US To Propose Watered Down North Korea Sanctions To Appease China And Russia

Originally appeared at ZeroHedge

In the latest indication that the US is desperate to reach a diplomatic compromise over North Korea, even if it means appeasing Beijing and Moscow, Reuters reports that while the UN Security Council is set to vote on Monday afternoon on a U.S.-drafted resolution to impose new sanctions on North Korea over latest nuclear test, as discussed on Friday, the new draft no longer proposes blacklisting North Korean leader Kim Jong Un, while also dropping a proposed oil embargo – something Beijing had vocally opposed – and instead intends to impose a ban on condensates and natural gas liquids, a cap of 2m barrels a year on refined petroleum products, and a cap on crude oil exports to North Korea at current levels.

North Korean leader Kim Jong Un reacts during a celebration for nuclear scientists and engineers who contributed to a hydrogen bomb test, Sept. 10

In short: the US has materially weakened its proposed North Korea sanctions, “in an attempt to appease” Pyongyang’s allies Beijing and Moscow following negotiations over the past few days. In order to pass, a resolution needs nine of the 15 Security Council members to vote in favor and no vetoes by any of the five permanent members — the United States, Britain, France, Russia and China.

Some more details:

• the draft resolution no longer proposes an asset freeze on the military-controlled national airline Air Koryo. The new draft resolution also drops a bid to remove an exception for transshipments of Russian coal via the North Korean port of Rajin. In 2013 Russia reopened a railway link with North Korea, from the Russian eastern border town of Khasan to Rajin, to export coal and import goods from South Korea and elsewhere.
• the new language drops a bid to remove an exception for trans-shipments of Russian coal via the North Korean port of Rajin, and it no longer proposes an asset freeze on the military-controlled national airline Air Koryo
• while the original draft resolution would have authorized states to use all necessary measures to intercept and inspect on the high seas vessels that have been blacklisted by the council, the final draft text calls upon states to inspect vessels on the high seas with the consent of the flag state, if there’s information that provides reasonable grounds to believe the ship is carrying prohibited cargo.
• the final draft text to be voted on Monday by the council would require the employment of North Korean workers abroad to be authorized by a Security Council committee. However, this rule would not apply to “written contracts finalized prior to the adoption of this resolution” provided that states notify the committee by Dec. 15 of the number of North Koreans subject to these contracts and the anticipated date of termination of these contracts. some diplomats estimate that between 60,000 and 100,000 North Koreans work abroad. A U.N. human rights investigator said in 2015 that North Korea was forcing more than 50,000 people to work abroad, mainly in Russia and China, earning between $1.2 billion and $2.3 billion a year. The wages of workers sent abroad provide foreign currency for the Pyongyang government.
• There is new political language in the final draft urging “further work to reduce tensions so as to advance the prospects for a comprehensive settlement” and underscoring “the imperative of achieving the goal of complete, verifiable and irreversible denuclearization of the Korean Peninsula in a peaceful manner.”

Ahead of the report of watered down sanctions, North Korea had warned that “in case the U.S. eventually does rig up the illegal and unlawful ‘resolution’ on harsher sanctions, the DPRK shall make absolutely sure that the U.S. pays due price,” the spokesman said in a statement carried by the official KCNA news agency.  “The world will witness how the DPRK tames the U.S. gangsters by taking a series of actions tougher than they have ever envisaged,” the unnamed spokesman said.

South Korean President Moon Jae-in said last week during a visit to Russia that shutting off North Korea’s supply of oil was inevitable this time to bring Pyongyang to talks and he called for Russian President Vladimir Putin’s support.  Putin has remained firm however that such sanctions on oil would have negative humanitarian effects on North Koreans.

Meanwhile, China, the North’s lone major ally, emerged as the most critical in deciding if oil sanctions go ahead because it controls an oil pipeline that industry sources say provides about 520,000 tonnes of crude a year to the North. Chinese Foreign Ministry spokesman Geng Shuang stressed the need for consensus and maintaining peace.

“I have said before that China agrees that the U.N. Security Council should make a further response and necessary actions with respect to North Korea’s sixth nuclear test,” he told reporters.

“We hope Security Council members on the basis of sufficient consultations reach consensus and project a united voice. The response and actions the Security Council makes should be conducive to the denuclearization of the peninsula, conducive to safeguarding the peace and stability of the peninsula, and conducive to push forward the use of peaceful and political means to resolve the peninsula nuclear issue.”

Since 2006, the Security Council has unanimously adopted eight resolutions ratcheting up sanctions on North Korea over its ballistic missile and nuclear programs. The Security Council last month imposed new sanctions over North Korea’s two long-range missile launches in July. The Aug. 5 resolution aimed to slash by a third Pyongyang’s $3 billion annual export revenue by banning coal, iron, lead and seafood.

According to Reuters, the latest draft of the resolution reflects the challenge in imposing tough sanctions on the North by curbing its energy supply and singling out its leader for a financial and travel ban, a symbolic measure at best but one that is certain to rile Pyongyang.

It will also be a disappointment to South Korea, which has sought tough new sanctions that would be harder for Pyongyang to ignore, as it said dialogue remained on the table.

“We have been in consultations that oil has to be part of the final sanctions,” South Korean Foreign Minister Kang Kyung-wha told a news conference, saying Pyongyang was on a “reckless path”.

“I do believe that whatever makes it into the final text and is adopted by consensus hopefully will have significant consequences on the economic pressure against North Korea.”

That no longer appears to be the case, what however has clearly emerged is that when it comes to the political fate of North Korea, even the US now admits that China and Russia are calling the shots.