20.03.2017 Author: Konstantin Asmolov

To Continued Sanctions Pressure on the DPRK

562343242343Against the backdrop of the scandal surrounding the murder of Kim Jong-nam, the author notices two tendencies. From one side, the excitement leads to the introduction of additional sanctions measures, from the other side, it becomes all the more clear that sanctions pressure on the DPRK does not work.

Let’s consider the first one. Although the media of the Republic of Korea often mixes up additional unilateral sanctions and those measures, which every member of the UN must accept as part of the framework of the implementation of UN Security Council Resolution 2321, it is believed that the murder of Kim Jong-nam had a definitive influence on the tightening of pressure.

Switzerland was the first to implement sanctions: cooperation with Pyongyang was terminated in all directions, except in the sphere of medicine. Training programs for North Korean students in the field of technology have collapsed and a significant portion of bank accounts connected to the DRRK were closed. The Australian Government announced plans to limit personnel exchange and trade with North Korea in the near future. The North Korean airline company Air Koryo will be deprived of the opportunity to use the services of local airports.

On February 27, within the framework of the restrictive measures stipulated by UN Security Council Resolution 2321 of November 30, 2016, additional sanctions against the North were approved by the EU Council. The sanctions impose restrictions on transactions involving coal, iron and iron ore and prohibit the import of copper, nickel, silver and zinc. A ban was introduced on the sale of new ships and helicopters. North Korean diplomatic missions in Europe are prohibited from having more than one account in European banks and restrictions on the use of real estate were introduced due to the fact that a number of North Korean diplomatic missions in Europe manage hotels and casinos. A ban on the study of disciplines that can contribute to the development of North Korea’s nuclear and missile programs was also imposed. Scientific and technological cooperation has been suspended with the exception of medical projects. Herein it is stressed that the application of sanctions must not have any negative humanitarian consequences for the civilian population.

The volume of trade between the European Union and the DPRK has also been in decline over the last three years. This was reported by Voice of America Radio on February 28, citing the data of the European Commission: in 2016, it amounted to $29 million, 6.6% less as compared to the previous year and only 10% of the maximum figure of 2006. Chemical products occupied the first place in terms of volume of purchases by North Korea from the EU; they amounted to the total of $8.4 million – 24% more than the previous year. Engineering products took the second place ($4.2 million).

On March 2, 2017, the Malaysian Government announced that its visa-free regime with the DPRK would be cancelled beginning on March 6. It is expected that the cancellation of the visa-free regime will impact Pyongyang’s foreign currency inflows given the fact that about a thousand North Korean citizens are currently working in Malaysian mining fields.

Attempts to establish a dialogue between North Korea and the United States are interrupted. On February 25, 2017, Free Asia Radio reported on the probability of a meeting between former US officials and North Korean diplomats, which was supposed to take place in New York on March 1-2. The discussions were to become the first of such consultations on US territory for almost the last six years. It was assumed that the North Korean delegation would include the Director of the North American Department of the Ministry of Foreign Affairs of North Korea, Choi Seung-hee, and the US delegation would include Deputy Chairman of the National Committee for Foreign Policy Donald Zagoria, former US ambassador in the DPRK Winston Lord, former Assistant Secretary of State for East Asian, and Pacific Affairs Evans Revere, known, by the way, for his rather tough stance on the nuclear issue of the Korean peninsula. However, on the same day, the State Department almost immediately refused to provide Choi Seung-hee with an entry visa.

On this occasion, the US State Department reported that US authorities had no relation to such “second track” contacts, which can take place anywhere and on a variety of issues and is in fact a common practice of “expert diplomacy”; non-governmental mediation in resolving various kinds of inter-state issues, which due to their nature are extremely difficult to resolve at the official level.

Parallel to this, some US representatives including the Secretary of State Mr. Tillerson, have been winding the topic of the so-called “secondary boycott”, which provides for sanctions against enterprises and organizations of third countries working with Pyongyang. Such a boycott would affect, first and foremost, Chinese enterprises, since (according to the US) China continues to provide Pyongyang with economic support despite international sanctions against North Korea. As a result, during a closed meeting on February 27, 2017, the UN Security Council unanimously adopted a statement condemning the “irresponsible and provocative” attempts of Pyongyang to evade sanctions.

The details of how this is happening are well illustrated in the report of UN Security Council Committee experts on sanctions and the report-based article in Foreign Policy Journal of February 28, 2017. It is noted that the evasion from sanctions is mediated by China. North Korean banks, which include Taedong, Thedonsin and Taeong Ynheng, operate in the Chinese cities of Dalian, Dandong and Shenyang, and have access to the world financial system.

Also, with China’s support, the DPRK created a trading network, to which Angola, Malaysia and Caribbean countries are affiliated. The DPRK trades in gold, mineral resources, missile components and high-tech devices with the participation of diplomats, entrepreneurs and smugglers from these countries. The General Intelligence Bureau of the DPRK used shell companies for the sale of military communications to Eritrea. Weapons from the DPRK were also found in Angola and Uganda, and around 30 thousand grenade launchers with North Korean markings were allegedly found in Egypt, which were smuggled in along with iron ore.

The North often acquires embargoed goods through third countries or shell companies. Here is a good example: at the first air show in North Korea held on September 24-26, 2016 in the city of Wonsan, a light ten-seat turboprop aircraft R-750 was introduced, which was manufactured by the New Zealand Company Pacific Aerospace. The import of such aircrafts to the North is a violation of UN sanctions, and on October 4, Free Asia Radio reported that in December 2015, Pacific Aerospace sold R-750 to the Chinese state corporation of Shiyan City, which, nevertheless, realizes various tourist projects in the DPRK. American-produced MD-500 helicopters were also presented at the airshow.

The report provides information about two DPRK trading companies associated with agencies under sanctions, including with the Intelligence Directorate of the General Staff of the North Korean Army. It also states that the DPRK is using the financial system to pay for sanctions operations.

The report concludes: North Korea “bypasses sanctions through trade of prohibited goods using evasion techniques, which are enhanced in scale, scope and complexity”, and “despite the increase of financial sanctions in 2016, the networks of the country are adapting, using great ingenuity in access to official banking channels”. Therefore, UN member countries must “exercise increased vigilance” regarding North Korean diplomats engaged in commercial activities and must be prepared to introduce additional restrictive measures.

What exactly is to be expected further? As stated by the US Ambassador to the UN Nikki Haley, summing up the closed meeting of the Security Council on March 8, “in response to the nuclear and missile threat from the side of Pyongyang, Washington is considering all options for action”. It is believed that the return of the North to the list of countries supporting terrorism is very likely as well as the introduction of “second boycott” measures as part of economic pressure on China, which depends on the success of anti-North Korean sanctions. The question of placing THAAD Antimissile Defense Systems in Japan is being discussed, as well as tactical nuclear weapons in South Korea. The South Korean media openly state that “it is also possible to use concealed measures to weaken the North Korean leadership, including cyberattacks”. This means it is unlikely that the tensions will be mitigated. On the contrary, the strengthening of sanctions will lead to a new spiral of instability.

Konstantin Asmolov, PhD in History, Leading Research Fellow at the Center for Korean Studies of the Institute of Far Eastern Studies of the Russian Academy of Sciences, exclusively for the online magazine “New Eastern Outlook.