The United Nations Security Council passed a resolution last week imposing additional sanctions against North Korea as result of that country’s recent nuclear and missile proliferation activities,including its nuclear test last month. The resolution, which came at U.S. urging, passed unanimously.
The resolution adds to existing UN sanctions against North Korea by identifying additional individuals and entities whose assets are to be frozen because of their involvement in activities relating to nuclear and missile proliferation. It also identifies additional individuals who are subject to an existing ban on entering or transiting a member state because of their involvement in such activities. The resolution, however, calls on member states for the first time to prohibit the provision of financial services to North Korea that could contribute to its nuclear proliferation and missile development activities and freeze any assets within their territory that are associated with such activities.
The UN resolution is unlikely to have much of an impact on U.S. dealings with North Korea because most trade between North Korea and the United States except for U.S. exports of food or medicine, is effectively prohibited under U.S. sanctions against that country because their export requires a license from the U.S. Commerce Department and the general policy is to deny such licenses except for so-called humanitarian items or other items classified as EAR99 under the Commerce Control List. The impact on other UN member states other than EU members may be greater because none has sanctions against North Korea like those of the United States or the EU.
The real question is whether China, which is North Korea’s largest trading partner, will implement the financial services prohibition effectively and, if not, what the United States or the UN will do about it. Any effort to penalize Chinese banks that fail to implement UN sanctions effectively would present quite a challenge if it ever comes to that.