North Korea Rails Against New Sanctions. Whether They Will Work Is Unclear.

August 8, 2017

By JANE PERLEZ and RICK GLADSTONE

https://www.nytimes.com/2017/08/07/world/asia/north-korea-responds-sanctions-united-states.html

 

The Trump administration has hailed the latest United Nations sanctions against nuclear-armed North Korea as the most severe yet, and the North’s fury over the penalties suggested they carried some sting.

In a staccato of outraged reactions on Monday to the sanctions imposed over the weekend, North Korea threatened retaliation against the United States “thousands of times” over, vowed to never give up its nuclear arsenal and called the penalties a panicky response by an American bully.

But it is unclear at best, experts on sanctions say, whether the measures will hinder North Korea’s nuclear militarization or even crimp its economy.

The sanctions are aimed at pressuring North Korea into negotiating, with the goal of renouncing its nuclear weapons. But Kim Jong-un, the North’s leader, has repeatedly said that the country’s nuclear capabilities are crucial to its self-defense.

North Korea’s foreign minister, Ri Yong-ho, reinforced that point, denouncing the new sanctions on Monday in Manila at a regional ministerial meeting that was also attended by Secretary of State Rex W. Tillerson.

“We will, under no circumstances, put the nukes and ballistic rockets on the negotiating table,” Mr. Ri said in a statement.

“Neither shall we flinch even an inch from the road to bolstering up the nuclear forces chosen by ourselves unless the hostile policy and nuclear threat of the U.S. against the D.P.R.K. are fundamentally eliminated,” Mr. Ri said, using the initials for the Democratic People’s Republic of Korea, North Korea’s official name.

In a more ominous response, North Korea’s official news agency said, “There is no bigger mistake than the United States believing that its land is safe across the ocean.”

Like all United Nations sanctions imposed on North Korea for more than a decade, the effectiveness of the new round, which American officials say could cost North Korea’s government about $1 billion annually, depends on faithful enforcement by China and to a lesser extent Russia.

Both countries joined in the Security Council’s unanimous vote on Saturday to penalize North Korea. But neither China nor Russia has a strong record of policing sanctions against the North. China, the North’s major benefactor by far, is reluctant to squeeze its economy for fear of causing instability on its borders.

The sanctions adopted by the 15-member Council left important elements of the North Korean economy untouched. For example, the resolution did not sanction oil imports, which are critical to the functioning of the North Korean state.

Further, North Korean laborers who work overseas and send remittances home — money that the United Nations says is used in the weapons program — will be allowed to stay abroad. The new sanctions cap the current number of workers overseas, but stop short of calling for those who already work abroad to return to North Korea.

“The number cited by the Trump administration assumes China and Russia will implement the resolution,” said Anthony Ruggiero, a senior fellow at the Foundation for Defense of Democracies, a Washington-based research group, referring to the $1 billion that the sanctions could slash from North Korea’s export revenue. “Eleven years of United Nations sanctions resolutions prove they will not.”

The new sanctions were a direct reaction to two North Korean tests last month of intercontinental ballistic missiles that appeared capable of reaching the continental United States.

After passage of the resolution, President Trump tweeted: “China and Russia voted with us. Very big financial impact.” The American ambassador to the United Nations, Nikki R. Haley, said the measures showed “we’re not playing anymore” with North Korea.

The new measures prohibit all exports of North Korean coal, iron, iron ore, lead ore and seafood. They put new restrictions on North Korea’s Foreign Trade Bank, forbid the country to increase the number of workers sent abroad and strengthen oversight of North Korean shipping.

The measures also place a cap on new investment and new joint ventures in North Korea.

China had already agreed this year to stop importing North Korean coal, and despite scattered reports of smuggling of coal shipments, that prohibition appears to have held, Chinese and Western experts say.

The North’s iron ore exports, which also go mainly to China, have dwindled in the past several years, they say. North Korean seafood — crab, lobster, shrimp and other shellfish — is sold to wholesalers in China, where it ends up at large buffet displays in major hotels.

The seafood hauls from North Korean boats, whose crews are mostly army personnel, have increased over the last few years, but the revenue to the state from seafood is not as high as from the metals trade, economists say.

China officially welcomed the new sanctions. The Foreign Ministry in Beijing said they were necessary, and, at the United Nations, the Chinese ambassador, Liu Jieyi, urged North Korea to “cease taking actions that might further escalate tensions.”

In supporting the United Nations measures, and winning good will from the Trump administration by doing so, China appears to have delayed an unpalatable set of sanctions that Washington was getting ready to impose on China itself.

The Treasury Department has been working on a series of so-called secondary sanctions against Chinese banks and corporations that do business with North Korea and help facilitate its access to foreign exchange.

But the administration will want to give China a chance to enforce the new United Nations sanctions, and will be hesitant to alienate Beijing by immediately imposing sanctions on Chinese organizations, said Bonnie S. Glaser, senior adviser for Asia at the Center for Strategic and International Studies.

Even though China has long considered North Korea a close ally, though a wayward and often irritating one, it could stomach United Nations sanctions against the North, she said. But Beijing vehemently opposed sanctions by Washington against Chinese institutions, particularly banks, that help the North, she said.

“Agreeing to tightening U.N. sanctions was a price that Beijing was willing to pay to avoid being hit with U.S. secondary sanctions on Chinese banks,” she said.

Another consideration for the administration: Mr. Trump’s daughter Ivanka Trump and her husband, Jared Kushner, are scheduled to visit China next month. The Chinese foreign minister, Wang Yi, said this weekend that China was preparing to welcome Mr. Trump before the end of the year. It was unlikely that Washington would want to sour relations before the visits by imposing the secondary sanctions.

This means the Chinese companies that give the North access to American dollars and other currencies would be essentially free to continue their business unabated, Mr. Ruggiero said.

“The U.S. will give China and Russia time to implement the resolution while Chinese companies, individuals and banks facilitate Pyongyang’s sanctions evasion,” he said.

Chinese banks and enterprises are critical to North Korea’s access to foreign exchange, Mr. Ruggiero said. Since 2009, North Korea has used Chinese entities to process at least $2.2 billion in transactions through the United States financial system, Mr. Ruggiero said in congressional testimony last month.

By allowing North Korea to continue sending workers abroad, the Security Council missed an easy target for crimping revenue, said Joseph DeThomas, a former State Department official who specialized in sanctions against Iran and North Korea.

“By just capping labor, you leave the field open to easy evasion by having additional workers work off the books,” Mr. DeThomas said.

Sixty thousand to 80,000 North Korean workers are employed overseas, many in heavy construction jobs in appalling conditions, according to human rights groups.

The United Nations “just locked in North Korea receiving at least $500 million a year for the practice” of sending laborers abroad, Mr. Ruggiero said.

During a low point in relations between China and North Korea this year, the Global Times, a state-run newspaper that sometimes reflects Beijing’s views, suggested that China might be willing to reduce the amount of oil it sends to North Korea. Without Chinese crude oil, North Korea’s economy would be imperiled.

The United Nations sanctions did not touch oil imports, which appeared to be a step too far for China, Mr. Ruggiero said.

Mr. DeThomas offered a mixed view of the latest sanctions.

“I am not saying it was not a good thing to do,” he said. “I am saying it is probably too little, too late. Other cards will have to be played by China, the U.S. and South Korea if something very damaging, bloody and politically catastrophic is to be avoided.”

Gardiner Harris contributed reporting.

 

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