Category: China

US calls proposed sanctions on North Korea a major upgrade

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The United States on Thursday introduced a draft U.N. Security Council resolution that it said will significantly increase pressure on North Korea in response to its latest nuclear test and rocket launch.

US Ambassador Samantha Power said the draft, which for the first time would subject cargo ships leaving and entering North Korea to mandatory inspections, goes farther than previous sanctions and is meant to ensure North Korea will be held accountable for its actions.

The draft is the result of an agreement between the United States and China, North Korea’s main ally and Beijing’s involvement signals a policy shift with regard to its often erratic neighbor. The council is expected to vote on it over the weekend.

China’s Ambassador Liu Jieyi said China was working very closely with other members of the Security Council and that he hoped the resolution “would achieve the objective of denuclearization” and result in “peace and stability.”

Ambassador Power said the sanctions would also prohibit the sale of small arms and other conventional weapons to North Korea, closing a loophole in earlier resolutions. Sanctions would also limit and in some cases ban exports of coal, iron gold titanium and rare earth minerals from North Korea and would prohibit countries from supplying aviation fuel, including rocket fuel to the country. In addition, the resolution imposes financial sanctions targeting North Korean banks and assets and bans all dual use nuclear and missile related items. Items such as luxury watches, snowmobiles, recreational water vehicles and lead crystal were also added to a long list of luxury goods that North Korea is not allowed to import.

Jeong Joon-Hee, a spokesman of Seoul’s Unification Ministry, said the measures included in the draft would significantly hurt the North’s foreign currency income because it’s estimated that minerals account for nearly 40 percent the country’s exports. South Korea and Japan have also announced new measures against Pyongyang.

[AP]

Draft agreement by US and China on UN Resolution on North Korea

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The U.S. and China reached an agreement over a new United Nations Security Council resolution that would punish North Korea for its recent rocket launch and nuclear test, according to diplomats from two Security Council member countries.

Chinese Foreign Minister Wang Yi and U.S. Secretary of State John Kerry met in Washington and said they were making “significant” progress on new sanctions, without giving details.

China’s participation is essential as it is North Korea’s biggest trading partner, providing most of the isolated country’s energy and food. Any draft resolution would have to be voted on in the Security Council, where the U.S., Russia, China, France and the U.K. wield veto power.

That vote could be taken this week, according to one of the diplomats, who asked not to be identified because he isn’t authorized to discuss the issue publicly.

Reuters cited unnamed diplomats as saying the U.S. is seeking Chinese support to curb North Korea’s access to international ports, and to tighten restrictions on North Korean bank routes to the international financial system.

[Bloomberg]

Chinese banks freeze North Korean accounts

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Chinese banks including a branch of China’s biggest bank Industrial and Commercial Bank of China (ICBC) have frozen accounts belonging to North Koreans, a South Korean newspaper reported on Monday.

Citing phone conversations with an unnamed employee of ICBC’s office in the northeastern Chinese border city of Dandong, the Dong-A Ilbo reported that since late December it had suspended all deposits and transfers of foreign currencies in and out of accounts with North Korean names. “[The bank] had never told me why it was taking such measures, but it seems that they are related with the strained relations between North Korea and China,” the ICBC employee told the Dong-A Ilbo.

Washington and Seoul are seeking support from Beijing, Pyongyang’s main ally, for tougher sanctions against North Korea for its Feb. 7 rocket launch and January nuclear test.

After the rocket launch, another bank in northeast China, had also blocked transactions to North Koreans’ accounts, according to the Dong-A Ilbo report, which cited a Chinese businessman who has invested in North Korean mines.

Dandong is home to many ethnic Korean Chinese traders who deal with both North and South Korean businessmen. It is also home to South Korean and western Christian missionaries trying to operate in North Korea.

[Reuters]

How North Korea relies on China to funnel cash into the country

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To inject life into an economy made moribund by the fall of the Iron Curtain, failed centralized policies and sanctions, Kim Jong Un needs foreign currency to pay for equipment from abroad, such as the recent purchase of Russian jets to upgrade the national airline.

For decades North Korea has built networks of front companies and foreign intermediaries to channel currency in and out, circumventing attempts to isolate it over its nuclear-weapons program. Court documents and interviews with investigators, banks and prosecutors show the cornerstone of those networks is China. “China is a very important piece in making sure that blockages work,” said William Newcomb, a former member of a panel of experts assisting the United Nations’ North Korea sanctions committee.

North Korea relies on China, its biggest trading partner, for food, arms and energy. The countries describe their ties as “friendship forged by blood” during the 1950-1953 Korean War where the U.S. was a common foe. China has criticized North Korea for provocative actions but historically opposed harsh sanctions that might precipitate a regime collapse and a flood of refugees across its 870-mile (1,400 kilometer) shared border.

About 70 percent to 80 percent of North Korea’s foreign earnings have in the past come via China, said Kim Kwang Jin, who ran the Singapore branch of North Korea’s North East Asia Bank before defecting in 2003. “That huge trade volume means there are more people in China who are willing to cooperate with the regime,” Kim said by phone from Seoul.

But China is no longer turning a blind eye to illicit North Korean activities, according to Richard Nephew, a former principal deputy coordinator for sanctions policy at the State Department until last year. “In the last 10-15 years, they actually really do care about trying to prevent some of these bad acts.”

David Asher, a former George W. Bush administration official who was involved in freezing North Korean assets at Banco Delta Asia, said sanctions can only be effective when China is coerced into cooperating. “The only way to cut off North Korea’s illicit cash flow is by interdicting these intermediaries,” said Asher, now an adjunct senior fellow at the Center for a New American Security. “That requires the cooperation of China, the biggest domicile for this type of integrated, clandestine, business-to-business relationship with North Korea.”

[Bloomberg]

North Korean Groundhog Day

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Unacceptable. Won’t be tolerated. Serious consequences. Those are just a handful of the scolding phrases uttered over the past two decades at every bend on North Korea’s road to becoming a nuclear state to its more recent advances in weapons and missile technology.

There have been sanctions designed to stop North Korea from acquiring weapons technology and conventional arms, sanctions to block its ability to move money around the world and sanctions to prevent the ruling Kim family and its cronies from getting personal watercraft and fancy watches.

The United Nations was already considering a new round of measures to punish Pyongyang for its fourth nuclear test, conducted last month, when leader Kim Jong Un ordered the latest launch of a long-range rocket thought to be part of his country’s ballistic missile program.

Denunciations of North Korea’s behavior and pleas for China–a veto-wielding member of the U.N. Security Council–to get tough on the regime followed immediately, prompting a familiar sense of deja vu.

Although sanctions have no doubt made it harder for Pyongyang to do business, they clearly have not forced the regime to change its behavior or prevented significant advances in the North’s nuclear weapons program. Indeed, no matter how strong any sanctions may be, they count for almost nothing if China is not on board.

[Washington Post]

Why cracking down on North Korea is difficult

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Cracking down on Pyongyang is much tougher than it sounds. Here’s why.

1. Sanctions – Much of the talk about North Korean sanctions comes from Seoul and Washington, but it’s Beijing that holds most of the cards. While additional sanctions will hurt, North Korea has long been economically insulated by its relationship with China, its northern neighbor and main trade partner, which fears that strict sanctions could undermine the Pyongyang government, unleashing chaos. While North Korea’s economic isolation and the international financial system make it tricky to identify sanction targets and prove violations, new US legislation could hit companies in China that deal with the North, including those that buy its main exports — coal and minerals.

2. Diplomacy – Is North Korea a nuclear state? That question has largely paralyzed major diplomatic efforts on the Korean Peninsula for years. The main diplomatic forum to try to get Pyongyang to abandon its nuclear program, the so-called six-party talks, hasn’t met since 2008. Some in the international community now believe that North Korea will never abandon its nuclear program, and say the only way to negotiate with the North is to accept it as a nuclear power and work on a freeze, and then gradual arms reductions. But with Washington steadfastly refusing to accept North Korea as a nuclear state — and North Korea steadfastly insisting it is one — diplomacy remains frozen.

3. Military response – What about simply erasing North Korea’s weapons programs, launching missiles to destroy its weapons facilities? Since the 1950s, South Korea and the United States have wrestled — both internally and sometimes with each other — over how to respond to North Korean aggressions. Again and again, the decision has been made to avoid military action. The immense danger on the Korean Peninsula is that any military response from the South could quickly spiral into all-out war. And with nearly half of South Korea’s 50 million people living in or around Seoul — just 50 kilometers (35 miles) from the border and within range of the North’s artillery batteries —— Pyongyang could inflict immense damage on its rival in just minutes. The potential risks are simply too high.

[Times of India]

UN to notify North Korea’s Kim of probe for crimes against humanity?

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A UN expert on human rights in North Korea has asked the United Nations to officially notify North Korean leader Kim Jong Un that he may be investigated for crimes against humanity.

A landmark 2014 report on North Korean human rights, co-authored by Marzuki Darusman, concluded that North Korean security chiefs and possibly Kim himself should face justice for overseeing a system of Nazi-style atrocities.

In a report to the U.N. Human Rights Council, Darusman recommended that the Council arrange an official communication, sent directly to Kim and signed by Darusman or U.N. High Commissioner for Human Rights Zeid Ra’ad al-Hussein.

His report, dated Jan. 19 but published on Monday, also said three experts should be appointed to find the best legal path to hold North Korea to account and find “creative and practical” ways to establish the truth and ensure justice for victims. Darusman stressed the importance of using the International Criminal Court but said it was “able to handle only the uppermost leadership”.

Only the U.N. Security Council can involve the court, but North Korea’s sole ally, China, a veto-wielding member of the top U.N. body, has repeatedly rejected calls for the Security Council to tackle human rights in North Korea. However, China said on Friday it would back a U.N. resolution to make North Korea “pay the necessary price” for recent North Korean rocket launches, with the aim of bringing Pyongyang back to the negotiating table.

[Reuters]

Defiant North Korean animosity toward America

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The United States and Japan have already announced plans for new sanctions over North Korea’s recent nuclear test and rocket launch, and the U.N. Security Council is likely to deliver more soon. Cross-border tensions with Seoul are escalating quickly and even China is starting to sound more like an angry neighbor than a comrade-in-arms.

But with a storm brewing all around them, North Koreans have their own take on things — and it’s decidedly unapologetic.

Pyongyang started off the new year with what it claims was its first hydrogen bomb test and followed that up with the launch of a satellite on a rocket. When Seoul responded by closing down an industrial park that is the last symbol of cooperation between the two rivals, Pyongyang lashed back, expelling all South Koreans from the site just north of the Demilitarized Zone and putting it under military control.

Each move brought a new round of international outrage. But ask a North Korean what’s going on and the reply is swift, indignant and well-practiced. It’s America’s fault.

“It’s not right for the U.S. to tell our country not to have nuclear bombs,” Pak Mi Hyang, a 22-year-old children’s camp worker, told The Associated Press as she walked with a friend near Kim Il Sung Square in Pyongyang on Sunday. “The U.S. has a lot of them and tells us not to have any. It’s not fair. We’ve been living with sanctions for a long time and we are not afraid.”

“We have a lot of hatred toward Americans,” Pak said, politely, before walking on.

But anti-U.S. sentiment in this country does run deep, for good reason. That is partly because the relentless propaganda that depicts Washington — which has made no secret of its desire for regime change — as its biggest existential threat. But it also reflects the brutality of the Korean War, which left millions of Koreans dead and most of North Korea’s cities and industrial base in ruins. Though called the “Forgotten War” in America, it is anything but forgotten in North Korea. And since the 1950-53 war ended in an armistice, not a peace treaty, the U.S. is still technically and literally “the enemy.”

[AP]

How impoverished North Korea earns its money

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Seoul and Washington want more stringent trade and financial sanctions to punish the North’s nuclear and missile adventures, but some question whether sanctions will ever meaningfully influence one of the least trade-dependent economies on the planet.

North Korea’s main exports to China, Pyongyang’s last major ally and by far its largest trading partner, include coal, minerals, clothing and textile, and foodstuff.  Transactions with China accounted for more than 74 percent of North Korea’s trade in 2014.

The South’s Unification Ministry says the Kaesong Industrial Park has provided $560 million of cash to the North since its establishment in 2004.

Outside experts say that North Korea since the mid-2000s has been increasing the number of workers sent for contract labor overseas in an attempt to bring in more hard currency. South Korea’s government-funded Korea Trade-Investment Promotion Agency estimates that there are about 60,000 to 100,000 North Koreans working in 40 different countries.

Marzuki Darusman, a U.N. special rapporteur on human rights in North Korea, said in a report last year that more than 50,000 North Korean are working overseas and earning the country something between $1.2 billion and $2.3 billion annually in foreign currency. North Korean workers overseas often face harsh working conditions and abuse, said the U.N. report.

And what of the North Korean  economy? South Korea’s central bank has been publishing estimates of North Korea’s economy since 1991. In its latest report, it said it believes the North’s economy grew by 1 percent in 2014 to $28.5 billion, or about 2 percent of South Korea’s economy.

[The Times of India]

Worldwide denunciation of North Korea over latest suspected missile test

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When North Korea ignored U.N. resolutions and launched a rocket this past weekend, it drew worldwide denunciation.  Prominently missing from the voices of condemnation was China.

Senior U.S., Japanese and South Korean defense officials met by teleconference on Tuesday to discuss the ramifications of North Korea’s suspected missile test disguised as a satellite launch.

The U.S., Japan and South Korea all view the launch as a forbidden test of an intercontinental missile that improves North Korea’s ability to deliver a nuclear bomb.

The North Koreans actually moved up the rocket launch so that it coincided with Chinese New Year’s Eve. And you can be sure that was not the kind of fireworks that the Chinese were expecting.

[NPR]