September 13, 2017
Elizabeth Rosenberg Testifies before the House Financial Services Committee
A Legislative Proposal to Impede North Korea’s Access to Finance
North Korea’s alarming and dangerous recent expansion of provocations, including more ballistic missile launches and a sixth, powerful nuclear test, highlight the need for much stronger pressure on the regime. This pressure may serve to curb North Korea’s threatening activity and facilitate a diplomatic process to advance denuclearization. Financial sanctions should be a core part of such a pressure strategy, along with force posture and projection, and other coercive tools of statecraft, and complemented by serious diplomatic engagement. The United States is placed to lead this effort and must closely coordinate with international partners even as it urges them to do more with secondary sanctions and other gestures.
The Sanctions Framework for North Korea, Compliance, and Circumvention
The United States has in place a framework of sanctions to apply financial pressure on North Korea to limit its proliferation activities and the broader revenue streams available to regime leaders. These complement and expand on sanctions put in place by the United Nations Security Council, which instruct member states to cease dealings with North Korean proliferation entities and stop engaging in proscribed economic activities that enrich the regime.
I applaud the recent work of Congress this past summer to impose new sanctions authorities to tighten the financial pressure framework on North Korea, along with new sanctions from the United Nations. Collectively, these new authorities expanded pressure on North Korea with restrictions on economic sectors including energy, metals and mining, transportation, financial services, and seafood, as well as limitations on North Koreans working abroad.
However, as your legislative discussion draft, the focus of today’s hearing, aptly points out, circumvention of sanctions and non-enforcement is a major problem and a key reason for North Korea’s continued proliferation activities. Tough sanctions authorities cannot, of themselves, create meaningful pressure on North Korea to change its policies. Rather, their enforcement, particularly by North Korea’s key financial partners, will determine the measures’ strength, which may contribute to an effective pressure strategy to facilitate North Korean policy change. In practical terms, effective sanctions enforcement comes down to China, which is responsible for over 90% of North Korea’s trade, adopting a strict enforcement posture.
The full testimony is available online.
More from CNAS
-
Since Russia Invaded Ukraine, Allies Levied More Than 11,000 Sanctions on Russia
Podcast
NPR's Leila Fadel talks to Rachel Ziemba of the Center for a New American Security about sanctions which have failed to dramatically weaken Russia's economy, and its ability t...
By Rachel Ziemba
-
A Tool of Attrition
Commentary
Sanctions are more of a marathon than a sprint, and the long-term picture looks much more promising than the short-term one....
By Edward Fishman
-
Sharper: The Future of Russia Relations
Commentary
While the recently released U.S. National Defense Strategy names the People's Republic of China as the greatest pacing threat facing the United States, Russia poses the most i...
By Anna Pederson
-
The Cost of Economic War
Podcast
Sanctions, not bombs, have been the weapon chosen to take on the Putin regime. BBC speaks with macroeconomist Rachel Ziemba about the effectiveness of modern economic statecra...
By Rachel Ziemba
