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North Korea Sanctions Lessons
| Wall Street Journal | - |
The
latest United Nations sanctions imposed on North Korea Wednesday are
valuable in one main way. They give the incoming Trump Administration a
fresh illustration of the dodges, omissions and loopholes that have made
a decade of similar sanctions ...
North Korea Sanctions Lessons
A guide for the Trump Administration on what not to do.
ENLARGE
The main new measure is a cap on North Korea’s coal exports, its chief source of hard currency, which diplomats aim to reduce by about 60%, or some $700 million annually. This could dent North Korea’s overall export revenue by about a quarter, complicating Pyongyang’s ability to fund its military. Kim Jong Un has spent some $200 million on his nuclear and missile programs this year, according to official South Korean estimates.
But it’s anyone’s guess how the U.N. will monitor how much coal North Korea is exporting and at what prices. Almost all of it goes to China, which isn’t known for publishing accurate economic data or fastidiously implementing sanctions against its client in Pyongyang.
Coal and other mineral exports were supposed to be banned by sanctions in February, but that effort exempted transactions for “livelihood purposes.” Having demanded this loophole, China used it to expand its coal purchases by 13% in the first 10 months of this year, with August having the highest flow ever recorded by Chinese customs.
Rather than imposing a real ban, the U.N. has now blessed North Korea to export up to 7.5 million metric tons, or $400 million, of coal a year, whichever comes first. A trade that might have become illicit is now merely regulated, with the monitoring and enforcement boondoggles inherent in tracking trucks and trains crossing the North Korea-China frontier.
Another 11 individuals have been hit with asset freezes and travel bans, including Pyongyang’s former envoys to Egypt and Sudan. There are new bans on imports of luxury bone china and rugs and exports of statues, the latter an effort intended to kill Pyongyang’s sideline in building garish monuments for African governments. Though the sanctions seek to limit North Korean diplomatic missions overseas to one bank account each, they don’t require states to track the ultimate beneficiaries of accounts held by North Korean individuals or entities.
The sanctions also ignore the Chinese oil transfers that sustain the Kim regime, the estimated $741 million in annual Chinese purchases from mostly state-run North Korean textile factories, and the legions of North Korean laborers sent overseas, mostly to China and Russia, to earn some $230 million a year for Pyongyang. China’s veto power at the U.N. ensures that such lifelines remain open for Pyongyang.
The lesson for the next U.S. Administration is to focus on sanctions enforcement outside the U.N., where Beijing can’t veto U.S. and allied moves against the Chinese banks, trading companies and ports at the root of the problem.
Thanks to Congressional leadership, the U.S. now has powerful sanctions laws on its books, but they’re only effective if the President is willing to use them. With the exception of September’s sanctions on China’s Dandong Hongxiang trading company, President Obama isn’t. The Trump Administration has an opportunity to do better.
