New sanctions choke shipping to North Korea

New sanctions choke shipping to North Korea

Felix Kim

A fresh round of sanctions against an array of vessels and shipping companies is making it increasingly difficult to ship goods into North Korea.

The United Nations Security Council enacted the measures at the request of the United States on March 30, 2018, and the European Union (EU) adopted them a week later.

The list includes 27 vessels, 21 shipping companies and one person. The EU also froze the assets of 15 ships that violated sanctions against North Korea, while 25 others will be denied entry to EU ports. Twelve others will lose their registrations and be “de-flagged.”

Twelve of the 27 sanctioned vessels are from outside North Korea, and five are from China.

The new restrictions are considered secondary sanctions because they target entities doing business with North Korea rather than the country itself. They are the latest effort by the international community to sever Pyongyang’s access to foreign trade and persuade the regime to end its missile and nuclear weapons programs.

These multifaceted efforts appear to be working, according to North Korea analyst Liang Tuang Nah at the S. Rajaratnam School of International Studies in Singapore.

“Since 2016, North Korea has been impacted by a series of sanctions that have directly impacted its civilian economy,” Na told FORUM. “Inasmuch as the North is opaque and does not publish economic statistics, we do know from inferred South Korean and Chinese economic intelligence that these sanctions are hurting the Kim regime’s cash flow. The new sanctions will simply add to the slow strangulation of the [North Korean] economy, the Kim regime’s finances and ultimately, Kim Jong Un’s ability to buy the loyalty of his elites.”

The new secondary sanctions broadly target the North Korean economy rather than taking the surgical approach of earlier sanctions. Previous restrictions prohibited the export to North Korea of luxury goods and military supplies, while others enabled the seizure and destruction of military research and development supplies heading to or from North Korea.

“Pre-2016 sanctions have generally not been effective because the Kim regime was still able to siphon the proceeds of its civilian sector to fund its missiles and nuclear warheads,” Na said. “However, the sanctions from 2016 onward have the effect of choking off cash flow from the otherwise legitimate economic sectors and thus starving Kim’s WMD [Weapons of Mass Destruction] programs from needed funding. Nonetheless, Pyongyang is skilled at sanctions busting via smuggling and various forms of skullduggery, so the effectiveness of sanctions from the past two years will be tempered.”

One method used by ships to evade sanctions has been the transfer of goods at sea. In October 2017, a transfer took place between Russian and North Korean vessels. The vessels docked with each other and transferred about 1,600 metric tons of fuel, Reuters reported. The exchange was far from any seaport where it could have been spotted by security personnel, but it was captured by satellite imagery. (Pictured: The North Korean-flagged tanker Yu Jong 2, left, and the Chinese vessel Min Ning De You 078 perform what appears to be a ship-to-ship transfer of fuel in violation of U.N. sanctions. The vessels were photographed by the Japan Maritime Self-Defense Force, which released the image in February 2018.)
Na concluded that the new sanctions targeting shipping firms and individual ships help isolate North Korea by cutting off nourishment to its economy.

“But such isolation is not absolute,” he said. “There will be attempts, and some will be successful, at sanctions evasion using ship-to-ship transfers at sea, covert overseas front companies and other methods.”

Felix Kim is a FORUM contributor reporting from Seoul, South Korea.