Posted September. 28, 2017 07:47,
Updated September. 28, 2017 08:47
The U.S. government on Wednesday announced that it implemented a new sanction on 10 North Korean banks and 26 nationals including managers of North Korean banks’ overseas branches. The new sanction has been introduced only five days after U.S. President Donald Trump signed on an executive order to sanction the North via a secondary boycott on individuals, corporations and financial institutions engaging in transactions with the North. This seems to be a Washington’s preemptive measure to shut down any entry to the U.S. financial network by foreign financial institutions doing businesses with the North.
Through the new, tougher measures, the United States is trying to cut funding that goes into the reclusive regime. Any foreign banks doing businesses with North Korea will be abandoned from the U.S.-dollar based financial system, which is serving as a key currency of the global financial network. Back in 2010, Washington had imposed a secondary boycott to stop Iran’s nuclear program, which proved to be successful. In addition to financial sanctions, the United States will pressure North Korea even further on trade bans with the North.
Against the backdrop, China, North Korea's biggest trading partner, holds the key. China resumed purchase of coal from North Korea last month, contrary to its announcement to stop coal imports from the North in early 2017. Through the United Nations Security Council’s resolution in 2016 to limit the amount of coal imports from the North, China stopped purchase of coal from the North. However, with the passing of new resolution to stop imports by the U.N. Security Council in August, China began importing coal up to the limit before the new resolution is ratified.
North Korea has tried to buy foreign currency in multiple ways while evading international sanctions. For Pyongyang, China has been its gateway for its secretive practices, including swap, smuggle, sending of overseas workers and diplomatic pouch, along with China’s mediation or connivance. Chinese authorities began investigation on Dandong-based Liaoning Hongxiang Group last year for exporting goods to the North, but no progress has been reported. This is the reason why China has been blamed for making sanctions on the North much less effective.
The U.S. government says any sanction on North Korea is a part of its peaceful approach to pressure the regime, while declaring that it will use military options if it does not work. President Donald Trump warned Tuesday (local time), saying, “Military options will be devastating.” “I applaud China for breaking off all banking relationships with North Korea. I want to thank President Xi,” Trump said at the same time. Trump seems to stay vigilant on China’s walk-away from sanctions on the North while making China seemingly responsible for any events going forward. China may not want a total destruction of the North as warned by Trump. However, if China becomes “a loophole” in reining in the North again, it will only stimulate North’s nuclear bomb going off.