FACTBOX: Sanctions and punishment options for North Korea

SEOUL (Reuters) - Key powers on the U.N. Security Council have agreed in principle that North Korea must face sanctions for defying a U.N. resolution with its second nuclear on Monday, Western diplomats said.

However, they said a draft resolution was unlikely to be ready for voting on until next week at the earliest and there may be little more the international community can do to punish the poor and already isolated state.

South Korea and China, the only major power North Korea can turn to for some support, are worried about moves that might push the belligerent state into collapse, which could lead to chaos on their borders and a bill estimated at more than $1 trillion for the South to absorb the North in the event of re-unification.

China and South Korea are the biggest trade partners with North Korea, whose annual GDP is estimated at $20 billion, less than 3 percent the size of the South's economy.

PUNISHMENT OPTIONS

* New U.N. trade sanctions. The Security Council is expected to opt to enforce and expand existing punishments.

* China, the North's biggest benefactor, could more tightly enforce existing U.N. sanctions put in place in 2006 after missile launches and the first nuclear test. This may have a limited effect on curbing trade, with Beijing seen unwilling to curb flows of energy and food aid to the North that help prop up its economy. Beijing is also reluctant to accept any new sanctions that would significantly undercut its economic ties or lead to instability in its neighbor.

* The United States could place North Korea back on its terrorism blacklist, a difficult bureaucratic process for Washington that would hurt the North's ability to tap into international finance. The U.S. could consider its own trade and financial measures which in the past hurt the North's leadership.

* South Korea could pull out of a joint factory park with the North, a costly and politically risky move for Seoul which has obligations to its companies operating there. But this would cut off a source of foreign currency for the government in Pyongyang, which is paid the salaries for the North Korean factory workers.

* New unilateral sanctions by Japan, although the impact would be small given the limited contact between the two countries.

SANCTIONS ALREADY IN PLACE:

* U.N. Security Council resolution 1718 of October 2006 imposes arms and financial sanctions on North Korea after it conducted its first nuclear test three months after test-firing its longest-range Taepodong-2 ballistic missile. This also bans the sale of luxury goods to the North.

* A Security Council statement on April 13, adopted after the North's launch of a multi-stage rocket, called for tough enforcement of the sanctions under resolution 1718.

* U.N. Security Council resolution 1695 of July 2006 after the North's launch of its Taepodong-2 bans trading of material, technology and financial resources that could be used in the North's weapons of mass destruction programs.

* U.S. Treasury Department regulations ban transactions by U.S. firms with some North Korean entities and transactions involving North Korean vessels. Imports of goods made in the North also require prior approval.

* Japan has in place a ban on imports of North Korean goods and also prohibits port calls by North Korean vessels. As part of the Security Council ban on trading in luxury goods, Japan prohibits the sale of beef, caviar and fatty tuna, along with expensive cars, motorcycles and cameras.

* The movement of goods and equipment from South Korea, with which the North has a sizable trading relationship, is severely limited under a 1996 multinational arrangement that controls the transfer of dual-use goods that could be used by the receiving country for military purposes.

(Source: the United Nations, U.S. State and Treasury Departments, South Korean Foreign Ministry, Reuters)

(Reporting by Jon Herskovitz and Jack Kim, editing by Jonathan Thatcher and Valerie Lee)