With North Korea threatening to continue to conduct nuclear and missile tests, the United States has taken further steps to choke off the funding that allows the rogue state to continue its nuclear and missile provocations.
U.S. President Barack Obama issued an executive order Wednesday designed to implement both the U.N. Security Council resolution against the recalcitrant regime and the recently enacted North Korea Sanctions and Policy Enhancement Act.
The latest executive order goes a step further than the U.N resolution and U.S. sanctions legislation. It zeroes in on the North’s labor exports, an important source of hard currency for the impoverished state.
A U.N. report estimates Pyongyang earns between $1.2 billion and $2.3 billion per year by exporting about 100,000 workers to some 40 foreign countries, including China and Russia. These workers earn just $120-$150 per month on average as the Pyongyang government walks away with a large chunk of their wages.
The executive order empowers the secretary of the treasury to block the property of any person or entity found “to have engaged in, facilitated, or been responsible for the exportation of workers from North Korea, including exportation to generate revenue for the government of North Korea or the Workers’ Party.”
The new measure is welcome as it would tighten the financial chokehold on North Korea by plugging a big loophole in the U.N. sanctions resolution.
The executive order also introduces a secondary boycott, granting the treasury secretary the power to expand sanctions to individuals or companies in third countries that do business with North Korea. Yet it stopped short of blacklisting any Chinese individuals or companies.
While the executive order is aimed at tightening the financial noose around North Korea’s neck, its effect hinges largely on China’s cooperation.
The most effective way to cut off North Korea’s cash flows would be to impose banking restrictions similar to those introduced in 2007.
At the time, the U.S. Treasury Department told American financial institutions to cut ties with a Macau-based bank called Banco Delta Asia, which was accused of handling North Korean funds.
This measure effectively cut the North off from the international banking system, as Chinese banks stopped doing business with it.
Washington needs to press China to cooperate in implementing BDA-type banking restrictions. This week, Adam Szubin, the U.S. Treasury’s acting undersecretary for terrorism and financial intelligence, visited Beijing and Hong Kong to discuss the matter.
North Korea should heed China’s participation in enforcing these sanctions. Earlier this week, North Korean leader Kim Jong-un told officials to conduct “a nuclear warhead explosion test and a test-fire of several kinds of rockets able to carry nuclear warheads” to enhance the regime’s nuclear attack capability.
Kim should realize that another round of nuclear and missile tests could put his regime on a path toward self-destruction by prompting the international community to further tighten its stranglehold on it.
Kim may not feel the effect of the sanctions now, but it will not be long before they begin to bite. He should change course before it is too late.
