North Korea beats sanctions and finds cash for nuclear weapons
Kim Jong-un has yet to make any concessions on armament programme as deadline looms with little progress in sight
New York — North Korea is poking holes through a global web of sanctions and generating enough cash to keep its nuclear weapons programme moving along as a year-end deadline Kim Jong-un set to reach a deal with the US approaches — with little progress in sight.
Instead of “concrete, verifiable steps towards denuclearisation” — a mantra of President Donald Trump’s policy towards Pyongyang — Kim has yet to make any concessions on his nation’s nuclear programme. The ability of the North Korean leader to find ways around UN sanctions is making it difficult for America’s “maximum pressure” campaign to deliver on what the Trump administration has promised.
“The problem is there is wiggle room, and while the sanctions are effective at squeezing the economy over the long run, I don’t believe chairman Kim Jong-un sees them as a challenge in the short term,” Hugh Griffiths, who led the UN’s panel of experts on North Korea until earlier in 2019, said in an interview.
Kim has repeatedly threatened to find a “new way” if negotiations with the US fail to progress by year end, and recent talks in Stockholm lasted less than half a day. That timeline may reflect the US political calendar as much as Kim’s own. Trump could be hard-pressed to secure progress on North Korea while facing a possible impeachment trial and running for reelection.
Also making a year-end breakthrough less likely is that the chief US negotiator, Stephen Biegun, is Trump’s pick to be the No 2 official at the state department. While the formal nomination hasn’t yet been sent to the Senate, Biegun has largely been unable to meet his North Korean counterparts this year.
The result is a deadlock for diplomacy, which could be just what Kim wants. The US is pushing hard to bring North Korea back to negotiations and South Korea is taking North Korea’s deadline “very seriously”, South Korean National Security Adviser Chung Eui-yong has said.
“We have nothing to show for several years of diplomacy except for a far more capable North Korea and a less robust US-South Korea relationship,” said Richard Haass, president of the Council on Foreign Relations. “He is uninterested in denuclearisation. He’s interested in keeping nuclear weapons, keeping ballistic missiles and getting out from under sanctions. And it seems to me he’s making some progress.”
North Korea has fired off at least 20 missiles in a dozen different military tests since breaking a testing freeze in May, with the manoeuvres seen by experts as improving Kim’s ability to launch quick strikes through new weapons that could eventually deliver nuclear warheads.
Yet that doesn’t mean Kim will resume testing of long-range missiles or walk away from talks with the US immediately after his deadline, as those options also pose risks to his regime.
While they haven’t forced Kim into making nuclear concessions, US-led sanctions have had a significant effect on his besieged economy. North Korea’s exports plunged 86% to just $240m (R3.57bn) in 2018, while imports fell 31% as GDP contracted 4.1%, according to estimates from South Korea’s central bank.
Griffiths said the volume of North Korean coal sales had fallen sharply as countries such as China and Russia keep the country’s ships away from their ports. But Pyongyang has found loopholes, like delivering coal at sea in ship-to-ship transfers. That takes advantage of the lack of interagency co-operation in some East and South Asian countries, which are less adept at co-ordinating among port authorities, safety inspectors and coast guards.
In the first four months of this year, North Korea raked in $93m via 127 deliveries of prohibited coal shipments, according to evidence provided to the UN panel of experts. That revenue stream helps it to ease the pain of sanctions.
Even with its isolated and restricted economy, North Korea can afford to push ahead with its nuclear aspirations because its 1950s-era programme is relatively cheap and it spends more than 20% of GDP on the military. The country has spent about $100m to test more than 30 ballistic missiles since 2011, according to South Korean estimates.
North Korea has also been successful in breaching UN-imposed caps on oil imports. In a letter in June to the UN, the US said the regime had already exceeded the 500,000 barrels of oil permitted. North Korea has been so successful in importing refined petroleum that the most recent UN report said “overall stable prices” for petrol and diesel show “a lack of domestic shortages”.
Then there’s North Korea’s growing mastery of cyberattacks and financial theft. According to the UN, North Korean agents have amassed about $2bn by stealing money from financial institutions and cryptocurrency exchanges. Griffiths said his own panel was hacked several times.
Citing the growing sophistication, Stephanie Kleine-Ahlbrandt, who also served on the UN panel, pointed to one example in which North Korean cyber operatives gained access to the ATM networks of an undisclosed country, prompting 10,000 cash distributions to individuals across more than 20 countries in five hours.
North Korea doesn’t “have to jump through hoops to arrange complicated evasion schemes”, Kleine-Ahlbrandt said in comments reported by the website 38 North. “Instead, it can just hack into a bank to steal money.”
Trump has shrugged off the more recent North Korean weapons tests, saying Kim has lived up to his pledge to halt tests of nuclear weapons and intercontinental ballistic missiles.
At the same time, North Korea continues to argue that the US is failing to take the steps needed to achieve a breakthrough. Pyongyang has called US-led joint military drills with South Korea a “breach” of agreements reached with the US. Washington isn’t taking seriously the year-end deadline, North Korea’s state-run news agency warned.
Susan Rice, a former national security adviser to president Barack Obama, said Trump has allowed Kim to keep on developing his programme by sending him “love letters” without getting anything “concrete” in return.
“The pressure is now off North Korea, and the Russians and the Chinese have eased sanctions,” Rice said on November 7 at The Year Ahead conference in New York. “And the American people have been lulled into a false sense of security.”