September 5, 2017 6:20 am JST

Workers abroad, oil seen as next step on North Korea sanctions

Tokyo, Washington seek to hit Pyongyang where they haven't before

SOTARO SUZUKI, Nikkei staff writer

SEOUL -- As Japan and the U.S. push for even tougher sanctions on North Korea following its latest nuclear test, the United Nations Security Council is expected to consider new penalties covering mainly two key lifelines for Pyongyang: its laborers in foreign countries and the oil it imports.

North Korea is estimated to have sent up to 147,600 laborers abroad, according to the South's Korea Institute for National Unification. Up to 80,000 are in China, the top taker, followed by Russia at up to 53,000. Mongolia, Kuwait, the United Arab Emirates and Qatar are also said to have thousands each.

Sanctions agreed on Aug. 5 in response to the previous month's ballistic missile tests, aimed at reducing North Korean exports by one-third, or $1 billion, also banned in principle the hiring of laborers from the country. But no new restrictions were imposed on existing ones. It is believed that workers must each send $7,000 of their annual income home, together generating more than $1 billion for their government each year.

"Restricting the North's export of labor will be a topic of debate," a source from the South Korean president's office said.

An oil embargo is another possibility. China ships an annual 500,000 tons or more of petroleum to the North, according to the South. Stemming this flow would inflict significant pain to Pyongyang.

China and Russia are both expected to oppose the measure, but Japan and the U.S. are advocating for it anyway. Given growing global concerns over Pyongyang, Beijing and Moscow will inevitably come under fire should they drag their feet on tougher sanctions. "If the world were under the impression China and Russia are defending North Korea, they eventually won't be able to hold out," a Japanese government source said.

There is also talk of other ways to cut North Korea's access to foreign currency. Coal and other mineral fuels were its biggest export in 2016, at $1.2 billion, followed by apparel, according to the South's Korea Trade-Investment Promotion Agency. Most of the clothing is made using imported Chinese fabric and then shipped back to China, resulting in just $50 million to $100 million a year in net income for North Korea, so it was not covered in the Aug. 5 sanctions. The U.N. could introduce new sanctions in this area.

Any decision on additional sanctions should be made by the Security Council, Chinese Foreign Ministry spokesperson Geng Shuang told reporters Monday.  "As a permanent member of the Security Council, China will ... participate in the relevant discussion with a responsible and constructive attitude," he said.

Japanese Prime Minister Shinzo Abe is visiting the Russian city of Vladivostok on Wednesday. At a summit with Russian President Vladimir Putin the next day, he will urge Moscow to cooperate on tougher sanctions.

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