The Chinese Sanctions: MOFCOM Announcement No. 11



The official translation of the 2016 MOFCOM Announcement No. 11 is on the website now; it can be found here. The document is interesting in reminding us how China views UNSC Resolution 2270. The import of coal, iron and iron ores is banned, but with two exceptions that are large enough to drive a truck through (setting aside the provision for Russian exports from Rason): one on links to the weapons program; the other humanitarian reservation if the activity is “conducted to generate profits solely for the people’s livelihood.” Given that money is fungible, we have no idea how judgments would be made on either of these issues. Foreign exchange almost certainly finds its way into the weapons program and every mine has workers.

The ban on Imports of gold ores, titanium ores, vanadium ore, and rare earth minerals is more definitive. The ban on the export of aviation fuel again has a seemingly large exception: “the aircraft fuel that is sold to civil airplanes outside the territory of the DPRK or is supplied solely for use in trips from and to the DPRK.” This seems designed to keep Air Koryo flying, but could be a constraint on aviation fuel for all military purposes.

Annex 1 on the list of embargoed items shows that the Chinese implementation of the sanctions regime is specified down to the product level; there are 25 products specified in the announcement for the General Administration of Customs to implement the mineral product embargo. Annexes 2 and 3 are legal forms for trading firms to put their commitments to the mineral product embargo on paper when exceptions apply.

Clearly the issue in question is whether Chinese authorities are going to simply sign off on exceptions coming from affected firms or not. Will these measures throw a chill on trade? And this is quite apart from any smuggling that the measures might induce.

My interpretation is “wait and see.” Both 2270 and this implementing document provide China with discretion to implement the sanctions depending on North Korean actions, which is not necessarily a bad thing. We should be pragmatic; the ultimate objective is to get North Korea to reconsider, and clearly that is what China would like to see Pyongyang do. But if there is no material distress, and if North Korea does not take action, then the US is certainly not under any obligation to act. It is hard for the US to take initiative with respect to the Six Party Talks if North Korea has no interest in coming back to the table.

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