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Sanctions on North Korea: How will they be lifted?

In this file photo taken on June 11, U.S. President Donald Trump gestures as he meets with North Korea's leader Kim Jong-un at the start of their summit at the Capella Hotel on Sentosa Island in Singapore. AFP=Yonhap

By Kim Yoo-chul

Since late last year, President Moon Jae-in has tried hard to pitch his ambitious "sanctions-easing" agenda to break the impasse in talks aimed at denuclearizing North Korea.

The efforts brought mixed results. During his trip to European capitals in October, Moon attempted to win backing for the agenda from British Prime Minister Theresa May and French President Emmanuel Macron, but his efforts fell flat as they didn't say anything positive about "sanctions exemptions" requested by South Korea.

But various types of inter-Korean projects are underway after the United States granted sanctions exemptions for projects such as connecting roads and railways, which were cut after the 1950-53 Korean War.

United Nations Security Council (UNSC) resolution 2397, which has been effective since December 2017, imposed import sanctions, banning items such as oil, machinery, electronic equipment, transportation equipment and base metals from export to North Korea.

Washington said it was waiting to see "concrete and detailed" steps from North Korea to move forward with the stalled denuclearization negations, while Pyongyang said it won't "unilaterally drop" the regime's nuclear programs unless the regime's security guarantee and the lifting of economic sanctions are confirmed.

Now, the big question is when and under what conditions can sanctions on North Korea be lifted? Are the U.S. imposing the Libyan model of "first denuclearize, then compensate" or is it willing to follow the "action-to-action" road that North Korea favors, lifting the sanctions step by step?

Apparently, the United States is looking for "low-cost ways" to get progress on dismantling North Korean nuclear weapons because its decision to grant sanctions exemptions on some joint inter-Korean projects was designed to incentivize North Korea to take detailed steps for denuclearization, according to political experts in Seoul.

"Sanctions on North Korea are related directly to the conditions of restoring inter-Korean economic cooperation. There is a possibility North Korea will push for step-by-step denuclearization according to the level of U.S. compensation, but it seems there is almost no possibility it will renounce the action-to-action principle. Alleviating or lifting sanctions is included in the compensation North Korea wants," said Lim Soo-ho, a senior research fellow at the Institute for National Security Strategy (INSS).

The researcher said the reason Washington is insisting on strict conditions for easing sanctions is because the United States sees the change in North Korea's behavior as a "policy byproduct of maximum pressure."

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But it's unlikely the Trump administration will stick to the Libya model regarding the connection between denuclearization and compensation which would include measures to ease sanctions.

The INSS researcher said considering the massive amount of funds to be put in development programs for North Korea, developing a "multilateral trust fund" between key concerned countries in the denuclearization talks including Japan and China will be one option to induce the North to come up with more detailed plans to drop its nuclear program.

"Even if North Korea completely denuclearizes, sanctions against the non-market economy will remain. But the United States prohibits aid to non-market economies from international financial institutions. Therefore, creating the fund to use for development purposes in North Korea appears to be the most realistic solution," Lim said.

In this file photo taken on Dec. 13, U.S. Secretary of State Mike Pompeo speaks to the press at the State Department in Washington, D.C. U.S. officials hope a second summit between President Donald Trump and North Korean leader Kim Jong-un could be scheduled for early this year. AFP=Yonhap

Offering more incentives to NK and flipside

Experts agreed the United States and other stakeholders in the denuclearization talks would further incentivize the impoverished North to take additional denuclearization steps.

Scott Snyder, director of the Program on U.S. Korea Policy at the Council on Foreign Relations, said Washington's approval on some sanctions exemptions for inter-Korean projects represents that "the U.S. is pragmatically maintaining sanctions while also demonstrating flexibility where necessary or desirable."

A more productive approach would be to offer a larger package of benefits but only as a part of "action-for-action" negotiations.

But the key concern is that if sanctions are lifted before irreversible denuclearization, North Korea is very likely to turn back into its old unyielding self as it would take an "uncompromising position" on the denuclearization issue if it secures China's aid.

Past patterns in North Korea's foreign policy have shown it has pursued improved foreign relations when its mid- to long-term economic development plans failed and it needed external capital.

Yet, it is also clear that they do not plan to provide compensation for each step of gradual, from low to high level, denuclearization as in the past. Until it is certain that North Korea has made a strategic decision to dismantle its nuclear weapons, fully and verifiably, in other words until irreversible denuclearization is achieved, there is the possibility the United States and UNSC won't ease sanctions or provide economic incentives.

Steve Biegun, a special U.S. envoy for North Korean issues, said the Trump administration will maintain its pressure on North Korea but added Washington is prepared to explore other things that could build trust with North Korea.

"We do have a number of initiatives we'd like to look at as we begin the process of denuclearization in North Korea," Biegun told reporters during his recent visit to South Korea. U.S. Secretary of State Mike Pompeo raised his hope that a second in-person meeting between Trump and Kim Jong-un could be planned for early next year.