As a professor teaching international law I receive questions from people from time to time asking me whether UN Security Council resolutions are binding, that is whether they are ‘legally’ binding. The answer to that question is yes. I figure that those questions and perhaps the misperception of UNSC resolutions partly come from the title itself – “resolution.” In fact, many a resolution adopted domestically or internationally is not legally binding (unlike statutes or treaties), albeit politically and diplomatically important. In fact, many times they contain recommendations rather than legal obligations. But UNSC resolutions are not mere recommendations: they become legally binding on all Members with the operation of specific obligation provisions contained in the UN Charter.

There are seven UNSC resolutions codifying sanctions against North Korea, with the most recent one adopted on June 2 this year (Resolution 2356). So, all UN members, South Korea included, are bound to abide by them. In particular, they prohibit financing for trade, technical cooperation, and maintenance of banking or insurance accounts with North Korea, which was one of the main reasons that prompted Seoul to close the Kaesong industrial complex in February 2016. The rather sudden closure reflected the success of the complex. At the height of the complex, both sides benefited from it: 124 SMEs from the South located in the complex enjoyed the supply of reliable, cheap labor and North Korea found a stable supply of hard currency.

Through 13 years of operation, $500 million was transferred to North Korea as compensation for North Korean labor and $1 billion as investment in the complex. With the steady increase of the level of sanctions, the logic that inter-Korea economic exchange projects should be an exception has gradually lost support from countries participating in the sanctions, ultimately leading to the complex’s closure.

As the new administration seeks a policy change toward the North, the re-opening of Kaesong complex is slowly coming back to the national agenda. While the resurrection of the complex will certainly help diffuse tension in the peninsula, the first and foremost question is how to reconcile the plan with the specific legal obligation under a series of UNSC resolutions.

Several ideas are floated to find a way where direct provision of hard currency to North Korea, the core target of the sanctions, can be avoided: some suggest providing compensation directly to North Korean workers; others suggest provision of goods in kind to North Korean workers. First of all, these suggestions may not be feasible in the first place: it is hard to expect that the North Korean authorities will now permit its workers to receive money or goods directly from the South Korean employers, given its tight control over the employees in the past.

More fundamentally, even if direct payment is somehow made, if the payment or part of it ends up in the coffer of the North Korean government in whatever form, be it taxation or contribution or fund, chances are the provisions of the resolutions will be still implicated. The idea behind these economic sanctions is that “money is fungible.”

It seems that one way to introduce a resolution-consistent economic exchange project is to accrue the wages in an escrow account and restrict its usage only to livelihood or humanitarian purposes of North Korea. A trustworthy guarantee needs to be ensured that hard currency or its variation is not available to the North Korean government, so as to be compatible with UN resolutions.

Perhaps in the new atmosphere of the renewed inter-Korea economic cooperation projects, the only logic seems to be again the old one, that South Korea is different. It may have worked in the past, but believing that others will still accept the Korea-exception may be much too speculative. It is not like Korea continuing with its existing cooperative projects as in the past; rather, the issue now is whether to permit South Korea to fall out of line in the North Korean sanctions.

Inter-Korea dialogue is important. There is no question about it. Economic cooperative projects constitute a critical component of such dialogue. But the UNSC resolutions specifically restrict many types of economic exchange activities, which also binds South Korea as a member of the UN.


By Lee Jae-min

Lee Jae-min is a professor of law at Seoul National University. He can be reached at jaemin@snu.ac.kr. -- Ed.