Shadow Government

This Is What North Korea Sanctions Relief Should Look Like

If North Korea agrees to denuclearize, here's how Trump should go about rolling back sanctions.

U.S. President Donald Trump waves from the door of Air Force One upon arrival in Singapore on June 10. (Saul Loeb/AFP/Getty Images)
U.S. President Donald Trump waves from the door of Air Force One upon arrival in Singapore on June 10. (Saul Loeb/AFP/Getty Images)

President Donald Trump plans to use his June 12 summit with North Korean leader Kim Jong Un in Singapore to press him to agree to completely dismantle his nuclear and intercontinental ballistic missile programs. Kim, on the other hand, will come to the table with a list of demands that includes legitimacy and security for his dynastic regime. Kim will also demand the termination of sanctions that have sharply curtailed North Korea’s access to the global economy and that legally prohibit some 90 percent of the value of North Korea’s pre-sanctions exports.

Although Trump will press to focus the summit on U.S. nuclear demands, he also needs to be prepared to discuss the outlines of the sanctions relief North Korea will receive if it actually implements the complete, verifiable, and irreversible dismantlement of its nuclear capabilities that is the key international demand.

In discussing the scope of potential sanctions relief, two principles should guide Trump. First, he should insist that any interim, partial sanctions relief granted after North Korea implements initial nuclear commitments, but before it fully dismantles its nuclear program, be tightly limited and quickly reversible if North Korea backs away from its commitments. Second, he should be prepared to offer extremely broad sanctions relief if North Korea does fully dismantle its nuclear, intercontinental ballistic missile, and weapons of mass destruction programs — retaining only targeted sanctions against specific malign enterprises and activities in North Korea. Trump will also need to keep in mind that most meaningful sanctions relief will require modifications of United Nations sanctions as well as U.S. law, given the comprehensive nature of the U.N. sanctions he successfully pushed for in 2017.

In the lead-up to the June 12 summit, the Trump administration has argued that North Korea should not receive any sanctions relief prior to fully implementing the nuclear steps it would have to take as part of a deal. While Trump is right to start the negotiations with this position, he may well find that it is unrealistic to insist that North Korea receive zero sanctions rollbacks until it has fully implemented nuclear commitments. North Korea has generally proposed a phased or action-for-action approach, in which it would get specific benefits for specific nuclear steps, and it is likely to insist on at least minimal interim sanctions relief as a confidence-building measure.

The United States should be prepared, if necessary, to offer a small amount of interim sanctions relief if North Korea takes major early steps toward denuclearization. But the United States should insist that any interim relief granted to North Korea come only after North Korea takes significant initial steps. Trump should also insist that interim relief be sharply limited, reversible, and have a fixed end date. For example, the United States could agree to temporarily raise the limits on North Korean exports of coal or other mineral products for a finite period, such as six months, providing North Korea with a discrete benefit for taking initial nuclear steps. But such relief would automatically terminate if North Korea failed to continue implementing further steps toward completely dismantling its nuclear program. The United States should generally refuse to provide interim relief that would be difficult to reverse or that gives North Korea long-term benefits, such as agreeing to major new investments in the country.

The United States should also press to keep as much of the value of any interim sanctions relief as possible escrowed until North Korea completely implements the deal. For example, Trump could offer to allow an increase in North Korea’s coal exports but require that the funds North Korea receives for these exports be held in escrow in China and used only for agreed-upon purposes. This escrow approach would ensure that North Korea could not use any interim sanctions relief to covertly continue its nuclear program or engage in other activities that threaten the United States and its allies.

When discussing the sanctions relief North Korea would receive after fully implementing its nuclear commitments, Trump should make clear that the overwhelming majority of U.N. and U.S. sanctions are on the table. But he should insist on retaining specific sanctions targeting specific actors and activities.

The Iran nuclear deal was always supposed to be a limited agreement, in which Iran would receive limited sanctions relief, but under which the United States and the international community would retain significant sanctions in place to combat other Iranian activities. Even before Trump’s recent announcement of a U.S. withdrawal from the deal, the United States kept its own primary sanctions in place, largely preventing Iran from doing business with the United States or the U.S. financial system, with the exception of a few specific types of business. This continuation of significant U.S. sanctions created difficulties for Iran in receiving the sanctions relief it thought it was promised under the deal and made it easier for Trump to withdraw the United States from the agreement in May.

Trump should be prepared to offer North Korea an even bigger sanctions relief package following its full implementation of any deal, including relief from many of the sanctions that prohibit U.S. trade with North Korea. Holding out the potential for major sanctions relief will provide a greater inducement for North Korea to actually agree to and implement a complete, verifiable, and irreversible dismantlement of its nuclear program. A comprehensive sanctions relief package would also avoid the situation created by the Iran deal, under which major European and Asian companies could profit but U.S. companies could not.

The U.S. president should, however, make clear that even after North Korea implements a comprehensive nuclear deal, the United States will retain targeted sanctions against specific North Korean entities involved in the country’s grotesque human rights abuses and other horrible activities. For example, Trump should maintain targeted sanctions on North Korea’s military, prison complexes, and other security apparatuses even after it fully implements a nuclear deal. While North Korea’s nuclear and WMD programs are by far the largest U.S. concerns, Washington should not give Pyongyang a free pass on its other violations of international law.

Similarly, Trump should refuse to give North Korea a free pass on its deceptive and illegal financial practices. While he should be willing to allow North Korea access to the international financial system as part of a comprehensive nuclear agreement, he should insist that Pyongyang’s access to the system would be dependent on North Korea overhauling its financial sector to eliminate the deceptive and illegal practices that pervade it. Specifically, Trump should insist that North Korea receive no relief from the measures that the Financial Action Task Force, the international financial crime standard-setting body, has imposed on North Korea until it meets the requisite standards.

Trump’s summit with Kim may well collapse if the North Korean leader proves unwilling to make commitments to fully dismantle his nuclear program. But if Kim does indicate that he is prepared to denuclearize, Trump will need to be prepared in kind to lay out general parameters for sanctions relief. By holding to the line that any interim relief must be sharply limited while holding out on the prospect of major relief after North Korea denuclearizes, Trump can increase the odds of his summit actually starting Pyongyang down a path to denuclearization.

Peter E. Harrell is an adjunct senior fellow at the Center for a New American Security. From 2012 to 2014, he served as the deputy assistant secretary for counter threat finance and sanctions in the U.S. State Department’s Bureau of Economic and Business Affairs.

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