Pyongyang Faces More-Punitive Sanctions

Submarine missile launch prompts move to tighten restrictions on North Korea

Alastair Gale, Wall Street Journal
26 August 2016

SEOUL—The top U.S. and South Korean officials for North Korea policy agreed to consider new punitive action against Pyongyang for its latest missile launch. 
Pyongyang on Thursday lauded its first successful launch of a missile from a submarine, a breakthrough that shows it is making progress in developing a harder-to-track threat to U.S. bases and allies in Asia. North Korean leader  Kim Jong Un was shown on state television directing the launch and hugging officials in delight afterward. 
Mr. Kim said the missile program showed how North Korea had demonstrated its strength “after breaking the chains of sanctions,” according to a state media report.
Following North Korea’s fifth nuclear test and a long-range rocket launch this year, both violations of United Nations’ resolutions, the U.N. Security Council imposed tougher new sanctions on Pyongyang in March. The U.S. and other nations added bilateral penalties on North Korea.
U.S. and South Korean officials say it is too soon to tell whether the new sanctions, which primarily seek to cut off North Korea’s sources of foreign currency for its nuclear-missile program, are having an effect. But following North Korea’s latest message of defiance, U.S. Special Representative for North Korea Policy Sung Kim and his South Korean counterpart  Kim Hong-kyun spoke by telephone to discuss a further response.
The officials agreed to cooperate at the U.N. and review other countermeasures, according to a statement from South Korea’s foreign ministry. A U.S. State Department spokeswoman said the U.S. and its allies continue to look for ways to use their respective domestic sanctions to maintain pressure on North Korea. 
It is unclear if Pyongyang will face additional sanctions, but a study expected to be released soon argues that the advance of North Korea’s nuclear-missile program despite years of sanctions shows that the existing approach is ineffective.  John Park of Harvard and  Jim Walsh of Massachusetts Institute of Technology say that North Korea has grown resistant to sanctions by building up its business operations inside China, Pyongyang’s sole major economic and political ally.
Through interviews with a dozen former managers of North Korean state trading companies, the scholars found that over the past decade North Korea has embedded its businesses in China, hired more Chinese middlemen and become part of the local business environment. In doing so, the businesses, which handle both illicit trade in items like missile parts and legal trade, have become harder to target through sanctions that blacklist specific companies or individuals.
The scholars argue that North Korea has learned over years of being targeted by sanctions how to strengthen its external trade and financial connections. “We’re now seeing some of the fruits of this creative labor,” said Mr. Park, referring to North Korea’s acceleration of its nuclear-missile program this year.
Some sanctions advocates argue that the latest round of penalties on North Korea are significantly stronger than those in the past and will eventually prove to be more effective. The U.S. administration has also created the option of blacklisting Chinese companies that do business with sanctioned North Korean entities, an approach that some favor to confront Beijing over its trade links with Pyongyang.
But Mr. Park and Mr. Walsh argue that the U.S. should seek to work more closely with Beijing to counter illicit North Korean businesses inside China. They say the U.S. could offer assistance to extend China’s existing domestic anticorruption campaign to North Korean entities. Further cooperation could be offered in helping with maritime law enforcement, they say.
China’s foreign and public security ministries didn’t respond to a question about Beijing’s efforts to prevent illicit North Korean trade. But a Chinese foreign ministry spokesman earlier this week said China had an “unimpeachable record” on meeting its international obligations to tackle North Korea’s nuclear-missile program.
The U.S. State Department spokeswoman said the U.S. and China closely coordinate on sanctions against North Korea and held discussions in June about the full implementation of the latest U.N. sanctions on Pyongyang. A call to North Korea’s embassy in Beijing went unanswered late Thursday.
Coordination between the U.S. and China over North Korea has been complicated by Beijing’s strong objections to a decision by Washington and Seoul to deploy an advanced missile-defense system in South Korea. After a missile launch by North Korea earlier this month that landed in Japanese-controlled waters, the U.N. Security Council failed to reach agreement on a statement of condemnation following China’s call for language opposing the missile-defense system to be included, according to diplomats at the U.N.