Loophole-closing sanctions on Pyongyang passed at UN

The United Nations Security Council imposed new sanctions Wednesday on North Korea to curtail its revenue from exports, especially by capping sales of coal, a move immediately welcomed in Seoul.

The 15-member council on Wednesday in New York unanimously adopted UNSC Resolution 2321, which is expected to slash the North’s coal export revenues, a major source of hard cash for the regime, by over 60 percent, or at least $700 million annually.

North Korea, despite facing rounds of sanctions in the past, conducted its fifth nuclear test on Sept. 9, following a fourth test in January, prompting the UN Security Council to work on additional, stiffer sanctions, a prolonged process that took 82 days, the longest to date.

UNSC Resolution 2270, which was implemented by the council in March, imposed the toughest-to-date sanctions, and the new measures attempt to close loopholes that allowed the generation of hard currency for the North’s nuclear and ballistic missile programs.

Under Resolution 2270 Pyongyang is not allowed to supply, sell or transfer coal, iron, gold, iron ore, gold, titanium ore, vanadium ore and rare earth minerals. It also prohibits the sale of aviation fuel to Pyongyang and imposed mandatory cargo inspection.

The new resolution bans North Korea from exporting four additional minerals: copper, nickel, silver and zinc. It also bans North Korea’s exports of statues.

Limiting North Korea’s major exports - coal and non-ferrous metals - is expected to cut the country’s revenue by more than $800 million annually, or up to 30 percent its current amount.

It will expand the list of banned items for import by North Korea including equipment with dual-use purposes and luxury goods such as rugs and tapestries worth more than $500 and porcelain tableware and bone china above $100.

The resolution also includes a blacklist of 10 entities and 11 North Koreans.

Individuals slapped with travel bans and the freezing of assets include North Korean Ambassador to Egypt Pak Chun-il and Kim Sok-chol, the top envoy to Myanmar, who are accused of supporting the Korea Mining Development Trading Corporation (KOMID), which sells natural resources including coal to allegedly raise money for the regime’s nuclear program.

It also includes Son Mun-san, external affairs bureau director-general of the North’s General Bureau of Atomic Energy and Chang Chang-ha, president of the Second Academy of Natural Sciences, a North Korean institute blacklisted since 2013 for research and development of advanced weapons systems, including missiles and likely nuclear weapons.

Sanctioned entities include DCB Finance Limited, a front company for North Korea’s Daedong Credit Bank, located in the British Virgin Islands and in Dalian, China. Other entities include the North’s Korea United Development Bank, Ilsim International Bank, which is affiliated with Pyongyang’s military and Korea Daesong Bank, which is owned and controlled by Office 39, a secretive bureau that manages slush funds and generates revenue for the leadership.

The new resolution requests member states to reduce the number of staff at North Korean embassies and consular posts, monitor their bank accounts, and also prohibit its nationals from procuring vessels and aircraft crewing services from North Korea.

The Security Council has imposed sanctions on Pyongyang since its first nuclear test in 2006, and this is its sixth such resolution.

The United States and China recently came to agreement on the new sanctions after wrangling over North Korea’s exports.

The previous resolution included an exception for transactions that are for “livelihood purposes” unrelated to generating revenue for North Korea’s nuclear or ballistic missile programs and other illicit activities.

But there has been no sign of decreased coal exports from North Korea, which are mainly sold to China.

Through the most recent resolution, North Korea’s coal exports cannot exceed $53.5 million or around 1 million metric tons, or whichever is lower, from the resolution adoption date to the end of the year. North Korea’s annual coal exports will be capped at whichever is lower between $400.9 million or 7.5 million metric tons starting from Jan. 1 next year.

Countries will also be required to report to the United Nations their North Korean coal purchases.

The North Korea mission to the United Nations immediately rejected the resolution, which was backed by China and Russia, veto-wielding permanent members of the council.

The South Korean Ministry of Foreign Affairs welcomed the unanimous adoption of Resolution 2321 and said that Seoul will also be announcing new unilateral sanctions Friday.

Cho June-hyuck, the Foreign Ministry spokesman, said in a briefing Thursday that “the new resolution is another milestone in that it imposes the toughest and most comprehensive non-military sanctions in the history of the UN against North Korea, which has repeatedly violated the UN Charter and relevant Security Council resolutions.”

Cho continued that unless North Korea “makes a strategic decision to take the path toward denuclearization as soon as possible in accordance with relevant Security Council resolutions, it will not only face more economic difficulties and diplomatic isolation, but it would also see its rights and privileges as a member of the UN suspended.”

Cho added that Seoul, as well as liked-minded countries including the United States, Japan and the European Union, “will swiftly adopt unilateral sanctions to impose all-out sanctions and put diplomatic pressure on North Korea.”

He added that the implementation of unilateral sanctions was a topic discussed during Foreign Minister Yun Byung-se’s meeting with his Japanese and U.S. counterparts in the sidelines of the UN General Assembly in September.

The White House likewise said that the new Security Council resolution putting a “hard, binding cap on North Korea’s coal exports” will “ratchet up pressure on Pyongyang” in a way that it has not experienced before.

“Coal exports are North Korea’s largest source of external revenue,” said White House Press Secretary Josh Earnest said in a press briefing Wednesday. “And we know that a significant portion of that revenue is plowed into their nuclear program. So putting in place this hard cap and closing loopholes that they’ve previously exploited to get around previous sanctions is a substantial development.”

BY SARAH KIM [kim.sarah@joongang.co.kr]