By Megha Rajagopalan

BEIJING, March 18 (Reuters) – Over two weeks after the United Nations slapped harsh new sanctions on North Korea, a number of Chinese transport and commerce sources say they haven’t been informed of any curbs on the import of coal from the remoted nation – a lifeline for its struggling financial system.

China accounts for about 90 % of North Korea’s commerce and its assistance is essential in imposing the sanctions introduced by the United Nations on March 2 to punish Pyongyang for its nuclear and ballistic missile programmes.

Coal is especially necessary to the financial well being of North Korea as a result of it’s considered one of its solely sources of onerous foreign money and its largest single export merchandise. Coal can be bartered for necessities, together with oil, meals and equipment.

Although some curbs have been put in place within the border metropolis of Dandong, half a dozen commerce and transport sources at ports in northeastern China mentioned they’d acquired no directions from the federal government on any new guidelines on coal imports from North Korea. The ports account for the majority of the coal commerce between the 2 international locations.

“At this point, nobody has come to us and said you shouldn’t do it,” mentioned an official at an organization within the port metropolis of Dalian that imports North Korean coal and different items. “I’m not even clear on what the specific sanctions are.”

“It’s chaos – at this time nobody knows what the impact will be on us and it’s tough to tell,” he added.

International sanctions consultants mentioned U.N. members are anticipated to implement sanctions instantly, and it was not too early to anticipate indicators of enforcement, together with in commerce. In apply, nonetheless, U.N. resolutions are sometimes inconsistently enforced.

China is North Korea’s closest ally, however supported the U.N. decision because it has change into more and more vital of Pyongyang’s nuclear and missile programmes. Nevertheless, Beijing prizes stability on the Korean peninsula and fears that any widespread unrest there might ship thousands and thousands of refugees throughout the border.

Beijing has barred a North Korean freighter from considered one of its ports and blacklisted 31 vessels coated by the U.N. sanctions, however Chinese officers and consultants have expressed concern that cracking down too stringently might end in catastrophe for the North’s financial system.

China’s Foreign Ministry mentioned this week the nation had all the time enforced U.N. sanctions and would “strictly manage” companies accordingly. The Ministry of Transport didn’t reply to repeated requests for remark.

The decision bans U.N. member states from importing North Korean coal, iron and iron ore except such transactions are for “livelihood purposes” and wouldn’t be producing income for Pyongyang’s nuclear and missile packages.

WIDE EXEMPTION

“I think it’s an indication that the Chinese managed to negotiate a wide exemption for the coal trade,” mentioned Andrea Berger, deputy director of the proliferation and nuclear coverage programme on the Royal United Services Institute.

On Wednesday, the United States slapped harsh sanctions of its personal on North Korea that included permitting Washington to blacklist any people, whether or not or not they have been U.S. residents, who cope with main sectors of North Korea’s financial system.

Analysts say the reference to “livelihood purposes” within the U.N. decision leaves open a window for China to proceed commerce with North Korea.

“It’s an explicit loophole,” mentioned Adam Cathcart, a specialist on China-North Korea ties on the University of Leeds. “Coal is a big lever for them. They’re wise from the Chinese standpoint to keep some leeway (so) they’re not branded as sanctions violators if a train goes from China to North Korea (carrying resources).”

Last yr, North Korean coal deliveries to China surged 26.9 % to 19.63 million tonnes, making North Korea China’s third largest provider behind Australia and Indonesia.

China imported $1 billion value of North Korean coal final yr and $73 million value of iron ore, based on Chinese customs knowledge.

“It’s the source of hard currency to the government sector, and military sector as well,” mentioned Jong Kyu Lee of the Korea Development Institute. “Hard currency is very important to the North Korean economy.”

A coal dealer in Dandong, the most important Chinese metropolis on the border with the North, informed Reuters his firm had stopped importing coal and different merchandise greater than a month in the past from North Korea, earlier than the U.N. decision was handed, due to coverage issues.

But as a result of North Korean coal arrives at an growing variety of ports across the nation, enforcement of customs rules should be coordinated nationally. However, China’s coal commerce just isn’t utterly centrally managed.

A transport agent informed Reuters that coal imports from North Korea to Lianyungang Port and Rizhao Port, each situated within the nation’s north, can nonetheless be cleared by customs.

“We’ve certainly had discussions about this (the sanctions) within the industry, but our business hasn’t been impacted,” mentioned a consultant from a Shandong-based commerce logistics agency that focuses on importing coal from North Korea. “The government hasn’t issued any notice to us about the sanctions.”

China has an incentive to point out it’s cracking down on commerce in Dandong, consultants mentioned.

“There is a visual element, the optics of sanctions enforcement,” Cathcart mentioned. “There are a lot of foreign journalists and other eyes on the border, everyone is watching Dandong. But the other areas on the border are much less scrutinised.”

Copyright (c) Copyright Thomson Reuters 2016.