The 'Livelihood Loophole' And Other Weaknesses Of N. Korea Sanctions : Parallels North Korea may face tougher sanctions in response to its most recent nuclear test, the most powerful blast yet. But Pyongyang keeps finding workarounds to the punitive measures.
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The 'Livelihood Loophole' And Other Weaknesses Of N. Korea Sanctions

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The 'Livelihood Loophole' And Other Weaknesses Of N. Korea Sanctions

The 'Livelihood Loophole' And Other Weaknesses Of N. Korea Sanctions

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STEVE INSKEEP, HOST:

How do you solve a problem like Korea - North Korea, to be specific? The U.S. and its allies are taking up sanctions, yet again, as a way to punish North Korea for its fifth nuclear test, the strongest yet. But the sanctions already in place were supposed to be the toughest yet, and they did not stop North Korea from advancing its nuclear program. From Seoul, NPR's Elise Hu asks why.

(SOUNDBITE OF ARCHIVED RECORDING)

UNIDENTIFIED WOMAN: (Speaking foreign language).

ELISE HU, BYLINE: When the announcement of yet another rules-breaking nuclear test came from Pyongyang, the cycle of international condemnations started quickly. And almost as fast as the angry reactions came calls for additional sanctions to economically cripple the North.

JIM WALSH: It's the same response every time. I don't think we're getting a lot of innovative thinking.

HU: Jim Walsh is an international security researcher at MIT, who, with Harvard's John Park, looked into whether sanctions work. What they found regarding sanctioning North Korea was similar to what the world has observed in 2016.

WALSH: North Korea has innovated. We imposed sanctions, but they have taken countermeasures. And we keep doing the same thing over and over again, singing the same song only a little louder. And they've taken actions that help them evade sanctions.

HU: One workaround for North Korea's nuclear program is to move North Korean businessmen into China to live and work. While there, they can hire a network of private Chinese companies to do arms procurement for them.

WALSH: So their fingerprints weren't on it. So these private Chinese companies were able to order parts and materials from other Chinese companies or from European companies that had set up production platforms in China, selling their goods without ever knowing that they were ultimately going to the North Koreans.

HU: A situation kind of created by all of the existing sanctions. And North Korea getting increasingly cut off from other countries has only deepened its dependence on China. An estimated 90 percent of North Korean trade is to or through China.

WALSH: China doesn't want a failed nuclear weapon state on its doorstep, so it's not going to cut off oil or coal or iron or something that threatens directly the survivability of the government.

HU: China did sign on to this year's, quote, "toughest sanctions yet." The language included cutting off the trade of minerals like coal. Coal is the North Korean economy's No. 1 export. But before signing on, China also insisted on a key loophole called the livelihood exemption. It allows the export of a product if cutting it off might affect the livelihood of the exporter.

TROY STANGARONE: I think because of this sort of potentially large carve-out, the Chinese are roughly saying, well, this coal is fine.

HU: Troy Stangarone is with the Korea Economic Institute.

STANGARONE: Right now the Chinese are essentially letting most of the trade go through.

HU: Which raises a key question about escalating any sanctions going forward. What's the point if they're not enforced? Jim Walsh.

WALSH: Eventually, you have to take the pressure or the leverage you get from sanctions and translate that into a political strategy. And that means negotiation.

HU: But getting there, Troy Stangarone says, requires a partner.

STANGARONE: For better or worse, a lot of the pressure has to come from the Chinese side because if they allow trade to continue apace, then the signal it sends to Pyongyang is that business as usual is fine.

HU: China, for its part, says it's not interested in heavier new sanctions, arguing they would drive an already difficult situation into a dead end. Elise Hu, NPR News, Seoul.

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