Proposed North Korea sanctions dig deep, implementation falls to China

Reuters News
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Posted: Feb 26, 2016 4:32 AM

By James Pearson and Ju-min Park

SEOUL (Reuters) - From inspecting visiting North Korean ships to paring back coal imports, the burden of enforcing new U.N. sanctions on Pyongyang falls mainly on China, which wants to punish its ally for nuclear violations without squeezing it to the point of crisis.

After nearly two months of negotiations between Washington and Beijing, China agreed on Thursday to a U.S. proposal that would dramatically tighten existing restrictions on North Korea after its Jan. 6 nuclear test and recent rocket launch.

The draft, seen by Reuters, would require U.N. member states to conduct mandatory inspections of all cargo passing through their territory to or from North Korea and bans all gold exports, as well as exports of coal if proceeds fund the North's weapons programs.

For China, which accounts for 90 percent of North Korean trade, that means stepping up inspections at sea ports such as Dalian and in the border city of Dandong, through which much of the trade between the countries passes.

China, which defended North Korea in the 1950-53 Korean War, is Pyongyang's closest ally and largest trading partner. While it has become increasingly critical of the North's nuclear and missiles programs, it prizes stability on the Korean peninsula.

"It might look like China is cooperating, but that'll just be on the surface," said Kim Dong-yub at Kyungnam University's Institute of Far Eastern Studies in Seoul.

The two countries share a fairly porous 1,400 km (870 mile) border where both legal and illicit trade has grown in recent years, and off-the-books trade accounts for a significant share of commerce between the two.

"Until these trade routes are shut off, the structure there makes it too difficult for sanctions to effectively kick in," said Kim.

Chinese foreign ministry spokesman Hong Lei said China believes the new sanctions should be aimed at reining in North Korea's nuclear and missile program, and should not affect ordinary people, and that what is most needed is to get negotiations back on track.

Asked about criticism China had not fully enforced previous sanctions, Hong disagreed. "China consistently strictly abides by its relevant decisions," he said.

AT THE COAL FACE

The draft resolution targets impoverished North Korea's heavy reliance on mineral exports by banning the sale or transfer of North Korean coal, iron and iron ore if profits are deemed to be spent on its nuclear or missile programs.

Minerals for sale which are "exclusively for livelihood purposes" are exempted, which analysts said would be impossible to monitor.

"You can't determine which part of the mineral trade is related to people's livelihoods or not," said Choi Kyung-soo, head of the North Korea Resources Institute in Seoul, who made dozens of trips to North Korean state mines between 2001 and 2008 as part of an inter-Korean cooperation team.

China imported $852 million worth of North Korean coal last year and $73 million worth of iron ore, according to Chinese customs data.

Last year, North Korean coal deliveries to China surged 26.9 pct to 19.63 million tonnes, making North Korea China's third biggest supplier behind Australia and Indonesia. Coal deliveries from Australia plunged 25 percent, indicating the increase in imports may have been to help support its ally.

'HUMANITARIAN PROBLEM'

Jin Qiangyi of China's Yanbian University, near the North Korean border, told Reuters there was a "real possibility" such far-reaching sanctions on top of an already moribund economy could create a "humanitarian problem", and affect China's ability to safely implement the proposed sanctions.

"China has to think about what will happen to the North Korean economy, whether there will be other problems," said Jin.

Critics of sanctions argue they would stifle the country's fledgling economy and hurt ordinary North Koreans.

A senior Western diplomat in Beijing who declined to be identified said China remains wary of cutting off North Korea completely, and insists ordinary North Koreans should not be punished for the behavior of their leader.

The draft resolution also proposes banning all exports of aviation fuel to North Korea, except for in "essential" and "humanitarian" cases, which could make it difficult stage an air show planned for September in the port city of Wonsan that is to include aerobatic displays by the North Korean air force.

Much of North Korea's aviation fuel appears to come from China. In 2015, the isolated country spent $876.6 million importing 1,414 tonnes of Chinese jet fuel according to Chinese customs data - enough for North Korea to operate its fleet of largely Soviet-era military aircraft.

"The draft is very strong and, if adopted as now written, was definitely worth the wait it took to plug loopholes and toughen restrictions on transport and finance," William Newcomb, a former member of the United Nations Panel of Experts on North Korea, told Reuters.

"Implementation remains a challenge, however. Not even all members of the Security Council have implemented past resolutions".

(Additional reporting by David Stanway, Megha Rajagopalan and Ben Blanchard in BEIJING and Louis Charbonneau and Michelle Nichols at the UNITED NATIONS; Editing by Tony Munroe and Raju Gopalakrishnan)