DPRK - EP 5

In response to the fifth North Korean nuclear test conducted on 9 September 2016, the second one of 2016, the Security Council adopted UNSCR 2321 on 30 November 2016, significantly strengthening the increasingly comprehensive logic of the sanctions regime.

Drafted by the US and then negotiated with China, the unanimously adopted resolution broadened the existing sanctions by specifying new items, individuals, and entities subject to sanctions measures. It also introduced a cap on the coal exports from DPRK (all exports of coal were banned during episode 4) to address the rise of DPRK’s coal trade with China in 2016 and tasked the Sanctions Committee with tracking the total amount of coal exports and their monetary value, making the information publicly available, and notifying the states when the overall limit was about to be reached.

To restrict the hard currency revenue of the DPRK regime, UNSCR 2321 imposed a ban on the export of copper, nickel, silver, and zinc, as well as statues from DPRK. In this respect, it also called on states to exercise vigilance over DPRK nationals working abroad and be alert to the risk of bulk cash being used to evade UN sanctions. In view of the frequent use of DPRK’s diplomatic and consular missions for sanctions evasion and revenue-generating activities, the resolution limited the number of bank accounts per diplomatic/consular staff and office and prohibited the use of DPRK owned or leased property for other than diplomatic/consular activity. Calling on states to reduce the number of staff at their diplomatic missions and consular posts in the country, it also authorized them to impose travel restrictions on DPRK state officials associated with prohibited activities and suspended scientific and technical cooperation with any group or individual representing or officially sponsored by DPRK.

UNSCR 2321 also expanded previous financial and transportation sector restrictions. In the financial sector, it prohibited any public or private financial support for trade with DPRK, imposed a closure of any existing representative office, subsidiaries, or bank accounts in DPRK, and authorized the expulsion and repatriation of any individual working on behalf of a DPRK bank or financial institution. In the transportation sector, UNSCR 2321 urged enhanced implementation of existing measures and imposed a ban on the import to DPRK of any new vessels or helicopters, procurement from DPRK of vessels and aircraft crewing services, ban on the insurance and reinsurance of DPRK vessels, as well as a mandatory de-registration of any DPRK vessels and ban on its subsequent registration by another state, and authorized the expansion of the provisions of asset freeze to vessels suspected of sanctions violation. With the view to improve the implementation of the existing sanctions, the resolution for the first time also directed the Sanctions Committee, with the assistance of the Panel of Experts, to hold special meetings on “important thematic and regional topics and Member States’ capacity challenges.”

DPRK continued to engage in proscribed activities. In December 2016, it conducted artillery drills, reiterated its May 2016 claim that the UNSC acted outside of its mandate, and in his 1 January 2017 New Year’s address, Kim Jong-un declared that the country was in the “last stage” of preparing for a test launch of an intercontinental ballistic missile. The following month, DPRK resumed ballistic missile launches (including a successful launch of a solid fuel-powered missile, which presented a technological breakthrough in DPRK’s ballistic missile program development) and the regime strengthened its domestic position vis-à-vis the reportedly increasingly dissatisfied elite. On 13 February 2017, Kim Jong-un’s half-brother was assassinated using a prohibited highly toxic nerve agent at the Kuala Lumpur airport and on 27 February, five high ranking state officials were executed in DPRK. A 13 February 2017 Security Council press statement (SC/12716) condemned the 11 February ballistic missile launch (first since October 2016) and called on states to redouble their sanctions implementation efforts. The Panel of Experts report, released later in February, concluded that sanctions implementation remained “insufficient and highly inconsistent,” noting that DPRK was “flouting sanctions through trade in prohibited goods” and its evasion techniques were “increasing in scale, scope and sophistication.”

Amidst the heightened tensions with DPRK, the US and South Korea began the largest ever joint military exercises and started installing the THAAD anti-missile system, warning at the end of March 2017 that DPRK sixth nuclear test could happen “at any time.” On 17 March 2017, the US Secretary of State Tillerson declared that the US policy of “strategic patience” with DPRK was over and a pre-emptive strike against DPRK remained “on the table” should the threat posed by the country reach a level that “requires action.” China, which in February announced suspension of coal imports from DPRK (after exceeding the 2016 limit and unilaterally already almost reaching the total coal exports limit from DPRK set for 2017), advocated for a two-track “suspension for suspension” approach – whereby the DPRK would cease its nuclear and missile activities, while the US and South Korea would simultaneously end major military exercises perceived by the DPRK as provocation – instead. Meanwhile, the increasingly broad DPRK sanctions regime drew criticism from UN agencies and international organizations operating in DPRK, holding the financial sector measures responsible for the disruption of humanitarian activities in the country. The sanctions regime was also criticized by the UN Special Rapporteur commenting on the situation of human rights in DPRK. While the new US administration continued to proclaim its resolve in confronting the DPRK regime and push for further sanctions measures against the country, rejecting the Chinese dual-suspension proposal, US President Trump and Secretary of State Tillerson in April expressed their readiness to enter into negotiations with DPRK. On the Korean peninsula, tensions began to ease after the election of a pro-reconciliation candidate Moon Jae-in as President of South Korea in May 2017.

Following ten rounds of DPRK ballistic missile launches since the beginning of 2017, condemned in eight UN Security Council press statements, UNSCR 2356 (2 June 2017) added new sanctions designees, followed by new US sanctions listings at the end of the month. On 4 July 2017, DPRK announced its first intercontinental ballistic missile launch. It was contested by Russia, which vetoed the proposed draft joint statement condemning the launch. Following the launch, the US announced a successful test of the THAAD anti-missile system, while South Korea proposed the re-opening of inter-Korean communication channels and a unified Korean representation at the Winter Olympic games to be held in South Korea in February 2018. DPRK conducted its second intercontinental ballistic missile test on 28 July 2017, prompting joint US-South Korean military exercises and a US push for further tightening of the UN sanctions.

Mandatory

Ongoing sanctions:

• Arms imports and exports embargo;
• Luxury goods imports ban;
• Asset freeze;
• Travel ban;
• Financial sector restrictions (ban on joint ventures, operation of DPRK banks abroad, new foreign financial institutions activity in DPRK);
• Commodity imports ban (aviation fuel);
• Commodity exports ban (iron and iron ore; gold, titanium ore, vanadium ore, and rare earth elements);
• Transportation-related prohibitions (ban on leasing or chartering of vessels and aircraft and related provision of crew services to DPRK and a ban on the use or servicing of DPRK registered or flagged vessels).

Adjustments to ongoing sanctions:

• Proliferation sensitive goods and technology imports and exports ban expanded to new items;
• Coal exports ban adjusted by introducing an export cap.

Newly imposed sanctions:

• Financial sector restrictions (closure of existing representative offices, subsidiaries, or banking accounts in DPRK, prohibition of public and private financial support for trade with DPRK);
• Commodity exports bans (copper, nickel, silver, zinc; statues);
• Diplomatic sanctions (limit use of DPRK territory abroad for other than diplomatic / consular activity; limit number of bank accounts for DPRK diplomatic / consular missions and staff; suspension of scientific and technical cooperation with DPRK representatives or sponsored groups / individuals);
• Transportation-related prohibitions (import of new vessels and helicopters; procurement of vessels and aircraft services; insurance, reinsurance, and registration of DPRK vessels; and their mandatory de-registration).

Conditional

Ongoing conditional restrictions:

• Bunkering ban;
• Financial sector restrictions (financial services, asset and resource transfers);
• Vessels port entry ban;
• Aviation ban;
• Provision of specialized teaching and training to DPRK nationals;
• Asset freeze on DPRK government and party officials;
• Arms and proliferation sensitive good and technology ban.

Adjustments to ongoing conditional restrictions:

• Expulsion/repatriation expanded to any individual working on behalf or at a direction of DPRK bank or financial institution.

Newly imposed conditional restrictions:

• Travel ban on DPRK state officials;
• De-flagging, redirection, and inclusion in asset freeze of vessels related to proscribed activities and sanctions violations.