Making Sanctions Smart Again: Why Maritime Sanctions Have Worked against North Korea

Abstract

Making Sanctions Smart Again:Why Maritime Sanctions Have Worked against North Korea Robert Huish (bio) Following a period of escalating tension between the United States and the Democratic People's Republic of Korea (DPRK), in which the Kim regime conducted a series of ballistic missile and nuclear tests and the Trump administration pursued a policy of maximum pressure, Donald Trump and Kim Jong-un met for a historic summit in Singapore on June 12. What changed to bring the two leaders together? The main reason North Korea sat down at the bargaining table was not sports diplomacy at the Winter Olympics or Trump's Twitter barrages. It was that the country is out of resources as a result of the international maritime sanctions.1 These sanctions have worked, and worked well, by targeting the environment on which the Kim regime depended to acquire belligerent materials. The 2017 maritime sanctions against North Korea, particularly U.S. Executive Order 13810 and UN Security Resolution 2397, worked for three reasons.2 First, owing to its unique geography, North Korea was almost entirely dependent on illicit maritime trade for its weapons programs, which stands in contrast to long-held claims that most military hardware came overland from China.3 Second, some argue that North Korea's already hollowed-out, authoritarian economy created an "inner isolation" among most of the country's nearly 26 million inhabitants.4 Sanctions are often responsible for increased suffering; however, most North Koreans survive through limited self-sufficiency or black markets that are often unaffected [End Page 42] by formal sanctions or the country's international economic environment. Third, sanctions that targeted foreign companies, in particular maritime insurance companies that may have provided protection and indemnity (P&I) insurance to North Korean vessels, provoked a swift reaction by the insurers to absolve themselves from dealings with North Korea. The important message of the sanctions imposed in 2017 is that this focus on pressuring the maritime industry led to a noticeable behavioral change in North Korea. The remainder of this essay examines what lessons about the efficacy of smart sanctions can be drawn from the case of maritime sanctions against North Korea. The next section will describe the 2017 sanctions from a maritime standpoint and analyze why they worked. The essay concludes by considering the potential to effectively apply similar sanctions to other targets. Have You Been to Sea? To understand why maritime sanctions worked so well against North Korea, two issues must be discussed. First, what are effective sanctions? And second, what role does China play in enabling North Korea to outsmart sanctions? For years, the international community made two major errors in dealing with North Korea. Many experts believed, first, that any sort of sanction would be a good measure against the Kim dynasty and, second, that China is the sole provider of resources, including military resources, to North Korea. Both of these claims are problematic. Sanctions aim to encourage a behavioral change of a target nation or its leadership. Traditional, or "dumb," sanctions either prohibit the target from any financial dealings with the issuer's market or seize the target's assets in the issuer's territory. Such ham-fisted sanctions often do more to further the suffering of the population than apply pressure on the leadership. In the 1990s, then secretary-general of the United Nations Kofi Annan encouraged the use of "smart" sanctions in order to overcome such blunders. Speaking in hindsight of the tragedies in Iraq, the Balkans, and East Africa, Annan argued that economic policy could be crafted so that despotic leaders are pushed toward behavioral change given that their own personal assets were at risk.5 In the 1990s this logic made sense because many dictators had offshore assets that could be directly targeted. Even so, many tyrants, including members of the Kim dynasty, managed to acquire [End Page 43] luxury goods and odious resources through shady networks involving fake currency production, narcotics trafficking, weapons smuggling, and insurance scams. Moreover, sanctions did not deter the Kims from pursuing nuclear tests or overseeing brutal human rights violations. One of the faultiest assumptions about North Korea in the international relations literature was that North Korea...