Chapter Two: Sanctioning North Korea

Abstract

Economic sanctions are becoming increasingly central to shaping strategic outcomes in the twenty-first century. They afford great powers a means by which to seek to influence the behaviour of states, to demonstrate international leadership and to express common values for the benefit of the international community at large. Closer to home, they can also offer a ‘middle way’ for governments that apply them, satisfying moderates and hardliners alike. For some great powers in the multipolar world order, however, they pose a threat to trading relationships. They may also serve as a prelude to military action. With China's international voice growing in prominence and Russia asserting its renewed strength, often in opposition to the use of sanctions, it will be ever more difficult to reach a consensus on their application.

Against this backdrop, knowing what kind of measures to take and in which scenarios they are most likely to work is invaluable. This Adelphi focuses on the different sanctions strategies of the United States, China, Russia, Japan and the EU, with regard to the unfolding nuclear crises in Iran and North Korea. It examines how these measures, designed to marginalise the regimes in both countries and restrict their ability to develop nuclear weapons, have also influenced the sanctioning states’ international partners. As such, they are not just a tool of statecraft: they are potentially an important facet of grand strategy.

Notes

Thomas Fuller and David E. Sanger, ‘Officials Seek Destination of North Korean Arms’, New York Times, 14 December 2009.

Peter Spiegel and Chip Cummins, ‘Cargo of North Korea Materiel is Seized en route to Iran’, Wall Street Journal, 31 August 2009.

Blaine Harden, ‘US Refuses Conditions Put Forth by N. Korea; Pyongyang Ties Nuclear Talks to Peace Treaty, Lifting of Sanctions’, Washington Post, 12 January 2009.

Choe Sang-Hun, ‘N. Korea Threatens to Halt All Talks With Seoul’, New York Times, 16 January 2009.

Christian Oliver, ‘Net Closes on North Korea's Arms Exports’, Financial Times, 15 December 2009.

Blaine Harden, ‘This Time, Promises Alone May Not Feed North Korea; US Seems Determined to Hold Out Food Aid until it Sees Moves to Disarm’, Washington Post, 19 November 2009.

Michael J. Mazarr, North Korea and the Bomb: A Case Study in Nonproliferation (New York: St Martin's Press, 1995), p. 158.

Marcus Noland, ‘The (Non-) Impact of UN Sanctions on North Korea’, Asia Policy, no. 7, January 2009, p. 64.

See, for example, Curtis H. Martin, ‘The US-North Korean Agreed Framework: Incentives-based Diplomacy after the Cold War’, in Steve Chan and A. Cooper Drury (eds), Sanctions as Economic Statecraft: Theory and Practice (New York: St Martin's Press, 2000), pp. 86–109. The term ‘positive’ sanction is not intended to connote any form of moral judgement. Rather, it is used to describe actual or promised rewards to a target actor. See David A. Baldwin, ‘The Power of Positive Sanctions’, World Politics, vol. 24, no. 1, October 1971, pp. 19–38.

United Nations Security Council Resolution 1695, Adopted by the Security Council at its 5490th meeting on 15 July 2006, http://www.un.org/News/Press/docs/2006/sc8778.doc.htm.

Noland, ‘The (Non-) Impact of UN Sanctions on North Korea’, p. 65.

For more on the PSI, see Mark Valencia, The Proliferation Security Initiative: Making Waves in Asia, Adelphi Paper no. 376 (Abingdon: Routledge for the International Institute of Strategic Studies, 2005).

United Nations Security Council Resolution 1718, Adopted by the Security Council at its 5551st meeting on 14 October 2006, http://www.un.org/News/Press/docs/2006/sc8853.doc.htm.

United Nations Security Council, ‘Security Council Condemns Launch by Democratic People's Republic of Korea, Agrees to Adjust Travel Ban, Assets Freeze, Arms Embargo Imposed in 2006’, Press Release, New York, 13 April 2009, http://www.un.org/News/Press/docs/2009/sc9634.doc.htm.

United Nations Security Council Resolution 1874, Adopted by the Security Council at its 6141st meeting on 12 June 2009, http://daccess-dds-ny.un.org/doc/UNDOC/GEN/N09/368/49/PDF/N0936849.pdf?OpenElement.

Dianne E. Rennack, ‘North Korea: Economic Sanctions’, CRS Report for Congress, Congressional Research Service, Washington DC, 17 October 2006, p.1.

Despite this lifting of sanctions, a number of US laws – such as the 1945 Export-Import Bank Act and the 1951 Trade Agreement Extension Act – remained in place and continued to condition economic engagement between the US and North Korea. For a useful overview of the American use of sanctions against North Korea see Karen Lee and Julia Choi, ‘US Sanctions and Treasury Department Actions Against North Korea from 1955 to October 2007’, North Korean Review, vol. 4, no. 1, Spring 2008, pp. 7–25.

Ibid., p. 9.

Xinhua News Agency, ‘US Beefs up Sanctions against DPRK’, 1 July 2009.

US Department of State, ‘North Korea: Presidential Action on State Sponsor of Terrorism and Trading with the Enemy Act, Fact Sheet, Office of the Spokesman, Washington DC, 26 June 2008.

Helene Cooper, ‘US Declares North Korea Off Terror List’, New York Times, 12 October 2008.

See, for example, Guy Dinmore and Daniel Dombey, ‘Bolton: Sanctions “Help Regime Change”’, Financial Times, 24 October 2006.

See Charles L. Pritchard, Failed Diplomacy: The Tragic Story of How North Korea Got the Bomb (Washington DC: Brookings Institution Press, 2007), pp. 49–56.

Richard L. Armitage and Joseph S. Nye, The US–Japan Alliance: Getting Asia Right through 2020 (Washington DC: Center for Strategic and International Studies, 2007), p. 15.

Thomas J. Christensen, ‘Shaping the Choices of a Rising China: Recent Lessons for the Obama Administration’, The Washington Quarterly, vol. 32, no. 3, July 2009, p. 89.

Christopher W. Hughes, ‘The Political Economy of Japanese Sanctions Towards North Korea: Domestic Coalitions and International Systemic Pressures’, Pacific Affairs, vol. 79, no. 3, Fall 2006, p. 461.

David Pilling and Andrew Ward, ‘Japan Emollient on North Korea Crisis’, Financial Times, 15 March 2003.

Hughes, ‘The Political Economy of Japanese Sanctions Towards North Korea: Domestic Coalitions and International Systemic Pressures’, pp. 461–2. At the urging of Seoul and Washington, Japanese funding for KEDO resumed in October 2009. Tokyo removed its other sanctions in December of that year, whilst normalisation talks resumed between April 2000 and October 2001.

Kanako Takahara, ‘Japan Lowers Hurdle for North Korea Sanctions’, Japan Times, 20 May 2003.

Victor Cha, ‘Happy Birthday, Mr Kim’, Comparative Connections, vol. 6, no. 1, April 2004.

Associated Press, ‘North Korean Ships will be Barred from Japan's Ports’, Wall Street Journal Asia, 2 March 2005.

See David C. Kang and Ji-Young Lee, ‘Missiles and Prime Ministers May Mark a Turning Point’, Comparative Connections, vol. 8, no. 3, October 2006.

David Pilling and Anna Fifield, ‘Japan Imposes Sanctions on N. Korea’, Financial Times, 11 October 2006.

Xinhua News Agency, ‘Japan Formally Decides on New Sanctions on DPRK’, 10 April 2009.

‘Japan plans to impose ban on exports to North Korea’, Wall Street Journal Asia, 17 June 2009.

Kang and Lee, ‘Seirei Ketsuzetsu (Cold Politics, Warm Economics)’, Comparative Connections, vol. 8, no. 1, April 2006.

Maaike Okano-Heijmans, Projecting Economic Power: Japan's Diplomacy towards North Korea, Clingendael Diplomacy Papers no. 21, Netherlands Institute of International Relations ‘Clingendael’, February 2009, p. 23.

‘Japan Lifts Some Sanctions as North Korea Vows Probe’, Wall Street Journal Asia, 16 June 2008.

Kang and Lee, ‘In a Holding Pattern with Hope on the Horizon’, Comparative Connections, vol. 10, no. 4, Janary 2009.

Kang and Lee, ‘Little Progress on North Korea or History Disputes’, Comparative Connections, vol. 7, no. 2, July 2005.

Kang and Lee, ‘Treading Water, Little Progress’, Comparative Connections, vol. 9, no. 2, July 2007.

Richard J. Samuels, Securing Japan: Tokyo's Grand Strategy and the Future of East Asia, (Ithaca, NY: Cornell University Press, 2007), p. 63.

Murray Hiebert, Jay Solomon and Charles Hutzler, ‘US to Put Sanctions On North Korean Trade’, Wall Street Journal Asia, 31 March 2003.

Ibid.

See, for example, Joseph Kahn and David E. Sanger, ‘China Rules Out Using Sanctions on North Korea’, New York Times, 11 May 2005.

James Dao, ‘US Planning Sanctions Against North Korea’, New York Times, 17 February 2003.

Andrew Scobell, China and North Korea: From Comrades-in-arms to Allies at Arm's Length (Carlisle, PA: US Army War College, 2004), p. 2.

Dingli Shen, ‘Cooperative Denuclearization toward North Korea’, The Washington Quarterly, vol. 32, no. 4, October 2009, p. 179.

‘North Korea: Country Profile 2008’ (London: Economist Intelligence Unit, 2008), p. 20.

Glenn Kessler, ‘China Rejected US Suggestion to Cut Off Oil to Pressure North Korea’, The Washington Post, 7 May 2005.

For further reading on the range of unilateral measures that China has taken against North Korea over recent years see Christopher Twomey, ‘Explaining Chinese Foreign Policy toward North Korea: Navigating between the Scylla and Charybdis of Proliferation and Instability’, Journal of Contemporary China, vol. 17, no. 56, August 2008, pp. 418–19.

Kessler, ‘China Rejected US Suggestion to Cut off Oil to Pressure North Korea’.

See Yitzhak Shichor, ‘China's Voting Behaviour in the UN Security Council’, China Brief, vol. 6, issue 18, May 2007.

Beijing did permit some Chapter VII language to remain in UNSCR 1695.

Scott Snyder, ‘Political Fallout from North Korea's Nuclear Test’, Comparative Connections, vol. 8, no. 4, January 2007.

Cited in Hui Zhang, ‘The North Korean Nuclear Test: The Chinese Reaction’, Bulletin of the Atomic Scientists, 2 June 2009.

For a useful analysis of Chinese notions of great-power responsibility see Beverley Loke, ‘Between Interest and Responsibility: Assessing China's Foreign Policy and Burgeoning Global Role’, Asian Security, vol. 5, no. 3, 2009, pp. 195–215; For further reading on Beijing's efforts to forge a more constructive relationship with Washington by way of the North Korean nuclear issue see Bonnie S. Glaser and Wang Liang, ‘North Korea: The Beginning of a China–US Partnership?’, The Washington Quarterly, vol. 31, no. 3, Summer 2008, pp. 165–80.

See Zhang, ‘The North Korean Nuclear Test: The Chinese Reaction’.

For further reading see Shi Yinhong, ‘China and the North Korean nuclear issue: competing interests and Persistent Policy Dilemmas’, Korean Journal of Defense Analysis, vol. 21, no. 1, March 2009, pp. 33–47.

For more on Beijing's preference for unilateral over multilateral sanctions see ibid.

‘UN Sanctions on NK Won't Work: EU leader’, Korea Herald, 13 February 2003.

Andrew Jack, ‘Koizumi says Russia could Help Resolve Crisis’, Financial Times, 10 January 2003.

Leszek Buszynski, ‘Russia and the CIS in 2003: Regional Reconstruction’, Asian Survey, vol. 44, no. 1, January–February 2004, p. 164.

Cited in Xinhua News Agency, ‘Sanctions against DPRK to Worsen Situation – Russian FM’, 27 January 2003.

‘Council Common Position 2006/795/CFSP of 20 November 2006 Concerning Restrictive Measures against the Democratic People's Republic of Korea,’, Official Journal of the European Union, no. L 332, 22 November 2006, p. 32.

Council of the European Union, ‘Restrictive Measures Against the Democratic People's Republic of Korea: EU Implementation of UNSCR 1874 (2009)’, Press Release, Brussels, 27 July 2009.

Kyodo News Service, ‘EU Official Backs Japan-led Draft UN Resolution over North Korea’, BBC Monitoring Asia Pacific, 13 July 2006, p. 1.

Axel Berkofsky, ‘EU: On the Bench in Pyongyang’, Policy Forum Online 09-019A, Nautilus Institute, 10 March 2009, http://www.nautilus.org/fora/security/09019Berkofsky.html.

Noland, ‘The (Non-) Impact of UN Sanctions on North Korea’, p. 66.

Xinhua News Agency, ‘DPRK Money to be Transferred to Russia Bank: official’, 14 June 2007. The funds were subsequently forwarded to Russia's Dalkombank, which then transferred them on to North Korea's Foreign Trade Bank on 25 June 2007. See Lee and Choi, ‘U.S. Sanctions and Treasury Department Actions against North Korea from 1955 to October 2007’, p. 15.

James Bone and Richard Lloyd Parry, ‘China and Russia Oppose West's Call for Robust Response’, The Times, 6 April 2009.

Ellen Barry, ‘Russia: Concern Over North Korean Missile Testing’, New York Times, 27 August 2009.

Michael Richardson, ‘Why Russia and China are Now Taking a Harder Line’, Straits Times, 15 June 2009.

Doug Struck, ‘US Signals it Won't Seek Sanctions against N. Korea; At Talks in Seoul, Pyongyang's Delegates Appeal for Unity’, Washington Post, 23 January 2003.

Amy Kazmin and Andrew Ward, ‘N Korea Threatens “Limitless’ Retaliation – US-led Curb on Illegal Trade’, Financial Times, 18 June 2003.

Martin Fackler, ‘Responding to UN Sanctions, North Korea Vows to Produce Nuclear Weapons’, 14 June 2009.

Glenn Kessler, ‘White Houses Voices Concern on North Korea and Uranium’, Washington Post, 8 January 2009.

Mark Fitzpatrick, ‘Stopping Nuclear North Korea’, Survival, vol. 51, no. 4, August–September 2009, p. 6.

Gottemoeller, ‘The Evolution of Sanctions in Practice and Theory’, p. 104.

Peter Alford, ‘Australia, Japan in N Korea Cash Curb’, The Australian, 20 September 2006.

See, for example, Glenn Kessler, ‘N. Korea Agrees to Return to Talks: A Surprise Reversal in Nuclear Dispute’, Washington Post, 1 November 2006.

David Lague, ‘US Negotiator Urges North Korea to End Standoff on Financial Curbs’, New York Times, 22 December 2006.

See ‘North Korea: Country Report’ (London: Economist Intelligence Unit, 2009), p. 6.

Anthony Faiola, ‘Despite US Attempts, N. Korea Anything but Isolated; Regional Trade Boom Reflects Division Between Bush Priorities, Asian Interests’, Washington Post, 12 May 2005.

For more on the ‘signalling’ functions of sanctions see Doxey, International Sanctions in Contemporary Perspective, p. 57.