Archive for November, 2017

US asks China to cease all oil shipments to North Korea

Wednesday, November 29th, 2017

By Benjamin Katzeff Silberstein

In response to yesterday’s missile test, Trump has asked Xi Jinping to cease all oil shipments to North Korea from China. “All” presumably includes the crude oil that China ships, in unknown but presumably large amounts, via the pipeline that runs from Northeast China through Dandong and to the Ponghwa refinery in Sinuiju in North Korea’s northeast.

It seems unlikely that China would fully cease shipments of oil to North Korea, especially over a longer term period. Should oil shortages get serious to the degree that vital industries, agriculture and other sectors cannot function properly, China would eventually grow concerned over social instability in North Korea that would risk spilling over its own borders.

Should China cut off crude oil shipments, it would mean that North Korea’s ability to acquire oil and fuel products is severely limited. Sanctions cap the amount that UN member states can ship to the country, and gasoline prices have risen to very high levels during the year. Oil imports through channels that go unnoticed in international trade records are probably much bigger than often estimated. Recall Ri Jong-ho’s famed estimate that North Korea purchases 300,000 tons of oil products each year from Russia. Overall, it is not entirely unfeasible that Russia could grow as a source of North Korean oil imports in the future. North Korea also has some capacity to transform domestically sourced coal products into synthetic liquid fuel.

The drastically increased fuel prices in North Korea during the year also suggest that the state may have been grabbing much of what fuel has been available for its own needs, likely to store for military and other uses, suggesting that North Korean strategists have long seen an oil embargo on the horizon. After all, the markets only exist at the mercy of the state, and will always come secondary. Therefore, we don’t know whether military and state storage might currently be larger than estimated in normal times.

At the end of the day, however, should crude oil flows from China be cut off entirely, there’s no denying it would be problematic for North Korea. Though China is unlikely to entirely cut off all crude oil shipments for a prolonged, long-term period, much pain can be caused in the meantime.

For more on this, I wrote about North Korea’s connections to, and reliance on, China in matters such as infrastructure, energy, and telecommunications earlier this year in IHS Jane’s Intelligence Review.

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On the December Dandong-Sinuiju bridge closing

Friday, November 24th, 2017

By Benjamin Katzeff Silberstein

Yesterday, Japan’s Yomiuri Shimbun reported that the Dandong-Sinuiju bridge will be closed during the coming weeks. The bridge is to be closed for ten days. Ostensibly for repairs, they said China was also closing the bridge for political reasons.

Should the bridge be closed for any longer period of time, that would be very problematic for North Korea (and for traders on the Chinese side, too). Around 70 percent of trade between the two countries is estimated to go through this connection point. Given North Korea’s poor infrastructure, re-routing goods transports through other parts of the country would likely be difficult.

But the closing most likely is not a measure taken to punish North Korea or the like, despite the current context. First, as many travellers going across the bridge attest to, repairs are in dire need. Second, the end of the year typically sees a lull in goods flows across the border anyway. Transport volumes are cyclical and no one point in the year is fully representative for the rest. Third, simply closing up the bridge would seem like an odd blanket-type measure, and should China want to punish North Korea, there are certainly much more efficient ways of doing so.

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On the Nov 21st US Treasury Sanctions against North Korea

Tuesday, November 21st, 2017

By: Benjamin Katzeff Silberstein

Today, the Treasury Department’s Office of Foreign Asset Control (OFAC) announced new sanctions against a number of Chinese and North Korean entities. The sanctions “target third-country persons with long-standing commercial ties to North Korea, as well as the transportation networks that facilitate North Korea’s revenue generation and operations,” said a press statement.

Overall, these additional measures seem designed to clamp down on avenues for North Korea to circumvent current UN sanctions. Among those sanctioned are three Chinese companies that have traded with North Korea in goods that are covered by UN sanctions from this and last year:

OFAC designated Dandong Kehua Economy & Trade Co., Ltd., Dandong Xianghe Trading Co., Ltd., and Dandong Hongda Trade Co. Ltd. pursuant to E.O. 13810.  Between January 1, 2013 and August 31, 2017, these three companies cumulatively exported approximately $650 million worth of goods to North Korea and cumulatively imported more than $100 million worth of goods from North Korea.  These goods have included notebook computers, anthracite coal, iron, iron ore, lead ore, zinc ore, silver ore, lead, and ferrous products.

Also targeted are companies that have traded in goods that are either covered by sanctions, or (it seems) fall under the dual-use category of goods that can be used in nuclear weapons/missile development:

OFAC designated Sun Sidong and his company, Dandong Dongyuan Industrial Co., Ltd. (Dongyuan), pursuant to E.O. 13810.  Sun and Dongyuan were responsible for exporting over $28 million worth of goods to North Korea over several years, including motor vehicles, electrical machinery, radio navigational items, aluminum, iron, pipes, and items associated with nuclear reactors.  Dongyuan has also been associated with front companies for weapons of mass destruction-related North Korean organizations.

The sanctions also target vessels that are suspected of having transferred oil to North Korea via other ships (ship-to-ship transfer) in violation of sanctions (this part contains some pretty impressive pictures):

All in all, these new sanctions appear to try to fill the gaps left by current sanctions. Surely, they will cause added trouble for North Korea. But the problem, to begin with, is that North Korea has historically been good at adapting to new sanction’s frameworks and finding new methods to circumvent them. Only time will tell whether these skills of North Korea still hold up in the current sanctions environment.

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Singapore cuts trade ties with North Korea

Thursday, November 16th, 2017

Benjamin Katzeff Silberstein

Reports Reuters (here in Asahi Shimbun):

Singapore has suspended trade relations with North Korea, the latest of Pyongyang’s major trade partners to cut commercial ties under toughening U.N. sanctions over its weapons program, a customs notice obtained on Thursday showed.

The move comes about two months after the United States imposed North Korea-related sanctions on a number of firms and individuals, including two entities based in Singapore.

“Singapore will prohibit all commercially traded goods from, or to, the Democratic People’s Republic of Korea (DPRK),” the city-state’s customs said in the notice sent to traders and declaring agents last Tuesday, referring to the country by its official name.

The suspension would take effect from Nov. 8, Fauziah A. Sani, head of trade strategy and security for the director-general of customs, said in the notice.

Repeated breach of the new prohibitions is punishable by a fine of up to S$200,000 ($147,341 or 16 million yen) or four times the value of the goods traded, imprisonment of up to three years, or both, it added.

Singapore is North Korea’s seventh largest trading partner. The Philippines, Pyongyang’s fifth biggest trading partner, suspended trade with North Korea in September to comply with a U.N. resolution.

Tension on the Korean Peninsula has escalated as North Korea’s young leader, Kim Jong Un, has stepped up the development of weapons in defiance of U.N. sanctions.

North Korea has tested a series of missiles this year, including one that flew over Japan, and conducted its sixth and biggest nuclear test in September.

Pyongyang maintains a diplomatic presence in Singapore, with an embassy in its financial district.

In September, Singapore issued a travel advisory urging citizens to avoid all non-essential travel to North Korea, where it does not have diplomatic representation.

In an interview with National Public Radio in May, Singapore’s minister of foreign affairs, Vivian Balakrishnan, had said the country was not ready to cut all diplomatic ties with North Korea.

In January last year, Singapore-based Chinpo Shipping Company (Private) Ltd. was fined S$180,000 for facilitating a shipment of arms to North Korea in violation of U.N. sanctions.

Article source:
Singapore suspends trade relations with North Korea
Reuters
2017-11-16

Say what you will about the Trump administration’s foreign policy, but they have scored some non-negligible victories lately in isolating North Korea.

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Latest in North Korea Tourism: Pyongyang Central Court

Thursday, November 2nd, 2017

By: Benjamin Katzeff Silberstein

Have you ever wondered what it’s really like to sentenced to years and years of hard labor for actions that wouldn’t be called “crimes” in most of the world? Ever wanted to visit a site where show trials have taken place, where defendants were later sentenced to death for trumped-up charges of spying for the American imperialists? Now’s your chance, with Swedish North Korea tour operator Korea Konsult. From their October newsletter:

You wish is our command! Visit the central court of Pyongyang and meet Korean judges to receive a legal consultation or ask questions about the legal system.  What are you waiting for? Start here. Book today

Presumably this is an offer and not a threat…

One may wonder how these legal consultations go down. “What is my best course of action if I have taken part in an anti-state demonstration, violating article 59, chapter 3, of North Korea’s criminal law?”.

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