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View more articles by Jacob Fromer
Jacob Fromer is NK News's Washington DC correspondent. He previously worked in the U.S. Senate.
Correction at 1330 KST: This article has been corrected to reflect the fact that Namgang Construction, not Namgang Trading, was sanctioned in 2016.
The U.S. Treasury Department has blacklisted two companies — one Chinese, one North Korean — for violating a global ban on DPRK citizens working overseas, the department announced on Tuesday.
According to the statement, the Korea Namgang Trading Corporation, based in Pyongyang, and Beijing Sukbakso, allegedly collaborated to send North Korean workers to Russia, Nigeria, and multiple countries in the Middle East — despite American and United Nations sanctions prohibiting DPRK laborers from earning money abroad.
The Treasury Department had previously designated a company called Namgang Construction in 2016 for sending workers overseas, though it’s unclear if the two entities are linked.
The UN Security Council (UNSC) and U.S. have at various points both accused North Korea’s leadership of taking its citizens’ income earned abroad and funneling at least some of the money into the country’s nuclear weapons program.
The two companies named on Tuesday were responsible for various logistics related to DPRK laborers’ work overseas, according to the Treasury Department, including visas, lodging, and remittance payments back to North Korea.
Both are now barred from the U.S. financial system, and any person who does business with them could be subject to sanctions as well, the Treasury Department said.
The Chinese embassy in Washington did not respond to a request for comment from NK News.
The new designations come as Washington and Pyongyang have been locked in a diplomatic stalemate for months — with the contentious issue of sanctions relief front and center in the dispute.
The U.S. and its European allies have insisted that the sweeping, punishing sanctions currently in place against the DPRK — backed by U.S. law and numerous UNSC resolutions — should not be lifted until the North fully abandons its nuclear weapons program.
Pyongyang disagrees, arguing that it must see a rolling back of what it describes as the U.S. “hostile policy” against it before it can disarm.
At the end of December, North Korean leader Kim Jong Un told senior Workers’ Party leaders that the country should prepare to “tighten our belts” rather than give in to the pressure.
According to a company database on NK News‘s sister site NK Pro, Korea Namgang Trading Corporation has appeared at multiple trade fairs in Pyongyang in recent years.
The company reportedly sells a range of products that include low-grade gold concentrate, liquor, and an “atoxin injection” that claims to “ensure a complete cure of multidrug-resistant tuberculosis in 2-3 months.”
The new designations also come as the U.S. appears to be struggling to maintain international unity on sanctions policy.
In recent weeks, China and Russia have circulated a draft resolution at the UNSC that would remove some of the sanctions currently in place — including the ban on North Korean workers overseas.
Multiple UN diplomats told NK News recently, however, that there was little broader interest in the proposal, which would not be able to pass without support from the U.S. or its European allies.
Russia has also seen a sharp increase this year in North Koreans entering the country on tourist and student visas, a trend some experts said could point to an attempt to evade a recent ban on DPRK citizens working overseas.
The opposition to sanctions is not only coming from U.S. rivals: South Korea’s president, Moon Jae-in, has also been outspoken about wanting to see at least some adjustments to the current policy.
At a press conference on Tuesday, President Moon repeated his desire to see an increase in inter-Korean tourism, for example — though it is unclear if Pyongyang would want to go along with that plan.
Kim Jong Un visited a once-celebrated inter-Korean project last fall — the famous Mount Kumgang tourist site — remarked that it was “built like makeshift tents in a disaster-stricken area,” and called for the site to be demolished and replaced with something better that the North would build alone.
But the Moon administration has repeatedly said it may move “independently” if the impasse with North Korea does not end soon.
One of President Moon’s top advisors, Moon Chung-in, was especially forthright during a visit to Washington last week.
He said that because South Korea had followed U.S. policy “100 percent,” relations between the two Koreas had become “completely frozen.”
One expert told NK News that the new sanctions designations announced on Tuesday would likely have little, if any, effect on the state of nuclear negotiations with the North.
“As diplomacy between the United States and North Korea is likely to remain stalled for some time, I don’t think this particular development has a major impact on the relations between the two countries,” said Naoko Aoki, an adjunct political scientist at the RAND Corporation.
“Other than perhaps giving North Korea another issue to complain about,” she added.
Democratic and Republican U.S. Senators told NK News that the new sanctions were important but didn’t go far enough.
Senator Chris Van Hollen, a Democrat from Maryland and the author of new sanctions legislation that passed into law late last year, told NK News that while the new Treasury designations may be better than nothing, they will be unlikely to “hold North Korea’s feet to the flame.”
“I’m glad to see the Administration doing its job in enforcing sanctions against some companies that violate the law with respect to North Korea,” he said. “But one-off penalties against smaller firms aren’t enough to change Kim Jong Un’s calculus.”
Cory Gardner, a Republican from Colorado and the chair of the Foreign Affairs Committee’s East Asia subcommittee, told NK News that he “welcomed” the new sanctions designations — and encouraged the Trump administration to take them even further.
“I welcome these new sanctions on North Korea from the Treasury Department and I renew my call for international community to increase the pressure on North Korea, as Kim Jong Un continues to build his illicit weapons programs and engage in human rights abuses against his own people,” Gardner said.
“I urge the Trump Administration to ramp up the maximum pressure campaign against Pyongyang and its enablers until such time as the regime fully complies with international law.”
Both Senators also said that the Trump administration should increase its enforcement of existing sanctions laws.
“Through bipartisan legislation like NKSPEA and ARIA, Congress has spoken loud and clear that the goal of any negotiation with Pyongyang should be the complete, verifiable, and irreversible denuclearization of North Korea,” Gardner told NK News, referring to the North Korea Sanctions Policy Enhancement Act and the Asia Reassurance Initiative Act, of which he was an author.
“The Administration must not delay the implementation of the Otto Warmbier BRINK Act,” Van Hollen said, referring to the sanctions law that he and Kentucky Republican Congressman Andy Barr wrote and which was signed into law by President Trump at the end of 2019.
“It’s past time we implement these sanctions to truly hold North Korea’s feet to the flame,” he said.
Instead of pressuring North Korea, the RAND Corporation’s Aoki said, the more likely effect of Tuesday’s sanctions designations may be to highlight divisions among the various nations trying to coax North Korea into talks.
“What is more concerning to me is that this underscores the diverging positions among the countries working on the North Korean nuclear problem,” she told NK News. “North Korea has a history of exploiting cleavages like this.”
“This also comes at a time when the United States and South Korea are struggling to agree on South Korea’s host nation support for U.S. troops, which adds to the problem,” she added. “I think it’s important for the two allies to try to smooth out the various differences.”
On the matter of U.S. troops, South Korea’s top negotiator in defense cost-sharing talks with the U.S. arrived in Washington on Monday for another round of negotiations over the issue known as “burden sharing” — essentially, a question of how much Seoul should have to pay Washington for the U.S. military presence in Korea.
President Trump has reportedly asked for a fivefold increase in payments from South Korea, but it is unclear if negotiators are currently debating that number. The U.S. Congress also blocked Trump from removing any troops from the Peninsula in late December.
A State Department official, speaking on background, told NK News on Tuesday that the U.S. is standing by Trump’s demand for more money, although the Americans “appreciate” what Seoul does to help out.
“We appreciate what the Republic of Korea provides to the U.S.-[South Korean] Alliance,” the official said. “But the President has been clear that the Republic of Korea has the ability and should contribute more of its fair share.”
“Sustaining the costs of our global military presence is not a burden that should fall on the U.S. taxpayer alone, but is a responsibility that should be shared fairly with allies and partners who benefit from our presence,” the official added.
U.S. Secretary of State Mike Pompeo also met with his South Korean counterpart, Foreign Minister Kang Kyung-wha, on Tuesday in California.
According to the State Department’s readout of the meeting, the two officials “reaffirmed continued close U.S.-[South Korean] coordination on North Korea.”
“The Secretary and Foreign Minister Kang praised the enduring strength of the U.S.-ROK Alliance,” the readout said, according to South Korea’s Yonhap News Agency.
It is unclear if Pompeo and Kang discussed cost-sharing or sanctions during their meeting.
Edited by Oliver Hotham