As the NLD celebrated its election victory, the US Treasury announced it had added four North Korean individuals and one company to its targeted sanctions list due to links with the Korean Mining Development Trading Corporation (KOMID), a sanctioned North Korean entity involved in arms trading.

NLD supports cheer as the vote-count appears on screen at Party HQ on election night. (Sebastian Strangio.)

While sanctioning such entities is nothing new, what makes this case interesting is that two of the individuals named are based in Myanmar. One was the North Korean Ambassador to Myanmar Kim Sok Chol, who is accused of working with KOMID to facilitate arms trades. The other is allegedly an employee of KOMID's Myanmar office.

These aren't the first US actions targeting Myanmar entities with links to North Korea. In 2013, three Myanmar companies with alleged links to North Korean arms trading were added to the US sanctions list. In 2014, the late U Aung Thaung was also added. The reason given was that he was 'undermining' Myanmar's reforms. However, US Embassy cables had previously identified his sons as facilitators of transactions with North Korean entities, which raises the question of whether suspected continued involvement was the underlying reason for the sanctions.

Little is known about the Myanmar-North Korea relationship, who is involved and what role the military (Tatmadaw) or president's office may play. But collectively, these actions suggest this relationship may not have ended, as some have hoped or claimed. After all, why would the US keep applying sanctions if it didn't have evidence of continued engagement?

Arguably even more concerning is the implication that outgoing Myanmar President Thein Sein was either unable to curtail the Tatmadaw's relationship with North Korea, or simply didn't care and paid lip service to international calls for it to end.

However, the NLD's recent election win and the upcoming transition of power provides an opportunity for the US to further align itself with the NLD and use what leverage it has to break these connections. The timing of the US announcement — soon after the elections, but just long enough to know the result — was likely a way to signal Washington's expectation that the incoming government will address the issue.

But will an NLD government be more successful than its predecessor? Even when the NLD takes over next year, it will not control the Tatmadaw, which, constitutionally speaking, has control over its own affairs. And if Thein Sein was unable to rein in the relationship, what chance does Aung San Suu Kyi or the NLD have?

Yet failure to address the North Korea issue carries risk for the NLD.

Whether Western governments like to admit it or not, Aung San Suu Kyi has long influenced (and perhaps dictated) their policy towards Myanmar, including on sanctions. She could ask for these to be lifted and it would likely happen. In some jurisdictions, this isn't as easy as it sounds, but with her support it would most likely be a rubber-stamp decision.

Removing economic sanctions would help the NLD implement significant economic reforms. But any lingering concerns about the Myanmar-North Korea relationship, or evidence that it is continuing, could hamper the lifting of sanctions. After all, the Myanmar-North Korea relationship is one of the stated reasons for continued US sanctions.

Would the US be willing to appease Aung San Suu Kyi by lifting sanctions at the expense of trying to end the Myanmar-North Korea relationship?

The US has some options. Washington could lift economic and trade sanctions but leave arms embargoes or military restrictions in place. If Congress is happy to lift sanctions but the White House wants to continue applying pressure, the Administration could increase its targeted sanctions on senior Tatmadaw officials. But any move that leaves the Tatmadaw out of the game is high risk. Aung San Suu Kyi needs the Tatmadaw onside, as it controls the three ministries (Home Affairs, Border Affairs and Defence) that are key to ensuring the rule of law. If it was thought she had negotiated or supported a deal for economic reform at the expense the Tatmadaw, she would be unlikely to get the cooperation she needs.

Alternatively, lifting these sanctions and embargoes could give the Tatmadaw the international military engagement it has sought for so long. Such a move might remove its dependence on countries like North Korea and open other avenues to legitimately procure defence materiel, especially from Western countries keen to provide such goods. On the other hand, lifting these restrictions could merely make it easier for the Tatmadaw to conceal its transactions with North Korea. Moreover, for many governments, giving up the stick in favour of the carrot is politically risky.

The NLD has a lot of work to do over the next few months, and turning its manifesto into actual policy is likely to be the main priority. But considering the US Government's continued interest, the NLD will need a strategy to address the North Korean issue.