Introduction

The Democratic People’s Republic of Korea is certainly one of the most heavily sanctioned countries in the world. The UNSC first imposed sanctions after North Korea’s first nuclear test in 2006, with Resolution 1718.Footnote ¹ The UNSC has continued to pass increasingly strict sanctions resolutions, the most recent of which, Resolution 2397, was adopted in December of 2017.

In contrast to the UNSC, the US’s unilateral sanctions date back to shortly after the Korean War. Despite moments of hope for reconciliation and negotiation, such as the Agreed Framework or the Singapore Summit, the US has maintained its own sanctions regime in addition to sponsoring UNSC sanctions. South Korea ended all trade with North Korea in 2010 following the sinking of the Cheonan, except for trade through the Kaesong Industrial Complex; however, this industrial complex later closed in 2016 after another North Korean rocket launch.Footnote ² Japan extended its sanctions to 2025, which include a ban on all imports, exports, remittances, travel, and technical ballistic and nuclear intellectual exchange.Footnote ³ Multiple other countries also uphold unilateral sanctions on North Korea.

What is the purpose of these sanctions? First and foremost, the sanctions are meant to dissuade the DPRK’s development of its missile and nuclear weapons program. However, evidence suggests that sanctions have had little to no effect on “denuclearizing” DPRK.Footnote ⁴ On the other hand, sanctions have had a considerable impact in other regards, such as compromising the health of the population and the availability of healthcare. Sanctions have hurt DPRK’s health sector by impeding the import of medical equipment and supplies, burdening humanitarian aid organizations with financial, logistical, and administrative barriers, and by debilitating the country’s economic progress as a whole. This has subsequently weakened multiple health domains, which include, but are not limited to, nutrition, water, sanitation and hygiene services, maternal health, and tuberculosis (TB).

Evaluating the Effect of Sanctions: Is There a Positive Value?

Sanctions, in theory, have the potential positive effect of regional stability by halting North Korea’s nuclear weapons and missile programs. But this has not happened. Since the UNSC first imposed sanctions on North Korea in 2006, the DPRK nuclear program has continued to grow. Besides ongoing production of nuclear materials and testing of weapons technology, according to the Panel of Experts reports, there continues to be illicit exportation of coal, imports of prohibited cargo and petroleum, and illegal cyber activities.Footnote ⁵ In fact, some analysts say that sanctions drive Kim to take more aggressive measures, because sanctions are seen as a threat to the regime’s survival.Footnote ⁶ The notion that sanctions avoided military action against North Korea is highly unlikely, because the potential loss of human lives from a conventional military conflict would likely be seen by international actors as unacceptably high. In addition, some leaders, like Kevin Martin, president of the NGO Peace Action, believe that tougher sanctions could escalate, not ease, military tensions in Northeast Asia.Footnote ⁷ In a petition shortly after the Pyeongchang Olympics in 2018, he remarked that “at a minimum the [sanctions] will exacerbate the misery of ordinary North Koreans and antagonize Russia and China, whose cooperation is needed to resolve the current impasse.”Footnote ⁸

Another possible positive value of sanctions is reducing human rights abuses. However, similar to the nuclear weapons program, sanctions appear to have had little if any effect on improving human rights in North Korea. The UNSC sanctions have never targeted human rights violations, although the US sanctions have. In 2016, the US passed the North Korea Sanctions and Policy Enhancement Act, which made it mandatory for the US president to enforce financial sanctions on individuals involved with North Korean human rights and cybersecurity abuses, and for the State Department to submit reports on key human rights abuses.Footnote ⁹ This targeted sanctions approach was praised by Human Rights Watch.Footnote ¹⁰ Yet not much has changed. Since the passing of the North Korea Sanctions and Policy Enhancement Act and associated Executive Order 13722, those placed on the blacklist are mostly symbolic, as these individuals do not normally engage in US banking, regardless of sanctions.Footnote ¹¹ The US State Department listed twenty-two significant categories of human rights abuses in its 2022 DPRK Report on Human Rights Practices, citing that “there was no indication that the [DPRK] government took steps to prosecute officials who committed human rights abuses.”Footnote ¹² The 2023 report revealed no significant changes in the human rights situation.Footnote ¹³ Instead of these unilateral coercive measures, North Korea appears more receptive to a multilateral, collaborative approach. The DPRK is a member of the UN Human Rights Council (UNHRC) and participates in the universal periodic review (UPR) of the country’s adherence to human rights conventions. During the third UPR cycle in 2019, the DPRK agreed to address 132 out of 262 recommendations (50.4%),Footnote ¹⁴ and has ratified five international human rights instruments.Footnote ¹⁵ Nevertheless, the DPRK government’s current engagement in responding to and addressing human rights abuses has been described as “minimal” according to the reports from the 52nd to 55th sessions of the UNHRC.Footnote ¹⁶ It refuses to recognize the mandate of the Special Rapporteur on the situation of human rights in the DPRK.Footnote ¹⁷ The UNHRC called for renewed engagement and “fresh, creative strategies” to address human rights abuses in North Korea.Footnote ¹⁸ Elizabeth Salmón, the Special Rapporteur since August 2022, set out her mandate using a two-track approach, the first being to hold perpetrators of abuse accountable for their actions, and the second, to seek to secure dialogue and cooperation through trust with the DPRK.Footnote ¹⁹ She emphasizes the need to strengthen engagement with the DPRK in order to improve the human rights situation and hold accountability for violations.Footnote ²⁰ Furthermore, it should be noted that healthcare, a decent standard of living, potable water, and access to sanitation facilities are also part of basic human rights. When sanctions worsen these conditions, they inadvertently exacerbate human rights violations in North Korea.

Alternatively, if the goal of sanctions is to hurt the economy, then sanctions are working. North Korea experienced a macroeconomic shock in 2018 from sanctions,Footnote ²¹ with the most notable pre-pandemic contraction of the GDP in the past two decades (4.1%) occurring in 2018.Footnote ²² In 2018, the total trade volume decreased by 48.8 percent.Footnote ²³ Choking North Korea’s economic activity, by banning the top export sectors and capping the import of refined petroleum to 10 percent of the normal levels, is a de facto economic blockade. The economy recovered slightly (0.4% growth) in 2019, responding to improved weather and crop yields,Footnote ²⁴ but plummeted again in the pandemic era. The loss of the export economy undoubtedly has had a profound negative impact on the North Korean people who were employed by those industries, particularly women.Footnote ²⁵ Sanctions-related economic decline also compromises state expenditures on healthcare. Nevertheless, the sanctions failed to have the desired effect – halting the nuclear weapons and the missile program. This, combined with the DPRK government’s self-imposed Covid-19-era border closure, has created an environment that has made access to healthcare more difficult. Without a stable economy, financing public health-related endeavors becomes an uphill battle.

Current State of Public Health in North Korea

At the turn of the century, North Korea partnered with humanitarian aid organizations to significantly improve the health of its citizens. In 2000, UNICEF Data shows that 54 percent of children exhibited stunting – a major indicator of malnutrition.Footnote ²⁶ But in 2015, this dropped to 28 percent and then to 17 percent in 2020,Footnote ²⁷ which ranks similarly to countries like Sri Lanka or Tajikistan.Footnote ²⁸ The maternal mortality ratio declined from 186 deaths per 100,000 live births in 2000,Footnote ²⁹ to 85 in 2014, and then to 106 in 2019.Footnote ³⁰ Similarly, the infant mortality ratio decreased from 60 deaths per 1,000 live births in year 2000,Footnote ³¹ to 16.8 in 2019,Footnote ³² and the neonatal mortality rate decreased from 26.3 per 1,000 live births in 2000,Footnote ³³ to 7.7 in 2019.Footnote ³⁴ Fatalities from malaria and TB sharply declined in this period as well.Footnote ³⁵ Despite these strides, the current humanitarian situation in North Korea is still dire.

As Hazel Smith discussed in her contribution to this volume, food insecurity is a pressing issue in North Korea. Pre-pandemic, 40 percent of the country’s population (10.1 million people) experience food insecurity.Footnote ³⁶ This likely increased to greater than 60 percent during the pandemic years.Footnote ³⁷ Almost every year during the East Asian monsoon season, at least one typhoon will cause major flooding. Combined with recurrent droughts and record low rainfalls in 2017 and 2019, this often compromises agricultural outputs and further devastates food security.Footnote ³⁸ Since Hazel Smith provided an in-depth analysis on this topic in Chapter 2, we will not touch upon it here. Nevertheless, the health effects of food insecurity are profound. For example, malnutrition leads to increased prevalence of opportunistic infections such as TB and Covid-19. Poor nutritional status is also associated with poor response to medical treatment and recovery from surgery.

In addition, as of 2017, 39 percent of the population (9.9 million people) did not have access to safe drinking water – varying from 29 percent in urban areas to 55.5 percent in rural areas.Footnote ³⁹ The WHO has identified the DPRK as one of twenty countries with the highest incidence of TB and multidrug resistant-TB (MDR-TB) burden. In fact, North Korea had a TB incidence of 131,000 and a mortality rate from TB of more than 20,000 deaths in 2018.Footnote ⁴⁰

The Health Impact of Sanctions on Government-Sponsored Healthcare

According to Article 72 of the DPRK Constitution and Article 9 of the Public Health Law, North Korea provides free universal healthcare for all its people, although informal costs may exist. North Korea is also one of the top spenders on military expenses proportionally,Footnote ⁴¹ but it also spends a relatively large portion of its GDP on health. In the WHO’s most recent Country Cooperation Strategy report, it was reported that the DPRK spent about 6.1 percent of its GDP on healthcare,Footnote ⁴² not including international aid or funding. This is higher than the lower- and middle-income country average of 5.4 percent.Footnote ⁴³ However, because North Korea’s GDP is low, especially during the Covid-19 pandemic, the health system is chronically underfunded.

North Korea has at times proven its dedication and willingness to invest in health. It has co-financed long-standing projects like its vaccination program with the Global Alliance for Vaccines and Immunization (GAVI), the international vaccine alliance. Over the last several years, North Korea has developed a prototype CT scanner, artificial knee joints, and ultrasound machines. Furthermore, North Korea invests a significant amount of capital into the education and training of its health workforce – one of the highest ratios of healthcare workers, relative to the population, in the world. North Korea has a significant mobilization capacity to deploy large scale health efforts, such as mass vaccination campaigns.Footnote ⁴⁴

However, the North Korean government’s efforts to provide healthcare are directly undermined by the sanctions, particularly in regard to the import of medical equipment and supplies. While NGOs may seek exemptions to import goods for DPRK’s health sector, the North Korean government itself has no mechanism to apply for exemption requests. The process it must follow to buy medical equipment supplies is extraordinarily convoluted. The hypothetical steps are shown in Figure 5.1 of what the Ministry of Public Health must do in order to replace a broken motherboard of an X-ray machine.

Figure 5.1

Theoretical roadmap of how the North Korean Ministry of Public Health would go about replacing a broken motherboard for an X-ray machine.

As a result of the many obstacles to the normal purchase of medical goods, the government has little choice but to utilize questionable and sometimes illicit means to procure medical supplies and parts.Footnote ⁴⁵

It is not surprising that the sanctions have had a significant effect on the DPRK’s health sector. They affect the health sector indirectly by undermining the economy as a whole and state revenues. But they also affect the health sector directly as well by delaying or preventing the importation of medical goods, and by impeding or discouraging funding for humanitarian needs. According to the Panel of Experts’ estimate in 2019, delays and lack of funding caused 229,235 people to not have access to clean drinking water (leading to diarrheal diseases). In addition, 35 wells and water systems for 61,284 people were also delayed due to sanctions.Footnote ⁴⁶ Due to medical equipment and supply delays, 150,000 pregnant women did not have access to safe delivery conditions, and 22,000 high-risk women did not have access to blood for blood transfusions.Footnote ⁴⁷ Sanctions also delayed the delivery of nine ambulances and spare parts for five ambulances involved in the distribution of TB and malaria medications and supplies.Footnote ⁴⁸ The construction of the Pyongyang General Hospital demonstrates an investment in health on the part of North Korea; however, the hospital’s opening has been delayed repeatedly because of difficulties importing equipment due to the Covid-19 border closure and sanctions-related shipping delays.Footnote ⁴⁹ Although construction began in 2020, the hospital has not yet been completed.Footnote ⁵⁰ Several NGOs have expressed concerns that prolonged sanctions have kept the health system weak, in that it is less resilient and adaptive, and is unable to effectively mitigate shocks such as the Covid-19 pandemic.Footnote ⁵¹ An analysis from Seoul National University expressed concerns that sanctions have caused unpredictability in the supply of essential medicines and equipment. This has additional consequences as well; because this is an environment lacking official regulation of the price of medicine, the unpredictable supply of medicines bolsters the marketization of healthcare practices and the unofficial health market, leading to socioeconomic disparities and unequal access to healthcare.Footnote ⁵² Researchers state, “Without additional efforts to strengthen the healthcare system in the DPRK, inadequate and unpredictable provision of essential medicines could accelerate the post-socialist transition of the healthcare system.” While there is no clear data about shortages of medications, there is reason to believe that these shortages are substantial. In a 2020 retrospective study amongst 383 DPRK defectors, it was found that 39.5 percent of participants did not seek care due to medication shortages at healthcare facilities.Footnote ⁵³ In 2019, Yoon et al. conducted a systematic literature review of 775 articles in North Korean medical journals. They found that research on drug replacements – for essential antibiotics, opioids/narcotics, and cardiovascular medications – increased after the implementation of economic sanctions in 2005.Footnote ⁵⁴ Thus, we may infer that shortages of imported medication have worsened, given the increased research into drug replacements.

The reduction in fuel has in all likelihood also affected healthcare delivery. Starting in 2017, UNSC sanctions began to ban importation of all natural gas and condensates into North Korea,Footnote ⁵⁵ with a cap of half a million barrels of refined oil products (i.e., diesel and kerosene) – a drastic reduction in prior amounts imported, and far below what is needed to support the economy and public services. This “inflection point,” from 2016 to 2017, was when UNSC sanctions effectively stopped differentiating between the civilian and the military sectors. Fuel restrictions had a profound effect on agricultural production, and while there is little direct data available, its effect on the healthcare sector must certainly be extensive, since the lack of fuel would undermine the capacity to operate a hospital, drive ambulances, and transport patients.

Health Effects of the DPRK’s Border Closure

While the sanctions have had a significant negative impact on the DPRK’s healthcare system and the health of its population, the sanctions also work in tandem with other factors. One of the most significant such factors has been the closure of the DPRK’s borders in response to the coronavirus pandemic.

Given the rates of malnutrition, the North Korean population is particularly vulnerable if a pandemic reaches its borders. In efforts to reduce the spread of Covid-19, North Korea closed its borders and imposed strict lockdown measures in early 2020, as it had successfully done before with the Ebola and SARS virus outbreaks.Footnote ⁵⁶ However, this dramatically halted trade. Virtually all shipments of medical supplies, essential medicines, food items, and personal protective equipment and other Covid-19 relief items were held up at the border, incurring additional costs for humanitarian aid agencies. Aid agencies removed all foreign personnel working in the country. In May 2022, North Korea’s Central News Agency announced that Covid-19 had entered the country with almost 5 million people having potential symptoms of the virus, and 168 testing positive out of the approximately 64,000 tested. They rejected the COVAX offer for vaccinations for unclear reasons.Footnote ⁵⁷ However, later on it appears the government performed a vaccination campaign with vaccines thought to be from China.Footnote ⁵⁸ It is widely feared that this self-imposed border closure has exacerbated a bad situation leading to humanitarian and human rights issues.Footnote ⁵⁹ The exact humanitarian situation is unknown since there are limited observers. Although the DPRK announced “victory” over the virus in August 2022,Footnote ⁶⁰ the DPRK Sanctions Committee approved a humanitarian exemption request from WHO for oxygen concentrators specifically earmarked for Covid-19 patients in critical condition.Footnote ⁶¹ According to Chinese Customs Data, imports from China into North Korea started to rebound, particularly in 2021, although it is unclear if these goods ultimately reached their final destination. The proportion of imports making up medical equipment and medicine has increased; particularly of antibiotics, vitamins, and a CT scanner; which could reflect direct purchases from the North Korean government. North Korea was able to implement a “catch-up” vaccination campaign for its children in March 2023, praised by WHO Representative for the DPRK country office Dr. Mohammed Jamsheed as “another testimony to DPR Korea’s strong leadership and governance of the national immunization program.”Footnote ⁶² However, reopening the borders alongside a firm commitment to addressing this crisis collaboratively is essential to mitigate the health impact of Covid-19 and the accompanying border closures.

Humanitarian Aid Challenges Due to Sanctions

There is little dispute that the sanctions regimes have worsened the urgent problems the DPRK is facing with regard to the basic well-being of the population. In 2022, the Panel of Experts carried out an inquiry on the effect of UN sanctions on the humanitarian sector in the DPRK. They concluded that although it is difficult to independently analyze the effects of UN sanctions, “there can be little doubt that the United Nations sanctions have unintentionally affected the humanitarian situation and the right to development, exacerbating the problems caused by the inward-looking centralized economic mismanagement by the Government of the DPRK.”Footnote ⁶³ They concluded that UN sanctions have led to a decline in currency earnings, with estimates of up to hundreds of millions of dollars lost for those individuals employed in industries impacted by sanctions or overseas work.Footnote ⁶⁴ Additionally, sanctions halt transborder financial transfers and transportation, disrupting the supply of necessities such as agricultural equipment, food, and medicine to the civilian population.Footnote ⁶⁵ Sanctions introduce high-risk legal exposure for private sector entities (including donors) and foreign economic entities, which increase costs for humanitarian work and “contributed to limiting the ability of the country [DPRK] to legally acquire humanitarian necessities and medical commodities, and the degradation of social services including healthcare.”Footnote ⁶⁶

The severity of the current crisis has made humanitarian aid particularly urgent. UN agencies and other organizations have long called for sanctions regimes to incorporate exemptions for such aid. The UN’s Inter-agency Standing Committee, for example, stated in its 1998 letter to the UNSC that “Sanctions should not impede the work of humanitarian organizations providing humanitarian assistance to the civilian population of targeted countries.”Footnote ⁶⁷ These recommendations were, in principle, put in place over twenty years ago, in response to the international community’s universal condemnation of the impact on the ordinary citizens by sanctions.

But while the humanitarian situation is extremely urgent, sanctions make it extraordinarily difficult, if not impossible, for aid organizations to feasibly work in the DPRK. This may seem surprising, as humanitarian aid is explicitly exempted in almost every multilateral or unilateral sanctions regime against the DPRK. But there has nevertheless been a considerable reduction in the flow of humanitarian aid. This can be attributed to three major factors: (1) reduction of funding for aid organizations, (2) the administrative burden on aid organizations seeking to import supplies, and (3) the lack of a banking channel that these international organizations can use. In addition, the DPRK government has not shown much flexibility in working with NGOs, and that has not helped matters.

The Administrative Burden of the Exemption Process

Once the sanctions from Resolution 2397 went into effect, the UN Panel of Experts for the DPRK estimated that sanctions delayed actual delivery of aid by nine to ten months.Footnote ⁸² There was a seven-month delay in the construction of canals against floods, and a nine-month delay in fully equipping hospitals for maternal emergencies as well as refurbishing safe shelters.Footnote ⁸³ There was a ten-month delay in equipment for those with disabilities, including wheelchairs, crutches, walking sticks, walkers, hearing aids, and glasses.Footnote ⁸⁴ In 2018, the average exemption approval took 99 days, with the slowest being 165 days for Concern Worldwide.Footnote ⁸⁵ It is worth noting that these delays were reduced dramatically with Information Assistance Notices (IAN) No. 7, adopted in April 2018, described later. However, that did not resolve the many difficulties that humanitarian organizations have faced while working in DPRK.

Almost all humanitarian aid organizations that want to work in or send aid to North Korea submit a sanctions exemption request to the UNSC’s 1718 Sanctions Committee, the committee charged with overseeing the sanctions against the DPRK. Technically, these exemption requests are not required for unsanctioned items like medications and food. However, since the list of prohibited items is extensive and the description of prohibited items can be broad – such as all metal – most organizations end up submitting requests for all items to avoid the risk of being found noncompliant. To illustrate this point, in a prior analysis done by our group, we found that UN sanctions have blocked fifty-nine total, broad categories of items.Footnote ⁸⁶ Within this group, there are nineteen categories of food and agricultural items, nineteen categories of medical items and fifteen categories of clean water items. The nineteen agricultural items included “stoves, greenhouses, irrigation, harvesting, and processing equipment.” Moreover, the nineteen medical categories of medical items included “medical sterilizers, syringes, needles, ambulances, X-ray machines, microscopes, nail clippers, UV lamps for disinfection, ambulances, ultrasound machines, respirators, reuse intravenous catheters, scalpels, gauze and gloves.” Lastly, the fifteen categories of clean-water items included “well drilling machines, filters, pumps for household water systems, water tanks, pipes, and heaters.”Footnote ⁸⁷ Aid organizations working in the DPRK, as well as the former special rapporteur Tomás Quintana on the situation of human rights in the DPRK,Footnote ⁸⁸ have long called for a “whitelist,” or a detailed list of items that are specifically exempt from sanctions and thus do not require a sanctions exemption application, or at least an explanation as to why specific items within broad sanctioned customs codes are banned.Footnote ⁸⁹

Humanitarian aid organizations have reported that compiling an application is an arduous process.Footnote ⁹⁰ These delays are the net effect of sanction-induced administrative burden and prolonged approval time, as well as logistical barriers (See Figure 5.2). In addition to detailing the project specific aims and partners, the process requires applicants to explain how they will ensure that their assistance will not be diverted for prohibited purposes.Footnote ⁹¹ They must include their import distribution plan, their strategy to evaluate diversion and what measures will be taken if diversion problems are to be uncovered.Footnote ⁹² Many of these procurement and shipping details are difficult to obtain without actually purchasing or outlining a contract with suppliers first, which proves risky if an exemption has not yet been obtained.Footnote ⁹³ The UNSC also requires an explanation of the selection criteria for the organization’s specific beneficiaries within the DPRK and a detailed description of the exact specification, purpose, and designated recipient of every item being transported into the country, as well as all parties involved in transportation and all financial transactions.Footnote ⁹⁴ Any changes must be approved by the UNSC before implementation. Organizations from member states face the additional barrier of having to apply directly to their government, which will then submit an application to the UNSC on their behalf (more options were introduced in the IAN 7).

Figure 5.2

Barriers faced by humanitarian aid organizations working in North Korea.

Source: Adapted from a figure published by Kate Parsons, the Mennonite Central Committee Representative.

After the application is submitted, the UNSC 1718 Sanctions Committee must then review and approve requests. This process can take time. In addition, the committee operates by consensus, meaning that any single member state can reject an exemption request. Given that there are no set criteria for what is considered humanitarian material, requests can be rejected on arbitrary reasoning. Once approved, exemptions become invalid if there are “any changes to planned suppliers, shipping routes, item specifications or quantities,” thus increasing processing times even further.Footnote ⁹⁵

Even if the exemption application is approved in a timely manner, the humanitarian organization faces further logistical challenges. American organizations have the added burden of having to seek licenses from the U.S. Department of the Treasury and U.S. Department of Commerce, a process which lacks transparency and results in additional paperwork and delays. In periods without a travel ban, all American humanitarian aid workers would also have to apply for new special validation passports every time they travel to North Korea.Footnote ⁹⁶ As of September 2021, American aid workers can apply for a multi-visit passport good for up to one year only.Footnote ⁹⁷ The issuance of these passports is not guaranteed, and they have been denied in the past without explanation.

Even before the pandemic-era border closure, shipping to North Korea was a complex process, and there was often a delay at Chinese customs, where goods are often barred, even if UNSC exemption approval documents are provided.Footnote ⁹⁸ Shipping delays are one of the most frequently cited challenges by NGOs working with the DPRK, now mostly due to the DPRK-imposed border closure.Footnote ⁹⁹ These delays and barriers have had consequences. Several NGOs report increased costs due to customs delays and hesitancy on part of suppliers to deal with the complicated and uncertain logistics and regulations, which in turn have caused donors to withdraw support.Footnote ¹⁰⁰ In 2017, the NGO Save the Children left North Korea because it said sanctions had made it too difficult to operate,Footnote ¹⁰¹ thereby leaving a gap of $3.5 million in required funding. In 2022, an NGO reported to the Panel of Experts that it could not procure pipes to build greenhouses due to delays in deliveries, which were estimated to have affected 30,000–45,000 beneficiaries, mostly children.Footnote ¹⁰² Even if goods and equipment do make it into the country, humanitarian organizations may face ongoing challenges for day-to-day operations. For example, one anonymous NGO admitted to using a blacklisted company, the Korean National Insurance Company,Footnote ¹⁰³ for its vehicle insurance out of necessity, as this is the only authorized insurance company in the country.Footnote ¹⁰⁴

IAN No. 7 and Other Strategies to Mitigate the Humanitarian Impacts of Sanctions

The UNSC issued a series of IANs in response to concerns by humanitarian organizations. IAN No. 7, issued on April 6, 2018, streamlined the approval process. It allowed certain organizations to submit requests directly to the Office of the UN Resident Coordinator to the DPRK or to the Secretary of the 1718 Sanctions Committee: UN agencies, International Committee of the Red Cross (ICRC), International Federation of the Red Cross and Red Crescent Societies, the International Olympic Committee, or an organization that had received two or more exemptions during the preceding eighteen months. Other organizations could submit requests directly in cases of urgent humanitarian crisis (such as Covid-19).Footnote ¹⁰⁵ Organizations in member state countries are still encouraged to submit to their home countries, and a specific justification is required if they do otherwise.Footnote ¹⁰⁶ This adds bureaucratic barriers in licensing and approval requirements within their own home country for humanitarian organizations based in member states.

There have been various attempts at streamlining these processes. In the US, Senate Bill S. 690, “Enhancing North Korea Humanitarian Assistance Act,”Footnote ¹⁰⁷ attempted to increase the range of humanitarian items that fall under general licensing from the US OFAC, rather than requiring special and separate licensing. In pandemic-era mid 2021, there were nineteen active UNSC exemption approvals, eight of which were from five different countries on behalf of their own organizations, three were directly from NGOs (two American and one Singaporean), three were from large international humanitarian organizations, and four were from UN organizations (UNICEF, UNFPA). The exemption expiration date was extended from six to nine months, and provisions were made for case-by-case “exemptions from exemption” after review by the UNSC in order to speed up the processing time.Footnote ¹⁰⁸ The Panel of Experts had recommended that responses to requests be time-bound, and that the 1718 Committee should meet on a regular basis to process exemption requests, publish a whitelist, seek feedback, and work to streamline and simplify the exemption application process.Footnote ¹⁰⁹

Furthermore, during the Covid-19 pandemic, IAN No. 7 was updated to mandate a two-day decision-making process for Covid-19-related humanitarian assistance.Footnote ¹¹⁰ The 1718 Sanctions Committee also started granting exemption extensions for up to one year,Footnote ¹¹¹ and even up to eighteen months.Footnote ¹¹² This flexibility on the part of the UN Sanctions Committee has largely been praised by aid organizations working in the DPRK.Footnote ¹¹³

The streamlining was effective in speeding up the approval process, with a reported 71 percent reduction in exemption approval time in the 2019 reporting period (average 15 days).Footnote ¹¹⁴ Humanitarian exemption approvals increased by 137.5 percent (16 approvals in 2018 to 38 approvals in 2019).Footnote ¹¹⁵ However, challenges still remain for humanitarian organizations, including rigid reporting criteria for technical specifications on planned shipments; and organizations are still required to make frequent submissions of additional documentation.Footnote ¹¹⁶ In addition, the sanctions may combine with other factors to worsen the environment for humanitarian operations. For example, the organizations, countries, and UN agencies that received pandemic-era exemption approvals were not allowed to work in North Korea for many months due to North Korea’s border closure. As a result, some humanitarian approvals then expired, requiring the organizations to reapply, if they still wanted to move forward with their projects.

As mentioned previously, these organizations are also subject to the bureaucratic barriers in licensing and approval requirements within their own host member states. These processes as well may be extremely burdensome and expensive, diverting resources from humanitarian operations. The Panel of Expert’s 2022 report noted that, according to one NGO, “The legal expertise required to understand the information involved in the sanction mechanisms and the absence of a direct channel for resident INGOs to communicate with the UNSC Sanctions Committee has, on some occasions proven detrimental to other tasks and responsibilities.”Footnote ¹¹⁷

In December 2022, the UNSC passed Resolution 2664,Footnote ¹¹⁸ proposed by the US and Ireland. This resolution is an attempt to give humanitarian organizations more flexibility in their activities in sanctioned countries by authorizing a broad exemption for their activities. This even permits organizations to engage with entities on list of designated entities, whose assets are frozen, if this engagement is related to the organization’s humanitarian work. This was largely praised by the humanitarian community as a step in the right direction, with the expectation that it will save much needed bureaucratic time in response to crises, and reduce the chance that humanitarian aid workers may be subject to criminal prosecution for their aid activities.Footnote ¹¹⁹ Thus, Resolution 2664’s aim is to create an environment where aid providers do not have to submit a request to the UN sanctions committee before acting.Footnote ¹²⁰ IAN No. 7 was updated to reflect Resolution 2664.Footnote ¹²¹

It is yet to be seen how this resolution will be operationalized in the real world. In the case of the DPRK, sanctions requests are still being submitted to the North Korea Sanctions Committee, suggesting that aid organizations may find the new general licenses unclear. In addition, unilateral sanctions regimes do not always correspond to the UNSC procedures. For example, in conjunction with this resolution, the Biden administration issued or amended general licenses related to specific sanction regimes, but this did not include the DPRK.Footnote ¹²² Technically, the US’s DPRK sanctions regime has a general license built in for humanitarian efforts already. But it is limited; NGOs must still obtain specific licenses from OFAC if they need to work with the DPRK government or other blocked persons in order to provide services.Footnote ¹²³

In addition, several official entities such as the Panel of Experts,Footnote ¹²⁴ the UN Special Rapporteur on human rights in North Korea,Footnote ¹²⁵ and the recent Resolution 2664 have called for the UN to carry out a formal assessment of the humanitarian impact of sanctions in the DPRK. This has yet to be accomplished in a formal manner.

Effects of US Sanctions on Banking

Besides the traditional trade embargos and interdictions, financial sanctions represent one of the powerful ways that the US can economically pressure North Korea.Footnote ¹²⁷ The US is in a singular position of power, given the role of the US dollar in the international financial system. This in turn gives the US the leverage to apply pressure on third party institutions that interact financially with North Korea.Footnote ¹²⁸ In 2002, the US formed the Illicit Activities Initiative (IAI),Footnote ¹²⁹ which gave the U.S. Treasury Department and law enforcement the authority to crack down on North Korea’s illicit financial practices, including in countries outside the US. The US Treasury then seized money from the Banco Delta Asia (BDA), based in Macau, under the Patriot Act,Footnote ¹³⁰ sending the clear message that even foreign banks will be ultimately held responsible for their activities that violate US sanctions. This triggered a series of actions by banks and banking authorities around the world. Following this BDA sanction, the Macau monetary authority froze $25 million linked to North Korean accounts.Footnote ¹³¹ Dozens of banks in Asia and Europe began to limit or shut off accounts with North Korea. US law authorizes the seizure of a bank’s assets – including foreign banks – if they are found to have defied US sanctions.Footnote ¹³² The Obama administration placed additional financial sanctions through executive orders on North Korean banking institutions themselves, including the main North Korean bank for international transactions – the Foreign Trade Bank.Footnote ¹³³ Even if banking is done for humanitarian purposes only, as one senior Treasury Department official stated, “the line between North Korea’s licit and illicit money is nearly invisible,” so the “US Government is urging financial institutions around the world to think carefully about the risks of doing any North Korea-related businesses.”Footnote ¹³⁴ The advent of clandestine cryptocurrency schemes, even recently involving a North Korean Foreign Trade Bank representative, has created an even greater wariness on the part of banks to engage in any transactions involving DPRK.Footnote ¹³⁵

Effects of UNSC Sanctions on Banking

While the US sanctions, following the BDA incident, created an immediate chilling effect throughout the banking world in regard to DPRK, the UNSC sanctions followed a more gradual progression. The UNSC started by banning banking activities only if they were related to nuclear or ballistic missile programs or other prohibited activities. Then the UNSC began prohibiting any new banking activities, regardless of relation to the nuclear program. Finally, it banned any and all new or existing banking activities, no matter the circumstance. For example, in 2013, UNSC Resolution 2094 called upon states to take “appropriate measures” to prohibit DPRK banks from opening new branches, subsidiaries, offices, or participate in joint ventures or relationships if there are reasonable grounds to believe they are involved with prohibited activities.Footnote ¹³⁶ In 2016, Resolution 2270 went one step further by prohibiting these financial transactions, unless approved by the UNSC’s 1718 Committee in advance, regardless of whether or not there is concern of prohibited activities.Footnote ¹³⁷ Analogously, UNSC Resolution 2094 prohibited foreign financial institutions from opening up new offices, subsidiaries, or bank accounts in the DPRK, only if there is reasonable suspicion that these financial services are contributing to prohibited activities.Footnote ¹³⁸ Resolution 2270 then went on to ban existing offices, subsidiaries, and bank accounts with suspicion for prohibited activities, unless the 1718 Committee on a case-by-case basis decides that the “offices, subsidiaries, or accounts are required for the delivery of humanitarian assistance or the activities of diplomatic missions in the DPRK.”Footnote ¹³⁹ All new banking activities are also banned according to paragraph 34, regardless of association with nuclear or other prohibited activity. In 2016, Resolution 2321 finally bans all banking activity, no matter what type, unless for humanitarian assistance (approved case by case).Footnote ¹⁴⁰

Attempts to Create Banking Channels

In August 2016, the UNSC approved an exemption for the Sputnik Bank of Russia in accordance with Resolution 2270’s exemption clause,Footnote ¹⁴¹ to facilitate financial transactions with DPRK for humanitarian and other legal purposes. This established a banking channel whereby funds originating in the UN would first be transferred to the German Commerzbank, then to the Sputnik Bank of Russia, ending with the Foreign Trade Bank (FTB) of DPRK.Footnote ¹⁴² In September 2017, the aforementioned banking channel fell apart when Commerzbank decided it did not want to participate, due to the risk that it might inadvertently violate the sanctions on North Korea.Footnote ¹⁴³ To this date, no bank has stepped up to take Commerzbank’s place as the liaison between the UN and Sputnik Bank. Since then, there have only been a few attempts at transferring money to international agencies working in North Korea. For example, the UN proposed that the DPRK, instead of sending its membership dues to the UN headquarters in New York, could send it directly to the Sputnik Bank, which still holds a sanctions exemption. At least two transfers were successfully completed using this channel, but questions remain about its long term viability.Footnote ¹⁴⁴

In October 2022, the UN performed a one-time transfer of funds valued at $1 million to the UN Federal Credit Union account of the permanent mission of the DPRK in New York, which was then transferred to bank accounts held by UN agencies and the WHO with the Foreign Trade Bank in North Korea, to be used for humanitarian purposes.Footnote ¹⁴⁵ This was mostly to pay outstanding debts by humanitarian aid organizations for their ground operational costs; no foreigner has been able to enter the country with cash since early 2020, so humanitarian organizations were not able to pay for their operational costs in the country.Footnote ¹⁴⁶ There was much skepticism as to whether the funds would go to the intended locations, since no UN personnel were in-country to directly monitor the transactions.Footnote ¹⁴⁷ However, the fact that this transfer took place suggests that this might be a viable means for humanitarian organizations to conduct financial transfers necessary for their in-country work.

Thus, the absence of a reliable banking channel is partly due to the direct strictures of sanctions regimes, both UN sanctions and unilateral sanctions. But it is also due to the secondary impact, whereby the severe enforcement of sanctions measures, as seen in the BDA case, creates a concern within the banking community that even an inadvertent violation may be very costly to them. They determine that it is not worth the risk to engage at all with the DPRK, even for legal humanitarian purposes; thus Commerzbank withdraws and finding a Western bank to replace it has proved to be effectively impossible.

The inability to engage in regular financial transactions through reliable means has significantly affected the work of NGOs in DPRK. For example, since 2017, staff of some international organizations, including humanitarian aid workers, have physically carried cash for the organization with them into North Korea – a risky practice for all concerned.Footnote ¹⁴⁸ In 2019, the lack of banking channels caused the Finnish NGO, Fida International, to end a two decade-long relationship with North Korea.Footnote ¹⁴⁹ With the end of this partnership, vulnerable communities in North Korea lost an annual investment of €414,000 for various food security and healthcare projects. According to the 2022 Panel of Expert’s report, one NGO reported that due to lack of cash in-country (due to the lack of a banking channel) and the Covid-19 border closure, their operational capacity is severely diminished, with over 60 percent of their budget allocations remaining underutilized.Footnote ¹⁵⁰

There are other examples as well of situations where NGOs either reduced their activities in the DPRK or withdrew altogether due to the lack of a banking channel, and sometimes then found themselves facing legal difficulties as well. A New Zealand NGO, New Zealand–DPRK Friendship Society, tried to donate $2,000 to the Red Cross Society in North Korea to buy personal protective equipment for North Korean healthcare workers. The NGO went through an intermediary in Indonesia, which transferred the cash to the North Korean embassy. However, this sparked an investigation because the donation was then flagged as a potential sanctions violation.Footnote ¹⁵¹

Thus, both the US and UNSC sanctions have made it extremely difficult for even UN agencies to conduct the fund transfers needed for humanitarian operations, let alone NGOs. In addition to the direct prohibitions and regulations, there is also a chilling effect, in which international commercial banks like Commerzbank withdraw or refuse to offer financial services, even though they may be permitted to operate; but the fear of inadvertent error and severe penalties drive them to avoid any engagement with the DPRK. Even though there have been efforts of various sorts to establish a banking channel, those have generally not succeeded or not been adequate; and humanitarian organizations find themselves in an untenable position, where they may resort to measures such as carrying cash into the country in person, to meet the needs of the populations they are serving. This relies on the ability for a foreigner to be able to enter into the country, which was not possible during the Covid-19 pandemic and other such times of instability, thus making this an unsustainable solution. The banking channel is cited as one of the largest concerns and barriers for humanitarian organizations currently working in the DPRK.Footnote ¹⁵²

North Korea’s Inflexibility in Working with International Organizations

There are also certain aspects and policies of the North Korean government that undermine the impact of humanitarian aid delivery, regardless of sanctions. North Korea is a highly securitized country; therefore, working with North Korea presents unique challenges. For example, communications with counterpart organizations are severely restricted and often need to go through someone at one of the DPRK missions or embassies. In addition, in-country activities require multiple layers of pre-approval and spontaneity is virtually impossible. Thus, overall, the North Korean government has in some circumstances been slow or inefficient at mitigating the harm done by the sanctions. Given the landscape, decisions on the parts of both international organizations and North Korea are often political, with North Korea prioritizing self-reliance. This ideology is echoed in multiple sectors. In health, for example, there is an emphasis on drug development and manufacturing within the country; and in defense, the continuation of the nuclear program is justified as self-preservation. This ideology also can be seen in the border closure due to Covid-19. The Covid-19 border closure imposed by the DPRK exacerbated already poor conditions causing a likely humanitarian crisis in the DPRK. The sanctions and the ensuing isolation have not changed this ideology, but have instead reinforced it.

There is no doubt that the responsibility of this current humanitarian crisis in North Korea is shared by both sanctions and the decisions and policies imposed by the government of DPRK. This is evident in the many barriers confronting international organizations in their efforts to assist the North Koreans. Regardless of what proportion each of these components contributed, both the international community and North Korea need to come together to resolve the humanitarian crisis.

Conclusion

If we look at the rationale for imposing sanctions on the DPRK – the nuclear program and human rights violations – it is hard to see any real success. North Korea’s nuclear program continues unabated, and human rights violations by the government continue as well. To the extent that the state has improved its human rights record, it has done so not in response to the unilateral sanctions imposed for this reason, but rather in response to bodies such as the UNHRC. In addition, it should not be forgotten that economic rights, such as the rights to food and health, are human rights as well; and by any account, the sanctions imposed on the DPRK have negatively affected these.

But if the success of the sanctions in terms of their stated objectives is questionable, there are other effects of sanctions that are indisputable. The UNSC and other sanctions regimes have certainly disrupted the economy and affected the government’s ability to function. The sanctions explicitly target key sectors of the economy. This affects the state’s ability to fund and deliver healthcare; and other consequences of the sanctions, such as the lack of fuel, then further impede access to nutrition and healthcare.

While there were significant improvements in public health indicators from about 2000 to 2018 – child malnutrition declined, as did maternal mortality, infant mortality, and fatalities from malaria and TB – these positive developments have been undermined as sanctions have been tightened. This is partly due to the broader impact of sanctions on the economy and the state, including access to medical imports. But more specifically, humanitarian aid from the UN and from international aid organizations has played a significant role in meeting needs for nutrition and healthcare, and this aid was severely compromised by the increasing strictures presented by the sanctions. While there are, in principle, humanitarian exemptions, those have not at all been sufficient to allow humanitarian organizations to provide the quantity of aid that is needed, or the specific goods that are required. As the sanctions tightened, maintaining normal operations and accessing humanitarian exemptions have entailed such extensive administrative burdens, financial costs, and legal risks that humanitarian organizations supporting vulnerable populations within DPRK have, in many cases, been compelled to withdraw from the DPRK or to reduce their presence. Because sanctions have targeted the DPRK’s access to the international banking system, it has been virtually impossible for UN agencies and other humanitarian organizations to conduct the financial transfers needed for their operations.

Certainly other factors have complicated the situation: The DPRK has not been particularly flexible in dealing with aid organizations, and the border closures due to the Covid-19 pandemic interfered greatly in the ability of aid organizations to work in North Korea. But there is no question that the sanctions regimes on North Korea are having a profound impact on the health of ordinary people of North Korea and the delivery of humanitarian aid to them. These “unintended” yet real consequences are unethical, morally problematic, and inhumane. These sanctions must be modified immediately to allow the North Korean government to care for its people and to ensure necessary humanitarian aid reaches the most vulnerable populations of the DPRK. The international humanitarian community should never have to ask permission to help those in need.