North Korea: New Watered-Down Sanctions Leave Lifelines in Place

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Just over a week after North Korea's test of a nuclear device, the United States has secured a fresh set of UN sanctions against the country. The speed with which the United Nations Security Council adopted these measures is unprecedented — sanctions on North Korea ordinarily take weeks of back and forth with China, North Korea's main defender, as well as consultations with Russia. US Ambassador to the United Nations Nikki Haley even thanked China, in particular, Chinese President Xi Jinping. The new UN sanctions will bite deeper into the North Korean economy than those past, but fall short of the sweeping measures included in a version leaked Sept. 7.

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That draft included a full ban on a range of oil products sold to North Korea, a freeze on the assets and travel of top North Korean leaders — including Kim Jong Un — as well blacklisting military-controlled airline Air Koryo. These broad measures — particularly the oil embargo — were unpalatable for both China and Russia, neither of which wants to see North Korea collapse. Negotiations toward the end of the week led to a second draft of the resolution, circulated Sept. 10.

The sanctions as adopted will cap refined petroleum shipments into North Korea at 2 million barrels per year (compared with 2.19 million in 2016) and crude oil to current levels (estimated at 10,000 barrels per day). They will also fully ban condensates and natural gas liquids. The biggest blow to the North Korean economy, however, is a ban on the purchase of the country's textile exports. In 2016, textiles accounted for around $752 million of North Korean exports, out of an estimated total of $3 billion. Aug. 5 UN measures following intercontinental ballistic missile tests went after coal, which accounts for about a third of North Korea's total exports.

The new sanctions are evidently a compromise solution, though, because Russia and China are keen to leave North Korean lifelines in place. A full oil embargo wasn't enacted, although initially proposed. Sanctions also did not blacklist Kim himself or North Korea's singular airline. And, unlike the earlier draft, the current resolution leaves in place an exception allowing Russia to transship coal through the North Korean port of Rajin via rail. The new resolution also fails to include hoped-for sweeping allowances when it comes to forceful inspections of North Korean vessels. Instead, countries must have permission from the state that flagged the vessel and can only inspect it on reasonable grounds. The measures also omitted a full ban on foreign labor. Rather, countries employing foreign workers would need to seek approval by a UN Security Council committee, with an exception given for existing contracts. North Korea's 50,000-100,000 overseas workers earn $1.2 billion to $2.3 billion each year, primarily in foreign currency that can be used to make overseas purchases. 

The text of the resolution includes calls for further work to reduce tensions with the goal of a settlement and peaceful denuclearization of the Korean Peninsula — language that is in line with Chinese and Russian statements. The North Korean Foreign Ministry warned that the United States would pay a price if the sanctions passed, and another test in the coming days would be characteristic of Pyongyang. These measures will do little to actually prevent North Korea from pursuing its nuclear deterrent — the country has numerous ways of sustaining itself amid economic hardship, as it proved during a massive famine that ran from 1994-1998. These new sanctions will be just as difficult to enforce as those in the past, and North Korea's timeline to gain a credible nuclear deterrent keeps getting shorter.

North Korea: New Watered-Down Sanctions Leave Lifelines in Place is republished with permission from Stratfor.com.

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