US order cranks up pressure but unlikely to rein in N. Korea

US Treasury Secretary Steven Mnuchin said on Thursday that banks doing business in North Korea would not be allowed to also operate in the United States under a new sanctions order aimed at thwarting Pyongyang's nuclear and missiles programme.
North Korean defectors protesting in Seoul yesterday against the South Korean government policy. The South had earlier approved US$8 million (S$10.8 million) worth of aid to the North.
North Korean defectors protesting in Seoul yesterday against the South Korean government policy. The South had earlier approved US$8 million (S$10.8 million) worth of aid to the North.PHOTO: EPA-EFE

Analysts say it will take months for sanctions to bite, and Kim could conduct more missile tests

President Donald Trump's new executive order empowering the Treasury Department to target individuals, companies and banks involved in business with North Korea casts a wide net. It runs the gamut of sectors from construction, energy, fishing and financial services, to information technology, manufacturing, medical, mining, textiles, transportation, and operation of any port of entry on land and sea.

Essentially, Section 4 of the order allows the United States government to freeze any and all funds associated with entities that do any kind of trade with North Korea.

"That is the bunker buster clause, and it is quite a powerful warning," Dr Sung-Yoon Lee, professor of Korean Studies at the Fletcher School of Law and Diplomacy at Tufts University in Boston, told The Straits Times.

Yet, analysts caution that it will still take months for sanctions to bite, and North Korean strongman Kim Jong Un may well conduct more tests as he rushes to perfect a deterrent nuclear missile system even as his economy - and the people - begins to suffer.

"Even in the best of sanctions, there is a time lag," Ms Shihoko Goto, senior associate for North-east Asia at the Woodrow Wilson Centre's Asia Programme, told The Straits Times. "There is technology that has already been developed that is in the works."

Dr Balbina Hwang, visiting professor at Georgetown University, told The Straits Times: "The North Korean regime has decided it wants nukes for strategic reasons, and sanctions alone will never achieve the goal of changing that."

Treasury Secretary Steve Mnuchin told journalists that the new executive order "allows us to freeze or block any transactions with any financial institution anywhere in the world that facilitates any transactions with the blocked person". He said: "The objective is for (North Korea) to stop their missile tests and give up their nuclear weapons."

Earlier, at a bilateral meeting with Mr Trump, Japanese Premier Shinzo Abe said: "Dialogue for the sake of dialogue would not produce anything. The key at this moment is to exercise and apply pressure against North Korea in a robust manner."

  • Key points of expanded sanctions

  • WASHINGTON • United States President Donald Trump has ordered a widening of US sanctions against North Korea in an attempt to get it to shut down its programme to develop nuclear weapons. Here is a look at some of them.

    • The US government will freeze the funds of any entity that does any kind of business with North Korea. This includes entities that own, control or operate any port in North Korea, including any seaport, airport or land port of entry; anyone who has engaged in at least one significant importation from or exportation to North Korea of any goods, services or technology; any North Koreans, including those that have engaged in commercial activity that generates revenue for the government of North Korea or the Workers' Party of Korea.

    • The order essentially covers a wide range of industries, from construction, energy, fishing and financial services to information technology, manufacturing, medical, mining, textiles, transportation and operation of any port of entry on land and sea.

    • No ship or aircraft can visit the US within 180 days of going to North Korea. The same restriction would apply to any vessel involvement in ship-to-ship transfers with North Korean vessels.

    • Banks doing business in North Korea will not be allowed to operate in the United States.

    SOURCE: REUTERS, WASHINGTON POST, AGENCE FRANCE-PRESSE

"This (new executive order) is consistent with the approach we had with Iran," said Mr Anthony Ruggiero, a sanctions expert and senior fellow at the Foundation for Defence of Democracies. "That was forcing countries and companies and individuals and banks to choose between the US and Iran, and in this case, it is North Korea."

In May 2015, French bank BNP Paribas SA was ordered by a US judge to forfeit US$8.83 billion (S$11.8 billion) and pay a US$140 million fine for violating sanctions on Iran, Sudan and Cuba.

But as the current crisis inexorably escalates, analysts have been warning that the language from Mr Trump only reinforces the Pyongyang regime's deep-rooted belief in a potential US attack.

Last month, former US president Jimmy Carter wrote: "The harsh rhetoric from Washington and Pyongyang during recent months has exacerbated an already confrontational relationship… and probably eliminated any chance of good faith peace talks.

"All parties must assure North Koreans they will forgo any military action against them if North Korea remains peaceful."

But talks have a bad record, others contend. "The suggestion that negotiations will somehow alter the thread is not realistic," Mr Ruggiero said.

Dr Lee said North Korea's ideological goal is to unify the peninsula and drive the US out. There is still nothing to suggest Mr Kim will give up his nuclear weapons. That will not come until he feels the choice is either denuclearise or abdication or death. "Until that existential point is reached, denuclearisation is a pipe dream," he said.

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Trump: Choose between US and North Korea. http://str.sg/4jRD

A version of this article appeared in the print edition of The Straits Times on September 23, 2017, with the headline 'US order cranks up pressure but unlikely to rein in N. Korea'. Print Edition | Subscribe