The New UNSC Sanctions Resolution on North Korea: A Deep Dive Assessment

UN Security Council Resolution 2270, passed on March 2, 2016, substantially shifts the multilateral sanctions regime on North Korea. It not only bolsters existing provisions, but also moves beyond sanctions that rest on determinations that a proscribed activity has taken place, such as arms-related proliferation.

Photo: Brendan McDermid/Reuters.
Photo: Brendan McDermid/Reuters.

The resolution seeks to ensure that Pyongyang’s latest provocations are met by efforts to shrink the number of overseas locations from which North Koreans can facilitate illicit activity, and increase the cost of doing business in those countries.

A complete assessment of the impact of the new resolution requires a deep dive into the prospects for implementation and the potential impact on North Korea. Two disclaimers are necessary. First, predicting implementation decisions by individual states at this stage is difficult, and largely rests on assessments of past behaviour. Second, the resolution’s effect will depend upon how vague concepts in the document are interpreted in practice.

North Korea’s Overseas Networks

North Korea’s official foreign presences have traditionally been essential nodes in the country’s illicit trade networks. In the past, other state-based proliferation and procurement networks have, for example, relied upon far-flung loyal diaspora communities to help facilitate their illegal activities and evade detection. Outside of China, North Korea generally does not have such established communities that it can draw upon. Instead, when generating or carrying out illicit activity, it relies to a much greater extent on deployed representatives of sanctioned entities, Embassy or trade officials or trusted foreign partners. The more locations it can base these representatives in without incurring intense scrutiny, the easier facilitating proscribed activity becomes. North Korea continues to use countries as diverse as Myanmar, Thailand, Brazil, Namibia, Vietnam, Uganda, Iran, Syria, China and Russia as bases for overseas operations of designated entities.

UNSCR 2270 takes aim at those ‘safe spaces.’ States are henceforth required to expel DPRK diplomats and associated individuals who are violating Security Council resolutions, close any offices of designated entities within their territory, and expel their representatives. If this provision is to be effective in curtailing North Korea’s overseas networks, outreach to a wide variety of states needs to occur quickly. The US and its like-minded partners should swiftly embark upon a diplomatic campaign where designated entities are known to be or suspected of being located, and demand compliance.

It will also be essential to closely monitor who North Korea is courting diplomatically in the future, as these countries pose a risk of becoming new conscious or unconscious bases for illicit North Korean operations. Namibia is one example where North Korea’s regular, and seemingly benign assistance in large-scale construction projects, has given officials who double-hat as arms traders a location from which to market goods across Southern Africa, either without the knowledge of or challenge from the Namibian government.

Realistically, however, it will be impossible to cripple North Korea’s illicit foreign networks. In the best-case scenario, a coalition of countries eager to support sanctions implementation will succeed in convincing other governments believed to be hosting North Korean designated entities (but who are unwedded to North Korea in any political, military or commercial sense) to comply with the resolution. In this scenario, diplomatic pressure and information dissemination campaigns may also help ensure that North Korean designated entities have more difficulty locating new safe territory from which to operate with cover from the host government. Intelligence gathering and sharing will also help identify any North Korean progress in finding such havens.

Even in this scenario, North Korea will continue to enjoy the protection of its more steadfast friends and those countries which actively reject or ignore sanctions obligations—Iran, Syria and Russia for example. The effect could be a consolidation of North Korean networks in countries where traditionally nonproliferation-active Member States have little realistic leverage.

In the worst case scenario, the majority of countries hosting North Korean designated entities will refuse to comply, perhaps believing (partly justifiably) that they are unlikely to face significant, concrete penalties for inaction. In some cases, if irritated by political pressure, foreign capitals may simply claim they have expelled the relevant representatives, and then avoid devoting resources to monitoring whether those designated entities reappear under a new guise or with new representatives. This dynamic would not be new. Furthermore, while this diplomatic struggle unfolds, North Korea’s designated entities will continue searching for uncharted territory to operate from. In both the best and worst case scenarios, it is clear that intelligence gathering and sharing will be key to making progress on the resolution’s implementation.

Logistical Restrictions

The introduction of significant logistical restrictions is a noteworthy feature of the resolution. States must prohibit their companies and nationals from chartering vessels, aircraft or crew services to the DPRK, and prohibit their nationals from operating DPRK vessels or using the DPRK flag,[1] unless those activities are exclusively for livelihood purposes. States are also required to ‘inspect’ all cargo going to and coming from the DPRK, cargo brokered by North Koreans or anything on North Korean-flagged vessels or aircraft.

While it will be relatively simple to police use of the DPRK flag by non-North Korean-owned vessels—curbing a fairly small stream of revenue from North Korea’s flag of convenience—provisions relating to cargo screening will be far more challenging to implement. At the moment, it is unclear what constitutes ‘inspecting’ cargo for the purposes of the resolution—a term probably deliberately left vague. Without clarification of the precise level of scrutiny expected, the inevitable effect of this provision will be widespread confusion and highly uneven implementation.

If clarified with its strongest interpretation, States whose ports see a substantial amount of North Korean trade and who opt to adhere to the letter of the resolution, will experience major burdens in screening relevant cargo. It is for that very reason that the prospects for the provision’s full implementation, especially by China, are very low. Indeed, given China’s abysmal record on implementing previous, softer cargo vigilance measures, it is difficult to envision Beijing taking systematic action to inspect North Korean cargo, however ‘inspect’ is defined. Unconfirmed reports that China has introduced a state ordinance which forbids North Korean-flagged vessels from docking in Dandong ports, based on interviews with local traders, should therefore be treated with skepticism and should not be viewed as an early indication of China’s intentions regarding the resolution.

If this prediction proves correct, the broader effect of the logistical measures contained within the resolution will be limited. As long as North Korean cargo can make it into China, it will be able to go elsewhere relatively easily. Once China can be falsely declared as the point of origin or destination of North Korean goods, those consignments will probably successfully evade most screening by other states and fall through the cracks in global sanctions implementation.

For North Korea in responding to this provision, the next steps will be to keep its flagged vessels close to home, wait and see how implementation proceeds, and then determine whether or not any special efforts are needed to get around changes that have occurred. In the unlikely event that North Korean-flagged vessels or vessels owned by the designated entity Ocean Maritime Management are systematically rejected from Chinese ports, for example, the broader task of getting goods into and out of China will become more challenging. In that situation, Pyongyang could re-flag and rename all of its vessels to conceal their national affiliation, a step it may take regardless of how China implements this provision. It appears that, already in the past few years, the share of the North Korean fleet that flies the North Korean flag has been shrinking—a trend which will likely be accelerated by this resolution.

How the US will treat any lacklustre Chinese implementation of inspection provisions is an interesting question. Under the new sanctions legislation recently passed by the US Congress, the Department of Homeland Security (DHS) is tasked with reporting on foreign ports that do not adequately screen North Korean cargo. If a port is deemed deficient, then the US is required to subject everything flowing between US territory and that port to increased scrutiny.[2] In practice, however, calling out Chinese ports for inadequate compliance could create more headaches for the US than for China, making it improbable that the DHS will take this step.

Coal and Mineral Sanctions

DPRK exports of coal, iron and iron ore are prohibited by the new resolution, exempting those for ‘livelihood’ purposes and unrelated to prohibited activity. How these caveats will be interpreted remains unclear, and it is probable that this language was inserted at the behest of Beijing. How can coal, iron, and iron ore exports be concretely proven to be directly linked to UNSCR violations? This distinction may have been slightly easier to make for imports to North Korea, perhaps by identifying an end-use facility that is part of the defence industrial complex, but is otherwise difficult to comprehend.

An additional caveat was also inserted by Russia to allow for coal from outside of the DPRK to be exported from Rason. While this exception may sound unusual, it likely relates to a specific deal between Mongolia, Russia and North Korea reached last year. Mongolia is set to transport its coal to Rason via Russia, with a view to selling it to the international market from there.

In practice, this provision means that China and other North Korean coal and iron importers will be able to take solace in vague language when they wish to. With caveated provisions such as these, Beijing appears to have bought itself leverage over North Korea that it previously argued (possibly disingenuously) that it did not enjoy. It is reasonable to believe that China’s agreement to UNSCR 2270—which goes far beyond the existing multilateral sanctions framework—indicates that, at minimum, it will vary its enforcement of new measures in accordance with North Korea’s own behaviour, taking action on some, but not all of the time. The most likely outcome of caveated sanctions on coal and iron trade is that there will be little systematic curbing of North Korean coal imports, but only periodic use of the measure to demonstrate displeasure with Pyongyang’s actions: an occasional pinching action.

The resolution also includes a ban on the DPRK’s exports of titanium ore, vanadium ore, rare earth minerals and gold—some of which have previously ended up in the supply chains of major multinational corporations. These measures will further curb existing and future streams that help North Korea generate hard currency, especially since they do not appear to contain Chinese-inserted caveats. This may be because it is in China’s interest to stem exports of those commodities. Recent geological studies assert that North Korea sits atop the world’s largest rare earth deposit, potentially jeopardizing China’s continued market dominance. Any foreign companies interested in North Korean rare earths will now have a strong disincentive to invest, meaning those minerals will likely stay in the ground and away from traditional Chinese customers. That could irritate Pyongyang, which has recently trumpeted the imminent expansion of its rare earths sector in the media. [3] Given the interests at play, this provision perhaps holds the greatest prospect of being implemented by China.

It is also worth noting that restrictions on exports of gold in particular could hamper North Korea’s use of that commodity as a form of payment for foreign goods and services—a method that evades the formal financial sector.[4]

Airplane Fuel Imports to North Korea

The resolution bans the export to North Korea of aviation fuel, including rocket fuel. As with other clauses, this was likely watered-down from a stronger US request for general restrictions on commercial air traffic with Pyongyang. Combined with the obligation to screen all cargo aboard Air Koryo flights, this revised measure is designed to hamper the airline’s ability to act as a means of transporting illicit cargo to and from North Korea. In practice, this measure will not affect Air China, and Russia made sure to clarify that countries will be permitted to fuel Air Koryo planes in their countries if that fuel will be used to fly to North Korea and back to the country in question. In effect, the provision therefore only requires countries to cease formal exports of airplane fuel consignments to North Korea.

As with other provisions, the primary country of interest from an implementation perspective is China, as the country accounts for most of Air Koryo’s commercial flights.[5] China is also a primary supplier of jet fuel to North Korea, having exported significant quantities in 2015. Yet despite its relevance as a transit point for North Korean air freight and previous UN Security Council resolutions compelling vigilance on Air Koryo’s cargo, China has not traditionally cooperated in scrutinizing those flights. If Beijing’s attitude has not changed in this respect, any cessation of formal airplane fuel exports will matter little. North Korean passenger flights will be able to fuel in the cities they fly into. Where Air Koryo planes are chartered, their journeys are usually to countries who are broadly friendly to North Korea with little regard for UN sanctions.

Financial Barriers

A raft of new financial restrictions are outlined in the resolution. States are obliged to close any existing North Korean financial institution presence on their territories. They must also ensure that financial institutions under their jurisdiction do not establish new joint ventures, take an ownership interest in DPRK banks, or have correspondent relationships[6] with DPRK banks unless with prior Sanctions Committee approval (which in most cases will probably not be given). Furthermore, they must ensure no such relationships, links or presences form in future. In short, if robustly implemented (a big ‘if’), these measures would further restrict North Korea’s direct and indirect overseas connectivity. China is not the only significant variable in this equation. Amongst others, Russia and Vietnam would also be affected, and they are unlikely to be enthusiastic adherents to these blunt requirements.

On the reverse side of the picture—the activities of foreign financial institutions inside the DPRK—the resolution is heavily caveated. While States must ensure that financial institutions under their jurisdiction do not henceforth establish new relationships or ventures in North Korea, they are allowed to keep open existing branches, subsidiaries or accounts there unless the State has ‘credible information’ that provides ‘reasonable grounds’ that those relationships are being used for prohibited activity.

In other words, Chinese financial institutions have existing representations and/or accounts in Pyongyang that they have no intention of closing. The enduring presence of foreign financial institutions in North Korea leaves the country with a channel for financing. International pressure will be increased on those banks and their home governments to make sure they are appropriately vigilant for use of that channel for illicit purposes.

North Korea’s approach to these obstacles will be consistent: keep assets offshore in accounts that conceal North Korean ownership, and use those assets to facilitate international transactions. Acknowledging this work-around, UNSCR 2270 also requires states to freeze the assets of any DPRK government- or party-linked entity or individual that ‘the State determines’ are associated with the DPRK’s nuclear and missile programs or other prohibited activities. Even then, North Korea’s wealth of experience in hiding those assets and their owners makes it improbable that these provisions will change the status quo to the extent that North Korea’s ability to work around other financial barriers introduced by the resolution is diminished.

The Bottom Line

The largest variable in its success for any UN Security Council resolution is always the breadth of implementation. UNSCR 2270 is no exception, as it makes the sanctions compliance task more complex than ever. In some areas, such as restrictions on rare earth exports from North Korea, major players have strong incentives to enforce the new provisions. Heavy caveating of other provisions, such as existing financial relationships in North Korea and coal exports, indicates that issues with competing interpretations and variable enforcement are likely to arise. In respect to provisions designed to constrain North Korea’s international networks, the past behaviour of relevant states indicates that demands for compliance may be ignored or half-heartedly responded to. Even in best-case scenarios, North Korea’s ‘safe spaces’ may simply be distilled down to the territories of persistently uncooperative governments.

It is difficult to foresee broad and consistent implementation of the new resolution, especially from players such as China, to create barriers that North Korea cannot find its way around. Pyongyang will continue to use its sanctions evasion experience to keep substantial assets hidden offshore for the purpose of facilitating legal and illegal trade deals, for example. And it will probably embark upon a campaign to re-flag and re-name what remains of the North Korean-flagged fleet. However, an important effect of the new resolution is that all of these initiatives require time, energy and resources, which are limited in the North Korean context.

Pyongyang will therefore probably feel a pinch in those places where China chooses to act systematically, where it cannot adapt quickly, or where limited resources do not permit all issues to be addressed simultaneously. The North will be irritated by future opportunities that the resolution now denies it, such as rare earth exports and increased gold trade. Whether those pressures are substantial enough to change decision-making calculations in Pyongyang over the merits of any or all of its illicit pursuits or in terms of its continued pursuit of nuclear weapons and ballistic missiles remains to be seen. But without participation from a wide range of states, we may never find out.


[1] North Korea’s flag continues to be used as one of convenience. This author’s investigations suggest that companies in territories as diverse as the UAE and Pakistan have flagged their ships under the North Korean flag. In 2014, a North Korean-flagged oil tanker evaded a Libyan naval blockade and was subsequently stopped by US marines. Pyongyang later announced that it had nothing to do with the incident and had only lent its flag for a six month period. ‘North Korea disowns Libya oil tanker,’ BBC News, March 13, 2014,

[2] H.R. 757, North Korea Sanctions and Policy Enhancement Act of 2016, signed into law on February 18, 2016,

[3] Pyongyang has not stopped talking about the discovery since, though some experts have shed doubt on the original study. See Leo Byrne, ‘Experts Skeptical of North Korea’s Rare Earth Mineral Claims,’ NK News, March 26, 2015,

[4] The latest known case of North Korean payment with gold was only one year ago, when the first secretary for commercial affairs at the North Korean Embassy in Bangladesh, was caught importing 27 kilograms of gold via Singapore, likely intended as payment for a major deal elsewhere. “Bangladesh orders N Korean envoy out for smuggling gold,” Al Jazeera, March 9, 2015,

[5] Air Koryo also flies to countries such as Russia and Kuwait, though those governments are equally unlikely to robustly implement UN restrictions on North Korean aircraft.

[6] The correspondent relationship and branch/office-opening provisions are significant for political reasons. While the US may eventually gain the legal ability to pursue foreign financial institutions for contributing to, or not sufficiently preventing, illicit North Korean activity, the political headaches of acting against Chinese or Russian banks unilaterally could have been so immense as to be self-deterring. With the new UN resolution, China and Russia have voluntarily acquiesced to greater restrictions on the interactions between their financial sectors and North Korea’s. That strengthens the US argument when firing future warning shots over any enduring financial relationships, before concluding that unilateral measures drawing upon secondary sanctions are a necessary course of action.

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