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China calls US bluff on North Korea – again

Full text and analysis of latest UN Security Council sanctions Resolution 2375 against North Korea.

Alexander Mercouris

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The North Korean crisis took a further twist on Monday with a significant climbdown by the US at the UN Security Council and a further diplomatic victory by China.

This is not being widely reported in the West though some sections of the Western media have  reported that the final draft of the Resolution that was voted on by the UN Security Council was ‘watered down’ by comparison with an earlier draft of the Resolution presented to the UN Security Council by the US because of Chinese and Russian pressure.

The US did indeed earlier present to the UN Security Council a draft Resolution, which called for a total stop of the supply of oil to North Korea and which imposed what would have amounted to a naval blockade of North Korea, with the UN navy authorised by the UN Security Council to stop and search any ship travelling to and from North Korea (the draft of the Resolution presented to the UN Security Council by the US contained the words “all necessary means” which the US would have taken as authorising the US navy to do this).

Moreover in the days before the vote US Treasury Secretary Steven Mnuchin publicly threatened that the US would sanction any country which voted against the Resolution which had been proposed by the US and even said that an Executive Order to that effect had already been prepared and merely needed President Trump’s signature.

The fact that the Resolution that the UN Security Council eventually voted for did not impose either a stop in the supply of oil to North Korea or the sort of naval blockade of North Korea the US demanded is what led some sections of the Western media to report that under pressure from China and Russia the US was forced to ‘water down’ its draft of the Resolution, making it weaker than the US originally intended.

In my opinion this is a total misconception.  The US draft was not so much ‘watered down’ as simply scrapped.

That this is so is shown by the fact that the Resolution the UN Security Council actually voted for is not just completely different from the US draft but clearly reflects Chinese thinking.

In order to explain this I herewith set out the full text of the UN Security Council Resolution (Resolution 2375) as provided by the United Nations’ website.

“The Security Council,

Recalling its previous relevant resolutions, including resolution 825 (1993),  resolution 1695 (2006), resolution 1718 (2006), resolution 1874 (2009), resolution 1887 (2009), resolution 2087 (2013), resolution 2094 (2013), resolution 2270 (2016), resolution 2321 (2016), resolution 2356 (2017), resolution 2371 (2017) as well as the statements of its President of 6 October 2006 (S/PRST/2006/41), 13 April 2009 (S/PRST/2009/7), 16 April 2012 (S/PRST/2012/13), and 29 August 2017 (S/PRST/2017/16),

Reaffirming that proliferation of nuclear, chemical and biological weapons, as well as their means of delivery, constitutes a threat to international peace and security,

Expressing its gravest concern at the nuclear test by the Democratic People’s Republic of Korea (“the DPRK”) on September 2, 2017 in violation of resolutions 1718 (2006), 1874 (2009), 2087 (2013), 2094 (2013), 2270 (2016), 2321 (2016), 2356 (2017), and 2371 (2017) and at the challenge such a test constitutes to the Treaty on Non-Proliferation of Nuclear Weapons (“the NPT”) and to international efforts aimed at strengthening the global regime of non-proliferation of nuclear weapons, and the danger it poses to peace and stability in the region and beyond,

Underlining once again the importance that the DPRK respond to other security and humanitarian concerns of the international community and expressing great concern that the DPRK continues to develop nuclear weapons and ballistic missiles by diverting critically needed resources away from the people in the DPRK who have great unmet needs,

Expressing its gravest concern that the DPRK’s ongoing nuclear- and ballistic missile-related activities have destabilized the region and beyond, and determining that there continues to exist a clear threat to international peace and security,

Underscoring its concern that developments on the Korean Peninsula could have dangerous, large-scale regional security implications,

Underscoring its commitment to the sovereignty, territorial integrity, and political independence of all States in accordance with the Charter, and recalling the purposes and principles of the Charter of the United Nations,

Expressing also its desire for a peaceful and diplomatic solution to the situation, and reiterating its welcoming of efforts by Council members as well as other Member States to facilitate a peaceful and comprehensive solution through dialogue,

Underlining the need to ensure international peace and security, and ensure lasting stability in north-east Asia at large and to resolve the situation through peaceful, diplomatic and political means,

Acting under Chapter VII of the Charter of the United Nations, and taking measures under its Article 41,

“1.   Condemns in the strongest terms the nuclear test conducted by the DPRK on September 2 of 2017 in violation and flagrant disregard of the Security Council’s resolutions;

“2.   Reaffirms its decisions that the DPRK shall not conduct any further launches that use ballistic missile technology, nuclear tests, or any other provocation; shall immediately suspend all activities related to its ballistic missile program and in this context re-establish its pre-existing commitments to a moratorium on all missile launches; shall immediately abandon all nuclear weapons and existing nuclear programs in a complete, verifiable and irreversible manner, and immediately cease all related activities; and shall abandon any other existing weapons of mass destruction and ballistic missile programs in a complete, verifiable and irreversible manner;

Designations

“3.   Decides that the measures specified in paragraph 8 (d) of resolution 1718 (2006) shall apply also to the individual and entities listed in Annex I and II of this resolution and to any individuals or entities acting on their behalf or at their direction, and to entities owned or controlled by them, including through illicit means, and decides further that the measures specified in paragraph 8 (e) of resolution 1718 (2006) shall also apply to the individual listed in Annex I of this resolution and to individuals acting on their behalf or at their direction;

“4.   Decides to adjust the measures imposed by paragraph 8 of resolution 1718 (2006) through the designation of additional WMD-related dual-use items, materials, equipment, goods, and technology, directs the Committee to undertake its tasks to this effect and to report to the Security Council within fifteen days of adoption of this resolution, and further decides that, if the Committee has not acted, then the Security Council will complete action to adjust the measures within seven days of receiving that report, and directs the Committee to regularly update this list every twelve months;

“5.   Decides to adjust the measures imposed by paragraph 8 (a), 8 (b) and 8 (c) of resolution 1718 (2006) through the designation of additional conventional arms-related items, materials, equipment, goods, and technology, directs the Committee to undertake its tasks to this effect and to report to the Security Council within fifteen days of adoption of this resolution, and further decides that, if the Committee has not acted, then the Security Council will complete action to adjust the measures within seven days of receiving that report, and directs the Committee to regularly update this list every twelve months;

“6.   Decides to apply the measures imposed by paragraph 6 of resolution 2371 (2016) on vessels transporting prohibited items from the DPRK, directs the Committee to designate these vessels and to report to the Security Council within fifteen days of adoption of this resolution, further decides that, if the Committee has not acted, then the Security Council will complete action to adjust the measures within seven days of receiving that report, and directs the Committee to regularly update this list when it is informed of additional violations;

Maritime Interdiction of Cargo Vessels

“7.   Calls upon all Member States to inspect vessels with the consent of the flag State, on the high seas, if they have information that provides reasonable grounds to believe that the cargo of such vessels contains items the supply, sale, transfer or export of which is prohibited by resolutions 1718 (2006), 1874 (2009), 2087 (2013), 2094 (2013), 2270 (2016), 2321 (2016), 2356 (2017), 2371 (2017) or this resolution, for the purpose of ensuring strict implementation of those provisions;

“8.   Calls upon all States to cooperate with inspections pursuant to paragraph 7 above, and, if the flag State does not consent to inspection on the high seas, decides that the flag State shall direct the vessel to proceed to an appropriate and convenient port for the required inspection by the local authorities pursuant to paragraph 18 of resolution 2270 (2016), and decides further that, if a flag State neither consents to inspection on the high seas nor directs the vessel to proceed to an appropriate and convenient port for the required inspection, or if the vessel refuses to comply with flag State direction to permit inspection on the high seas or to proceed to such a port, then the Committee shall consider designating the vessel for the measures imposed in paragraph 8 (d) of resolution 1718 (2006) and paragraph 12 of resolution 2321 (2016) and the flag State shall immediately deregister that vessel provided that such designation has been made by the Committee;

“9.   Requires any Member State, when it does not receive the cooperation of a flag State of a vessel pursuant to paragraph 8 above, to submit promptly to the Committee a report containing relevant details regarding the incident, the vessel and the flag State, and requests the Committee to release on a regular basis information regarding these vessels and flag States involved;

“10.  Affirms that paragraph 7 contemplates only inspections carried out by warships and other ships or aircraft clearly marked and identifiable as being on government service and authorized to that effect, and underscores that it does not apply with respect to inspection of vessels entitled to sovereign immunity under international law;

“11.  Decides that all Member States shall prohibit their nationals, persons subject to their jurisdiction, entities incorporated in their territory or subject to their jurisdiction, and vessels flying their flag, from facilitating or engaging in ship-to-ship transfers to or from DPRK-flagged vessels of any goods or items that are being supplied, sold, or transferred to or from the DPRK;

“12.  Affirms that paragraphs 7, 8 and 9 apply only with respect to the situation in the DPRK and shall not affect the rights, obligations, or responsibilities of Member States under international law, including any rights or obligations under the United Nations Convention on the Law of the Sea of 10 December 1982, with respect to any other situation and underscores in particular that this resolution shall not be considered as establishing customary international law;

Sectoral

“13.  Decides that all Member States shall prohibit the direct or indirect supply, sale or transfer to the DPRK, through their territories or by their nationals, or using their flag vessels or aircraft, and whether or not originating in their territories, of all condensates and natural gas liquids, and decides that the DPRK shall not procure such materials;

“14.  Decides that all Member States shall prohibit the direct or indirect supply, sale or transfer to the DPRK, through their territories or by their nationals, or using their flag vessels or aircraft, and whether or not originating in their territories, of all refined petroleum products, decides that the DPRK shall not procure such products, decides that this provision shall not apply with respect to procurement by the DPRK or the direct or indirect supply, sale or transfer to the DPRK, through their territories or by their nationals, or using their flag vessels or aircraft, and whether or not originating in their territories, of refined petroleum products in the amount of up to 500,000 barrels during an initial period of three months beginning on 1 October 2017 and ending on 31 December 2017, and refined petroleum products in the amount of up to 2,000,000 barrels per year during a period of twelve months beginning on 1 January 2018 and annually thereafter, provided that (a) the Member State notifies the Committee every thirty days of the amount of such supply, sale, or transfer to the DPRK of refined petroleum products along with information about all the parties to the transaction, (b) the supply, sale, or transfer of refined petroleum products involve no individuals or entities that are associated with the DPRK’s nuclear or ballistic missile programmes or other activities prohibited by resolutions 1718 (2006), 1874 (2009), 2087 (2013), 2094 (2013), 2270 (2016), 2321 (2016), 2356 (2017), 2371 (2017) or this resolution, including designated individuals or entities, or individuals or entities acting on their behalf or at their direction, or entities owned or controlled by them, directly or indirectly, or individuals or entities assisting in the evasion of sanctions, and (c) the supply, sale, or transfer of refined petroleum products are exclusively for livelihood purposes of DPRK nationals and unrelated to generating revenue for the DPRK’s nuclear or ballistic missile programmes or other activities prohibited by resolutions 1718 (2006), 1874 (2009), 2087 (2013), 2094 (2013), 2270 (2016), 2321 (2016), 2356 (2017), 2371 (2017) or this resolution, directs the Committee Secretary to notify all Member States when an aggregate amount of refined petroleum products sold, supplied, or transferred to the DPRK of 75 per cent of the aggregate amount for the period between 1 October 2017 and 31 December 2017 has been reached, and again notify all Member States when 90 percent and 95 percent of such aggregate amount has been reached, directs the Committee Secretary beginning on 1 January 2018 to notify all Member States when an aggregate amount of refined petroleum products sold, supplied, or transferred to the DPRK of 75 per cent of the aggregate yearly amounts have been reached, also directs the Committee Secretary beginning on 1 January 2018 to notify all Member States when an aggregate amount of refined petroleum products sold, supplied, or transferred to the DPRK of 90 per cent of the aggregate yearly amounts have been reached, and further directs the Committee Secretary beginning on 1 January 2018 to notify all Member States when an aggregate amount of refined petroleum products sold, supplied, or transferred to the DPRK of 95 per cent of the aggregate yearly amounts have been reached and to inform them that they must immediately cease selling, supplying, or transferring refined petroleum products to the DPRK for the remainder of the year, directs the Committee to make publicly available on its website the total amount of refined petroleum products sold, supplied, or transferred to the DPRK by month and by source country, directsthe Committee to update this information on a real-time basis as it receives notifications from Member States, calls upon all Member States to regularly review this website to comply with the annual limits for refined petroleum products established by this provision, directs the Panel of Experts to closely monitor the implementation efforts of all Member States to provide assistance and ensure full and global compliance, and requests the Secretary-General to make the necessary arrangements to this effect and provide additional resources in this regard;

“15.  Decides that all Member States shall not supply, sell, or transfer to the DPRK in any period of twelve months after the date of adoption of this resolution an amount of crude oil that is in excess of the amount that the Member State supplied, sold or transferred in the period of twelve months prior to adoption of this resolution, unless the Committee approves in advance on a case-by-case basis a shipment of crude oil is exclusively for livelihood purposes of DPRK nationals and unrelated to the DPRK’s nuclear or ballistic missile programmes or other activities prohibited by resolutions 1718 (2006), 1874 (2009), 2087 (2013), 2094 (2013), 2270 (2016), 2321 (2016), 2356 (2017), 2371 (2017) or this resolution;

“16.  Decides that the DPRK shall not supply, sell or transfer, directly or indirectly, from its territory or by its nationals or using its flag vessels or aircraft, textiles (including but not limited to fabrics and partially or fully completed apparel products), and that all States shall prohibit the procurement of such items from the DPRK by their nationals, or using their flag vessels or aircraft, whether or not originating in the territory of the DPRK, unless the Committee approves on a case-by-case basis in advance, and further decides that for such sales, supplies, and transfers of textiles (including but not limited to fabrics and partially or fully completed apparel products) for which written contracts have been finalized prior to the adoption of this resolution, all States may allow those shipments to be imported into their territories up to 90 days from the date of adoption of this resolution with notification provided to the Committee containing details on those imports by no later than 135 days after the date of adoption of this resolution;

“17.  Decides that all Member States shall not provide work authorizations for DPRK nationals in their jurisdictions in connection with admission to their territories unless the Committee determines on a case-by-case basis in advance that employment of DPRK nationals in a member state’s jurisdiction is required for the delivery of humanitarian assistance, denuclearization or any other purpose consistent with the objectives of resolutions 1718 (2006), 1874 (2009), 2087 (2013), 2094 (2013), 2270 (2016), 2321 (2016), 2356 (2017), 2371 (2017), or this resolution, and decides that this provision shall not apply with respect to work authorizations for which written contracts have been finalized prior to the adoption of this resolution;

Joint Ventures

“18.  Decides that States shall prohibit, by their nationals or in their territories, the opening, maintenance, and operation of all joint ventures or cooperative entities, new and existing, with DPRK entities or individuals, whether or not acting for or on behalf of the government of the DPRK, unless such joint ventures or cooperative entities, in particular those that are non-commercial, public utility infrastructure projects not generating profit, have been approved by the Committee in advance on a case-by-case basis, further decidesthat States shall close any such existing joint venture or cooperative entity within 120 days of the adoption of this resolution if such joint venture or cooperative entity has not been approved by the Committee on a case-by-case basis, and States shall close any such existing joint venture or cooperative entity within 120 days after the Committee has denied a request for approval, and decides that this provision shall not apply with respect to existing China-DPRK hydroelectric power infrastructure projects and the Russia-DPRK Rajin-Khasan port and rail project solely to export Russia-origin coal as permitted by paragraph 8 of resolution 2371 (2017);

Sanctions Implementation

“19.  Decides that Member States shall report to the Security Council within ninety days of the adoption of this resolution, and thereafter upon request by the Committee, on concrete measures they have taken in order to implement effectively the provisions of this resolution, requests the Panel of Experts, in cooperation with other UN sanctions monitoring groups, to continue its efforts to assist Member States in preparing and submitting such reports in a timely manner;

“20.  Calls upon all Member States to redouble efforts to implement in full the measures in resolutions 1718 (2006), 1874 (2009), 2087 (2013), 2094 (2013), 2270 (2016), 2321 (2016), 2356 (2017), 2371 (2017), and this resolution and to cooperate with each other in doing so, particularly with respect to inspecting, detecting and seizing items the transfer of which is prohibited by these resolutions;

“21.  Decides that the mandate of the Committee, as set out in paragraph 12 of resolution 1718 (2006), shall apply with respect to the measures imposed in this resolution and further decides that the mandate of the Panel of Experts, as specified in paragraph 26 of resolution 1874 (2009) and modified in paragraph 1 of resolution 2345 (2017), shall also apply with respect to the measures imposed in this resolution;

“22.  Decides to authorize all Member States to, and that all Member States shall, seize and dispose (such as through destruction, rendering inoperable or unusable, storage, or transferring to a State other than the originating or destination States for disposal) of items the supply, sale, transfer, or export of which is prohibited by resolutions 1718 (2006), 1874 (2009), 2087 (2013), 2094 (2013), 2270 (2016), 2321 (2016), 2356 (2017), 2371 (2017), or this resolution that are identified in inspections, in a manner that is not inconsistent with their obligations under applicable Security Council resolutions, including resolution 1540 (2004), as well as any obligations of parties to the NPT, the Convention on the Prohibition of the Development, Production, Stockpiling and Use of Chemical Weapons and on Their Development of 29 April 1997, and the Convention on the Prohibition of the Development, Production and Stockpiling of Bacteriological (Biological) and Toxin Weapons and on Their Destruction of 10 April 1972;

“23.  Emphasizes the importance of all States, including the DPRK, taking the necessary measures to ensure that no claim shall lie at the instance of the DPRK, or of any person or entity in the DPRK, or of persons or entities designated for measures set forth in resolutions 1718 (2006), 1874 (2009), 2087 (2013), 2094 (2013), 2270 (2016), 2321 (2016), 2356 (2017), 2371 (2017), or this resolution, or any person claiming through or for the benefit of any such person or entity, in connection with any contract or other transaction where its performance was prevented by reason of the measures imposed by this resolution or previous resolutions;

Political

“24.  Reiterates its deep concern at the grave hardship that the people in the DPRK are subjected to, condemns the DPRK for pursuing nuclear weapons and ballistic missiles instead of the welfare of its people while people in the DPRK have great unmet needs, and emphasizes the necessity of the DPRK respecting and ensuring the welfare and inherent dignity of people in the DPRK;

“25.  Regrets the DPRK’s massive diversion of its scarce resources toward its development of nuclear weapons and a number of expensive ballistic missile programs, notes the findings of the United Nations Office for the Coordination of Humanitarian Assistance that well over half of the people in the DPRK suffer from major insecurities in food and medical care, including a very large number of pregnant and lactating women and under-five children who are at risk of malnutrition and nearly a quarter of its total population suffering from chronic malnutrition, and, in this context, expresses deep concern at the grave hardship to which the people in the DPRK are subjected;

“26.  Reaffirms that the measures imposed by resolutions 1718 (2006), 1874 (2009), 2087 (2013), 2094 (2013), 2270 (2016), 2321 (2016), 2356 (2017), 2371 (2017) and this resolution are not intended to have adverse humanitarian consequences for the civilian population of the DPRK or to affect negatively or restrict those activities, including economic activities and cooperation, food aid and humanitarian assistance, that are not prohibited by resolutions 1718 (2006), 1874 (2009), 2087 (2013), 2094 (2013), 2270 (2016), 2321 (2016), 2356 (2017), 2371 (2017) and this resolution, and the work of international and non-governmental organizations carrying out assistance and relief activities in the DPRK for the benefit of the civilian population of the DPRK and decides that the Committee may, on a case-by-case basis, exempt any activity from the measures imposed by these resolutions if the committee determines that such an exemption is necessary to facilitate the work of such organizations in the DPRK or for any other purpose consistent with the objectives of these resolutions;

“27.  Emphasizes that all Member States should comply with the provisions of paragraphs 8 (a) (iii) and 8 (d) of resolution 1718 (2006) without prejudice to the activities of the diplomatic missions in the DPRK pursuant to the Vienna Convention on Diplomatic Relations;

“28.  Reaffirms its support for the Six Party Talks, calls for their resumption, and reiterates its support for the commitments set forth in the Joint Statement of 19 September 2005 issued by China, the DPRK, Japan, the Republic of Korea, the Russian Federation, and the United States, including that the goal of the Six-Party Talks is the verifiable denuclearization of the Korean Peninsula in a peaceful manner, that the United States and the DPRK undertook to respect each other’s sovereignty and exist peacefully together, that the Six Parties undertook to promote economic cooperation, and all other relevant commitments;

“29.  Reiterates the importance of maintaining peace and stability on the Korean Peninsula and in north-east Asia at large, expresses its commitment to a peaceful, diplomatic, and political solution to the situation, and welcomes efforts by the Council members as well as other States to facilitate a peaceful and comprehensive solution through dialogue and stresses the importance of working to reduce tensions in the Korean Peninsula and beyond;

“30.  Urges further work to reduce tensions so as to advance the prospects for a comprehensive settlement;

“31.  Underscores the imperative of achieving the goal of complete, verifiable and irreversible denuclearization of the Korean Peninsula in a peaceful manner;

“32.  Affirms that it shall keep the DPRK’s actions under continuous review and is prepared to strengthen, modify, suspend or lift the measures as may be needed in light of the DPRK’s compliance, and, in this regard, expresses its determination to take further significant measures in the event of a further DPRK nuclear test or launch;

“33.  Decides to remain seized of the matter.”

 

Annex I

Travel Ban/Asset Freeze (Individuals)

1.    PAK YONG SIK
a.    Description: Pak Yong Sik is a member of the Workers’ Party of Korea Central Military Commission, which is responsible for the development and implementation of the Workers’ Party of Korea military policies, commands and controls the DPRK’s military, and helps direct the country’s military defense industries.
b.    AKA: n/a
c.    Identifiers: YOB: 1950; Nationality: DPRK

 

Annex II

Asset Freeze (Entities)

1.    CENTRAL MILITARY COMMISSION OF THE WORKERS’ PARTY OF KOREA (CMC)
a.    Description: The Central Military Commission is responsible for the development and implementation of the Workers’ Party of Korea’s military policies, commands and controls the DPRK’s military, and directs the country’s military defense industries in coordination with the State Affairs Commission.
b.    AKA: n/a
c.    Location: Pyongyang, DPRK

2.    ORGANIZATION AND GUIDANCE DEPARTMENT (OGD)
a.    Description: The Organization and Guidance Department is a very powerful body of the Worker’s Party of Korea. It directs key personnel appointments for the Workers’ Party of Korea, the DPRK’s military, and the DPRK’s government administration. It also purports to control the political affairs of all of the DPRK and is instrumental in implementing the DPRK’s censorship policies.
b.    AKA: n/a
c.    Location: DPRK

3.    PROPAGANDA AND AGITATION DEPARTMENT (PAD)
a.    Description: The Propaganda and Agitation Department has full control over the media, which it uses as a tool to control the public on behalf of the DPRK leadership. The Propaganda and Agitation Department also engages in or is responsible for censorship by the Government of the DPRK, including newspaper and broadcast censorship.
b.    AKA: n/a
c.    Location: Pyongyang, DPRK

(bold highlighting added)
Turning first to the question of the sanctions, the key point to grasp is that the sanctions imposed on North Korea by Resolution 2375 do not materially change the economic situation of North Korea.  Moreover paragraph 26 of Resolution 2375 specifically rules out any suggestion that they should do so.
The sanctions are not intended to ‘punish’ North Korea economically.  Rather they are intended as a signal to North Korea of the UN Security Council’s strong disapproval of its ballistic missile and nuclear weapons programme, whilst the text of Resolution 2375 is also intended to set a clear limit on how far sanctions on North Korea can go.
The second important point about Resolution 2375 is that enforcement of the sanctions is not delegated to UN Member States – which in this context means the US – but to a special sanctions Committee set up previously by the UN Security Council, which not only reports to the UN Security Council but on which both China and Russia are represented.
Turning to the specific sanctions which have been imposed on North Korea, Resolution 2375 does not order a stop in the supply of oil to North Korea.  Instead it caps the quantity of oil supplied to North Korea at existing levels.  The point about this is that this of course the same quantity of oil that North Korea has been choosing to import.  The fact that North Korea is known to have been stockpiling oil since the spring of last year means that this is a greater quantity of oil than North Korea actually needs, so that if North Korea continues to import oil at this level it can continue to stockpile it.
The Resolution does restrict the supply of refined oil and gas products to North Korea.  However it seems that these are not being supplied to North Korea in any great quantity anyway since in accordance with its Juche policy North Korea does not import gas condensates in any significant quantity and itself refines most of the oil it imports.   Moreover the complex wording of paragraph 14 makes it clear that North Korea can continue to import refined petroleum products for use by its civilian economy and that the export of refined petroleum products to North Korea is not entirely prohibited.
These provisions – of which US ambassador Nikki Haley made a great deal in her speech to the UN Security Council – are not intended to cause North Korea further economic damage.  Rather they appear to be primarily intended to prevent North Korea from circumventing the cap imposed on its crude oil imports by increasing its import of refined oil and gas imports in their place.  In addition there seems to be a secondary motive of limiting the import by North Korea of certain refined oil products (diesel oil in particular) which are used by its military.
As for the elaborate procedure outlined in Resolution 2375 for inspecting ships trading with North Korea, the reality – as everyone knows – is that the US navy has been stopping and searching North Korean ships and other ships trading with North Korea on the high seas for some time.
This is of course an entirely illegal practice, but the US has never shown any hesitation in acting in this way when it thinks it can.
Resolution 2375 not only implicitly forbids this practice by setting out a procedure which instead should be followed but by setting out such an elaborate procedure for inspecting ships trading with North Korea essentially precludes the US from stopping and searching Chinese ships, which are of course the main carriers of traded goods between North Korea and China.
Resolution 2375 also imposes a ban on North Korean textile exports.  This is the major concession in the Resolution to the US, which has seized on North Korea’s textile exports as North Korea’s major foreign currency earner since prohibition of its coal exports earlier this year.
The key point about this provision is however that this is both a relatively minor trade (its annual value is put at around $700 million) whilst enforcement on its prohibition is all but impossible given the difficulty of tracing the origin of textile goods and the ease with which such goods move across the border between North Korea and China.
The underlying truth is that North Korea’s annual trade turnover in 2016 is calculated to have been no more than $3 billion.  Even on the most pessimistic assessment of the size of the North Korean economy that figure is remarkably low, and points to the limited importance of foreign trade to North Korea.  It is likely that the only product which North Korea needs to import in order to sustain its economy at its existing level is crude oil.
The true meaning of Resolution 2375 is that it shows that China is determined to continue supplying North Korea with crude oil at existing levels, and that it is not prepared to change its stance on this.
Chinese thinking on this issue has been set out clearly in a Global Times editorial published directly following the vote in the UN Security Council on Resolution 2375.  Its most important passages read as follows

The new resolution has triggered widespread discussion in the West, and some believe China and Russia “softened” a plan drafted earlier by the US.

The resolution represents the unified stance and will of the Security Council members and the international community to sanction North Korea at this point. The new sanctions are welcomed by Washington and Seoul, and will be largely pushed forward by Beijing and Moscow.

The US first circulated a draft resolution that called for a full oil embargo on North Korea in an attempt to win more leverage. As the new UN resolution has already been passed, raising such a request would be against the will of the international community and destroy international unity on the Pyongyang issue…..

Some Americans and South Koreans have attempted to collapse Pyongyang’s economy and suffocate the current Pyongyang regime. This is dangerous. North Korea’s nuclear crisis requires arduous efforts to find a final solution, and any attempt to immediately end the crisis will only escalate tensions and eventually jeopardize self-interests.
(bold italics added)
In other words the fact that Resolution 2375 does not impose a full oil embargo on North Korea means that imposing such a full oil embargo is “against the will of the international community” and merely to make such a demand – in the event for example that North Korea were to conduct another nuclear test – is construed by China as being unacceptable and wrong.
Read in this way it becomes clear what Resolution 2375 is intended to do.  Instead of “punishing” North Korea it imposes a sanctions red line beyond which China is not prepared to go.   That red line is a “full oil embargo”.
China not only rejects that demand but regards it as being made “against the will of the international community” and as being therefore illegitimate.
In place of US efforts to “solve” the North Korean crisis by “collapsing” North Korea’s economy – an approach Global Times says is “dangerous” – Resolution 2375 instead makes clear in paragraphs 28 to 30 that the objective is a negotiated solution of the crisis.  Moreover the highlighted words in the preamble make clear that a military solution, such as has been proposed for example by Senator Lindsey Graham and which from time to time has been hinted at by President Trump, is absolutely excluded.
As is often the case what the Chinese say softly the Russians, who the Global Times editorial confirms are working closely with the Chinese on this issue, say more forcefully.  Here is how the United Nations’ website summarises the comments made by Vasily Nebenzia, Russia’s new UN ambassador, at the UN Security Council meeting on Monday

VASSILY A. NEBENZIA (Russian Federation) said his country did not accept the Democratic People’s Republic of Korea’s claim to be a nuclear-weapon State, emphasizing provisions in Council resolutions that called for a peaceful, political and diplomatic resolution of the situation.  Ignoring those provisions would mean a direct violation of the consensus within the Council.  The rejection by the resolution’s sponsors of the Secretary-General’s good offices, and reluctance to reaffirm the “four nos” — regime change, regime collapse, accelerated reunification and military deployment north of the thirty-eighth parallel — raised serious questions that remained unanswered, he emphasized.

Recalling that President Vladimir Putin of the Russian Federation had denounced Pyongyang’s recent provocations, he said it would be a “big mistake” to underestimate the Russian Federation-China joint initiative, and insisted that it be taken into consideration.  While it would be wrong not to react firmly to nuclear tests, the Council’s response must be thought out thoroughly, taking the humanitarian situation into account, he stressed.  He concluded by recalling that in the course of finalizing today’s resolution, many Council colleagues had described it as a “prologue” to work on a political settlement.  “We would like to see proof of that in the near future,” he said.

(bold italics added)

Though Nebenzia’s words are far more direct than those the Chinese use, the sentiments are the same.

Resolution 2375 does not therefore actually represent a ‘softening’ of the original draft Resolution presented to the UN Security Council by the US.  Instead it amounts to a complete replacement of that draft, even if it borrows from the US draft some of its language.  This is a point which incidentally is implicitly made in the wording of the Global Times editorial which I quoted above.

What then happened that caused the US to drop its demands for a “full oil embargo” and naval blockade?

The short answer is that the Chinese and the Russians in the discussions which took place in the UN Security Council over the weekend made it clear that they would veto the US backed draft and that faced with this threat the US backed down and instead agreed to the sort of Resolution the Chinese wanted.

The reason for that is that it would have been a total disaster for the US if China and Russia had vetoed a Resolution the US presented to the UN Security Council on the North Korean issue.

Not only would such a veto have ended North Korea’s isolation in the UN Security Council.   More seriously still, it would have put the US in a position where it might have felt obliged to act on US Treasury Secretary Steven Mnuchin’s foolish threats of sanctions against China or risk losing face by not doing so.  With China holding $1 trillion of US treasury bonds and running a $300 billion surplus in its trade with the US it is easy to see how that might have ended in disaster, and why that was an outcome the US in the end chose to avoid.

In other words the US again tried to bluff China and again saw its bluff called.

This is becoming a regular pattern throughout the North Korean crisis.  Unfortunately Mnuchin’s foolish repetition of the same threats after Resolution 2375 was voted into force shows that no lesson has been learnt from it.

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Social media purge continues, as platforms operate as publishers (Video)

The Duran – News in Review – Episode 80.

Alex Christoforou

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Following the suspension of Alex Jones, Twitter has also moved to restrict Jones’ Infowars account.

BuzzFeed News is reporting that the Infowars account will be restricted from tweeting, but will still be able to browse Twitter and send direct messages to other users, while users will still be able to view the account.

The move, which essentially puts the account in read-only mode, comes less than a day after Twitter temporarily limited Infowars proprietor Alex Jones for a week after he tweeted a link to a video in which he called on his supporters to get their “battle rifles” ready. That video, which was shared on Twitter-owned live streaming service Periscope, was also shared by Infowars earlier on Wednesday.

A Twitter spokesperson confirmed that Infowars’ account, which has more than 430,000 followers, will be prevented from tweeting, retweeting, liking or following other users during a seven-day window. The account will stay online, allowing users to view it during that period.

Via Zerohedge

On Tuesday, Twitter suspended the conspiracy theorist and blogger for violating the social media company’s policies, in a stark reversal for Jack Dorsey who previously bucked the trend by other tech giants to muzzle the Infowars creator.

As CNET first reported, Jones’ account was put in “read only” mode and will be blocked from posting on Twitter for seven days because of an offending tweet, the company said. While Twitter declined to comment on the content that violated its policies, a Twitter spokesperson told CNN the content which prompted the suspension was a video published Tuesday in which he said, “now is time to act on the enemy before they do a false flag.”

A Twitter spokesperson wouldn’t say what would get Jones or Infowars permanently suspended, however they noted “We look at [the] volume and nature of violations before suspending an account,” according to Buzzfeed.

The Duran’s Alex Christoforou and Editor-in-Chief Alexander Mercouris discuss the latest twists and turns in the vicious social media purge of conservative right and libertarian accounts. Platforms are acting like publishers and this may mean the end of monopoly social media services.

Remember to Please Subscribe to The Duran’s YouTube Channel.

Meanwhile, in a censorship move against Libertarian commentary, Ron Paul Institute director Daniel McAdams and Antiwar editor Scott Horton were suspended by Twitter for simply retweeting. Justin Raimondo informs…

Target Liberty reports

Update from Justin:

Neither @scotthortonshow nor @DanielLMcAdams have been reinstated. You can see their tweets: they can’t tweet.

RW

Daniel McAdams explain what happened…

Robert I can give you an update from my perspective regarding what happened:

Yesterday on Twitter, former US diplomat Peter Van Buren (@WeMeantWell) took members of the mainstream media to task for swallowing and printing government lies without even bothering to check them out. He said as a former US government official (turned whistleblower) he also lied to the press on behalf of the government and was astonished that the press swallowed each one, hook, line and sinker.

Several corporate media hacks and in particular one employee of an NGO funded by George Soros — a fellow called Jonathan Katz — piled on Peter, accusing him of all manner of treachery. When Peter ended one response with a sarcastic reference to zombie attacks – “I hope a MAGA guy eats your face” — which is obviously a joke, Katz replied that he is reporting Peter for promoting violence.

So he and his buddies ganged up on Peter and got him banned. Scott Horton and I were incensed over the ban, which seemed to us totally arbitrary. There was no threat of violence and it was no different than millions of Tweets all the time. So Scott and I both joined in and criticized Katz for running off to the authorities in attempt to get someone banned rather than just walk away from the debate.

Katz then did his usual routine and ran to the authorities and had Scott and me banned. Mine was for, as Twitter informed me, because “you may not promote violence against, threaten, or harass other people on the basis of race, ethnicity, national origin, sexual orientation, gender, gender identity, religious affiliation, age, disability, or serious disease.” There is no way at all that my Tweet violated the above rule. In no way did I harass or threaten based on those criteria. I merely strongly criticized Katz for running to the authorities to get Peter banned.

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“I’m Not A Racist, But I’m A Nationalist”: Why Sweden Faces A Historic Election Upset

Sweden is set to have a political earthquake in September.

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Via Zerohedge


“Trains and hospitals don’t work, but immigration continues,” Roger Mathson, a retired vegetable oil factory worker in Sweden, told Bloomberg on the same day as the violent, coordinated rampage by masked gangs of youths across five Swedish cities.

We noted earlier that Swedish politicians were quick to react with anti-immigrant party ‘Sweden Democrats’ seeing a surge in the polls ahead of the September 9th election.

“I’m not a racist, but I’m a nationalist,” Mathson said. “I don’t like seeing the town square full of Niqab-clad ladies and people fighting with each other.”

Is Sweden set to have its own political earthquake in September, where general elections could end a century of Social Democratic dominance and bring to power a little known (on the world stage), but the now hugely popular nationalist party often dubbed far-right and right-wing populist, called Sweden Democrats?

Sweden, a historically largely homogeneous population of 10 million, took in an astounding 600,000 refugees over the past five years, and after Swedes across various cities looked out their windows Tuesday to see cars exploding, smoke filling the skies, and possibly armed masked men hurling explosives around busy parking lots, it appears they’ve had enough.

Over the past years of their rise as a political force in Swedish politics, the country’s media have routinely labelled the Sweden Democrats as “racists” and “Nazis” due to their seemingly single issue focus of anti-immigration and strong Euroscepticism.

A poll at the start of this week indicated the Sweden Democrats slid back to third place after topping three previous polls as the September election nears; however, Tuesday’s national crisis and what could legitimately be dubbed a serious domestic terror threat is likely to boost their popularity.

Bloomberg’s profile of their leader, Jimmie Akesson, echoes the tone of establishment Swedish media in the way they commonly cast the movement, beginning as follows:

Viking rock music and whole pigs roasting on spits drew thousands of Swedes to a festival hosted by nationalists poised to deliver their country’s biggest political upheaval in a century.

The Sweden Democrats have been led since 2005 by a clean-cut and bespectacled man, Jimmie Akesson. He’s gentrified a party that traces its roots back to the country’s neo-Nazi, white supremacist fringe. Some polls now show the group may become the biggest in Sweden’s parliament after general elections on Sept. 9. Such an outcome would end 100 years of Social Democratic dominance.

The group’s popularity began surging after the 2015 immigration crisis began, which first hit Europe’s southern Mediterranean shores and quickly moved northward as shocking wave after wave of migrants came.

Jimmie Akesson (right). Image source: Getty via Daily Express

Akesson emphasizes something akin to a “Sweden-first” platform which European media often compares to Trump’s “America First”; and the party has long been accused of preaching forced assimilation into Swedish culture to be become a citizen.

Bloomberg’s report surveys opinions at a large political rally held in Akkeson’s hometown of Solvesborg, and some of the statements are sure to be increasingly common sentiment after this week’s coordinated multi-city attack:

At his party’s festival, Akesson revved up the crowd by slamming the establishment’s failures, calling the last two governments the worst in Swedish history. T-shirts calling for a Swexit, or an exit from the EU, were exchanged as bands played nationalist tunes.

Ted Lorentsson, a retiree from the island of Tjorn, said he’s an enthusiastic backer of the Sweden Democrats. “I think they want to improve elderly care, health care, child care,” he said. “Bring back the old Sweden.” But he also acknowledges his view has led to disagreement within his family as his daughter recoils at what she feels is the “Hitler”-like rhetoric.

No doubt, the media and Eurocrats in Brussels will take simple, innocent statements from elderly retirees like “bring back the old Sweden” as nothing short of declaration of a race war, but such views will only solidify after this week.

Another Sweden Democrat supporter, a 60-year old woman who works at a distillery, told Bloomberg, “I think you need to start seeing the whole picture in Sweden and save the original Swedish population,” she said. “I’m not racist, because I’m a realist.”

Sweden’s two biggest parties, the Social Democrats and Moderates, are now feeling the pressure as Swedes increasingly worry about key issues preached by Akesson like immigration, law and order, and health care – seen as under threat by a mass influx of immigrants that the system can’t handle.

Bloomberg explains further:

But even young voters are turning their backs on the establishment. One potential SD supporter is law student Oscar Persson. Though he hasn’t yet decided how he’ll vote, he says it’s time for the mainstream parties to stop treating the Sweden Democrats like a pariah. “This game they are playing now, where the other parties don’t want to talk to them but still want their support, is something I don’t really understand,” he said.

Akesson has managed to entice voters from both sides of the political spectrum with a message of more welfare, lower taxes and savings based on immigration cuts.

With many Swedes now saying immigration has “gone too far” and as this week’s events have once again thrust the issue before both a national and global audience, the next round of polling will mostly like put Sweden’s conservative-right movements on top

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The Turkish Emerging Market Timebomb

Turkish President Recep Tayyip Erdoğan’s populist economic policies have finally caught up to him.

The Duran

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Authored by Jim O’Neill, originally on Project Syndicate:


As the Turkish lira continues to depreciate against the dollar, fears of a classic emerging-market crisis have come to the fore. Turkish President Recep Tayyip Erdoğan’s populist economic policies have finally caught up to him, and sooner or later, he will have to make nice with his country’s traditional Western allies.

Turkey’s falling currency and deteriorating financial conditions lend credence, at least for some people, to the notion that “a crisis is a terrible thing to waste.” I suspect that many Western policymakers, in particular, are not entirely unhappy about Turkey’s plight.

To veteran economic observers, Turkey’s troubles are almost a textbook case of an emerging-market flop. It is August, after all, and back in the 1990s, one could barely go a single year without some kind of financial crisis striking in the dog days of summer.

But more to the point, Turkey has a large, persistent current-account deficit, and a belligerent leader who does not realize – or refuses to acknowledge – that his populist economic policies are unsustainable. Moreover, Turkey has become increasingly dependent on overseas investors (and probably some wealthy domestic investors, too).

Given these slowly gestating factors, markets have long assumed that Turkey was headed for a currency crisis. In fact, such worries were widespread as far back as the fall of 2013, when I was in Istanbul interviewing business and financial leaders for a BBC Radio series on emerging economies. At that time, markets were beginning to fear that monetary-policy normalization and an end to quantitative easing in the United States would have dire consequences globally. The Turkish lira has been flirting with disaster ever since.

Now that the crisis has finally come to pass, it is Turkey’s population that will bear the brunt of it. The country must drastically tighten its domestic monetary policy, curtail foreign borrowing, and prepare for the likelihood of a full-blown economic recession, during which time domestic saving will slowly have to be rebuilt.

Turkish President Recep Tayyip Erdoğan’s leadership will both complicate matters and give Turkey some leverage. Erdoğan has  constitutional powers, reducing those of the parliament, and undercutting the independence of monetary and fiscal policymaking. And to top it off, he seems to be reveling in an escalating feud with US President Donald Trump’s administration over Turkey’s imprisonment of an American pastor and purchase of a Russian S-400 missile-defense system.

This is a dangerous brew for the leader of an emerging economy to imbibe, particularly when the United States itself has embarked on a Ronald Reagan-style fiscal expansion that has pushed the US Federal Reserve to raise interest rates faster than it would have otherwise. Given the unlikelihood of some external source of funding emerging, Erdoğan will eventually have to back down on some of his unorthodox policies. My guess is that we’ll see a return to a more conventional monetary policy, and possibly a new fiscal-policy framework.

As for Turkey’s leverage in the current crisis, it is worth remembering that the country has a large and youthful population, and thus the potential to grow into a much larger economy in the future. It also enjoys a privileged geographic position at the crossroads of Europe, the Middle East, and Central Asia, which means that many major players have a stake in ensuring its stability. Indeed, many Europeans still hold out hope that Turkey will embrace Western-style capitalism, despite the damage that Erdoğan has done to the country’s European Union accession bid.

Among the regional powers, Russia is sometimes mentioned as a potential savior for Turkey. There is no doubt that Russian President Vladimir Putin would love to use Turkey’s crisis to pull it even further away from its NATO allies. But Erdoğan and his advisers would be deeply mistaken to think that Russia can fill Turkey’s financial void. A Kremlin intervention would do little for Turkey, and would likely exacerbate Russia’s own .

The other two potential patrons are Qatar and, of course, China. But while Qatar, one of Turkey’s closest Gulf allies, could provide financial aid, it does not ultimately have the wherewithal to pull Turkey out of its crisis singlehandedly.

As for China, though it will not want to waste the opportunity to increase its influence vis-à-vis Turkey, it is not the country’s style to step into such a volatile situation, much less assume responsibility for solving the problem. The more likely outcome – as we are seeing in Greece – is that China will unleash its companies to pursue investment opportunities after the dust settles.

That means that Turkey’s economic salvation lies with its conventional Western allies: the US and the EU (particularly France and Germany). On August 13, a White House spokesperson confirmed that the Trump administration is watching the financial-market response to Turkey’s crisis “very closely.” The last thing that Trump wants is a crumbling world economy and a massive dollar rally, which could derail his domestic economic ambitions. So a classic Trump “trade” is probably there for Erdoğan, if he is willing to come to the negotiating table.

Likewise, some of Europe’s biggest and most fragile banks have significant exposure to Turkey. Combine that with the ongoing political crisis over migration, and you have a recipe for deeper destabilization within the EU. I, for one, cannot imagine that European leaders will sit by and do nothing while Turkey implodes on their border.

Despite his escalating rhetoric, Erdoğan may soon find that he has little choice but to abandon his isolationist and antagonistic policies of the last few years. If he does, many investors may look back next year and wish that they had snapped up a few lira when they had the chance.

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