The Philippines is one of North Korea’s few remaining non-China trade partners and has been a significant site of DPRK illicit operations, which generate hard currency to sustain the regime and its weapons programs.
Closing off these operations and the funds they supply would put increased international pressure on North Korea, in response to its recent nuclear and missile tests and latest inflammatory propaganda. Here are three important points about the Philippines’ role:
1) How deep are the links between the Philippines and North Korea?
According to WTO statistics, the Philippines was North Korea’s third-largest trading partner in 2016, with bilateral trade volume of around $87 million. This ranks the Philippines behind only China ($5.5 billion, around 90 percent of DPRK trade) and India ($140 million), which recently announced that it would restrict that trade. Even Russia trades less with North Korea ($76 million) than does the Philippines.
Equally important, the Philippines has been an important location for the complex illicit networks that sustain the Kim regime, fund DPRK weapons development and export arms abroad.
2) Where does the Philippines fit in U.S. strategy?
The Philippines appears to be part of the Trump administration’s larger strategy to get Southeast Asia to pressure the DPRK — by tightening sanctions enforcement, preventing onward proliferation of DPRK missiles and weapons to other countries of concern, and downgrading or cutting off trade ties. President Trump has made personal calls to the leaders of Singapore and Thailand, while Secretary of State Rex Tillerson prioritized North Korea in a meeting with ASEAN foreign ministers last week.
Why Southeast Asia? Countries in the region are key sites of DPRK trade, weapons proliferation and illicit network activity. That’s especially true of Malaysia, where Kim’s brother Kim Jong Nam was assassinated with chemical weapons earlier this year, and where the DPRK was running an arms export operation remitting funds to Pyongyang in alleged violation of U.N. sanctions.
Other activities in the region — http://www.reuters.com/article/us-northkorea-malaysia-kim-relations-idUSKBN16E1A6">mining, http://asia.nikkei.com/Politics-Economy/Policy-Politics/Southeast-Asia-clamping-down-on-North-Korean-businesses">restaurants, etc. — are designed to boost DPRK hard currency reserves. Southeast Asia is an important operating site for DPRK state trading companies and their financial networks. At least two countries (Malaysia and Singapore) offered North Koreans visa-free travel.
3) Can sanctions against the DPRK be more effective?
Critics of sanctions commonly argue that the DPRK is “heavily sanctioned,” so there’s little possibility of adding meaningful pressure. However, the number of individuals/entities sanctioned for DPRK weapons development is only around a quarter of the number sanctioned for similar Iran-related activities.
There has been little use of “secondary sanctions” — measures targeting non-DPRK companies and banks that do business with sanctioned North Korean entities and enable them to continue to operate.
Enforcement of existing sanctions is also incredibly weak: Of the 193 countries bound by the U.N. resolutions on North Korea, 116 — including some co-sponsors — have yet to submit a single implementation report. Pressure could be increased in all of these areas.
North Korea’s moneymaking operations are highly adaptable. If Beijing turns up the heat, it’s important that North Korea not be able to rely on its southern neighbors as an easy revenue substitute. And for pressure to have maximal impact, it’s important that all of these things happen simultaneously, not gradually, so that Pyongyang doesn’t have time to adapt and insulate itself.
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