The problem of sanctions against North Korea

North Korea is one of the most heavily sanctioned countries in the world. It has been subject to U.S. and international sanctions for more than 70 years. Those sanctions have come in three overlapping waves, first as a result of the Korean War, then in response to its development of nuclear weapons, and finally to roll back that nuclear program as well as activities such as counterfeiting and cyberterrorism.

These sanctions have contributed to isolating North Korea from the rest of the world. The country has not entirely welcomed this isolation. Despite longstanding suspicions of outside influences, Pyongyang has shown considerable interest in engaging with the West and with the global economy more generally. Economic sanctions have severely limited this interaction.

There is currently little political support in the United States for lifting sanctions against North Korea. Despite claims to the contrary, the Biden administration has settled into the same de facto policy of “strategic patience” adopted by the Obama administration. The new administration has not even reversed the Trump administration’s re-designation of North Korea as a state sponsor of terrorism.

In general, the United States views economic sanctions as a tool of leverage to bring North Korea back to the negotiations table around its nuclear weapons program. The experience with Iran, for instance, suggests that if the pain of economic sanctions proves sufficiently high, a country will be more willing to restrict its nuclear program. Sanctions can then be reduced in a phased manner as part of a nuclear deal like the Joint Comprehensive Plan of Action.

But economic sanctions haven’t played that role with North Korea. They didn’t deter Pyongyang from pursuing a nuclear weapons program, nor have they been subsequently responsible for pushing it toward denuclearization. Unlike Iran, North Korea has been under sanctions for nearly its entire existence and it doesn’t have a strong international economic presence that can be penalized. It has been willing to suffer the effects of isolation in order to build what it considers to be a credible deterrence against foreign attack.

US sanctions policy has demonstrably failed. Is a more credible policy possible or likely?

There is some controversy over whether North Korea is the most sanctioned country in the world or only the fifth on the list. This debate, stimulated by a report by the Foundation for the Defense of Democracies, has revolved around a single point. If North Korea isn’t the most sanctioned country in the world, then there is room to apply even more sanctions against it.

Even if the United States and North Korea have practically no interaction—no diplomatic relations, no commerce, few informal ties—some political actors in Washington would still like to pile on additional sanctions against Pyongyang. It’s unclear what purpose these additional sanctions would serve: purely punitive, one more stick to push Pyongyang back to negotiations, or an effort to precipitate some form of regime change.

Before addressing the utility of the current sanctions regime, let’s take a look at the different categories of prohibitions that the United States and the United Nations has adopted against North Korea. In addition, South Korea, Japan, Australia, and the EU have imposed their own sanctions against the country.

Economic sanctions against North Korea cover trade, finance, investment, even North Korean workers in foreign countries. The earliest of these were imposed by the United States after the Korean War, when Washington imposed a total trade embargo on North Korea and also froze all North Korean holdings in the United States. In the 1970s, the United States tightened these restrictions by prohibiting the import of any agricultural products that contained raw material from North Korea. The United States also prohibits any exports to North Korea if they contain more than 10 percent of U.S.-sourced inputs. There are some minor humanitarian exemptions to these sanctions.

Between 2004 and 2019, in the wake of the failed Agreed Framework of the Clinton era, Congress passed eight bills that further restricted economic and financial interactions with North Korea. On the financial side, the United States has effectively blocked North Korea from participating in the U.S. financial system but more importantly from engaging in any dollar-based transactions. Secondary sanctions target any countries that conduct business with North Korea, which further limits the country’s access to the global economy.

Because North Korea remains on the State Sponsors of Terrorism list, it does not enjoy sovereign immunity from prosecution for certain acts such as torture and extrajudicial killing. The United States is further obligated by the stipulations of this regulation to oppose any effort by North Korea to join the IMF or World Bank.

A rather lengthy list of individuals and entities have been singled out for sanctions, from high-level officials and directors of banks to trading and shipping companies to specific vessels and even non-Korean business people.

The United States is not alone in imposing sanctions against North Korea. The UN Security Council has passed about a dozen unanimous resolutions that ban trade in arms, luxury goods, electrical equipment, natural gas, and other items. Other sanctions impose a freeze on the assets of designated individuals and entities, prohibit joint ventures with these prohibited entities, and restrict cargo trade with North Korea.

Japan has also imposed sanctions, largely as a result of North Korea’s missile and nuclear tests. “These measures freeze certain North Korean and Chinese assets, ban bilateral trade with North Korea, restrict the entry of North Korean citizens and ships into Japanese territory, and prohibit remittances worth more than $880,” reportsEleanor Albert.

South Korea, Australia, and the EU also maintain their own sanctions against the country.

counterpunch