North Korean Arms Entering Egypt: The System at Work

On October 1, 2017, reports emerged of an odd interdiction of North Korean arms in August 2016. Acting on a tip from Washington, Egyptian customs officials boarded the Jie Shun, a bulk freighter sailing under the Cambodian flag, as it passed through the Suez Canal. Manned by a North Korean crew and originating from North Korea, the ship carried more than 30,000 rocket-propelled grenades, worth an estimated $23 million. As it turns out, Egyptian businessman were buying grenades on behalf of the Egyptian military, even as Egypt is a major recipient of U.S. aid.

Unnamed U.S. officials claimed that this North Korean arms shipment contributed to the Trump administration’s decision to freeze or delay $300 million in military and economic aid to Egypt this summer. The decision to pause aid, originally reported as a response to Egyptian human rights abuses, highlights the administration’s prioritization of the North Korean crisis. The administration was willing to both punish and make an example of a nominal ally in order to quash trade in North Korean arms.

The incident also highlights the state of the North Korean sanctions regime. There are two sets of sanctions we care about here: international and U.S. sanctions. The U.N. Security Council originally implemented a ban on North Korean sales of certain military equipment, such as missile systems, after North Korea’s 2006 nuclear test. However, it wasn’t until its May 2009 test that the Security Council expanded its sanctions to ban both the import and export of all North Korean arms and called upon all states to inspect cargo entering and leaving North Korea for arms.

The arms ban, as a Security Council resolution, is mandatory for U.N. members. So, Egypt was violating international law by importing arms. However, without a universal enforcement mechanism, the U.N. can’t prevent North Korea from remaining one of the largest illicit arms traffickers in the world. U.N. experts estimate North Korean arms exports at nearly $100 million per year; Chosunilbo, a major South Korean media organization, estimates sales at three times that figure.

The U.S. complements international sanctions with an enforceable regime of its own, involving a series of primary and secondary sanctions. Primary sanctions restrict U.S. persons from engaging in specific activities, like trade, with a hostile country or terrorist organization. Secondary sanctions target non-U.S. persons for engaging in activities outside U.S. jurisdiction, usually via economic restrictions. The U.S. currently has expansive primary sanctions in place against North Korea, prohibiting U.S. persons and companies from any trade of “​goods, services, or technology.” The secretary of the treasury has all available authority to enforce the sanctions under U.S. law and deters violations by enforcing hefty fines and up to 20 years in jail for circumventing sanctions.

Egypt’s purchase of North Korean weapons comes up against a February 2016 law, the North Korea Sanctions and Policy Enhancement Act of 2016. Under the Act, the president must withhold foreign assistance to a state that trades arms with North Korea unless the secretary of state waives the requirement because of the national interest.

Additionally, the Act authorizes the president to designate persons who facilitate the arms trade. Coupled with the broad secondary sanctions I outline here, U.S. law gives the treasury secretary significant authority to cut off access to the U.S. financial system when an entity, or in this case, members of the Egyptian government, participates in the North Korean arms trade.

Both the United Nations and Congress put authorities in place to stymie the North Korean arms trade and regulate the countries that facilitate it. The U.S. has not used all its available tools to alter Egyptian behavior (it will keep secondary sanctions in its back pocket) but it likely won’t need to, as Egypt has cooperated since the interdiction of the arms shipment. The event will signal to all other aid recipients U.S. willingness to enforce the existing laws, and will hopefully cause other states to reconsider business with North Korea. This episode may be a perfect example of the system at work.