US seizes opportunity to upgrade existing North Korea Sanctions

 beenScreen Shot 2016-02-23 at 02.52.24On February 18th President Obama signed a bill that had previously passed the Congress. The legislation will make it possible to curb some of the shortcomings in the implementation of current sanctions. Since North Korea’s nuclear test in January, the UN Security Council was unable to agree on an ad hoc sanctions package. Most measures that were suggested from side of the US obviously targeted improvements on side of Chinese agencies and businesses.

But the question is, whether the US really needs UN sanctions in order to achieve its goals.

The US move to adopt a new legislation and introduce additional bilateral sanctions has been ascribed to strong internal political pressure. However, the congress bill was also a welcome tool in order to make current non-proliferation sanctions more effective. The bill primarily targets third parties that engage in all kinds of transactions with North Korea. This concerns particularly  financial, material and technological support, as defined under UNSC resolutions, that would benefit the further development of North Korea’s nuclear program.

So far the US Treasury was only been able to ban blacklisted companies from operations in the US. The new bill allows targeting third parties abroad and block their assets and property if deemed necessary. Overall the new sanctions are primarily targeting shortcomings of the existing regime as they were reported in a recent document by the Government Accountability Office (GAO). Thus the US reacts to a felt need that UN sanctions cannot be efficiently implemented due to a lack of capacities in third countries. The new legislation provides it with a powerful tool to apply pressure or take action when a misconduct was reported.

For the Chinese government this move has inconvenient side effects. Chinese financial institutions in Northeastern China have been key to North Korea’s covert international transactions. Besides cross border trade and cargo are not sufficiently monitored. Of course US agencies can not enforce asset freezes inside China. But they can target Chinese companies’ assets at home and abroad. This has already alerted Chinese finance institutions. First reports indicate that Chinese Banks such as ICBC have begun to freeze North Korean assets. Albeit forestalling US treasury measures, these moves are in line with Chinese government policies of curbing the proliferation of technologies that enable North Korea to develop its nuclear program.

Although the new sanctions will be a setback for North Korea, the results will unlikely change the leadership’s determination to pursue its nuclear program. Pyongyang is determined to develop its nuclear arms program because it regards it as crucial for guaranteeing its national security. Additionally, an effective deterrent would provide North Korea with a better bargaining position vis-à-vis the US (and South Korea).

Is there a political strategy that could complement sanctions?

This is the sixty-four-thousand-dollar question. Existing dialogue formats and agendas are not promising when it comes to bringing about change. At the moment neither side is accepting the other sides maximum demands. The US insists on North Korea implementing previous 6-Party-Talk agreements and taking steps towards denuclearization as a precondition for talks. North Korea has emphasized the centrality of the nuclear program to its national security. More recently it has also made a rhetorical shift towards a development agenda: the deterrent will free resources that could be used in the countries economic development. With such hardened fronts is is difficult to find ways to resume dialogue and negotiations. The only way forward lies in unofficial negotiations in order to set the parameters for future talks.

At the same time the US is in a dilemma. It is a key security player in Northeast Asia and needs to demonstrate military preparedness. North Korea has repeatedly demanded a moratorium for US-South Korean military exercises. At the moment it is more likely that the extent of exercises will be intensified. From North Korea’s perspective such a move will provide additional legitimacy of its nuclear program.

Thus any future talks need to address security issues and perceptions as a stepping stone for for a process that might eventually tackle big items on the agenda.

 

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