New sanctions on North Korea a direct hit on conventional trade

The UN Security Council has voted unanimously to impose strict new sanctions on North Korea in response to Pyongyang’s launch of two intercontinental missiles last month.

Conventional trade not associated with proliferation is a key target of the new sanctions as they significantly step up restrictions on doing business with the country.

The sanctions, if effective, may cost Pyongyang as much as US$1 billion a year, a very large sum for such a small economy with exports under normal circumstances running at just US$3 billion a year.

Expanded scope

Trade not directly related to proliferation with North Korea was targeted for first time after a missile launch last year, which prompted UN Security Council Resolution 2270.

These sanctions included restrictions on the export of mineral resources such as coal and iron.

The new sanctions set out in UN Security Council Resolution 2371 expand upon those measures, for example by placing a total ban on coal and iron exports whereas previously sales of these commodities were subject to a cap.

Restricted activities

The latest resolution, drafted by the US, bans North Korean exports of coal, iron, iron ore, lead, lead ore and seafood.

Restrictions have also been placed on the use of North Korean labourers abroad.

Categories: Trade Based Financial crimes News

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