reduce the inflow of goods into the country which would then lead to a rapid rise in market prices and exchange rates, but so far the market prices appear to have remained relatively stable. According to the Daily NK, a South Korean online newspaper reporting on North Korea, 1kg of rice is selling for 5,100 KPW, 5,150 KPW, and 5,080 KPW in Pyongyang, Sinuiju, and Hyesan, respectively. These prices are relatively similar to the prices prior to when the sanctions were in full effect (i.e., 5,100 KPW in Pyongyang and Sinuiju, and 5,260 KPW in Hyesan).

The exchange rate appears no different. One US dollar exchanges for 8,150 KPW in Pyongyang, 8,200 KPW in Sinuiju, and 8,170 KPW in Hyesan. The rate has been only slightly reduced compared to the rate prior to when the sanctions were put in place (i.e., 8,200 KPW in Pyongyang, and 8,290 KPW in Sinuiju, and Hyesan).

The reason for the stability in the market and the exchange rate is because even though the market hours have been reduced due to the 70-day campaign, the markets actually are running better than before and in some regions the price has gone down for some goods, presumably because some of these items that were exported in large scale via China have been circulated in the North Korean domestic market.

Also, aside from the underground resources (i.e., minerals) — the sanctioned items that used to account for most of the exports — other goods are still sold accordingly, which helps in stabilizing the market. Furthermore, the improvement of the domestic market cannot be taken lightly when considering the stability of the markets. In other words, unless markets are completely closed, people in North Korea wouldn’t consider it an issue.

Meanwhile, despite the international community’s sanctions against the country, including that of the UN Security Council, North Korea is claiming overproduction in areas such as electrical power and minerals in the run-up to the Seventh Party Congress in May. The North Korean propaganda media ‘DPRK Today’ has mentioned about production and the country’s success in confronting the imposed sanctions.

More specifically, since the initiation of the 70-day campaign last month (February 23rd), in order to boost economic success, Namhung Youth Chemical Complex has reportedly turned out 60% more fertilizer; Pyongyang Railway Bureau increased the traffic by 40%; Ryongyang Mine increased its production of magnesite by 20%; and 2.8 Jiktong Youth Coal Mine produced 7,200t beyond its quota. In addition, Kim Jong Suk Textile Mill reportedly has seen more than 40 labors complete the plan for the first half of the year, while Baekdu Hero’s Youth Power Plant has reached 37,000m2 in dam construction. Previously on March 3rd, the Korean Central Broadcasting radio reported that many of the production targets for February in the national economy have been surpassed.

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The UNSC sanctions and the North Korean economy

Friday, March 11th, 2016

By Benjamin Katzeff Silberstein

In the past few days, Daily NK has carried a number of interesting reports on how the latest round of UNSC sanctions have impacted the domestic economy in North Korea. Below, I’ve gathered a compendium of sorts. I’ll continue updating it as more stories surface.

Only a short while after the sanctions were announced, trucks carrying mineral exports were blocked from entering China. Some businesspeople were apparently surprised at China’s relatively forceful implementation of the sanctions, given that little impact had been seen from past sanctions:

Chinese authorities began prohibiting mineral exports from North Korea on March 1st in a move not strictly related to the passing of UN Security Council Resolution 2270, which outlines sanctions against North Korea. North Korean authorities and foreign-earning currency enterprises tied to the military did not see this move coming and expressed embarrassment and shock.

In a telephone conversation with the Daily NK on March 4, a source from North Pyongan Province said, “Beginning on March 1, mineral exports such as coal and ore have not been allowed to pass through Chinese customs into China. Trucks loaded with mineral deposits have been idly waiting in front of Chinese customs near Dandong. The foreign trading companies are simply waiting for instructions from the higher authorities.”

Full story:
Trucks loaded with mineral exports blocked from entering China
Seol Song Ah
Daily NK
2016-03-07

A few days later, Daily NK reported that “panic” had begun to set in, not just among high-level businesspeople and traders involved in the mineral extraction industry, but also among market vendors who worry that they won’t be able to buy products for import from China:

“The news that the UN resolution containing sanctions against North Korea passed unanimously is spreading like wildfire through [domestic] cell phones. People in the North had little interest in sanctions in the past, but these days they are expressing concern that ‘this time things are going to be different,’” a source in South Pyongan Province reported to Daily NK on March 7.

A source in North Hamgyong Province corroborated this news, reporting the same developments on the ground in that region.

“Sinuiju is known as the gateway to China and the ultimate symbol of friendly relations between our two nations. That’s why news of its closure to mineral exports is causing dismay,” she explained, adding that a rumor has also taken off that international customs offices in other border towns such as North Hamgyong’s Rajin and Hoeryong will be shuttered.

Further anxiety is being stoked by the fact that trusted allies such as China and Russia are participating in the sanctions and the fact that residents are getting detailed information about the resolution’s specific clauses.

“People are further concerned because things have apparently changed significantly since China helped the country to overcome the difficulties during the ‘Arduous March,’ [famine] in the mid 1990s. People from all over the country are concerned that China might shut the border down totally. If that happens, it will become difficult for everyone to make a living,” the source indicated.

“Wholesalers and market vendors are feeling the most vulnerable to the UN sanctions. Their greatest fear is that they won’t be able to buy products. Merchants who have been selling Chinese products at cheap prices are expecting a cost increase and have momentarily discontinued sales.”

Full story:
Panic sets in as sanctions specifics circulate 
Daily NK
Choi Song Min
2016-03-08

Not just mineral exports to China have taken a hit. Food products specialties like hairy crab, frequently imported to cities like Yanji in China from North Korea’s northern fishing cities like Rajin, are now being sold at domestic markets instead:

“These days items that were previously hard to find because they were earmarked for export are suddenly emerging at the markets,” a source from North Hamgyong Province told Daily NK on Thursday. “The price haven’t gone down enough yet, so you don’t see too many people actually buying them. But you do see flocks of curious people coming out to the markets to see all the delicacies for sale.”

She added, “High-end marine goods like roe, sea urchin eggs, hairy crab, and jumbo shrimp and produce like pine nuts, bracken, and salted pine mushrooms were once considered to be strictly for export, but now they’re easy to find. The number of such products, referred to as ‘sent back goods,’ at Sunam Market and other markets around Chongjin is growing by the day.”

Additional sources in both North and South Hwanghae Provinces reported the same developments in those regions.

Despite the sanctions that have already kicked in, products from China are still flowing into North Korea. however, the goods sold in bulk to China–minerals like coal, marine products, etc.– have nowhere to go and are therefore making their way back into the country.

Full story:
Would-be food exports to China popping up in jangmadang
Choi Song Min
Daily NK
2016-03-11

Politically, too, the topic of sanctions has become highly sensitive. According to reports by Daily NK, surveillance authorities have increased their focus on certain groups that they deem as more likely than others to speak out about the added pressures from the sanctions:

The boost in surveillance is interpreted as a move by the regime to nip in the bud any rumblings of political unrest engendered by members of society more likely to speak out about the pressure squeezing North Korea. Those tracing the lines of the circumstances leading to this pressure, namely a volley of sanctions lobbed at North Korea by the international community in response to its nuclear test and rocket launch, are a threat to the regime’s authoritarian grip over the population.

A source with the Ministry of People’s Security [MPS, or North Korea’s equivalent of a police force] informed Daily NK on March 8 that internal orders came down at the beginning of March for the MPS to survey and track the recent movements of those anyone ascribed to the “wavering” cohort. Two separate sources in the same province verified this information, but Daily NK has not yet confirmed if the same orders are in effect in other provinces.

Full story:
MPS steps up surveillance to suppress potential ‘pot stirrers’
Kang Mi Jin
Daily NK
2016-03-11

(UPDATE 2016-02-18): a couple of days ago, Daily NK published another piece on this topic. They note that market prices have remained relatively stable, and that many people don’t seem to treat this sanctions round as anything out of the ordinary:

Market prices in North Korea have remained relatively stable despite stronger sanctions enforced by the international community, including China, as well as greater limitations on market operationsdue to nationwide preparation for Pyongyang’s May Party Congress.

Multiple Daily NK sources within the country have confirmed that rice prices in Pyongyang, South Pyongan Province’s Sinuiju, and Ryanggang Province’s Hyesan are trading at 5,100 KPW, 5,150 KPW, and 5,080 KPW per kilogram, respectively, similar to levels before sanctions were stepped up (5,100 KPW, 5,100 KPW, 5,260 KPW).

This is also the case on the foreign exchange front, with 1 USD trading for 8,150 KPW in Pyongyang, 8,200 KPW in Sinuiju, and 8,170 KPW in Hyesan, showing some signs of strengthening for the local currency from pre-sanction rates (Pyongyang 8,200 KPW, Sinuiju·Hyesan 8,290 KPW).

“There had been concern we would see fewer goods in the market because of UN sanctions, but in reality, there hasn’t been much difference,” a source from North Pyongan Province told Daily NK in a telephone conversation on Sunday. “The state is placing restrictions on opening hours for the market for the ‘70-day battle’ (mobilization for the Party Congress), but the markets have remained lively, and there’s not much change in terms of market prices.”

Further confirming trends previously reported by Daily NK last week, an additional source in North Hamgyong Province reported yesterday that some people had stocked up food worried about sanctions from the UN, but that this hasn’t led to a violent gyration in prices. “Actually, in some regions, we’re seeing prices of certain products drop,” he noted.

This price stability seen in the marketplace, in spite of the sanctions having kicked in earlier this month, can be attributed to the fact that most products are still trading as they would have save one of the North’s main export items: minerals.

The simple reality that people have experienced similar times before is also at play. “In the past, people who had stockpiled food during other sanctions discovered that after the political climate evened out a bit they were unable to get their money’s worth for everything they bought. This is why we’re seeing less of it,” a source from Ryanggang Province explained. “Initially there was a little bit of noise, but in general people are remaining calm.”

Full article:
Market prices so far showing resilience against sanctions
Daily NK
Kang Mi Jin
2016-03-14

Also, Marcus Noland recently launched a “Black Market Contest” at the Witness to Transformation blog, letting readers bet on what will happen with the unofficial exchange rate as a result of the sanctions:

The exchange rate issue has re-emerged with the imposition of sanctions. My colleague Steph Haggard leans toward the view that the imposition of a broader set of sanctions, particularly with respect to mining, together with enhanced Chinese enforcement will generate a balance of payments cum financial crisis with uncertain implications for political stability. I am more skeptical of both the additional coverage and the likely Chinese rigor in enforcement.

But this is an empirical issue. If the sanctions bite, then one would expect to see their effects manifested in the black market rate on the won. So we decided to offer up this conundrum to the wisdom of the crowd, or at least of our readership, in this Witness to Transformation Black Market Contest. Yes, you can ply your wits against North Korean loan sharks and black market traders. Or maybe the North Korean monetary authorities. Here’s how it works.

Steph thinks that within two months, evidence of the impact of sanctions should begin to emerge. So the object of the contest is to guess the black market won-dollar rate two months hence. Since the sanctions resolution passed 2 March, we will use the first DailyNK average rate applying to the post-2 May period as the reference. So you have the next month to analyze trade data, contact spies in Dandong, or call in favors in Switzerland to inform your estimate. Whoever guesses closest to the May black market rate wins. In the event of a tie, whoever submitted their entry first wins.

Please list your estimate in the comments section below. The entry period closes 15 April.

Full article:
Witness to Transformation Black Market Contest
Witness to Transformation blog
Marcus Noland
2016-03-16

(UPDATE 2016-05-02): DailyNK continues to cover domestic prices in the context of the sanctions. In late April, vegetable prices rose, but rice prices remain notably stabile:

Despite these high prices, movements on the rice and foreign currency front have remained relatively stable, leading people to believe the spike in vegetables will be short lived.

“Vegetables are not export items and therefore their prices are determined by domestic supply and demand,” the Pyongyang-based source noted. “However strong the sanctions may be, rice prices have nonetheless remained the same and, under these conditions, not many will choose to eat expensive cabbages over rice,” the source added, suggesting that prices are likely to return to normal as the markets readjust for supply and demand.

Full article here:
Vegetable prices spikes, rice remains stabile 
Daily NK
Kang Mi Jin
2016-04-28

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North Korea emphasizes economic independence amid pending international sanctions

Thursday, March 10th, 2016

Institute for Far Eastern Studies (IFES)

With the soon-to-be announced UN Security Council’s sanctions against the DPRK in response to the country’s recent provocations, North Korea is urging economic independence through its ‘speed battle’ to confront the resolution.

On February 29, the state-sponsored Rodong Sinmun newspaper emphasized that “against the sanctions, building an independent national economy based on today’s modern technology is the utmost important mission for us . . . as without strong self-reliant economy, we cannot move towards autonomy.”

The newspaper also defined the building of the independent national economy as “a historical mission that is challenging but needs to be achieved for a bright future.”

Such claims by the DPRK can be interpreted as a means to unite the country behind the Party and prepare the people for the upcoming sanctions, as the UN Security Council is about to pass the most impactful sanctions against the country ever.

North Korea is also urging its people to join the ‘70-day campaign’ to greet the upcoming Seventh Congress of the Workers’ Party of Korea, which is to be held in May. The 70-day campaign is a ‘speed battle’ (as it is traditionally known), which is a socialist mobilization technique employed to increase people’s performance in order to meet economic production or construction targets in the building of a strong country. This technique was first introduced in North Korea’s economic planning back in the early 1970s. The newspaper emphasized that the goal of this year’s 70 day-long campaign is to overcome the struggle in solidifying the Party under the monolithic leadership based on the philosophies of Kim Il Sung and Kim Jong Il – i.e., Kimilsungism-Kimjongilism.

The 70-day speed battle will be a good opportunity to observe the leadership capabilities of Kim Jong Un following the era of his late father Kim Jong Il. With the international community gearing towards announcing sanctions against North Korea due to the country’s latest nuclear test (of possibly a hydrogen bomb) and launch of a long range missile, economic stabilization of the country through robust policy can be regarded as a ‘battle’ related to Kim’s leadership. That is, the 70-day speed battle is not just an ordinary economic mobilization campaign, but 70 days of establishing Kim Jong Un as ‘leader’ as the Party Congress approaches.

On the same day (February 29), the Choson Sinbo (the pro-North Korean newspaper published in Japan) emphasized in a column that “the initial bill on sanctioning the DPRK has been drafted for the fifth time. . . . which shows that no sanctions can compromise Choson [DPRK] from building an autonomous strong nation.”

The newspaper criticized the United States saying “the United States has shown the most savage and brutal side of imperialism by asking China to join the sanctions against the DPRK with such terms that completely isolates the DPRK from the world, aiming for the country to be unable to exist and ultimately collapse as a state.”

The newspaper also said that the claim that the UN sanctions will not affect the North Korean people’s livelihoods is completely hypocritical and cunning, and expressed disappointment with China’s agreement to the sanctions.

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UNSC adopts new DPRK sanctions: UNSC Resolution 2270

Wednesday, March 2nd, 2016

UPDATE 7 (2016-3-24): The Daily NK reports that DPRK coal shipments are sitting in limbo outside of Chinese ports.

UPDATE 6 (2016-3-18): NPR discusses China’s interest in enforcing new sanctions:

Beijing has begun instructing Chinese banks, ports and shipping and trading companies doing business with North Korea to implement the U.N. resolution to the letter.

Adam Szubin, the Treasury Department’s acting undersecretary for terrorism and financial intelligence, tells NPR that China is taking this very seriously.

“I know from my meetings here in Beijing that my counterparts have very much taken the resolution to heart,” he says.

Szubin, who visited Beijing this week, says the new sanctions will hit hard enough to change Pyongyang’s “decision-making calculus.”

The new U.N. resolution is not just “adding a few new companies to a sanctions list or a few new North Korean officials,” Szubin says. Instead, it targets “every major aspect of North Korea’s access to international shipping, international banking [and] international trade to develop revenues for its missile and illicit nuclear programs.”

Although China appears committed, the sanctions put it in a tough spot.

First, says People’s University international relations expert Cheng Xiaohe, some Chinese companies are going to take a hit to their bottom line. China-North Korea trade was worth $6.86 billion in 2014.

“At the same time as we protect our national security interests, we must be prepared to sacrifice some of our own economic interests in order to accurately target North Korea with sanctions,” he says.

Cheng says the U.S. has its work cut out for it, collecting intelligence on the hundreds of Chinese firms doing business with North Korea, and on North Korean firms adept at concealing their business dealings behind fronts and shells.

And if Chinese firms are found to be violating the U.N. resolution, Cheng points out, they could themselves face sanctions.

“This could create new frictions between the U.S. and China,” he warns. “I hope that the U.S. will think carefully before it uses this big stick to crack down on Chinese firms.”

Cheng notes that China continues to supply North Korea with crude oil as humanitarian assistance. The sanctions allow this, even if North Korea may be able to refine some of the oil for military uses.

China says neither a humanitarian crisis nor regime collapse are acceptable outcomes for North Korea. But Zhang Liangui, a veteran North Korea watcher at China’s Central Party School in Beijing, says that at the end of the day, China cannot save North Korea from its fate.

“If North Korea is going to collapse,” he says, “no external force can prop it up. Frankly speaking, whether it collapses or continues to develop will mainly depend on its own domestic and foreign policies.”

UPDATE 5 (2016-3-15): According to UPI, the Philippines has searched a second DPRK ship.

UPDATE 4 (2016 3-10): Sanctioned North Korean ship, Gold Star 3, was turned away from Hong Kong port. According to Yonhap (via Korea Times):

Hong Kong has banned a North Korean freighter, which is blacklisted by new U.N. sanctions over the North’s latest nuclear test and rocket launch, from berthing at its port, a source with knowledge of the matter said Thursday.

The North Korean freighter Gold Star 3 arrived at the Hong Kong port on Wednesday to get fuel and supplies for its crew, but Hong Kong authorities did not allow the ship to dock at the port, the source said on the condition of anonymity.

The ship is among 31 vessels operated by a North Korean shipping company, Ocean Maritime Management, which is hit by the new U.N. sanctions.

For now, the ship is said to be staying in international waters, according to the source.

Media reports have said the Chinese port of Rizhao in the eastern Shandong province also barred another North Korean ship from docking at the port.

China has said it will “earnestly” implement the new U.N. sanctions, but the sanctions should not affect the well-being and humanitarian needs of North Korean people.

Still, China is unlikely to put crippling sanctions on North Korea because a sudden collapse of the regime could spark a refugee crisis at its border and lead to a pro-U.S., democratic Korea on its doorstep, analysts say.

UPDATE 3 (2016-3-6): North Korea ship impounded in Philippines. According to Yonhap:

A North Korean ship impounded in the Philippines last week was registered as being from Sierra Leone via a practice called flag of convenience, South Korea said Sunday.

Flag of convenience is a business practice of registering a merchant ship to a country other than its origin for the purposes of avoiding taxes and other regulations.

The Philippines seized the North Korean ship Jin Teng on Saturday, becoming the first country to enforce sanctions on the reclusive country since the United Nations Security Council passed a more comprehensive resolution last week.

Resolution 2270 subjects 31 ships belonging to North Korea’s Wonyang Shipping Corp. to an asset freeze and sanctions.

Despite being Sierra Leone-flagged, the Jin Teng was seized because the sanctions are imposed via the ship’s International Maritime Organization (IMO) number, not its country of origin, a South Korean official said.

Nine other ships on the list are registered as being from countries other than North Korea, including Tanzania and Cambodia, the official added.

Here is coverage in Xinhua.

UPDATE 2 (2016-3-4): Analysis of the sanctions by the European Council on Foreign Relations:

The case of sanctions against North Korea – where earlier resolutions were already adopted in 2006, 2009 and 2013 – provides a useful window into their efficiency and limits. All the more so because the debate on this latest round of sanctions has been long and hard (it has been nearly two months since the DPRK’s nuclear test of 6 January). As noted by ECFR’s Mathieu Duchâtel earlier this week, China and Russia have taken a big step towards tightening the noose around Pyongyang – by accepting to place limits on its external revenue, in areas that go much beyond the illicit activities directly targeted by the resolution. They have agreed to a ban on the export of coal, iron ore, rare earth and other minerals, as well as gold, and also to inspection of North Korean cargoes in other ports. The sanctions include North Korean diplomatic offices that harbour entities otherwise targeted by sanctions. All of these developments have the potential to be game changers. The fact that China – which received 90 percent of North Korea’s foreign trade given earlier sanctions – has agreed to the sanctions, certainly gives some indication of how vast the chasm between the Chinese and North Korean leadership is growing.

But more questions arise as a result of these sanctions, and on three different levels. Firstly, what are the limits of the resolution, secondly, how will it be implemented, and thirdly, what has been conceded or left out in order to secure this result at the United Nations Security Council.

The limits of these sanctions can be uncovered in the wording of the resolution itself. Almost all new sanctions can be overridden if the trade is being made for “humanitarian” or “livelihood purposes”. These exceptions only apply if they do not generate “revenue”, which would seem to reserve the provision of bona fide food or medical assistance. Alas, the resolution’s language appears to be contradictory in places. Point b of article 28 exempts trades which are “exclusively for livelihood purposes and unrelated to generating revenue for the DPRK’s nuclear or ballistic programs or other activities prohibited”. This clearly leaves the door open to other revenue streams. It is not clear whether the resolution will target North Korea’s export of indentured labour – not only in Russia, but in Poland and reportedly in Lithuania and Slovakia too. In these places there are North Korean workers remitting over 70 percent of their wages to the state – which leaves them with just $120 a month for living.

This loophole, along with the exclusion of oil imports from sanctions, has all the hallmarks of being imposed by China. There are many others too, such as the exclusion of coal re-exported from the port of Rason – a transit center for Mongolian coal towards Russia. Aviation fuel cannot be sold to North Korea but its planes can be fueled elsewhere on a return journey. North Korean financial institutions and firms elsewhere are subject to sanctions, with trade banned, but foreign firms already present in North Korea are not.

More important than these concerns is the undefined nature of “inspections” in foreign ports. In this respect, the US sanctions go much further by imposing checks on third parties. It will be interesting to see if the European Union, a champion of the “smart power” of sanctions, follows suit. Some, for example the French, who still suffer from the heavy fines imposed by the US on BNP Paribas because of its actions in Sudan, may beg to differ. In any case, the practical difficulties of checking, for example, on China’s immense export and re-export volume preclude an efficient implementation. What happens in Dandong, China’s notoriously opaque harbor that processes North Korea’s trade, is key. US sanctions will create moral hazard for traders, which is altogether a desirable but insufficient goal.

Which leads us to a third observation. The resolution has left a wide gamut of sanctions open to interpretation. In practice, these interpretations will be dictated by China, North Korea’s chief intermediary with the outside world. In some aspects, the resolution hands the key to North Korea’s economic fate to China, even if one might believe that North Korean diplomats are experts at circumventing restrictions, and creatively exploiting loopholes in “easy” third countries. After all, who will be checking the “humanitarian” nature of its relations with Namibia?

UPDATE 1 (2016-3-2):  Chinese banks halt transfer of yuan currency to N. Korean banks. According to Yonhap:

Chinese banks in the northern border city of Dandong have suspended the transfer of the yuan currency to North Korean banks, Chinese financial sector officials told Yonhap News Agency on Wednesday.

The move comes as the U.N. Security Council is set to vote on new sanctions against North Korea’s fourth nuclear test and rocket launch this year.

Employees of the Dandong branch offices of China’s top four state-owned banks, including Agricultural Bank of China and Industrial and Commercial Bank of China, as well as six commercial banks such as China Merchants Bank, told Yonhap that the suspension came after “orders” from their headquarters.

Since North Korea’s third nuclear test in 2013, the Dandong branches of the Chinese banks have halted the transfer of U.S. dollars to North Korean banks.

An employee of the Dandong branch of the Agricultural Bank of China said the order came down after North Korea’s fourth nuclear test in January.

Dandong is a border city between North Korea and China and a main conduit of bilateral trade between the two neighboring countries.

ORIGINAL POST (2016-3-2): According to the Washington Post:

The U.N. Security Council unanimously adopted harsh sanctions Wednesday against North Korea, imposing some of the strongest measures ever used to pressure Pyongyang to abandon its nuclear weapons program.

The new sanctions come two months after North Korea tested what it claimed was a hydrogen bomb and a month after it conducted what was widely described as a banned missile test under the guise of launching a satellite into space. But U.S. officials began drafting the measures three years ago, soon after North Korea conducted a previous nuclear test, in order to move swiftly the next time it happened. Negotiations to win China’s support began two days after North Korea’s January nuclear test, its fourth in a decade.

The resolution is far more sweeping than existing sanctions requiring a link to proliferation activities. That precondition has been removed, in effect erasing the presumption of innocence.

It mandates cargo inspections for all goods going in and out of North Korea by land, sea or air, chokes off supplies of most aviation fuel for its armed forces, and bans the sale of all small arms and conventional weapons to Pyongyang. It also prohibits transactions that raise hard cash for North Korea through sales of its natural resources.

The resolution doubles the blacklist of people and institutions already sanctioned and requires countries to expel North Korean diplomats involved in any sanctioned activities.

One provision was designed to prevent Pyongyang from sending taekwondo instructors to train foreign police forces. Another bars North Koreans from specialized training at any school or research center in the world if the learning can advance Pyongyang’s nuclear and ballistic missile programs.

President Obama welcomed the sanctions as a firm and appropriate response to North Korea’s attempts to develop weapons of mass destruction.

“Today, the international community, speaking with one voice, has sent Pyongyang a simple message: North Korea must abandon these dangerous programs and choose a better path for its people,” he said.

As soon as the sanctions were released, the Treasury Department and the State Department updated their blacklists of people and entities tied to the Democratic People’s Republic of Korea, the official name for North Korea, and its proliferation programs. The designation freezes their U.S. assets and bars Americans from doing business with them.

The U.N. sanctions, which target the country’s elites and avoid “adverse humanitarian consequences” for civilians, aim to accomplish what worked with less onerous sanctions on Iran by pushing the impoverished nation to quit pumping money into its nuclear program.

“The chronic suffering of the people of North Korea is the direct result of the choices made by the DPRK government, a government that has consistently prioritized its nuclear weapons and ballistic missile programs over providing for the most basic needs of its own people,” said Samantha Power, the U.S. ambassador to the United Nations.

“The North Korean government would rather grow its nuclear weapons program than grow its own children,” she added.

The resolution was presented by the United States with the support of China, a sharp reversal, given Beijing’s longtime support of its neighbor. Although the United States has long had an embargo on trade with North Korea, China has provided food and fuel and has been a key trading partner. In recent years, living conditions in North Korea have improved, thanks in large part to China.

In the past, China has been unwilling to tighten the screws on Pyongyang, in part out of concern for what an imploding, unstable North Korea might mean for China’s own border. But recently North Korea has continued testing new weapons and missiles, disregarding China’s warnings and personal envoys.

After North Korea on Jan. 6 detonated a new device — calling it a hydrogen bomb, although most experts say it was a smaller nuclear device — China’s ambassador to six-party talks, Wu Dawei, went to Pyongyang to urge restraint. Instead, North Korea announced while he was there that it would test a missile.

China’s about-face suggests it has started to realize that doing nothing would impose growing political costs internationally — the possibility of a greater U.S. presence in the region and weaker relations with South Korea, which Beijing has been cultivating.

“I expect there’s been a delayed recognition in China to the political price China was paying, with South Korea in particular, for its equivocation or outright silence about how to respond to North Korea and North Korea actions,” said Jonathan Pollack, a specialist on East Asian politics and security at the Brookings Institution.

During a visit to Washington last month, Chinese Foreign Minister Wang Yi hinted at the strains in policy toward North Korea.

“On the one hand, we’re saying to the international community . . . that the normal exchanges, especially those affecting the livelihoods of the North Korean people, should not be adversely affected,” he said at the Center for Strategic and International Studies. “On the other hand, in order to uphold the international nuclear nonproliferation regime for the sake of denuclearization, our exchanges will be affected to some extent.”

But some analysts question the depth of China’s commitment to the latest round of sanctions.

“The real question going forward is whether China will enforce the new measures,” said Victor Cha, a professor at Georgetown University. “My guess is that China will squeeze for a little bit, but not too hard, while the U.S. will want China to squeeze harder and for a longer period of time.”

Sung-Yoon Lee, a Korean studies professor at Tufts University, said the U.N. sanctions, even if violated in the future, will become increasingly meaningful if ordinary citizens in North Korea are adversely affected.

“The fact the U.N. is involved will lend greater legitimacy to the effort to sanction North Korea and enable others, like Japan and Europe, to shoulder some of the blame if there are negative repercussions from sanctions, so the blame doesn’t just fall on the shoulders of the United States,” he said.

Preparatory work on the sanctions began in early 2013, immediately after the Security Council passed a sanctions resolution in response to North Korea’s third nuclear test, according to a State Department official who spoke about the sensitive negotiations on the condition of anonymity. U.S. officials concluded that incrementally ratcheting up sanctions was insufficient and that more restrictive measures were needed, the official said.

As technical experts from many government agencies met to share ideas, a contingency draft of sanctions was repeatedly updated to be ready for a fourth nuclear test by North Korea.

On Jan. 8, two days after North Korea announced the fourth test, diplomats from the U.S. mission to the United Nations presented a draft to the Chinese mission. There was little response during January as China studied the proposed sanctions, which dropped requirements to prove proliferation links, as China had insisted on previously.

China did not change its position during a Jan. 27 visit to Beijing by Secretary of State John F. Kerry or during a Feb. 5 phone call that Obama placed to Chinese President Xi Jinping.

But after the Feb. 7 missile test, the State Department official said, the Chinese came around to the U.S. point of view. Throughout much of February, U.S. and Chinese diplomats met several times a day to discuss provisions that had to be approved by Beijing, the official said.

“At 8 or 9 at night, diplomats at the U.S. mission would schlep to the Chinese mission,” the State Department official said. Then they would meet again the next day after Beijing had worked through the provisions overnight.

After a tentative agreement was reached early last week, U.S. officials had hoped for a quick adoption by the Security Council. But there were delays while Russia studied the sanctions to gauge their impact. Russia transports coal over a short stretch of railroad in North Korea to a port, and Moscow wanted reassurances it would not be banned, the official said.

In recent days, North Korea has boasted that more sanctions would not hurt. Now China, South Korea, Japan and the United States are awaiting its reaction. Early Thursday, hours after the sanctions were approved, the North fired short-range projectiles into the sea, South Korea’s Defense Ministry said.

“We’ve seen its reckless and unpredictable acts for years,” Power said. “We’ve seen threats directed at the continental United States and the Republic of Korea. We’ve seen cyberattacks on American companies costing hundreds of millions of dollars. We do not expect a change of behavior overnight.”

Read the full story here:
U.N. adopts sweeping new sanctions on North Korea
Washington Post
Carol Morello and Steven Mufson
2016-3-2

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The 2015 UNSC Panel of Experts report published

Monday, February 23rd, 2015

The report is dated February 23, 2015 and you can download the PDF here.

Andrea Berger commented on the report in this article at 38 North.

Media coverage of the report has focused on two aspects: 1. North Korea has changed the name of the ships in its commercial fleet to avoid sanctions enforcement. 2. North Korean spies managed to infiltrate the UN World Food Program and UNESCO.

Here is Reuters on the report:

Exclusive: Sanctioned North Korea shipping firm still active, renamed ships – U.N. panel

A U.N.-blacklisted North Korean shipping company has renamed most of its vessels in a bid to disguise their origin and continues its illicit shipments in violation of United Nations sanctions, according to a U.N. experts report seen by Reuters on Wednesday.

The U.N. Security Council’s Panel of Experts on North Korea, which monitors implementation of sanctions on Pyongyang, also said in the 76-page report that North Korea “continued to defy Security Council resolutions by persisting with its nuclear and ballistic missile programs.”

North Korea is under United Nations sanctions because of its nuclear tests and missile launches. In addition to arms, Pyongyang is banned from importing and exporting nuclear and missile technology and is not allowed to import luxury goods.

The experts’ report also said the sanctions have not curbed food or humanitarian aid to the impoverished hermit state, but it recommended that the U.N. spell out which items for such use are exempt.

The council last July blacklisted shipping company Ocean Maritime Management Company (OMM) for arranging an illegal shipment on the Chong Chon Gang ship, which was seized in Panama and found to be carrying arms, including two MiG-21 jet fighters, hidden under thousands of tonnes of Cuban sugar.

“Following the designation of OMM … (North) Korea acted in order to evade sanctions by changing the registration and ownership of vessels controlled by the company,” the report said.

“Thus far, 13 of the 14 vessels controlled by OMM have been renamed, their ownership transferred to other single ship owner companies (with names derived from the ship’s new names) and vessel management transferred to two main companies,” it added.

The report said OMM worked with individuals and entities based in countries such as Brazil, China, Egypt, Greece, Japan, Malaysia, Peru, Russia, Singapore and Thailand.

The panel recommended that the council’s sanctions committee blacklist 34 OMM entities (shell companies), including Chongchongang Shipping Co, Amnokgang Shipping and Biryugang Shipping. It also recommended sanctioning OMM Vice President Choe Chol Ho, Chongchongang Shipping President Kim Ryong Chol and three Chongchongang directors.

It said that North Korean diplomats, officials and trade representatives played key roles in illegal weapons and missile deals. They often were involved in illegal funds transfers.

The panel also said North Korean intelligence agents aided the movement of money believed to be linked to weapons transactions.

The report said agents of the Reconnaissance General Bureau (RGB), North Korea’s main intelligence agency, had worked at international organizations and were using those positions to support activities aimed at skirting sanctions.

It cited as an example the French government’s decision to freeze assets of Kim Yong Nam, an RGB officer working under cover as an employee at UNESCO, the U.N. cultural and scientific organization in Paris, and his son and daughter. His son Kim Su Gwang, also an RGB officer, was working at the U.N. World Food Program.

The panel said Kim Young Nam’s daughter, Kim Su Gyong of the Korean United Development Bank, “was engaged in financial activities under false pretences in order to conceal the involvement of her country.”

The panel also opened its first inquiry into the use of drones. Between October 2013 and March 2014, South Korea found wreckage of three drones it determined were from North Korea and had been spying on military facilities.

The Security Council has banned the supply, sale or transfer of complete armed or surveillance drones with a range of at least 300 km (186 miles). The panel said it was unclear if the recovered drones were acquired abroad or made in North Korea.

EXEMPTIONS

The experts found “no incidents where bans imposed by the (U.N.) resolutions directly resulted in shortages of foodstuffs or other humanitarian aid.”

“National legislative or procedural steps taken by (U.N.) member states or private sector industry have been reported as prohibiting or delaying the passage of certain goods to (North Korea),” the report said. “It is sometimes difficult to distinguish these measures from United Nations sanctions.”

The U.N. Security Council says the sanctions are not intended to harm North Korean civilians, but there is no exemption mechanism. For that reason, the experts recommended that exemptions be proposed “provided that such items are confirmed to be solely for food, agricultural, medical or other humanitarian purposes.”

North Korea has said the sanctions are illegal and aimed at toppling the country’s reclusive government. A U.N. inquiry last year reported systematic torture, starvation and killings by the country’s leaders that are comparable to Nazi-era atrocities.

In the Associated Press:

UN: North Korean company renames ships to evade sanctions

A North Korean shipping company that famously tried to hide fighter jets under a cargo of sugar later sought to evade U.N. sanctions by renaming most of its vessels, a new report says.

The effort by Pyongyang-headquartered Ocean Maritime Management Company, Ltd. is detailed in the report by a panel of experts that monitors sanctions on North Korea. The report, obtained by The Associated Press, makes clear the challenge of keeping banned arms and luxury goods from a nuclear-armed country with a history of using front companies to duck detection.

The U.N. Security Council holds consultations Thursday on the report, which also says North Korea’s government persists with its nuclear and missile programs in defiance of council resolutions.

North Korea’s mission to the U.N. did not respond to a request for comment.

The council last year imposed sanctions on OMM after Panama in 2013 seized a ship it operated that carried undeclared military equipment from Cuba. Panamanian authorities found two Cuban fighter jets, missiles and live munitions beneath the Chong Chon Gang’s cargo of sugar.

The council’s sanctions committee said that violated a U.N. arms embargo imposed in response to North Korea’s nuclear and missile programs. At the time, U.S. Ambassador Samantha Power said that imposing a global asset freeze on OMM meant that the company would no longer be able to operate internationally.

But the new report says that in the months after the sanctions were imposed, 13 of the 14 ships controlled by OMM changed their owners and managers, “effectively erasing” the company from a database kept by the International Maritime Organization. Twelve of the ships “reportedly stayed, visited or were sighted near ports in foreign countries,” and none were frozen by member states as the panel of experts recommends.

The new report explores the shipping company’s global reach, using people and entities operating in at least 10 countries: Brazil, China, Egypt, Greece, Japan, Malaysia, Peru, Russia, Singapore and Thailand. The report recommends updating the sanctions list with 34 OMM entities and says all 14 vessels should be subject to sanctions.

No interdictions of the kind that Panama made in 2013 were reported in the period between Feb. 8 of last year and Feb. 5 of this year. But the new report warns that the panel of experts sees no evidence that North Korea “intends to cease prohibited activities.”

The report also says diplomats, officials and trade representatives of North Korea continue to “play key roles in facilitating the trade of prohibited items, including arms and related materiel and ballistic missile-related items.”

The panel of experts warns that some U.N. member states still are not implementing the council resolutions that are meant to keep North Korea from further violations.

North Korea also faces an embargo on luxury goods, but the report found that it managed to bring in luxury goods from multiple countries, including with the help of its diplomatic missions. Some items were for the country’s Masik Pass luxury ski report, which opened in 2013. China told the panel of experts that the ski lift equipment it provided was acceptable because “skiing is a popular sport for people” and that ski items are not specifically prohibited.

In another case, a yacht seen alongside leader Kim Jong Un in 2013 was sourced by the panel of experts to a British manufacturer, Princess Yachts International, which the panel said did not reply to a request for more information.

The panel also said it has opened its first investigation into a case involving North Korean drones after the wreckage of three drones was found in South Korea in late 2013 and 2014. The report says the drones had been used for reconnaissance over South Korean military facilities and that the drones contained components “sourced from at least six foreign countries.”

North Korea protests that the U.N. sanctions are harmful to its citizens, but the report says it has found no incidents where they “directly resulted in shortages of … humanitarian aid.” It does recommend that the sanctions committee propose exemptions for purely food, medical or other humanitarian needs.

Here is more in the Telegraph.

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Loopholes in UN sanctions against North Korea

Tuesday, May 6th, 2014

A new article in 38 North by Hugh Griffiths and Lawrence Dermody.

Here is the introduction:

The latest United Nations report on North Korean sanctions has once again highlighted the role of foreign companies in cases of UN sanctions evasion. TheMarch 2014 report by the independent Panel of Experts assigned to monitor sanctions against the DPRK on behalf of the UN noted the widespread involvement of foreign companies.

A new SIPRI study backs up the UN report and goes further, showing that foreign company involvement in North Korean sanctions violations is not new and is more than just a trend-foreign companies and individuals travelling on foreign passports constitute an overwhelming majority of those identified as involved in the violation of both multilateral and unilateral sanctions dating as far back as 2004.While the majority of companies and individuals identified as involved in sanctions violations are either registered abroad or hold foreign passports, the international community continues to overwhelmingly target companies and individuals registered in North Korea. This targeting takes the form of “designations” by which the United Nations and the European Union together with countries such as Australia, Japan and the US order asset freezes on particular companies, as well as trade bans, and slap travel bans on named individuals traveling on North Korean passports.

These dynamics–identified for the first time in the SIPRI study–may have implications for policy-makers seeking to apply new rounds of sanctions on North Korea in response to any fourth nuclear test.

Most firms designated by the UN and the EU as well as Australia, Japan and the United States are North Korean-registered trading companies while virtually no North Korean transportation companies have been designated. In conREAD MOREtrast to trading companies which have few fixed assets and can easily switch name and other forms of corporate identity, transportation companies that utilize aircraft and ships are easier to monitor and track despite name-changes. Given the key role that transportation plays in the logistics of sanctions evasion, the SIPRI study provides a number of recommendations in support of these and other findings….

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New UN Panel of Experts report on DPRK released

Tuesday, June 25th, 2013

You can downlod all three of their reports here.

Marcus Noland comments here.

Lots more information at the Economic Statistics Page.

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UNSC Resolution 2094: Response to DPRK’s third nuclear test

Thursday, March 7th, 2013

UPDATE 6 (2013-3-11): Here is the DPRK Ministry of Foreign Affairs response to the UNSC Resolution 2094. As you can imagine, they do not approve.

UPDATE 5 (2013-3-8): The full official resolution can be read here.  Here is the DPRK response to 2094. Here is some information on the Chinese response. Here is some more analysis/commentary from Scott Snyder in The Diplomat. Choson Ilbo reports that large North Korean bank accounts exempt from sanctions.

UPDATE 4 (2013-3-7): The resolution has passed 15-0.  Read more at the BBC, Washington Post, New York Times. Marcus Noland commentary here and here. Victor Cha hereNK Leadership Watch has more on the events in Pyongyang

UPDATE 3 (2013-3-7): Once made public, the resolution will be posted here. Steve Herman (via Adam Cathcart) tweeted a link to the draft resolution which has been uploaded to Scribed. It is dated yesterday (2013-3-6).

UPDATE 2 (2012-3-7): Here is a Press Release from the US mission to the UNSC that went out this morning on the new sanctions (Resolution 2094). Thanks to Aidan Foster-Carter.

For reasons of brevity, I have put the entire document into this PDF for download.

UPDATE 1 (2013-3-7): Yonhap offers details on the unpublished sanctions proposal put forth by the US and China:

The three North Korean arms dealers are: Yon Chong-nam, the chief representative for the Korea Mining Developing Trading Corp (KOMID); Ko Chol-chae, the deputy chief representative for the KOMID; and Mun Chong-chol, an official at Tanchon Central Bank, the resolution showed.

KOMID is described by the resolution as North Korea’s “primary arms dealer and main exporter of goods and equipment related to ballistic missiles and conventional weapons,” while the North Korean bank is the “main DPRK (North Korea) financial entity for sales of conventional arms, ballistic missiles, and goods related to the assembly and manufacturing of such weapons.”

The two North Korean entities are the Second Academy of Natural Sciences, which is responsible for research and development of the North’s advanced weapons systems, including “missiles and probably nuclear weapons,” and the Korea Complex Equipment Import Corp. linked to the North’s “military-related sales,” according to the draft.

The Security Council is set to vote on the draft resolution on Thursday in New York.

The new sanctions will also focus on the DPRKs shipping, air, and “financial” industries:

The Security Council “decides that all states shall inspect all cargo within or transiting through their territory that has originated in the DPRK, or that is destined for the DPRK,” the draft said.

It also “calls upon states to deny permission to any aircraft to take off from, land in or overfly their territory, if they have information that provides reasonable grounds to believe that the aircraft contains items” banned by previous U.N. resolutions, the document said.

It also makes it difficult for North Korea to move in and out “bulk cash,” in an effort to squeeze the North Korean elite’s access to hard currency.

The Security Council also calls on all states to “exercise enhanced vigilance over DPRK diplomatic personnel so as to prevent such individuals from contributing to the DPRK’s nuclear or ballistic missile programs,” it said.

The U.N.’s powerful body “expresses its determination to take further significant measures in the event of a further DPRK launch or nuclear test,” the draft warned.

The DPRK’s Uranium enrichment program also gets a mention:

Apparently mindful of the North’s uranium concerns, the draft resolution includes Pyongyang’s uranium enrichment program for the first time, condemning “all the DPRK’s ongoing nuclear activities, including its “uranium enrichment.”

The North claims its uranium enrichment program is for peaceful energy development, but outside experts believe that it would give the country a new source of fission material to make atomic bombs, in addition to its widely known plutonium-based nuclear weapons program.

The DPRK, has of course, issued a response

In response to the proposed U.N. sanctions and ongoing Seoul-Washington joint military drills, the North’s military threatened to scrap the Korean War cease-fire.

Kim Yong-chol, a hard-line North Korean general suspected of involvement in a series of provocations against the South, read the statement on state TV, saying the North “will completely declare invalid” the Armistice Agreement that ended the 1950-53 Korean War.

The North also said it will cut off a military phone line at the truce village of Panmunjom.

South Korea’s military responded to the North’s bellicose threats with a verbal salvo, warning it would strike back at the North and destroy its “command leadership,” if provoked by Pyongyang.

ORIGINAL POST (2013-3-5): According to the New York Times:

The United Nations Security Council moved closer on Tuesday to expanding sanctions on North Korea for its nuclear and ballistic missile activities. The United States and China introduced a resolution that would target North Korean bankers and overseas cash couriers, tighten inspections of suspect ship and air cargo, and subject the country’s diplomats to invasive scrutiny and increased risk of expulsion.

Passage of the measure, drafted in response to the third North Korean underground nuclear test three weeks ago, seemed all but assured, in part because China — North Korea’s major benefactor — participated in drafting the language. It would be the fourth Security Council sanctions resolution on North Korea, which has defied the previous measures with increasing belligerence. A vote was expected on Thursday.

Infuriated, North Korea vowed to scrap the 1953 armistice that halted the Korean War and threatened to attack the United States with what the North Korean government news agency called an arsenal of diverse “lighter and smaller nukes.”

American officials played down the North Korean warning, which echoed bombastic admonitions that have become part of the standard fare from the North. Still, the threat of a North Korean nuclear attack seemed all the more provocative, coming two days after North Korea conveyed a message of friendship to a visiting American group that included Dennis Rodman, the former basketball star.

Susan E. Rice, the United States ambassador to the United Nations, who introduced the resolution in a closed session of the 15-member Security Council, told reporters afterward that it “builds upon, strengthens and significantly expands the scope of the strong U.N. sanctions already in place.”

For the first time, she said, the resolution would target “the illicit activities of North Korean diplomatic personnel, North Korean banking relationships, illicit transfers of bulk cash and new travel restrictions.” In the past, North Korea has been accused of running extensive counterfeiting and illegal drug enterprises, to raise much-needed hard currency.

Ms. Rice declined to predict whether the North would respond with another nuclear test or other retaliation. “All I can tell you is that the international community is united and very firm in its opposition to North Korea’s illicit nuclear and missile programs,” she said. “And the more provocations that occur, the more isolated and impoverished, sadly, North Korea will become.”

The Americans did not publicly release the resolution text. But a Security Council diplomat familiar with the measure, who spoke on the condition of anonymity because the language may still be subject to revision, said it broke new ground with restrictions and prohibitions on North Korean banking transactions, new travel restrictions and increased monitoring of North Korean ship and air cargo.

The diplomat also said that the resolution added a special lubricant and valve, needed for uranium enrichment, to items that North Korea cannot import.

The resolution would also place greater scrutiny on North Korean diplomatic personnel who are suspected of carrying proscribed goods and cash under the guise of official business, exposing them to possible deportation. “We know there are diplomats out there cooking up deals and moving funds around,” the Security Council diplomat said.

Among the other provisions, the diplomat said the resolution also included new language aimed at enforcement that had been absent from the earlier resolutions. It requires, for example, that if a North Korean cargo vessel crew refuses a host country’s request for inspection, the host is under a legal obligation to deny the vessel port access.

If a cargo plane is suspected of carrying prohibited goods to or from North Korea, the resolution would urge, but not require, that it be denied permission to fly over any other country — a new provision that could affect China, which routinely permits North Korean flights over its territory.

Previous rounds of sanctions have blacklisted trading and financial firms believed to be directly involved with nuclear and missile work. The sanctions have also restricted the importation of luxury goods, an effort directed at the country’s ruling elite.

American officials said privately that the latest resolution did not go as far as they would have liked, reflecting China’s insistence that the punitive measures remain focused on discouraging North Korea’s nuclear and missile behavior and avoid actions that could destabilize the country and lead to an economic collapse.

But the text was stronger than what some North Korean experts had anticipated, particularly the measures that could slow or frustrate the country’s banking activities and extensive dependence on cash payments in its trade with other countries.

“Going after the banking system in a broad brush way is arguably the strongest thing on this list,” said Evans J. R. Revere, a former State Department specialist in East Asian and Pacific affairs, and now senior director at the Albright Stonebridge Group, a Washington-based consulting company. “It does begin to eat into the ability of North Korea to finance many things.”

Mr. Revere attributed North Korea’s reaction on Tuesday to an accumulation of perceived affronts: China’s cooperation in drafting the sanctions, the annual military exercises under way between the United States and South Korea, and a hardened attitude by the South’s newly elected president, Park Geun-hye.

“This is North Korea’s way of saying, ‘We know you guys are doing several things, and here is our response,’ ” Mr. Revere said.

Here is coverage in The Guardian.

Here is coverage in the Washington Post.

Here is coverage of the DPRK’s response in CNN.

Here is my archive post on the DPRK’s third nuclear test.

Here is a statement (in Korean) by the North Korean military.

Read the full story here:
U.N. Resolution to Aim at North Korean Banks and Diplomats
New York Times
Rick Gladstone
2013-3-5

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UNSC sanctions on the DPRK

Tuesday, January 22nd, 2013

On January 22, 2013, the UN Security Council adopted Resolution 2087–new sanctions on the DPRK. Here is the press release:

The Security Council, condemning the launch by the Democratic People’s Republic of Korea on 12 December 2012, which used ballistic missile technology in violation of the sanctions imposed on it, today demanded that the country not proceed with any further such activities and expressed its “determination to take significant action” in the event it did so.

In that connection, the Council demanded, through the unanimous adoption of resolution 2087 (2013), immediate compliance by the Democratic People’s Republic of Korea with its obligations under resolutions 1718 (2006) and 1874 (2009), including that it abandon all nuclear weapons and nuclear programmes completely, verifiably and irreversibly.

It deplored the country’s violations of the measures imposed on it in 2006, and strengthened in 2009, including the use of bulk cash to evade sanctions, and underscored its concern over the supply, sale or transfer to or from that country or through States’ territories of any item that could contribute to the activities banned by those resolutions.

The Council recalled that States may seize and dispose of items consistent with its previous resolutions, and clarified that the methods for disposal included, but were not limited to, destruction, rendering inoperable, storage or transferring to another States other than the originating or destination States for disposal.

It further clarified that the sanctions banned the transfer of any items if a State involved in the transaction has reasonable grounds to believe that a designated individual or entity, under the previous resolutions, is the originator, intended recipient or facilitator of the item’s transfer.

In a related provision, the Council called for enhanced vigilance by Member States and directed the relevant sanctions Committee to issue an Implementation Assistance Notice in the event a vessel refused to allow an inspection authorized by its Flag State or if any vessel flagged by the Democratic People’s Republic of Korea refused to be inspected, in line with its obligations.

Reaffirming its support for the six-party talks, the Council called for their resumption and urged all participants to intensify efforts to fully and expeditiously implement the 19 September 2005 Joint Statement issued by China.

The meeting was called to order at 3:08 p.m. and adjourned at 3:10 p.m.

You can see the full resolution here (PDF).

Here is the response from the US State Department:

Designation Of DPRK Entities Pursuant To Executive Order 13382 In Response To UN Security Council Resolution 2087

Media Note
Office of the Spokesperson
Washington, DC
January 24, 2013

The United States welcomes the UN Security Council’s unanimous adoption on January 22 of UN Security Council resolution (UNSCR) 2087, condemning North Korea’s launch of December 12, 2012, which used ballistic missile technology in violation of UN Security Council resolutions 1718 and 1874. Once again, the international community has sent a clear, united signal that North Korean provocations that undermine international security and the global nonproliferation regime, like the December 2012 launch, will not be tolerated.

To implement our obligations pursuant to UNSCR 2087 and to impede the DPRK’s illicit WMD and ballistic missile programs, the Departments of State and the Treasury on January 24, 2013, designated several entities and individuals directly tied to North Korea’s proliferation activities. The Department of State designated one entity and two individuals pursuant to Executive Order 13382, which targets proliferators of weapons of mass destruction (WMD) and their supporters. These include the Korean Committee for Space Technology (KCST), KCST senior official Paek Chang-Ho, and General Manager of the Sohae Satellite Launching Station Chang Myong-Chin.

Information on the Department of the Treasury’s concurrent actions may be viewed at:

http://www.treasury.gov/press-center/press-releases/Pages/default.aspx

The Korean Committee for Space Technology orchestrated the launches of the Taepo-Dong 2 via the satellite control center and Sohae launch area. The technology used to launch a satellite is virtually identical to and interchangeable with that used in an intercontinental ballistic missile. KCST has contributed directly to the DPRK’s long-range ballistic missile development efforts.

Paek Chang-Ho is a senior official and head of the satellite control center of KCST.

Chang Myong-Chin is the head of the launch center at which the launches took place.

These actions aim to disrupt North Korea’s continued WMD proliferation and procurement efforts that are in flagrant violation of UN Security Council resolutions. North Korea will continue to face isolation if it refuses to take concrete steps to address the concerns of the international community over its nuclear and missile programs.

More: Marcus Noland’s comments hereSlate.

UPDATE (2013-1-28): According to Yonhap, the DPRK regime is using the sanctions to unite public opinion behind leadership:

North Korea is using U.N. sanctions to unify public opinion behind the leadership and strengthen allegiance to the state, observers said Monday.

Observers in Seoul said Pyongyang places the utmost importance on the solidarity of the people whether it is in the pursuit of its “songun” or military-first politics or to build up the economy. They said recent media reports of foreign threats and the need to defend the sovereignty and dignity of the country is a move in this direction.
Incumbent leader Kim Jong-un has emphasized the importance of economic growth, while his late father placed greater emphasis on the military. North Korea’s current leader took power after the sudden death of Kim Jong-in in late 2011.

“The sudden flood of articles and stories highlighting external threats can be construed as a sign that Pyongyang wants to prop up Kim Jong-un’s weak public support base as well as the overall leadership,” a North Korean watcher said.

Others said that a spike in media reports calling on the people to defend North Korea’s independence may be a tell-tale sign that Kim Jong-un’s hold on power may not be strong as some predicted.

Reflecting these views, media outlets such as the Rodong Sinmun, an organ of the ruling Workers’ Party of Korea, Radio Pyongyang and Korean Central News Agency (KCNA), all claimed that the people are reacting strongly to calls by the powerful National Defense Commission last Thursday. The commission said future nuclear and rocket tests will have the United States in mind.

Rodong Sinmun said in an article in its Monday edition that the U.N. sanctions have fueled the firm conviction and will of the armed forces and the general public to defend the country.

The newspaper said that the all-out confrontation that can occur is a holy nationalist war.

Similar views were expressed by Radio Pyongyang on Sunday, which pointed out that the only way to deal with the United States and other outside hostile forces is to follow the military first policy.

KCNA said Saturday that foreign forces have hindered efforts to divert more attention to economic development and warned that as long as adversaries try to weaken the country, Pyongyang has no choice but to focus on the military.

The media reports come as the North’s foreign ministry, the defense commission and the Committee for the Peaceful Reunification of the Fatherland all issued statements last week denouncing the U.N. sanctions and emphasizing the country’s resolve to build up its capability to defend itself.

Meanwhile, South Korean officials have warned the North not to detonate another nuclear device. If they do detonate a nuclear device, it will be difficult to engage in inter-Korean dialogue and economic exchange, they said.

Seoul military and diplomatic sources have speculated that the communist country can conduct a nuclear test if the leadership gives its approval. Pyongyang detonated two nuclear devices in 2006 and 2009, in the face of international condemnation.

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