North Korean hopes that an Olympic “charm offensive” would slow the international campaign to isolate their country have been dashed. Pyongyang’s refusal to abandon its nuclear weapon program continues to bar rapprochement with the rest of the world. Last week, the United States announced what President Donald Trump called “the heaviest sanctions ever imposed on a country” and there are reports of an intensified campaign to interdict ships carrying trade with North Korea. The strategy of “maximum pressure” continues unabated — as it should — but the risk of a conflict is also rising.
U.S. Treasury Secretary Steven Mnuchin announced Friday that the U.S. “is aggressively targeting all illicit avenues used by North Korea to evade sanctions.” His department sanctioned 56 entities — one person, 27 companies and 28 ships, located, registered or flagged in North Korea, China, Singapore, Taiwan, Hong Kong, Marshall Islands, Tanzania, Panama and Comoros. The targets include shipping and energy firms, as well as a Taiwanese citizen and two of his companies. As Mnuchin explained, the sanctions force companies and individuals anywhere in the world to choose between helping fund North Korea’s nuclear ambitions or doing business with the U.S. They cannot do both.
The U.S. measures have been applauded by governments that see a need to increase pressure on Pyongyang. Japan supports “maximum pressure” on the North and has said that it will continue its “close collaboration with the U.S., South Korea and the international community including China and Russia to secure the effectiveness of United Nations Security Council Resolutions” to achieve denuclearization of the Korean Peninsula. Defense Minister Itsunori Onodera backed the new moves, saying “We strongly support them because they are intended to step up the pressure on North Korea.” During a visit to Washington last week, Australian Prime Minister Malcolm Turnbull added that “We need to cooperate and ensure that we do everything we can to tighten the vice of those sanctions.”
China is not enthused about the new U.S. measures, and was particularly irritated by the inclusion of its companies on the list of sanctioned entities. China’s Foreign Ministry insisted that Beijing fully enforced U.N. resolutions regarding North Korea and will “seriously handle” any violations by its citizens or companies, but that “China resolutely opposes the U.S. side enacting unilateral sanctions and ‘long-armed jurisdiction’ in accordance with its domestic law against Chinese entities or individuals.” It added that “We have already lodged stern representations with the U.S. side about this issue, and demand the U.S. side immediately stop such relevant mistaken actions to avoid harming bilateral cooperation in the relevant area.”
China was not lying: Beijing is tightening screws. While it is responsible for about 90 percent of North Korea’s external trade, China’s trade with the North is falling. In January, bilateral trade reached the lowest level since June 2014. Chinese data indicates that China recorded a fourth consecutive month with no diesel, gasoline or fuel oil shipments to the North; it provided just 201 tons of liquefied petroleum gas. In addition, China imported no iron ore, coal or lead from North Korea in January, and trade in cereals such as rice shrank 4.3 percent compared to a year earlier.
Mounting international pressure has forced North Korea to come up with more creative ways to keep its economy afloat. There are an increasing number of reports — and mounting evidence — of North Korea getting fuel and other banned trade, such as weapons components, via ship-to-ship transfers or falsely labeled manifests. This has reportedly prompted the U.S. and its partners to begin preparing for a more active interdiction at sea effort. The program was discussed last month at the meeting of foreign ministers that was held in Vancouver, Canada.
This effort would include intensified intelligence sharing and monitoring of North Korea trade as well as the stopping and inspecting of vessels on the high seas. U.S. officials claim that the legal basis for such actions was established by previous U.N. Security Council resolutions, although North Korea, along with China and Russia, take issue with that interpretation. There is a real danger that North Korea will consider active measures to stop and inspect vessels, or any attempt at a blockade, as an act of war, as Japanese officials have acknowledged. There is also a danger that such steps will divert resources needed elsewhere in the world or that they will erode the international consensus that favors maximum pressure on Pyongyang.
Given North Korea truculence and its refusal to change course, more pressure is needed. The Financial Action Task Force — the global watchdog that monitors the illicit use of funds — has called for increasing vigilance given North Korea’s “ongoing and substantial” money laundering programs. Trump continues to emphasize the prospect of a military strike, but that should only be a last resort. Pyongyang’s Olympic charm offensive is a sign that maximum pressure is working and that it seeks relief. Pressure is only a means to an end, however; more attention must now be devoted to a strategy for achieving those results.
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