North Korea's Second Nuclear Test: Implications of U.N. Security Council Resolution 1874
Abstract:
The United Nations Security Council unanimously passed Res. 1874 on June 12, 2009, in response to North Koreas second nuclear test. The resolution puts in place a series of sanctions on North Koreas arms sales, luxury goods, and financial transactions related to its weapons programs, and calls upon states to inspect North Korean vessels suspected of carrying such shipments. The resolution does allow for shipments of food and nonmilitary goods. As was the case with an earlier U.N. resolution, 1718, that was passed in October 2006 after North Koreas first nuclear test, Resolution 1874 seeks to curb financial benefits that go to North Koreas regime and its weapons program. This report summarizes and analyzes Resolution 1874. In summary, the economic effect of Resolution 1874 is not likely to be great unless China cooperates extensively and goes beyond the requirements of the resolution andor the specific financial sanctions cause a ripple effect that causes financial institutions to avoid being tainted by handling any DPRK transaction. On the surface, sanctions aimed solely at the Democratic Peoples Republic of Korea DPRK, the official name of North Korea and its prohibited activities are not likely to have a large monetary effect. Governments will have to interpret the financial sanctions ban of the resolution liberally in order to apply sanctions to the bank accounts of North Korean trading corporations. A key to its success will be the extent to which China, North Koreas most important economic partner, implements the resolution. A ban on luxury goods will only be effective if China begins to deny North Korea lucrative trade credits. Provisions for inspection of banned cargo on aircraft and sea vessels rely on the acquiescence of the shipping state. In the case of North Korean vessels, it is highly unlikely that they would submit to searches. Resolution 1874 is vague about how its air cargo provisions are to be implemented, in contrast to the specific pro