(Bloomberg) -- The United Nations Security Council unanimously passed a resolution Wednesday to cut North Korean coal exports as part of efforts to punish Kim Jong Un's regime for a September nuclear test by cutting off his government's few sources of hard currency.
The resolution will deny Pyongyang at least $700 million a year, according to two U.S. State Department officials who asked not to be identified discussing private deliberations on the move. Crucially, the proposal got the backing of China, which can veto any resolution before the 15-member council and has been wary of strangling its isolated neighbor's economy given the turmoil that might follow.
China accounts for more than 70 percent of North Korea's trade and provides most of its food and energy supplies, according to the Council on Foreign Relations.
The resolution's most significant provision is a binding cap that would cut coal exports by about 60 percent. It bans the export of non-ferrous metals such as copper, nickel and silver, which gives Kim's regime another $100 million a year. It also seeks to block diplomats from smuggling illegal items or selling arms by, among other things, limiting accredited diplomats to one bank account each.
“I am not overly optimistic that China will strictly enforce the new sanctions but am prepared to be pleasantly surprised,” said Ralph Cossa, president of the Pacific Forum CSIS policy research group in Honolulu. “Beijing's track record is not all that good but hopefully they will demonstrate new commitment in face of the growing danger.”
Read more: A QuickTake explainer on North Korea's nuclear program
The North Korean economy and senior officials are already under a raft of Security Council restrictions that have failed to deter the regime's nuclear ambitions. Other components of the resolution include:
* Targeted sanctions on 11 senior officials and 10 entities involved in North Korea's weapons program
* Prohibiting the sale of new vessels and helicopters to North Korea
* Restricting travel to other countries by government and military officials “if they are determined to be associated with the DPRK's nuclear or ballistic missile programs or other prohibited activities”
* Calling on countries to reduce the number of staff allowed at North Korean diplomatic posts
In March the UN passed its toughest sanctions yet against Kim's regime, but a loophole allows it to trade goods needed for “livelihood" or emergencies. China currently allows imports of coal and iron ore -- banned items under the UN sanctions list -- if the resources are not related to Pyongyang's nuclear project.
“The sanctions will at least establish better criteria and make it easier to monitor activities,” Cossa said. “While nothing will ever totally prevent abuses, any attempt to close or clarify loopholes is useful.”
--With assistance from Isabel Reynolds To contact the reporter on this story: Nick Wadhams in Washington at nwadhams@bloomberg.net. To contact the editors responsible for this story: Bill Faries at wfaries@bloomberg.net, Rosalind Mathieson, Larry Liebert
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.
