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U.N. vote Saturday on U.S. bid to slash North Korea exports over missile tests

[August 05, 2017] By Michelle Nichols

UNITED NATIONS (Reuters) - The United Nations Security Council is set to vote on Saturday on a U.S.-drafted resolution that aims to slash by a third North Korea's $3 billion annual export revenue over Pyongyang's two intercontinental ballistic missile (ICBM) tests in July.

A council diplomat, speaking on condition of anonymity, said there was a "high confidence" that North Korea ally China and Russia would support the draft resolution, which was circulated to the 15 Security Council members on Friday.

The council is due to vote at 3 p.m. EDT (1900 GMT). A resolution needs nine votes in favor, and no vetoes by the United States, China, Russia, France or Britain, to be adopted.

The draft resolution would ban North Korea's exports of coal, iron, iron ore, lead, lead ore and seafood. It would also prohibit countries from increasing the current numbers of North Korean laborers working abroad, ban new joint ventures with North Korea and any new investment in current joint ventures.

"These are export sectors where this money is viewed as a critical, critical source of hard currency that the North immediately turns around into its fantastically expensive war machine and these just amazingly expensive ballistic missile and nuclear weapons programs," the diplomat said.

"These sanctions are not targeted at the people of North Korea," the diplomat said.

U.S. PRESSURE ON CHINA

The draft resolution would also add nine individuals and four entities to the U.N. blacklist, including North Korea's primary foreign exchange bank, subjecting them to a global asset freeze and travel ban.

The United States and China have been negotiating the draft text for the past month. Typically, they agree sanctions on North Korea before formally involving other council members.

U.S. President Donald Trump's administration has been frustrated that China has not done more to rein in North Korea and Washington has threatened to impose new sanctions on Chinese firms doing business with Pyongyang.

"The Trump administration should issue new sanctions against China at the same time the new resolution is adopted as Beijing is still violating U.S. law by allowing its companies, individuals, and banks to facilitate North Korea's sanctions evasion," said Anthony Ruggiero, a Foundation for Defense of Democracies senior fellow and former U.S. Treasury official.

China has also been upset by possible moves by the Trump administration to exert trade pressure on Beijing.

"(The draft) appears to reflect a compromise between the U.S. and China in several areas," Bonnie Glaser, senior adviser for Asia at the Center for Strategic and International Studies, said. "It notably does not include any reduction in Chinese crude oil shipments to North Korea."

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North Korea's leader Kim Jong Un watches a military drill marking the 85th anniversary of the establishment of the Korean People's Army (KPA) in this handout photo by North Korea's Korean Central News Agency (KCNA) made available on April 26, 2017. KCNA/Handout via REUTERS/File Photo

While supportive of new U.N. action, Security Council member Sweden said sanctions alone could not solve the problem.

"More creative diplomacy is urgently needed. A long-term solution can only be achieved through dialogue and negotiations," said Sweden's Deputy U.N. Ambassador Carl Skau.

U.S. VS RUSSIA

The United States had been informally keeping Britain and France in the loop on the bilateral negotiations, while U.S. Ambassador to the United Nations Nikki Haley said China had been sharing the draft and negotiating with Russia.

It has not been clear if poor relations between Russia and the United States, which imposed new unilateral sanctions on Moscow on Wednesday, would hamper negotiations.

Moscow has disagreed with assessments by Western powers that Pyongyang launched two long-range missiles, saying they were mid-range. Diplomats say China and Russia only view a test of a long-range missile or a nuclear weapon as a trigger for further possible U.N. sanctions.

North Korea has been under U.N. sanctions since 2006 over its ballistic missile and nuclear programs and the Security Council has ratcheted up the measures in response to five nuclear weapons tests and two long-range missile launches.

The U.N. diplomat said North Korea has been estimated to earn in 2017 $400 million from coal, $251 million from iron and iron ore, $113 million from lead and lead ore and $295 million from seafood. The diplomat said it was difficult to estimate how much North Korea was earning from sending workers abroad.

A United Nations human rights investigator said in 2015 that North Korea has forced more than 50,000 people to work abroad, mainly in Russia and China, earning the country between $1.2 billion and $2.3 billion a year for the government.

(Additional reporting by David Brunnstrom in Washington; Editing by James Dalgleish and Mary Milliken)

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