U.S. says North Korean remittances at risk if it conducts nuclear test

North Korean leader Kim Jong Un watches the ballistic rocket launch drill of the Strategic Force of the Korean People's Army (KPA) at an unknown location, in this undated file photo released by North Korea's Korean Central News Agency (KCNA) in Pyongyang on March 11, 2016. REUTERS/KCNA/Files (Reuters)

By Arshad Mohammed and David Brunnstrom WASHINGTON (Reuters) - A fifth North Korean nuclear test could trigger new sanctions including an effort to choke off hard currency earnings by its workers abroad, the top U.S. diplomat for the Asia-Pacific region has said. "Like a regimen of medicine, the dosage can be upped when the effects fall short of what's required," Assistant Secretary of State for East Asian and Pacific Affairs Danny Russel told Reuters on Tuesday. Russel made clear he was speaking about the possibility of fresh sanctions by the U.N. Security Council, by the United States on its own, or by a group of like-minded states from the European Union and Southeast Asia, along with the United States. North Korea conducted a fourth nuclear test in January and a long-range rocket launch the following month, triggering expanded U.N. sanctions aimed at starving it of funds for its atomic weapons program. Some experts expect North Korea to conduct a fifth nuclear test in the near future, possibly before a ruling party congress in early May, following an embarrassing failure of a test of an intermediate-range missile last week. Estimates of North Korean workers abroad vary widely but a study by the South's state-run Korea Institute for National Unification put the number as high as 150,000, primarily in China and Russia, sending back as much as $900 million annually. North Koreans are known to work abroad in restaurants and on construction sites, and also as doctors. The effectiveness of current, or any new, sanctions depends heavily on them being fully implemented by China, North Korea's neighbor, the closest thing it has to an ally and by far its largest trading partner, U.S. officials and analysts say. Chinese Foreign Ministry spokeswoman Hua Chunying said all sides should refrain from doing or saying anything to worsen tensions, and remain calm and exercise restraint to get the talks process back on track. "I don't want to answer a hypothetical question," she told a news briefing on Wednesday, when asked if China would support new, tougher sanctions in the event of another nuclear test. If the North were to test a fifth nuclear device, the United States and its allies South Korea and Japan could also take unspecified "defense-related measures," Russel said. "As the threat grows, then our defensive capabilities need to adjust as well," he said, stressing that there was also a diplomatic route that the North could take by reviving long-dormant negotiations on curbing its nuclear program. MORE WEIGHT ON SANCTIONS South Korean Unification Ministry spokesman Jeong Joon-hee downplayed the prospect that an upcoming visit to New York by North Korean Foreign Minister Ri Su Yong to attend a U.N. climate conference would create an opening for engagement. "At a time when the North is talking of more provocation, I think it's time to put more weight on sanctions rather than dialogue," Jeong told a briefing in Seoul on Wednesday. Russel laid out what he called the possible "universe" of how the U.S. government and others might respond to a fifth test and he acknowledged that sanctions have failed to deter North Korea, which tested its first nuclear device in October 2006. He stressed that no decisions had yet been made and said he could not preview a response to an event that has yet to occur. U.S. General Vincent Brooks, whom President Barack Obama has nominated to lead American forces in South Korea, said on Tuesday that China was frustrated over North Korea's behavior, including its nuclear advances, but was unwilling to apply pressure that could threaten the viability of Kim Jong Un's government. Brooks also said Kim appeared more "risk-tolerant, arrogant and impulsive" than his father, Kim Jong Il. He was more aggressive in ignoring international concerns while advancing the North's nuclear program, the general said. Russel said it would take time to judge how well the latest sanctions were being enforced, but Beijing had "exhausted traditional options of encouraging and cajoling and persuading the North Koreans and they have clearly shifted to the application of pressure." "There is an argument to be made that serious and sustained pressure on North Korea has never before been undertaken," he said. "The degree to which the North Korean economy depends on China and access to China is such that this stated resolve on the part of China, I think, constitutes something of a new ball game." However, Frank Jannuzi, a former Senate Foreign Relations Committee staffer for East Asia and the Pacific, voiced skepticism that China had had a change of heart and was now willing to apply much more significant pressure on the North. "The Chinese are the one country that still has economic leverage but they are reluctant to put it to full use because they don’t think it’ll work and they are worried about the costs," he said, citing long-standing Chinese fears that severe sanctions could trigger "conflict, or refugees, or turmoil." (Additional reporting by Jack Kim in SEOUL and Ben Blanchard in Beijing; Editing by Bill Trott, Alan Crosby and Raju Gopalakrishnan)