The Economics Of North Korean Sanctions

January 25, 2013 in Daily Bulletin

North Korea Trade

The United Nations once again tightened sanctions against North Korea. Centives favourite Brian Palmer looked at the dynamics of North Korean sanctions:

  • Sanctions on North Korea are relatively light. Weapons and luxury goods can’t be sold and about a 100 individuals, companies, and government agencies are blacklisted.
  • This is in contrast to countries such as Iran, Cuba, and Syria that have blanket trade restrictions imposed upon them by the United States.
  • Even the existing sanctions are easily circumvented. The UN hasn’t defined what it means by ‘luxury’ goods allowing China to send North Korea tobacco and cars. Shell companies set up by the North Korean government allow it to disguise all other economic transactions.
  • Yet America doesn’t make it easy to trade with North Korea, even in non-sanctioned industries. Those who want to trade get no support from the various export encouragement programs that the United States has set up.

Read more about how trade with South Korea compares with that of North Korea, and the countries that don’t take the sanctions seriously over here.

Source: Slate