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NUKEWARS
New UN sanctions on North Korea: what do they mean?
By Hwang Sunghee
Seoul (AFP) Sept 12, 2017


Chinese banks halt transactions for North Koreans
Beijing (AFP) Sept 12, 2017 - Branches of China's biggest banks have suspended financial transactions for North Koreans, employees told AFP, suggesting that Beijing has pursued stronger measures against its nuclear-armed ally than previously thought.

Staff at branches in Beijing and the border city of Yanji -- a major trade and transportation hub between the two neighbours -- said their banks have banned North Koreans from opening new accounts and some have even started to close existing ones.

The restrictions were imposed well before the United Nations Security Council unanimously approved, with China's blessing, new sanctions on Pyongyang on Monday following its latest and largest nuclear test.

Employees at several branches of the country's "big four" -- Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China and China Construction Bank -- confirmed the financial curbs for North Korean clients.

"We have frozen their accounts, which means they cannot withdraw (money)," a staff member at a Yanji branch of China Construction Bank told AFP.

"They cannot use (their accounts) in Yanji anymore, as well as our services... We have already started to inform them to cancel their account. If they can cancel, we let them cancel. If they cannot, we will not let them use it," the staffer said.

An employee at the Industrial and Commercial Bank of China in Yanji said the restrictions began last year or the previous year.

"We also won't open new accounts now. We offer no service to them. Opening accounts or foreign currency operations, we don't offer such services to them," the employee said.

Other local bank branches said the bans have been carried out for a while, but they did not remember exactly when.

Some said they have received a written document on the ban but others said there has only been a "verbally delivered" message.

A staff member at a Beijing branch of China Construction Bank said they received a notice in May, and North Koreans can no longer conduct transactions.

An Agricultural Bank of China employee in Beijing said North Koreans are barred from opening new accounts but those with current accounts can carry out transactions.

- Cut off nuclear funds -

Zhang Liangui, a professor at the Chinese Communist Party Central Committee school, said the ban is "very normal" and in accordance with UN resolutions.

"Chinese banks restricting financial flows between (China and) North Korea is actually restricting trade on the whole," Zhang said.

"It mainly aims at limiting North Korea's foreign exchange revenue and cutting off the foreign exchange (supply) that it needs to develop its nuclear plans."

A 2013 UN Security Council resolution stipulates that member states must curb financial services or transactions that could subsidise North Korea's nuclear programmes.

China has long been accused of lax enforcement of UN sanctions on North Korea, and US President Donald Trump complained earlier this year that trade between the two countries surged in the first quarter.

In June, the United States slapped sanctions on the Bank of Dandong, a Chinese bank located at the border with North Korea which it accused of "facilitating millions of dollars of transactions for companies involved in North Korea's WMD (weapons of mass destruction) and ballistic missile programs."

But China has insisted that it adheres to the UN sanctions. It suspended North Korean coal imports in February and more recently banned new business ventures and stopped buying iron, seafood and lead from its neighbour.

China also backed Monday's UN resolution, which bans textile exports and restricts shipments of oil products, though it did so only after Washington toned down its original proposal to secure the backing of Beijing and Moscow.

The UN Security Council has unanimously adopted new sanctions on North Korea, including restrictions on oil shipments, to punish Pyongyang for its sixth and largest nuclear test.

But Washington toned down its initial proposals to secure backing from China and Russia.

Here are some key questions on UNSC resolution 2375, and its attempt to end the North's nuclear weapons and missile programmes.

What impact will the oil measures have?

The new resolution ends natural gas shipments to North Korea, caps crude oil shipments at their current levels, and puts a ceiling on refined oil products such as petrol and diesel.

North Korea has little oil of its own, relying on imports to keep its citizens and soldiers moving.

The US initially sought an oil embargo, which China -- North Korea's sole ally and main trading partner -- strongly opposed.

Instead the resolution limits crude oil shipments from any country to the amount sent to the North in the last 12 months.

Beijing does not publish statistics for crude oil shipments to the North, shrouding the issue in secrecy, but is believed to supply around 4 million barrels a year.

The resolution also limits the North to importing 2 million barrels a year of refined oil products -- representing a 15 percent cut based on UN-WTO International Trade Centre estimates, although some analysts put the effect as high as 56 percent.

"It's a red light for the growth of the North Korean economy," said Cheong Seong-Chang of Seoul's Sejong Institute, "but will not have huge impact on North Korea's military because the crude oil supply remains the same".

Crucially, the resolution includes an exemption for "livelihood purposes" -- similar to clauses in past resolutions that have been used as loopholes.

Kim Hyun-Wook, professor at the Korea National Diplomatic Academy, warned there are "no means to check how much crude oil is delivered through the pipeline" between China and North Korea.

Koo Kab-Woo of the University of North Korean Studies in Seoul said the measures carried symbolic value as the "first US attempt at touching North Korea's economic lifeline".

How significant is the textiles ban?

The resolution bans the import and export of textiles -- both fabric and clothing -- by the North.

Textiles are one of North Korea's major exports, estimated by Rajiv Biswas of IHS Markit to value $750 million.

Analysts say the move could cut off a major source of foreign currency for Pyongyang.

China supplies materials to the North, where they are made into clothing in factories using cheap labour, and re-exported to China.

Most go to China and Russia, so the effects will depend on enforcement by Beijing and Moscow, said Koo.

"It all depends on China and Russia's willingness."

A UN report published at the weekend said Pyongyang collected at least $270 million over a six month-period this year by exporting "almost all of the commodities prohibited" by existing sanctions.

What about overseas workers?

The resolution bars countries from issuing new permits to the roughly 93,000 North Korean labourers working abroad.

Their toil, mainly at construction sites in Middle Eastern countries as well as Russia and China, earns revenue for Pyongyang.

There is an exemption for existing contracts. Analysts are sceptical about any immediate effects of the ban, but say it could increase pressure on Pyongyang over time.

Will cargo inspections increase?

Under the measure, countries are authorised to inspect ships suspected of carrying banned North Korean cargo -- but must first seek the consent of the vessel's flag state, limiting the impact.

Washington had sought authorisation for searches by force, which Koo said China and Russia "strongly opposed".

North Korea is suspected of engaging in arms trade with countries in Africa and the Middle East.

The UN report said it was investigating "chemical, ballistic missile and conventional arms cooperation" between North Korea and Syria.

UN member states had interdicted shipments destined for Syria believed to be from the North's state-owned arms dealer, the Korea Mining and Development Trading Corporation (KOMID), it said.

Will the sanctions curb Pyongyang's ambitions?

Analysts say the sanctions were significantly watered down from the initial draft proposal to get China and Russia on board and are sceptical about whether they will curb Pyongyang's nuclear ambitions.

North Korea is already under multiple UN sanctions but has still made rapid progress in its nuclear and missile programmes.

"It is not enough to cause pain," said Go Myong-Hyun at the Asan Institute of Policy Studies.

Instead, said Koh of Dongguk University, the new sanctions will drive Pyongyang to accelerate its programmes.

"North Korea will try to become a nuclear state as quickly as possible to negotiate with the US as an equal before the effect of the sanctions fully kicks in," he said.

Pyongyang habitually attributes UN measures to the "hostile" US, which it blames for the body's actions.

And Kim Hyun-Wook of the Korea National Diplomatic Academy, predicted: "The sanctions will only provide North Korea with an excuse for further provocations, such as an ICBM launch."

NUKEWARS
US revises draft UN sanctions proposal on NK; China reports no radiation
United Nations, United States (AFP) Sept 11, 2017
The United States released a revised draft for new sanctions against North Korea on Sunday, diplomats said, making concessions to Russia and China as it seeks to convince the UN Security Council to punish Pyongyang for its recent nuclear test. The Security Council is set to vote Monday on the US-led effort to impose harsher new sanctions against North Korea, which has defied multiple measure ... read more

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