A copy of the Asia Economy newspaper featuring images of U.S. President Donald Trump, left, North Korean leader Kim Jong-un, right, and South Korean National Security Council chief Chung Eui-yong speaking in Washington. (Photographer: Jean Chung/Bloomberg)

It's Time to Tighten North Korea Sanctions, Not Ease Them

(Bloomberg View) -- The administration of U.S. President Donald Trump may or may not be right in thinking that its “maximum pressure” campaign has brought North Korea to the bargaining table. What’s certain is that there remain cracks in that campaign. To sustain pressure on the Pyongyang regime and give the U.S. leverage in upcoming talks between Trump and North Korean leader Kim Jong Un, they need to be plugged.

Certainly, the Trump administration deserves credit for coordinating the harshest set of sanctions ever levied against North Korea, targeting in particular its energy trade with the outside world. The United Nations has banned member states from buying North Korean coal and sharply curtailed the volume of crude oil and refined petroleum products the country can import. The U.N. also prohibits ship-to-ship transfers of fuel, in addition to exports of commodities such as iron and seafood.

While such measures are welcome, they’re virtually unenforceable under the current system. The U.N. committee tasked with monitoring sanctions is overworked, not particularly expert in hydrocarbon markets and starved of administrative capacity. The onus to ensure that the committee is supplied with timely, accurate data falls to national governments. They in turn depend on compliance by companies that have little incentive to cooperate enthusiastically.

To improve oversight, the U.S. and likeminded countries should enlist the help of the International Energy Agency. The IEA is a gold-standard barrel-counter. It has a sophisticated administrative apparatus already dedicated to understanding global energy market flows, as well as established relations with energy officials and private firms around the world. Given its technical expertise and data-gathering capabilities, the agency could develop a much more effective process to monitor North Korea’s energy trading and pinpoint where it’s skirting sanctions.

Weak inspection rules for ocean-going vessels pose another challenge. When ships suspected of illegally transporting prohibited goods for North Korea are in port or territorial waters, U.N. member states are bound to inspect them. On the high seas, though, that requirement is non-binding, since many governments fear such action could violate freedom of navigation. Cannily, North Korea conducts much of its business through ship-to-ship transfers in international waters.

In late February, the U.S. announced a major tranche of sanctions on vessels and shippers engaged in such transfers. It also issued maritime guidance to help shipping and insurance companies, banks and port managers, among others, appreciate the risks they ran if they participated in or overlooked such activity. A day later, as the Japanese government documented publicly, North Korea was at it again.

China and Russia should join with the U.S. in pushing for binding inspections rules on the high seas. Both countries have resisted tougher measures in the past, even merely expanding the list of vessels suspected of conducting illegal trade for North Korea. Still, they share a desire for stability in the region and have signaled that the time to ignore North Korean sanctions violations is over. It’s in their interests to show Kim that the international community doesn’t intend to be divided.

Separately, the U.S. and China could launch a joint maritime interdiction effort, which isn’t unprecedented and for which the two navies have appropriate staging areas and vessel capacity. As far-fetched as the idea sounds given current trade tensions, it would be a relatively painless way to demonstrate resolve ahead of talks with North Korea, in which both countries are deeply invested.

Ultimately, only those negotiations can determine whether or not North Korea will give up its nuclear program. But only a serious and sustained pressure campaign, with no loopholes, is likely to convince Kim that he can neither buy off the U.S. with a false peace offering nor continue to threaten international security. As he prepares for their summit, Trump should keep that in mind.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

To contact the authors of this story: Elizabeth Rosenberg at nurwitz@cnas.org, Neil Bhatiya at nbhatiya@cnas.org.

For more columns from Bloomberg View, visit http://www.bloomberg.com/view.

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