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North Korea Circumventing UN Sanctions With China's Help, U.S. Report Says

North Korea is circumventing United Nations sanctions by routing trade and financial transactions through China, a U.S. report said.

Flawed intelligence about North Korean actions and varying interpretations of UN sanctions also allow the isolated communist country to avoid the full weight of penalties meant to push it to reconsider its nuclear weapons program, according to a report by the nonpartisan Congressional Research Service.

President Barack Obama is pursuing a policy of sanctions and engagement with North Korea to encourage it to rejoin denuclearization talks. North Korea’s leaders have made ending the sanctions a condition for returning to talks. Implementation of those sanctions has been uneven globally and in cases has diminished over time, the report said.

“Because China has taken a minimal approach to implementation on North Korea, it has proven difficult to strengthen measures any further in the UN context,” said the report, requested by Senator Richard Lugar of Indiana, the top Republican on the Senate Foreign Relations Committee.

Calls to the Chinese Embassy in Washington weren’t answered.

North Korea’s unpredictable behavior complicates U.S. attempts to draw it into negotiations. South Korea is currently monitoring North Korea for signs of a nuclear test, Han Min Koo, chairman of South Korea’s Joint Chiefs of Staff, said today.

Retaliation Threatened

In August, North Korea threatened “physical retaliation” against South Korean naval ships carrying out military drills. An international tribunal found the North responsible for torpedoing a South Korean vessel in March, killing 46 sailors.

The CRS report found that North Korea uses air and land routes through China with little risk of inspection and that luxury goods flow through China to Pyongyang’s elites “almost unabated.”

China’s chief interest is in maintaining the status quo and regional stability, and preventing a flood of North Korean refugees over its northern border region, according to the report.

“Clearly, China holds the key to implementing sanctions on the DPRK,” the report said, using the acronym for the Democratic People’s Republic of Korea. “It could arguably devote more resources to detecting and stopping North Korean violations.”

Lugar said in a statement that the findings are a reminder that U.S. and Chinese interests regarding North Korea differ.

“While the United States presses for elimination of North Korea’s nuclear weapons program, China’s primary focus is on preserving regional stability,” Lugar said. China’s less than rigorous approach “should be a wake-up call to this White House in the ongoing development of its North Korea strategy,” he said.

To contact the reporter on this story: Nicole Gaouette in Washington at ngaouette@bloomberg.net

To contact the reporter on this story: Mark Silva at msilva34@bloomberg.net

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