• International Area Studies Review
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• v.20 no.3
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• pp.23-44
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• 2016

This study attempts to scrutinize the effectiveness of the international economic sanction on North Korea by analyzing the determinants of the North Korea-China trade with Chinese Customs House data classified under general, border, processing, bonded warehouse. The result shows that after international economic sanctions, North Korea-China trade was increased across types of trade. In particular, sanction-sensitive items were increased after sanctions and China also weakened the effectiveness of sanctions. To put it concretely, North Korea's food and fuel imports from china increased in processing and border trade. In the case of luxury good, it was increased in general trade. Strategy goods (weaponry) increased only in bonded warehouse trade. For China's import from North Korea, food and fuel were increased in total, border and bonded warehouse trade. Considering the features of each type of trade, these increase are presumed to have been playing a decisive role in weakening the effect of international sanction on North Korea.

• KDI Journal of Economic Policy
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• v.32 no.2
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• pp.93-143
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• 2010

This paper estimates the impact of Japan's economic sanction on DPRK trade in the 2000s. It conceptualizes the effects of sanction on DPRK trade, econometrically tests whether such effects exist in case of Japan's sanction using currently available DPRK trade statistics, and measures the size of the effects by correcting and reconfiguring the deficiencies of the currently available DPRK trade statistics. The main findings of the paper are as follows. First, Japan's sanction can have two different effects on DPRK trade: 'Sanction Country Effect' and "Third Country Effect.' The former means that the sanction diminishes DPRK trade with Japan while the latter refers to the effects on DPRK trade with other countries as well. The third country effect can arise not simply because the DPRK changes its trade routes to circumvent the sanction, but because the sanction forces the DPRK to readjust its major trade items and patterns. Second, currently no official DPRK trade statistics are available. Thus, the so-called mirror data referring to DPRK trading partners' statistics should be employed for the analysis of the sanction effects. However, all currently available mirror data suffer from three fundamental problems: 1) they may omit the real trade partners of the DPRK; 2) they may confuse ROK trade with DPRK trade; 3) they cannot distinguish non-commercial trade from commercial trade, whereas only the latter concerns Japan's sanction. Considering those problems, we have to adopt the following method in order to reach a reasonable conclusion about the sanction effect. That is, we should repeat the same analysis using all different mirror data currently available, which include KOTRA, IMF and UN Commodity Trade Statistics, and then discuss only the common results from them. Third, currently available mirror data make the following points. 1) DPRK trade is well explained by the gravity model. 2) Japan's sanction has not only the sanction country effect but also the third country effect on DPRK trade. 3) The third country effect occurs differently on DPRK export and import. In case of export, the mirror statistics reveal positive (+) third country effects on all of the major trade partners of the DPRK, including South Korea, China and Thailand. However, on DPRK import, such third country effects are not statistically significant even for South Korea and China. 4) This suggests that Japan's sanction has greater effects on DPRK import rather than its export. Fourth, as far as DPRK export is concerned, it is possible to resolve the abovementioned fundamental problems of mirror data and thus reconstruct more accurate statistics on DPRK trade. Those reconstructed statistics lead us to following conclusions. 1) Japan's economic sanction diminished DPRK's export to Japan from 2004 to 2006 by 103 million dollars on annual average (Sanction Country Effect). It comprises around 60 percent of DPRK's export to Japan in 2003. 2) However, for the same period, the DPRK diverted its exports to other countries to cope up with Japan's sanction, and as a result its export to other countries increased by 85 million dollars on annual average (Third Country Effect). 3) This means that more than 80 per cent of the sanction country effect was made up for by the third country effect. And the actual size of impact that Japan's sanction made on DPRK export in total was merely 30 million dollars on annual average. 4) The third country effect occurred mostly in inter-Korean trade. In fact, Japan's sanction increased DPRK export to the ROK by 72 million dollars on annual average. In contrast, there was no statistically significant increase in DPRK export to China caused by Japan's sanction. 5) It means that the DPRK confronted Japan's sanction and mitigated its impact primarily by using inter-Korean trade and thus the ROK. Fifth, two things should be noted concerning the fourth results above. 1) The results capture the third country effect caused only by trade transfer. Facing Japan's sanction, the DPRK could transfer its existing trade with Japan to other countries. Also it could change its main export items and increase the export of those new items to other countries as mentioned in the first result. However, the fourth results above reflect only the former, not the latter. 2) Although Japan's sanction did not make a huge impact on DPRK export, it might not be necessarily true for DPRK import. Indeed the currently available mirror statistics suggest that Japan's sanction has greater effects on DPRK import. Hence it would not be wise to argue that Japan's sanction did not have much impact on DPRK trade in general, simply using the fourth result above.

• Journal of Korea Trade
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• v.26 no.5
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• pp.88-105
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• 2022

Purpose - This paper studies whether economic sanctions can be used as grounds for a party to an international sales contract to get an exemption if he fails to meet his contractual obligation. Because the answer can differ depending on the governing law of the contract, this study focuses on CISG, the most widely recognized international uniform legal instrument as the governing law of the international sale of goods. Design/methodology - This paper focuses on analyzing the conditions to meet before getting an exemption under CISG. For such analysis, this paper examined various scholarly writings, cases, and hypothetical examples reflecting a wide variety of economic sanction measures. Findings - The findings of this paper are as follows. The main provision for exemption under CISG is Article 79(1), which provides for an exemption for a party that failed to perform if such failure was caused by an impediment that was uncontrollable, unforeseeable, and unavoidable; either a seller or a buyer may rely on the Article for his non-performance, delay, or defective performance. The Article is applicable not only where the economic sanction caused impossibility of performance but also where it caused hardship. The economic sanction will likely be found to be an uncontrollable impediment; however, it will be relatively more difficult to prove it to be unforeseeable or unavoidable. Originality/value - The subject of this paper is whether a party can be exempted from liability under CISG when he fails to perform his contractual obligations due to economic sanctions. Given that this issue is now actually faced by many involved in international trade, it is expected to provide practical help to practitioners and companies alike.

• Strategy21
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• s.44
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• pp.254-290
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• 2018

Why did Kim Jong Un turn his foreign policy upside down in a sudden? US naval blockade became one of candidates for the reason since it had been threatened by Trump administration for the first time in December 2017. Has the blockades worked well like that in the international politic history? This paper reveals the effectiveness of naval blockade on sanctioning in the peacetime. This research analyzes three hypothetical arguments about the naval blockade based on the result of empirical tests with TIES Dataset. First, sanctions by blockading are more effective in gaining political benefits than the other economic sanctions. It was ranked the 4th effective way of sanction out of 9. And 56.3% of pacific naval blockades without packaged economic sanctions were succeeded, whereas the possibility of success increase up to 61.2% when blockade has been imposed in accordance with the other type of economic sanctions. Second, blockades deter military collisions, even war. When it comes to military provocation issue, blockading sanctions gain political interest far more than the other type of economic sanctions. The possibility of the success reaches up to 74%. Also, there wasn't any historical cases of war incurred by blockading sanctions within 5 years after the blockade end. Third, policy makers just need 1.2 years on average to see the end of sanctions when they choose the naval blockade as the method of imposing sanction on the adversary. It is impressively short span of time in achieving political goal compared to the other types of sanctions which are need 9 years on average. North East Asia sea could be the next stage for a naval blockade sooner or later. Because China and Japan not only possess capabilities of blockade but also have will to impose blockades to the others if conditions are set. And even the North Korea with lots of submerging forces could be a blockading threat in the specific area. So, the Republic of Korea has to pay more attention and be prepared for naval blockading sanction.

• Journal of Arbitration Studies
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• v.34 no.1
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• pp.27-50
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• 2024

This paper examines issues concerning conflicts between arbitral awards and public interests, particularly with respect to economic sanctions. Sanctions have been widely used by political entities, such as States and organizations, as means to promote public interests and to resolve cross-border disputes. In particular, economic sanctions have been increasingly more visible in recent years due to the accelerating fragmentation of the international communities, and their magnitude and range of the impacts have grown accordingly. For example, the U.S. and the EU have imposed economic sanctions on Russia and related persons in response to Russia's invasion of Ukraine. The U.S. recently re-introduced a comprehensive economic sanction on Iran. One of the notable impacts of the sanctions, particularly economic sanctions, is that on international arbitration. Sanctions are essentially built on the notion of the protection of public interests, and public interests are some of the few grounds upon which recognition and enforceability or arbitral awards may be rejected. However, jurisprudence on such conflict between sanctions and arbitral awards have not been sufficiently addressed in Korea because court case and administrative decision records on this conflict have not been sufficiently accumulated. In this regard, this paper begins with offering a survey of the concept of public interests, economic and trade sanctions, arbitral awards and their enforceability, and the relationships between them. It then examines the mechanism upon which public interests, trade and economic sanctions may lead certain arbitral awards unenforceable. Next, the paper suggests judiciaries' balanced approach toward the public interests protected by trade and economic sanctions and the predictability and fairness in the enforcement of arbitral awards. Finally, this paper concludes with the methods of the implementation of such balanced approach.

• Journal of Contemporary Eastern Asia
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• v.18 no.1
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• pp.30-48
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• 2019

China has initiated a series of "economic sanctions" against South Korea, affecting Korean pop stars visiting China and Korean investments in China. Sanctions were imposed on South Korea in response to the decision of South Korea to deploy Terminal High Altitude Area Defense (THAAD) in 2016. Furthermore, the Global Daily assembled local population to boycott Korean products and investments in China. However, the Chinese Foreign Ministry has never positively confirmed these activities as economic sanctions to South Korea related to the THAAD installation. In other words, the Chinese government singled a relatively weak message via these sanctions to South Korea. As a result, the THADD implementation continued in South Korea. In the paper, I interpret China's rationale to impost puzzling economic sanctions, which have a weak resolution, to South Korea and Taiwan. As signaling theory argues, economic sanctions with insufficient resolution, which are more likely to fail, is a more provocative foreign policy. By reviewing China's sanctions usage to South Korea and Taiwan, I propose arguments of bureaucratic competition to answer why China launched such sanctions to other countries: those are caused by domestic institutions who are seeking reward from the Communist Party of China. By comparing shifts of leadership between domestic agencies, the paper provides evidence to support the proposed argument. I also include two alternative explanations to strengthen the proposed argument, albeit connecting the paper with other two larger streams of research, which address analyses of China's aggressive foreign policies as well as the domestic politics of economic sanctions.

• International Area Studies Review
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• v.21 no.1
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• pp.163-179
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• 2017

Iran has been focused on FDI by global automobile companies after the economic sanction on Iran was removed except primary sanction. In this paper, some strategies for Korean Automobile Industry to branch out into Iran are suggested. For the purpose, Iran's automobile industry and characteristics are examined. The market situation is analyzed qualitatively and quantitatively. In passenger cars sector, Korean automobile companies would be better to wait and see the development of US-Iran relationships while exporting CKD sets of cars to Iran. It can be a good strategy, however, to put parts companies into Iran first because of Iran Government could be displeasing with exporting CKD only. FDI, licensing, and joint venture are all available for the parts companies. Motor companies can clear the regulation of auto-parts localization proportion by the method. The parts companies will be able to do key roles as supply chains after OEM branch out into Iran. It is also advisable to upgrade outpost in Iran into frontline for exporting cars to MENA area. In such a case it will be a prerequisite to develop a role-division model with facilities in East Europe. It could be called Parts first-then cars strategy. In commercial cars sector, it can be suggested to leverage natural gas as a link to branch out into Iran. Iran government wishes to develop natural gas resources. The strategy can be summarized that automobile companies carry out producing CNG buses in Iran while energy companies are drilling and producing natural gas.

• Korea Trade Review
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• v.45 no.4
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• pp.83-93
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• 2020

Sanctions by the international community can increase their effectiveness with the participation of major countries with global economic influence, and can lead to efficient sanctions against the target countries when different sanctions procedures and methods can be operated in an integrated manner. To this end, it is being carried out with the aim of maximizing the performance of sanctions through collective economic solidarity by inducing international participation centered on the joint agenda, such as drawing up a resolution for sanctions. In this study, the definition and purpose of sanctions imposed by the international community and by major specific countries were explained and an empirical analysis was conducted on the economic impact of each sanctions, focusing on the United Nations Security Council and the United States, which directly implement them. Based on the selected research model, the effects of economic sanctions on the international community and countries subject to sanctions by certain countries were mutually compared and analyzed in the data. Finally, the conclusion obtained from this study was stated and the implications were derived and the possibility of further research expansion was described.

• KDI Journal of Economic Policy
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• v.37 no.2
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• pp.40-63
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• 2015

Anthracite exports have special value within the DPRK's economy. In this paper, we focus on what determines the DPRK's anthracite exports to China. We use panel data consisting of cross-section data from 30 provinces in China and quarterly time-series data from 1998 to 2013. Controlling for all other variables that affect anthracite imports, the variable for steel production in China is robust and statistically significant. This is consistent with on-site interviews which indicate that much of North Korean anthracite is consumed by China's steel industry. This implies that the North Korean authorities need to make adjustments to the foreign trade structure, as the import demand for anthracite in China may decline further.

• The Southeast Asian review
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• v.27 no.2
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• pp.185-212
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• 2017

The National League for Democracy (NLD) has restored a civilian government since the military had taken political power in 1962 as a result of general elections on 7, November 2015. But Daw Aung San Suu Kyi could not take part in the presidential election due to some restraints in constitution, so new government created the state counsellor position and the ministry of sate counsellor's office against military's resistance. It never publicized whether the military has to back to barracks including abolish of military's occupying the parliament seats. The ruling party is still taking laissez-faire to the military's political and economic role. The National level Ceasefire Agreement called the 21st Panglong conference launched in the end of August for a week, but stakeholders only insisted their demands. Rohingya issue is not involved in the 21st Panglong conference which aims to achieve national unity. The U.S. fully lifted a comprehensive sanction toward Myanmar since 1993, Japan promised huge grant assistance succeeding the former quasi civilian government. China strived to restore alienated relations of two countries. Although Korea kept Official Development Assistance, the summit which was planed two times in 2016 did not hold. The civilian government announced twelve points of developmental agenda in July 2016, instead of destroying the national development policy of the Thein Sein government. This agenda only showed the direction of policy not road map which was the same trend of the former government. The main direction of economic development stressed agriculture but manufacture like light industry was ignored.