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(4th LD) U.N. Security Council imposes new sanctions choking off N. Korea's revenue sources

All Headlines 05:11 December 01, 2016

(ATTN: UPDATES with comments from White House, UN chief)
By Chang Jae-soon

NEW YORK/WASHINGTON, Nov. 30 (Yonhap) -- The U.N. Security Council adopted a new package of sanctions on North Korea on Wednesday, imposing a significant cap on Pyongyang's exports of coal and slapping other restrictions in an effort to choke off major sources of hard currency for the regime bent on developing nuclear missiles.

The 15-member council unanimously adopted Resolution 2321, 82 days after Pyongyang conducted its fifth nuclear test on Sept. 9, which marked the first time it has carried out two nuclear blasts in one year, and underlined its headlong push for nuclear development.

The centerpiece of the new sanctions is significantly curtailing North Korea's coal exports -- its single biggest export item and source of hard currency -- by putting a cap on the total amount even if exports are for "livelihood" purposes.

The North's coal exports have already been banned under the previous resolution, adopted in response to January's fourth nuclear test, but shipments for "livelihood" purposes have still been allowed, an exception that has been cited as the biggest loophole that has kept export levels little changed despite the ban.

The cap, set at whichever is lower between 7.5 million tons or US$400 million, would cut the North's annual coal export revenue by more than 60 percent or about $700 million, a huge sum that accounts for nearly a quarter of its total exports estimated at $3 billion.

The new resolution also added four other minerals -- copper, nickel, silver and zinc -- to the list of mineral items the North is banned from exporting. The previous resolutions have banned exports of coal, gold, titanium, vanadium and rare earth metals.

These additions are expected to slash the North's revenue by some $100 million.

In total, the new sanctions, if fully enforced, would strip the North of at least $800 million in annual revenues, a heavy blow that could slow its nuclear and missile programs.

As in previous sanctions, Chinese cooperation is key to enforcement of the new resolution.

More than 90 percent of North Korea's total trade is with China, and coal exports, which account for about 42 percent of the total, are almost entirely for the neighboring nation. In 2015, coal exports amounted to 19.6 million tons or $1.05 billion.

"Resolution 2321 will reduce the hard currency that the DPRK has to advance to its programs and that it has used to advance its programs by approximately $800 million per year," U.S. Ambassador to the U.N. Samantha Power told reporters after the council meeting.

It also sends a "a clear message to North Korea that the Security Council is united ... in continuing to impose even stronger sanctions on the country's international trade, financila transactions and weapons related programs," Power said.

She stressed the importance of implementation.

"Implementation is everything. All member states are obliged to enforce the sanctions contained in this resolution scrupulously and in the spirit of the resolution's intentions to cut off even further the North Korean regime's ability to fund its senseless weapons programs," Power said.

South Korean U.N. Ambassador Oh Joon also said the new sanctions are very powerful.

"They cannot last too long under this level of sanctions regime. This is a very strong, robust regime and no country, in my opinion, can last too long under this kind of sanctions. If your export is cut down by a quarter by the sanctions, how can you go on?" he said during the press stakeout at the U.N.

"Even if North Korea is very secluded and cut out from the rest of the world, no country is an island. North Korea is not an island, either. So for themselves, I think they should forgo their nuclear program and come back to us for talks and for dialogue to settle this issue once and for all," he said.

(4th LD) U.N. Security Council imposes new sanctions choking off N. Korea's revenue sources - 1

Other measures designed to dry up revenue sources include banning exports of statues, another source of foreign money for the regime that has developed expertise at building huge statues and monuments while erecting those of its leaders across the country.

Officials said statues the North has exported to African nations could cost as much as $10 million each.

The resolution also calls for U.N. member nations to pay attention to the North's labor exports, saying their wages could be diverted for the nuclear and missile programs. Though not a mandatory requirement, the warning could also lead to a cut in the North's revenue.

About 50,000 North Koreans are believed to be toiling overseas, mainly in the mining, logging, textile and construction industries under substandard working conditions. Pyongyang reportedly rakes in hundreds of millions of dollars from this system per year.

Other measures in the new resolution include requiring U.N. member nations to reduce the number of officials at North Korea's foreign missions and limit the number of bank accounts to one per North Korean diplomatic mission and one per diplomat in an effort to prevent them from involvement in illicit-money making activity.

The sanctions also blacklisted 11 North Korean officials and 10 entities, including Pyongyang's current ambassador to Egypt, Pak Chun-il, and former ambassador to Myanmar Kim Sok-chol, for their roles in weapons proliferation; banned the provision of financing for trade with the North; and called for tighter inspection of North Korean cargo.

The resolution warned the North could have its rights and privileges as a U.N. member state suspended if it continues to defy its obligations.

The White House welcomed the resolution, saying it will put "real pressure" on Pyongyang.

"This resolution will impose a hard binding cap on North Korea's coal exports," White House press secretary Josh Earnest said, adding that coal exports are North Korea's largest source of external revenue and a significant portion of that revenue is plowed into its nuclear program.

"It certainly ratchets up pressure on the North Korean government in a way that they have not experienced before. This will put real pressure on the North Korean government to evaluate the strategy that they have pursued," Earnest said.

U.N. Secretary-General Ban Ki-moon said the resolution includes the "toughest and most comprehensive sanctions regime ever imposed by the Security Council" and urged U.N. members to fully implement the restrictions.

"Targeted sanctions matter. Security Council sanctions represent the clear and unified will of the international community. Yet sanctions are only as effective as their implementation. It is incumbent on all Member States of the United Nations to make every effort to ensure that these sanctions are fully implemented," he said in a statement.

It is the sixth Security Council resolution imposing sanctions on the North.

The previous five resolutions were adopted after the North's first nuclear test in 2006, its second nuclear test in 2009, its long-range rocket launch in late 2012, its third nuclear test in early 2013 and the fourth nuclear test in January.

So far, U.N. Security Council resolutions have been unsuccessful in preventing the North from advancing its nuclear and missile programs, even though they could have slowed their progress, due in large part to China's reluctance to press Pyongyang.

China is North Korea's last-remaining major ally, and a key provider of food and fuel supplies. But it has been hesitant about using its influence over Pyongyang for fear that pushing the regime too hard could result in instability in the North and hurt Chinese national interests.

Analysts say that China often increased pressure on the North in the past, too, especially when Pyongyang defied international appeals, and carried out nuclear tests and other provocative acts, but China never went as far as to inflict real pain on the North.

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