North Korean Trade Freeze

North Korea's only major import to the United States has been a highly potent grain alcohol, but new trade curbs are drying up that trade as well.
2009-08-19
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The United Nations Security Council meets on North Korea's nuclear policy at the United Nations in New York,  June 12, 2009.
The United Nations Security Council meets on North Korea's nuclear policy at the United Nations in New York, June 12, 2009.
AFP

WASHINGTONThe United States has effectively frozen what little trade existed with North Korea, under economic sanctions linked to a stand-off over Pyongyang's nuclear program.

According to a senior official at the U.S. Treasury, no applications to import goods manufactured in North Korea into the United States have been approved over the last 13 months.

A total of 10 import applications were filed after President George W. Bush said "trading with the enemy" sanctions would no longer apply in mid-2008, the official said, but none has been approved.

All the applications are considered "pending," the official said.

The action comes under International Emergency Economic Powers legislation, which requires all government departments and agencies to implement its provisions.

Washington recently announced new sanctions, authorized by the U.N. Security Council after Pyongyang conducted a second nuclear test and fired off a series of missiles.

Steep drop

According to Commerce Department statistics, U.S.-North Korea trade amounted to U.S. $52 million in 2008, but stood only at about U.S. $374,000 dollars through the first half of 2009.

Since 2006, officials say, the only North Korean good imported to the United States has been soju, a particularly potent Korean grain alcohol with alcohol content ranging from 20 to 45 percent.

After North Korea promised, within the context of the Six Party Talks, that it would give up its nuclear program, the United States exported humanitarian food aid to North Korea worth U.S. $52 million dollars.

But Washington froze food aid in March, citing a refusal by North Korean officials to allow adequate monitoring of where the food ended up, including the use of Korean interpreters on the ground.

Sanctions expert George Lopez of Notre Dame University said the Executive Order effectively reimposed trade sanctions on Pyongyang.

"It's just an executive decision by the U.S. government, in a sense to reimpose some of these sanctions  unilaterally," Lopez said.

"But, now, of course, since the Security Council has gone ahead and passed a new resolution, all of this comes under both executive order and as a matter of U.S. foreign policy in conjunction with the United Nations."

De facto ban

According to Lopez, the current situation amounts to a de facto ban on commerce with North Korea.

"The 'pending' is not likely to be removed, I would think, in practice until we see a dramatic change in conditions between North Korea and the United States," Lopez said.

"They can hold these things in suspension for a very long time."

The Treasury Department's Office of Foreign Assets Control (OFAC) enforces economic and trade sanctions based on U.S. foreign policy and national security goals, according to the agency's Web site.

The sanctions target foreign countries and regimes, terrorists, international narcotics traffickers, those engaged in activities related to the proliferation of weapons of mass destruction, and other threats to the national security, foreign policy, or economy of the United States.

OFAC acts under Presidential national emergency powers, as well as authority granted by specific legislation, to impose controls on transactions and freeze assets under U.S. jurisdiction.

Original reporting in Korean by Kim Jin-Kuk. Korean service director: Insop Han. Translated by Grigore Scarlatoiu. Written for the Web in English by Luisetta Mudie. Edited by Sarah Jackson-Han.

CH. 1: MANDARIN | CANTONESE

CH. 2: VIETNAMESE | BURMESE | KOREAN

CH. 3: KHMER | LAO | UYGHUR

CH. 4: TIBETAN

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