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North Korea Sanctions: Will Economic Pressure Be Enough?

September 13, 2017

 

On Monday September 11, the United Nations Security Council unanimously passed a new round of sanctions against North Korea, after Pyongyang’s sixth and largest nuclear test so far. Following the vote, US Ambassador to the United Nations Nikki Haley argued that sanctions would work to “take the future of the North Korean nuclear program out of the hands of its outlaw regime”. However, while sanctions will no doubt increase the economic pressure on the regime, they may not be enough on their own to persuade Pyongyang to get rid of its nuclear weapons.

 

What’s New?

 

The new Resolution 2375 targets important revenue sources of the Kim regime including a ban on North Korean textile exports (worth an estimated $833 million in revenues in 2015), and a ban on future North Korean migrant labour abroad which earns Pyongyang an estimated $500 million in revenues each year. The migrant labour restrictions are, however, caveated by the fact that they may still take place on a case-by-case basis in support of “humanitarian assistance” or “denuclearisation” efforts and are done entirely by self-reporting only. This is an important point, as it could allow Russia (where most of the 93,000 North Korean migrant workers are stationed) to continue to use North Korean labour.

 

The resolution also targets North Korea’s energy imports, an element which has long been on the Trump administration’s sanctions shopping list. North Korea currently imports 4.5 million barrels of refined petroleum and 4 million barrels of crude oil, with China the primary supplier. The resolution caps annual refined petroleum imports at 2 million barrels a year (a 55% reduction from current supply), and stipulates that crude oil supplies to North Korea cannot exceed the current level supplied by China. Any crude oil over this level must be “exclusively for [the] livelihood purposes of DPRK nationals”, although an argument that oil is fundamental to the daily workings of the country and its citizens can easily be made by countries wishing to export. Strangely, the resolution also includes a complete ban on natural gas supply to North Korea – not because it is currently a significant energy source for Pyongyang, but because the Council is putting in place preventative measures in case North Korea seeks to counteract the effect of sanctions by diverting their energy mix and finding a substitute for refined petroleum products.

 

What’s Next?

 

The push for sanctions has become a familiar story by now. Since 2006, the UN Security Council has passed 8 sanctions resolutions against North Korea, with four of them adopted since 2016 alone. With every resolution, new measures have been introduced and existing ones strengthened. For example, Resolution 2270 in March 2016 introduced a ban on North Korean export of coal, unless revenue earned from this export was unrelated to Pyongyang’s nuclear and missile development. Resolution 2321 in November 2016 strengthened this by introducing an annual cap on coal exports. Neither resolution drastically reduced North Korea’s revenues earned from coal exports. Resolution 2371 in August 2017 therefore placed a full ban on North Korean coal exports. The US has sought to gradually build sufficient pressure on the regime this way, in order to gain the support of China and Russia who may not be amenable to dealing sudden deathblows to regime stability. The current caps on oil and petroleum just introduced follow this same pattern.

 

However, by introducing new sanctions the international community also runs the risk of sanctions as a foreign policy tool becoming futile. Quoting a recent report by Andrea Berger, “not a single component of the [existing] UN sanctions regime against North Korea currently enjoys robust international implementation”. Facing weak implementation of existing sanctions regimes (in some cases rendering them obsolete) new sanctions initiatives could divert attention away from the critical task of strengthening current sanctions commitments. By introducing new sanctions measures in quick succession, in the absence of other ways to respond to North Korea’s provocations, countries are finding themselves several steps behind and still struggling to implement previous commitments.

 

We must also ask ourselves what we are hoping to achieve with sanctions vis-a-vis North Korea. If sanctions are our go-to default response to any North Korean provocation, surely they must fit into a wider strategy for how to get North Korea back into compliance with international norms of behaviour. Worryingly, that does not appear to be the case.

 

Sanctions can be a valuable foreign policy tool, but should not constitute the only method available to policymakers – rather, they are more likely to succeed if joined up with other initiatives. The sanctions-induced isolation of Iran was pursued in parallel with high-level negotiations, resulting in the comprehensive nuclear agreement in 2015. Indeed, as sanctions were strengthened in 2012 to include European embargo on Iranian oil, negotiations likewise intensified. This was further helped by the election of Iranian President Rouhani, although US and European commitment to negotiate with Iran had existed for years before this.

 

In many cases, the sanctions brought against North Korea are starting to mirror the history of sanctions against Iran: isolating the regime from global trade and limiting its ability to export its most significant revenue-earning sources. Sanctions theory generally says that the more economic pressure a regime is facing, the more domestic opposition will grow and create pressure on countries to back away from dangerous policies and receive relief from sanctions pressure in return. North Korea may be a different case. The international community’s understanding of the inside working of North Korea is sparse, and so far sanctions have not resulted in any evidenced domestic opposition against the regime.

 

The preference to add more sanctions measures in response to North Korea’s provocations is

understandable: it sends a clear message that something is being done to tackle the destabilising behaviour of North Korea, and to some extent it helps constrain the regime’s ability to operate further. A side effect is also the demonstration to other would-be violators of international law and order that any transgressions will be penalised.

 

However, the international community’s hopes that sanctions will result in denuclearisation of the Korean peninsula may have dwindled. The North Korean nuclear and missile capability will not be dismantled overnight, and economic pressure will not change that this late in the game.

 

Instead, sanctions should be employed in coordination with a structured dialogue with North Korea, where options focusing more on stabilising the current environment rather than full denuclearisation are pursued. It is problematic that the Trump administration is unwilling to pursue a two-track approach of sanctions paired with negotiations when it comes to North Korea. Right now, by defaulting to sanctions without negotiations, the administration runs the risk of sanctions becoming nothing more than a default response and an end in themselves. Rather, sanctions should be a tool working in support of wider foreign policy objectives to address the North Korean nuclear challenge.

 

Emil Dall is a Research Fellow at RUSI where he focuses on nuclear and missile proliferation, proliferation finance and global nuclear diplomacy. He is also involved in the Institute’s sanctions programme focusing on the issues surrounding the design and implementation of economic sanctions.
 

Banner image taken by Emil Dall at the UN Security Council adoption of UNSCR 2321, November 2016

 

 

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