New UN Security Council Resolution Strengthens Sanctions against North Korea

But Iran, freed of sanctions, is likely to be the spoiler.

The United Nations Security Council unanimously adopted Resolution 2321 (2016) on November 30th. It condemns the North Korean (DPRK) regime’s continued pursuit of nuclear weapons and ballistic missiles while its people continue to suffer under inhumane conditions. The resolution strengthens previous UN-imposed sanctions on the DPRK in response to its fifth nuclear test conducted on September 9, 2016.

The prior resolutions have failed to slow, much less eliminate, the DPRK’s nuclear program involving the development and testing of both nuclear device and ballistic missile capabilities. As UN Secretary General Ban Ki-moon pointed out in his remarks to the Security Council following the vote, “The Council first adopted a resolution on the DPRK nuclear issue in 1993. Twenty-three years and six sanctions resolutions later, the challenge persists.”

The new resolution is intended to put more of a financial squeeze on the DPKR regime than ever before by closing loopholes and cutting the DPRK off from sources of hard currency that can be used to fund its nuclear bomb and ballistic missile programs.

Most notably, the new resolution places tighter restrictions on the DPRK’s export of coal. There will now be an absolute cap on how much coal the DPRK can export per year, closing a loophole that had allowed an exemption from any coal export limitations so long as the transactions were determined to be exclusively for “livelihood” purposes. Member states must report all transactions promptly to the 1718 DPRK Sanctions Committee, which is directed to monitor total volumes and notify states when the allowed quantities have been reached and all procurement of coal from the DPRK must end. 

The binding export cap will potentially cut the DPRK’s largest export, coal, by approximately $700 million per year from 2015 (more than 60%). Considering the fact that China is the DPRK’s principal purchaser of coal, the new restrictions agreed to by China are significant if fully implemented.

In addition, the new resolution imposes further restrictions on the sale or transfer of copper and other non-ferrous metals. It also places a ban on the supply, sale or transfer from the DPRK of statues, which has proven to be a lucrative source of hard currency needed by the regime. The resolution contains travel bans and assets freezes directed to individuals and entities not previously listed for such punitive actions, who are determined to be involved in the development, production, and financing of the DPRK’s nuclear weapons and ballistic missile programs, as well as the DPRK coal and conventional arms trade. There are more dual-use items, materials, equipment, goods and technology that will be subject to the embargo covering transfers to and from the DPRK.  Strict new sanctions on the DPRK’s illicit transportation activities are imposed.  Inspections of cargo transiting to and from the DPRK by rail, sea, air and road are to be expanded. And the new resolution contains further measures to isolate the DPRK from the global financial system and to prohibit financial support for trade with the DPRK in the form of export credits, guarantees, insurance and the like.

Resolution 2321 emphasizes, for the first time, a human rights dimension beyond the DPKR’s proliferation activities - the need for the DPRK to respect and ensure the inherent dignity of people in its territory. It also warns the DPRK that it is subject to being suspended from its UN rights and privileges.

U.S. Ambassador to the UN Samantha Power, who led the negotiations of the text primarily with her Chinese counterpart, heralded the new resolution. She said it “imposes unprecedented costs on the DPRK regime for defying this Council’s demands.” She admitted, however, that “No resolution in New York will likely, tomorrow, persuade Pyongyang to cease its relentless pursuit of nuclear weapons.” Ambassador Power stressed that for the resolution to have any material impact on the DPRK’s behavior “all Member States of this United Nations must fully implement the sanctions that we have adopted today.” Secretary General Ban Ki-moon, while lauding the new resolution for including “the toughest and most comprehensive sanctions regime ever imposed by the Security Council,” reinforced Ambassador Power’s admonition. He warned that “sanctions are only as effective as their implementation. It is incumbent on all Member States of the United Nations to make every effort to ensure that these sanctions are fully implemented.”

The problem with such an expectation for full implementation by all member states is Iran, which is known to have a tight collaborative relationship with the DPRK to bolster both countries’ nuclear weapons and missile programs. Iran has flouted UN Security Council resolutions in the past aimed at its own nuclear program. And despite the nuclear deal under which Iran is expected to curtail its nuclear program, it is continuing the testing and development of ballistic missiles designed to carry nuclear weapons. When I raised the concern about Iran’s relationship with the DPRK to Ambassador Power after she delivered some brief remarks to the press, she refused to answer my question and walked away. It is not surprising in this case why she ducked my question. The concessions President Obama and Secretary of State John Kerry made in order to reach agreement with Iran on the nuclear deal known as the Joint Comprehensive Plan of Action (JCPOA) have provided a huge loophole for Iran and the DPRK to exploit together.

More specifically, the JCPOA contains a long “Specially Designated Nationals” list of individuals and entities that will no longer be subject to previously instituted nuclear-related sanctions. This delisting includes entities involved in supporting Iran’s ballistic missile program, which Iran is now arguably freer to pursue thanks to other concessions offered by Obama and Kerry.

One of the entities removed from both the UN and U.S. sanctions lists is Bank Sepah, a large Iranian state-owned financial institution. Bank Sepah had been sanctioned by the U.S. Treasury Department back in 2007 for “facilitating Iran’s weapons program” and providing “support and services to designated Iranian proliferation firms.”   The bank had also been listed as an entity “involved in nuclear or ballistic missile activities” in UN Security Council Resolution 1747.

In addition to supporting Iran’s own missile program, Bank Sepah has also been involved, according to the U.S. Treasury Department, in transferring large sums of money from Iran’s Aerospace Industries Organization to a North Korean firm associated with the Korea Mining Development Trading Bureau (KOMID), “a North Korean entity designated for providing Iran with missile technology.” 

The DPRK’s Tanchon Commercial Bank, which has been designated by the US and the UN Security Council for sanctions due to its suspected proliferation-related activities, has served as the financial arm for KOMID.  “Since 2005,” according to a statement issued several years ago by the Treasury Department, “Tanchon has maintained an active relationship with various branches of Iran’s Bank Sepah…the U.S. has reason to believe that the Tanchon-Bank Sepah relationship has been used for North Korea-Iran proliferation-related transactions.” 

Bank Sepah now is no longer hobbled by sanctions as a result of the JCPOA and a follow-up Security Council resolution endorsing the JCPOA and terminating the previous UN sanctions resolutions against Iran. This means not only more funding for Iran’s missile program, which Iran is continuing to pursue without any consequences. It also means a potential source of hard currency for North Korea’s nuclear program – precisely the opposite of what Ambassador Power said was the intent of the new DPRK Security Council sanctions resolution. And this is only scratching the surface of how the unfreezing of billions of dollars of Iranian assets and removal of sanctions on Iranian entities involved in nuclear-related activities, which have had ties with North Korean entities involved in nuclear-related activities, will help accelerate the nuclear weapons and missile programs of both rogue regimes. 

In short, for the Obama administration, “The one hand giveth; the other hand taketh away.” Hopefully, the new Trump administration will do a better job in connecting the dots in the dangerous collaborative relationship between Iran and the DPKR and undo the damage the Iran nuclear deal is likely to do in helping to further that relationship.