North Korea is one of the most heavily sanctioned countries in the world. And so far, these punitive measures have yet to achieve their aim — forcing North Korea to denuclearize, or at least return to the negotiating table.
The most recent round of U.N. sanctions — which U.S. Ambassador Samantha Power called the “toughest … in more than two decades” — was passed by the Security Council last March.
One sanctions workaround for North Korea has been to station North Korean businessmen in China. While there, they work with a network of private Chinese companies. “So these private Chinese companies were able to order parts and materials from other Chinese companies or from European companies that had set up production platforms in China, selling their goods without ever knowing that they were ultimately going to the North Koreans,” Jim Walsh, an international security researcher at MIT, says.
China signed on to the package of new sanctions in March, which called for cutting off trade in commodities, such as coal. Many analysts thought that was a big deal at the time, since coal is North Korea’s No. 1 export and makes up an estimated 35 percent of the economy there.
But before signing on to the sanctions, China insisted on a key loophole called the “livelihood exemption.” It allows the export of a product if cutting it off might affect the livelihood of the exporter, so long as the revenue doesn’t go to North Korea’s nuclear program. The problem is, companies self-certify that’s the case.