UN close to sanctions deal to slash North Korea export earnings

The UN Security Council's five veto powers are close to approving new sanctions on North Korea to cut the isolated state's earnings from exports by more than a quarter, principally by targeting its coal exports to China, diplomats said on Friday.

The US-drafted resolution, in response to North Korea's fifth nuclear test in September, would set a UN cap on North Korean coal exports with the aim of cutting hard currency revenues by at least $700 million.

The resolution would also restrict North Korea's maritime and financial sectors. If successful, it could cut the country's $3 billion in annual export earnings by at least $800 million, UN Security Council diplomats said.

The diplomats did not want to be identified as discussions were still under way. The new resolution would also target other North Koreans individuals and entities, they said.

Exports of coal from the North would be capped at $400.9 million or 7.5 million metric tonnes per year, whichever is lower, starting on Jan. 1, according to the draft resolution obtained by Reuters.

As soon as the resolution is adopted, North's coal exports to the end of this year will be capped at $53.5 million or 1 million metric tonnes, whichever is lower, the draft showed.

Over the first 10 months of the year, China has imported 18.6 million tonnes of coal from North Korea, up almost 13 percent from a year ago.

The restrictions on coal would bar exports connected to individuals and entities involved in North Korea's weapons programmes, the draft resolution said.

The resolution added 11 individuals, including people who have served as ambassadors to Egypt and Myanmar, and 10 entities as targets for travel ban and asset freeze for their role in the North's nuclear and ballistic missile programmes.

The resolution would also ban the North's export of helicopters, vessels and statues, banning contracts similar to the ones worth millions of dollars that the North had signed to build large statues in some African countries.

It called on UN states to reduce the number of staff at North Korea's foreign missions and limit the number of bank accounts to one per North Korean diplomatic mission and one per diplomat at banks in their territory, highlighting concerns that the North had used its diplomats and foreign missions to engage in illicit activities.