North Koreans fight a losing battle for the soil they till & the food they grow

With the greening of the trees each year in North Korea come annual predictions of famine due to weather conditions that, by some meteorological miracle, never cross the Demilitarized Zone and cause hunger in South Korea. This year, as with every year since 1999, the reality was not as bad as the dire predictions, but the situation is still bad: some of the Daily NK’s sources say that they’ve seen the bodies of people who (or so they believe) have starved to death. That wouldn’t be the first time that’s happened since the end of the Great Famine, and it’s also a sign that the causes of hunger in North Korea remain unchanged.

So unsurprisingly, yet again, Pyongyang isn’t feeding its people. But of all the obligations a state undertakes in its social contract with the governed, the one obligation you’d think Pyongyang would be able to deliver on would be security. But as this blog has documented, in North Korea, unfed soldiers roam the roads and rape women with impunity, and are sometimes ordered to pillage homes and farms by officers who aren’t feeding them. This year, Pyongyang will again loose its soldiers on the people.

Sources in North Korea are reporting that the authorities are preparing another push to collect rice for the armed forces this fall. However, in contrast to previous years, this time the order has been issued to the military itself. Ordinary citizens have in the past been assigned the task of gathering these provisions, but the responsibility this year has fallen on military conscripts.

“Military leadership handed down orders last month detailing the quotas required to be collected by the local 12th Corp. These orders include amounts covering every division and brigade in the entire 12th Corp, which must be collected and presented to division leaders in the coming season,” a source in Ryanggang Province informed Daily NK on October 18.

“It is quite absurd that military personnel have to collect these provisions themselves. And such orders were handed down in all provinces, covering all military divisions across the country.”

The source says that soldiers are complaining about the plan, especially given the government’s failure to distribute goods, even to the military in recent times.

“Is there any other country on Earth that does not feed its own military? I thought the army was supposed to be defending our country, but instead they’re turning us into an army of farmers,” one serviceman told the source. [Daily NK]

In the markets, the best thing that has happened to the North Korean people since the Japanese occupation army left, organized crime (often, in alliance with corrupt officials) is starting to monopolize trade and control prices. Now, with most North Koreans expecting a bad harvest, private sotoji farmers are taking the security of their crops into their own hands, unarmed.

Many farmers take security over their fields seriously even in good harvest seasons, but with this year’s poor yields, people are staying up all night to keep watch, as even a small amount lost to theft can leave a whole family in dire straits. The farmers and locals tend to watch the fields themselves. Although police officers also keep watch in some places, they are widely criticized as being so incompetent that “10 of them could not catch a single thief,” she said.

According to the source, the police are widely distrusted because they often only demand bribes from thieves that are caught in the act, which does little to address the problem. However, because citizens are patrolling the fields and catching thieves themselves, it has also been common for fights and other incidents to break out during confrontations.

Another source in Jagang Province spoke of a specific incident where “a fight broke out after citizens in the village of Wiwon caught a thief in the fields. However, after many locals began angrily condemning the thief for stealing their food, they also found themselves asking whether they would do the same in such circumstances.” [Daily NK]

Citizens, including the farmers who feed everyone else — and who will become increasingly important to the survival of the population as sanctions invariably have unintended impacts on non-sanctioned trade — can’t really look to the security forces for security: the security forces shake them down for bribes and intermittently enforce orders to clear, confiscate, and replant the plots they farm. Indeed, the abusive and corrupt security forces themselves are the single greatest threat to the security of the people. And consequently, the converse is increasingly true, as it justly should be in this unjust world.

The North Korean authorities have yet to identify any leads in the murder of a Preliminary Examination Officer outside his own home in Sunchon, South Pyongan Province. The officer worked for the Ministry of People’s Security’s Inspection Department.

A source in the area notified Daily NK on October 17 that the “authorities believe the state inspector was killed out of revenge, though they have yet to find the killer.”

According to the source, the 32-year-old agent was ambushed after returning home from work outside an apartment block in the Kangpo neighborhood of Sunchon. As the man parked his motorbike, he was struck in the back of the head and later died. The authorities are apparently wary of additional attacks targeting law enforcement officials.

MPS personnel responding to the scene of the crime immediately notified their superiors when they discovered that the victim was an MPS investigator. Attention soon turned to the likelihood that it was a revenge killing, carried out as payback for misconduct by the officer.

“This MPS officer was the most sadistic and brutal of them all. Anyone caught by him was usually beaten half to death, paralyzed, sent to a correctional labor camp, and almost always died within a few years after intense suffering,” the source said. [Daily NK]

Surely events like this must enter into the minds of the security forces’ officers as they go about their brutal work. More events like this would cause more of them to think twice — specifically about actions that impede the supply and distribution of food.

Lately, I’ve taken to citing the argument of Nobel prize-winning economist Angus Deaton, that foreign aid can have the effect of reinforcing the very state behavior that causes the hunger aid is meant to address. Marcus Noland is fond of citing the work of the Nobel prize-winning economist Amartya Sen, who argues that most modern famines are not the consequence of inadequate supply, but of grossly unequal distribution of that supply as a consequence of unequal entitlements. North Korea turns out to be a good case study for both of these arguments. Look no further than the U.N. aid agenciessilence — even falsehoods — attributing hunger to everything except Pyongyang’s gross waste of resources, and its onagain, offagain suppression of private farming and trade. No wonder hunger still stalks the people of North Korea despite decades of U.N. aid.

This blog has long presented evidence that North Korea’s government has more than adequate resources to feed its people with just a fraction of what it spends on weapons and luxuries for its morbidly obese tyrant. The reasons for hunger in North Korea are not material, they are political. And if the world won’t confront those political causes, the North Korean people must. To shift their country’s grossly unequal balance of entitlements away from the state, they will first have to confront its monopoly on violence. With a futility borne of desperation, they are. But without the means to communicate and arms with which to resist, they will do no more than shift that balance minimally at its margins.

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Computer crime, bank fraud & money laundering: A preview of Kim Jong-un’s indictment

The Wall Street Journal is reporting that hackers employed by the government of North Korea have been implicated in yet another international bank fraud scheme using hacked SWIFT software. This time, the victim is a bank in Taiwan, and the take was $60 million, all of it laundered through accounts in Cambodia, Sri Lanka, and the United States.

In a blog post Tuesday, cybersecurity researchers at U.K. defense company BAE Systems PLC also implicated Lazarus in the Taiwanese theft, saying that tools used in the attack on the Far Eastern International Bank include those used by Lazarus in the past.

“The attack this month on Taiwanese Far Eastern International Bank has some of the hallmarks of the Lazarus group,” BAE researchers wrote.

The suspected ties to Lazarus suggest the group’s continued focus on financial cybercrimes. In addition to the Bangladesh Bank theft, the BAE researchers said the group has been targeting bitcoin and is behind attacks on banks in Mexico and Poland.

Security researchers suspect the group has links to North Korea. U.S. authorities have said that one hack also linked to Lazarus—the 2014 Sony Pictures hack—originated in North Korea. The country has denied being behind the attack.

The BAE researchers said they found further evidence of the group’s North Korea links, saying they observed infrastructure in North Korea controlling the malware used in a previous Lazarus-linked attack. Representatives at North Korea’s Beijing embassy and Hong Kong consulate weren’t immediately available for comment. [WSJ, Dan Strumpf]

Sri Lankan authorities have arrested two suspects, one of whom was trying to withdraw $520,000 (which is more than my ATM ordinarily allows me to take out before a trip to Home Depot for plywood and router bits).

That report closely follows this New York Times story on the recent history of North Korea’s cyber crimes, including the Bangladesh Bank fraud, where the North Koreans got away with $81 million, the 2013 Dark Seoul cyberattacks, the 2014 Sony cyberattack and cyberterrorist attack against the U.S. homeland (about which the United States of America did approximately diddly squat), and (consequently) this year’s the WannaCry ransomware attacks.

Earlier this year, I wrote about reports that high officials in U.S. intelligence and law enforcement agencies had found evidence implicating North Korea in recent cyberattacks. Clearly, the FBI is investigating this course of criminal conduct, which is something I presume the FBI wouldn’t do without some prospect of a prosecution. We are speaking, after all, of conduct that is highly dangerous, ongoing, and undeterred. That gives the U.S. government a powerful incentive to charge those who conspired to commit these crimes.

Which brings us to this question: Is there any real doubt as to who the real person of interest is here? Of course, the feds would need at least some proof to get a grand jury to indict. The opacity of the royal court in Pyongyang presents some obvious challenges to this, but just over a decade ago, when prosecutors very nearly indicted His Porcine Majesty’s father for counterfeiting — before George W. Bush stopped them for political reasons — they concluded that those challenges were surmountable.

“The most difficult thing is connecting evidence of criminality to a state’s leader, because there is so much deniability built in. But there isn’t a whole lot of activity in North Korea that isn’t sanctioned by the leadership, and the evidence we had already built up was very good. These cases were very doable.” The criminal cases, says Asher, were based on information from undercover agents, informants, and a vast surveillance operation. [Vanity Fair, David Rose]

If you’ve read the links above or my posts on the Sony cyber attacks, it’s apparent that our signals intelligence is part of the case that implicates state-sponsored North Korean hackers. The Justice Department has cited the testimony of defectors in recent civil forfeiture cases against North Korean funds, and at least two defectors with inside knowledge of North Korean cyber operations have spoken publicly.

But even assuming there are no defectors who testify to His Porcine Majesty’s complicity, and that the government offers no signals intelligence implicating him (which it might not want to do to protect sources and methods) the feds could still do what the plaintiffs did in their lawsuits against North Korea for the state sponsorship of terrorism — they could call experts to testify about North Korea’s system of government, command systems, and the certainty that this conspiracy must have been approved at the very top.

Then, what would the feds most likely charge? Prosecutors’ opinions inevitably vary, but here are my best guesses. I’ve linked the relevant sections in the Criminal Code so that you can read the elements yourself.

  • Count I: Conspiracy. This one is pretty much a given in most federal prosecutions now. Note that the federal conspiracy statute doesn’t require proof of an overt act, and “defraud the United States” is defined broadly.
  • Count II: Bank Fraud. Which should be self-explanatory.
  • Count IV: Violations of the Computer Fraud & Abuse Act. This is the statute the feds use to charge computer hacking offenses.
  • Count III: Money Laundering. In plain English, the transfer, use, or spending of crime-tainted funds with intent to carry out, facilitate, or profit from one of the predicate offenses listed in subsection (c) of the money laundering statute. This is an important count, because — let’s face it — it’s not like we’re ever going to arrest Kim Jong-un short of his overthrow. The only way to hold people beyond our personal jurisdiction accountable is to shame them and seize and forfeit their funds. The indictment shames; the forfeiture count takes the money away.
  • Count V: Criminal Forfeiture. This is how we take money away from people after they’re convicted (but hold that thought for a moment).

Assuming the feds do indict, would His Porcine Majesty, a sitting head of state, be immune from prosecution in a U.S. court? I want to thank one of my Twitter followers, Shin Chang-hoon, for pointing me to this interesting discussion of that potential obstacle in the broader, global context. In the U.S. federal courts, however, there is at least one precedent for the feds successfully indicting, prosecuting, and convicting a sitting, de facto head of state. That would be Manuel Antonio Noriega, the former dictator of Panama, whom we arrested after the 1989 U.S. invasion of that country. Noriega argued his indictment on drug charges must be dismissed because he was immune from prosecution. The U.S. Court of Appeals for the 11th Circuit rejected Noriega’s argument on the grounds that the U.S. had not recognized him as the lawful head of state, and because (and this is admittedly circular) by invading Panama, and by arresting and extraditing him, the U.S. showed that it did not intend to immunize him. You can read the court’s decision here.

Yes, the potential for such prosecutions to get out of hand is obvious, but it’s hard to believe that a federal court of appeals would immunize a head of state from prosecution for straight-up international bank fraud. The key distinction is whether the prosecuted conduct consists of the acts of a head of state or “for private or criminal acts.”

Having navigated past one problem, we encounter a more difficult one: the requirement to have a defendant present for the arraignment before a prosecution can go forward. (One of my least pleasant trials was a case where I defended a man who ran away after his arraignment and before trial. Much like Clint Eastwood did not do in 2012, only more effectively, I had to defend an empty chair. The chair got three years — a good result, given the charges and the evidence.)

So, does this bring us to an Emily Litella moment?

Not quite. Admittedly, my experience in federal civilian criminal litigation is limited, but as I read the Federal Rules of Criminal Procedure and the U.S. Attorneys’ Manual, you don’t need to have custody of a defendant to indict. The statute of limitations (typically, five years) stops running when the feds indict. Then, the indictment sits on a shelf until arraignment, which starts the ticking of the defendant’s speedy trial clock. But why do that? Again, past history is instructive.

The final stage, which David Asher says President Bush had been fully briefed about, would have been the unsealing of criminal indictments. “We could have gone after the foreign personal bank accounts of the leadership because we could prove they were kingpins,” Asher says. “We were going to indict the ultimate perpetrators of a global criminal network.” “The world wanted evidence that North Korea is a criminal state, not a lot of hoo-ha,” says Suzanne Hayden, a former senior prosecutor at the Department of Justice who ran its part of the Illicit Activities Initiative. “The criminal cases would have provided the evidence. It would have been in the indictments. As with any money-laundering investigation, we would have identified the players and traced them back, from Macao to those who were behind it in North Korea.” [Vanity Fair, David Rose]

A better reason might be to charge and prosecute the third-country nationals and businesses that provide the North Korean hackers with the havens and support they require.

The feds would also have the alternative of filing a civil forfeiture case under 18 U.S.C. 981, alleging all of the same counts in a civil, in rem suit against funds that belong to Kim Jong-un, on the theory that the funds are proceeds of that conduct, or are facilitating property (such as property co-mingled with the stolen funds to conceal their origin and ownership). The advantage of that strategy is that the feds would only have to prove the forfeitability of the property by a preponderance of the evidence, and the feds would win the suit by default unless Kim Jong-un enters an appearance in federal court and intervenes in the proceeding.

In 2005, President Bush decided not to go forward with the prosecution of Kim Jong-il because it was afraid that he’d walk out of six-party talks. But of course, North Korea did walk about of six-party talks in 2008, hasn’t returned since then, and is absolutely adamant in its refusal to negotiate either a freeze or denuclearization, that concern isn’t present.

Of all the dumb things smart people tend to write about North Korea, the dumbest of them all may be the idea that what North Korea needs most is for us to teach it how to do capitalism. Over the last week, I’ve read reports of how North Korea and its officials make money through drug trafficking, racetrack gambling, tourism, and ivory and rhino horn smuggling. It runs one of the world’s more sophisticated money laundering operations using front and shell companies in Hong Kong. The last thing Pyongyang needs us for is to teach it how to make money. To Pyongyang, capitalism is not a path to reform, but a path to the enslavement of all Koreans. What Pyongyang needs to learn is an object lesson in the rule of law — that at last, its crimes will have consequences, even if some of those consequences are symbolic. And for a system of government built on symbols and myths, symbolic consequences can be some of the most powerful ones.

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On North Korea sanctions, evidence of an inflection point

As I’ve mentioned previously, this has been a busy month for me, and a difficult one for keeping up with the many developments in North Korea sanctions enforcement. Over the last months, I’ve been keeping a tally of how those efforts are taking shape. The accumulating evidence now gives reason for guarded optimism that at last, the sanctions are starting to show significant effects.

Financial. Treasury Undersecretary Sigal Mandelker sent the right message to the financial industry in her recent testimony before the Senate Banking Committee:

Banks worldwide should take note that we are acting to protect the U.S. financial system from North Korean illicit financial activity.  The new authorities granted to the Treasury Department by the Executive order issued last week give us even greater ability and leverage to target foreign banks that support the Kim regime.  We now have the ability to suspend correspondent account access to, or designate and freeze the assets of, any foreign financial institution that knowingly conducts significant transactions in connection with any trade with North Korea or on behalf of any North Korea-related designated person.  These new financial sanctions will be forward looking, and will apply to behavior that occurs following the date of the Executive order.  These types of sanctions were used to great effect in the Iran context, and present a stark choice to banks around the world.

Treasury took an important step late last month when it designated most of the remaining active North Korean banks (see the list in this post for reference). The designation of North Korea’s Central Bank, which issues its currency and has historically sold gold overseas, could be the most significant. But the designation of 26 individual North Korean bankers, trade representatives, and diplomats (read: money launderers and arms dealers) also matters, because banks everywhere now have a legal duty to close and/or freeze their accounts. Targeting these operatives in larger numbers makes it harder for the regime to react and shift funds to other operatives. The regime probably can’t replace these operatives and their valuable contacts faster than we’re designating them now.

Financial sanctions are also having second-order effects. The decision by China National Petroleum to stop selling fuel to North Korea reflects a concern that Pyongyang can’t pay for it, although Beijing has historically supplied fuel to Pyongyang through a cross-border pipeline, free of charge, and without reporting it in its official trade statistics.  Last month, I noted that banks in China were freezing or closing North Koreans’ accounts.

Similarly, the North Korean coal industry, which has been sanctioned by the U.N., and (perhaps more significantly) targeted by the U.S. Treasury and Justice departments for asset freezes, seizure warrants, and civil forfeiture suits, is clearly suffering, according to Daily NK interviews of citizens living near the mines.

In late September, China reportedly ordered joint ventures with North Korea to shut down. Since then, other reports have suggested that North Korean workers are returning from China in large numbers — despite the fact that U.N. sanctions allow those workers to complete their three-year contracts — and multiple reports suggest that Chinese businesses that relied on the cross-border trade have been hurt or idled. In Russia, too, North Korean money launderers are having trouble remitting funds.

Although most press reports have assumed that these developments were the result of Beijing ordering Chinese firms to comply with U.N. sanctions, I’ve theorized that the actual reason for these changes may be, as one Chinese trader put it, that their North Korean partnerscan’t pay us.” That is most likely a consequence of Chinese banks’ fear of losing their access to the dollar system. Chinese firms may also be concerned that products made with North Korean labor or materials will lose their access to U.S. markets, or that millions in profits may be frozen in correspondent accounts.

Historically, actions by Beijing have tended to generate optimistic headlines until, a few weeks later, we’d learn that its actions weren’t being enforced. It’s too early to conclude that this trend will continue, but it bears watching.

Designations. And yet, there are still some surprising oversights. It is objectively difficult to understand why, months after the U.N. and C4ADS exposed them, the feds still haven’t frozen and forfeited the assets of large North Korean arms-trading fronts like Glocom and Vast Win Trading, unless we believe that Malaysia, Singapore, and China are going to do that for us. Belatedly, Treasury has also designated one of the Chinese companies that sold North Korea the chassis that it converted into transporter-erector-launchers for its missiles.

Lawmakers like Senator Cory Gardner (R, CO) and Ed Markey (D, MA) recently introduced new legislation to toughen the sanctions even more, and to emphasize human rights — a key component that has been missing from our diplomatic efforts to build a global coalition. It’s good that they’re keeping the pressure on, and offering this useful course correction. Legislation is one way to do that, but another is to demand regular classified briefings, which means that congressional committee staffs need more staffers with the right clearance levels.

Diplomatic. A month ago, I aggregated the evidence that State’s efforts to isolate North Korea diplomatically — efforts that only began in the final weeks of the Obama administration, and that began to increase last spring — were starting to pay off. Spain, Mexico, Italy, Kuwait, and Peru all cut diplomatic relations with North Korea. Poland, the Philippines, Malaysia, India, the Sudan, Taiwan, Vietnam, and Egypt all announced that they would reduce trade relations with North Korea, or expel North Korean money launderers, slave laborers, or arms dealers.

Since the publication of that post, Portugal and the United Arab Emirates have also announced that they would sever relations with Pyongyang. The UAE also joins Kuwait in ending its acceptance of North Korean workers. Treasury’s removal of a number of Sudan designations suggests that the administration believes that Khartoum has also stopped buying North Korean weapons. Malaysia has banned travel to North Korea, and will not be replacing its withdrawn ambassador, in the wake of a brief hostage crisis early this year following the assassination of Kim Jong-nam. The EU has imposed new sanctions that ban oil and gas exports, textile imports, joint ventures and investments, and new work authorizations for North Korean laborers.

Finally, sanctions are, if slowly, taking their toll on the North Korean embassies that remain to sell its weapons and launder its money, by requiring national governments to freeze payments and shut down the businesses the embassies use to fund their salaries and operations. These developments represent not just a loss of multiple revenue sources, but also nodes within a global, interdependent money-laundering network.

Domestic. As state industries have increasingly struggled to meet their quotas, the regime has turned increasingly to the taxation of domestic industry, including small businesses, for its revenue. A new yuan-denominated tax on license plates suggests that even the state may be losing confidence in the North Korean won. That’s not entirely a bad thing, as one consequence of it is that more people gain a greater degree of economic independence from the state, people have more access to the things they need, there are more opportunities for corruption to siphon off more of this revenue, and the tax collection process puts more citizens into conflict with the state and its corrupt petty despots.

Personnel changes within the regime suggest that it may be under financial strain. An unconfirmed South Korean report says that Pyongyang may have replaced the head of Bureau 39. And whereas until recently, people associated with Jang Song-thaek were under suspicion, some are now being promoted. Jang’s network of operatives in China was Pyongyang’s financial root system. Their restoration might — I stress, might — mean that in its financial desperation, the regime is now (at least, temporarily) prioritizing money over loyalty.

Domestically, the regime is increasingly coming into conflict with its people as the regime squeezes them to make up for the loss of revenue, but the regime can only squeeze them so much: first, there is hardly anything left to steal from them; and second, as with the Great Confiscation of 2009, the regime knows that it has historically been economic conflicts with the state that have caused North Koreans to resist it. In the last six months, prices of fuel and other commodities have risen. South Korea’s National Intelligence Service believes that North Koreans are already disgruntled over the economic effects of sanctions, and that the regime is “conducting a large-scale campaign” to suppress that disgruntlement. None of these developments is irreversible, but for the first time since 2007, there are clear signs that sanctions are starting to take a toll on Pyongyang’s access to the global economy.

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How the U.S. fishing industry can do its part to disarm Kim Jong-un

Long-time readers know that I’ve had many uncomplimentary things to say about the Associated Press’s North Korea coverage. Its still-undisclosed agreements with the North Korean government to open a bureau in Pyongyang sacrificed journalistic ethics for a dubious dividend of access. Since opening its bureau in 2012, AP and its state-supplied North Korean stringers have reported a great deal of North Korean government propaganda and almost no actual news, while ignoring major news stories (to include a hotel fire, a building collapse, the taking of at least a dozen foreign hostages, and multiple purge rumors).

Careful readers also know that I’ve singled out AP reporter Tim Sullivan as a bright spot in this dreary picture. Like most foreign reporters, Sullivan, who is not a part of AP’s Pyongyang bureau, does his best reporting from outside North Korea. The latest example is his outstanding investigative reporting, along with Seoul-based Hyung-Jin Kim and half a dozen others, finding evidence that Chinese fisheries are smuggling seafood packed by North Korean laborers into U.S. markets.

Through dozens of interviews, observation, trade records and other public and confidential documents, AP identified three seafood processors that employ North Koreans and export to the U.S.: Joint venture Hunchun Dongyang Seafood Industry & Trade Co. Ltd. & Hunchun Pagoda Industry Co. Ltd. distributed globally by Ocean One Enterprise; Yantai Dachen Hunchun Seafood Products, and Yanbian Shenghai Industry & Trade Co. Ltd.

They’re getting their seafood from China, Russia and, in some cases like snow crab, Alaska. Although AP saw North Korean workers at Hunchun Dongyang, manager Zhu Qizhen said they don’t hire North Korean workers any more and refused to give details. The other Chinese companies didn’t respond to repeated requests for comment.

Shipping records seen by the AP show more than 100 cargo containers of seafood, more than 2,000 tons, were sent to the U.S. and Canada this year from the factories where North Koreans were working in China.

Packages of snow crab, salmon fillets, squid rings and more were imported by American distributors, including Sea-Trek Enterprises in Rhode Island, and The Fishin’ Company in Pennsylvania. Sea-Trek exports seafood to Europe, Australia, Asia, Central America and the Caribbean. The Fishin’ Company supplies retailers and food service companies, as well as supermarkets.

American importers and retailers are already cutting their ties with these Chinese suppliers, which may be one reason why Chinese factories are sending their North Korean laborers home, despite the fact that new U.N. sanctions (see paragraph 17) allow the workers to serve out their (typically, three-year) contracts.

Often the seafood arrives in generic packaging, but some was already branded in China with familiar names like Walmart or Sea Queen, a seafood brand sold exclusively at ALDI supermarkets, which has 1,600 stores across 35 states. There’s no way to say where a particular package ends up, nor what percentage of the factories’ products wind up in the U.S.

Walmart spokeswoman Marilee McInnis said company officials learned in an audit a year ago that there were potential labor problems at a Hunchun factory, and that they had banned their suppliers, including The Fishin’ Company, from getting seafood processed there. She said The Fishin’ Company had “responded constructively” but did not specify how.

Some U.S. brands and companies had indirect ties to the North Korean laborers in Hunchun, including Chicken of the Sea, owned by Thai Union. Trade records show shipments came from a sister company of the Hunchun factory in another part of China, where Thai Union spokeswoman Whitney Small says labor standards are being met and the employees are all Chinese. Small said the sister companies should not be penalized.

Shipments also went to two Canadian importers, Morgan Foods and Alliance Seafood, which did not respond to requests for comment.

Boxes at the factories had markings from several major German supermarket chains and brands — All-Fish distributors, REWE and Penny grocers and Icewind brand. REWE Group, which also owns the Penny chain, said that they used to do business with Hunchun Dongyang but the contract has expired. All the companies that responded said their suppliers were forbidden to use forced labor. [AP]

The report is long and detailed, and well worth reading in full. The moral and national security hazards should be clear enough, so I’ll devote most of this post to the legal hazards for the companies involved in this trade. Let’s start with this one:

At a time when North Korea faces sanctions on many exports, the government is sending tens of thousands of workers worldwide, bringing in revenue estimated at anywhere from $200 million to $500 million a year. That could account for a sizable portion of North Korea’s nuclear weapons and missile programs, which South Korea says have cost more than $1 billion. [AP]

Of course, there is no direct evidence that the world’s most financially opaque regime is using its slave labor revenues to fund its nuclear program. As with the Kaesong Industrial Complex, however, the importer’s duty under UNSCR 1718, paragraph 8(d), is to know where its money goes, and to “ensure” that Pyongyang is not using it for nukes. Ignorance is no defense, and cash is fungible. A dollar in Pyongyang’s bank accounts can just as well be used for centrifuge parts, barbed wire, cognac, or cell phone trackers.

Second, the U.N. Security Council has recently banned North Korean exports of seafood, and the KIMS Act authorizes sanctions against transactions in North Korean food exports or fishing rights. Transactions in North Korean forced labor are subject to mandatory sanctions under the NKSPEA, as “severe human rights abuses.” By exposing this latest example of China violating U.N. sanctions, the legal and diplomatic pressure on Beijing to enforce the sanctions it voted for increases.

Third, although these authorities are relatively recent, smuggling any North Korean products into the United States has long been a felony. Executive Order 13570, signed by President Obama in 2011, banned all imports of products made with North Korean goods, services, or technology. Because the authority for this executive order is the International Emergency Economic Powers Act, violations of this order are punishable by 20 years in prison, a $1 million fine, a $250,000 civil penalty, and even the forfeiture of any property “involved in” that transaction. The exporter also faces the risk of designation by the Treasury Department, which would freeze any assets that enter or transit the United States.

Fourth, Chinese fisheries that use North Korean laborers may face additional sanctions under the Trafficking Victims Protection Act.

The workers wake up each morning on metal bunk beds in fluorescent-lit Chinese dormitories, North Koreans outsourced by their government to process seafood that ends up in American stores and homes.

Privacy is forbidden. They cannot leave their compounds without permission. They must take the few steps to the factories in pairs or groups, with North Korean minders ensuring no one strays. They have no access to telephones or email. And they are paid a fraction of their salaries, while the rest — as much as 70 percent — is taken by North Korea’s government.

This use of North Korean labor also puts a powerful sanction in the hands of the U.S. fishing industry. Recall that in this post, I wrote about the similar problem of Chinese textile factories smuggling clothing made by North Korean workers, or using North Korean materials, into the United States, and noted how U.S. textile manufacturers have taken advantage of an obscure Customs regulation to bar Uzbek cotton* exports from entering U.S. commerce if those products may be made by convict or forced labor.

It’s unknown what conditions are like in all factories in the region, but AP reporters saw North Koreans living and working in several of the Hunchun facilities under the watchful eye of their overseers. The workers are not allowed to speak to reporters. However, the AP identified them as North Korean in numerous ways: the portraits of North Korea’s late leaders they have in their rooms, their distinctive accents, interviews with multiple Hunchun businesspeople. The AP also reviewed North Korean laborer documents, including copies of a North Korean passport, a Chinese work permit and a contract with a Hunchun company.

When a reporter approached a group of North Koreans — women in tight, bright polyester clothes preparing their food at a Hunchun garment factory — one confirmed that she and some others were from Pyongyang, the North Korean capital. Then a minder arrived, ordering the workers to be silent: “Don’t talk to him!” [AP]

Under section 321 of the KIMS Act, products made with North Korean labor now face a rebuttable presumption that they are made with forced labor, which means that Chinese seafood exports made with North Korean labor (whether inside or outside North Korea) could end up spoiling in warehouses or running up storage charges while the petition process runs its course. That, in turn, will incentivize bankers and insurers to do due diligence to ensure that Chinese exporters cleanse their supply chains of North Korean labor.

The reputational cost of using North Korea labor or materials may be just as effective as any legal sanction.

Every Western company involved that responded to AP’s requests for comment said forced labor and potential support for North Korea’s weapons program were unacceptable in their supply chains. Many said they were going to investigate, and some said they had already cut off ties with suppliers.

John Connelly, president of the National Fisheries Institute, the largest seafood trade association in the U.S., said his group was urging all of its companies to immediately re-examine their supply chains “to ensure that wages go to the workers, and are not siphoned off to support a dangerous dictator.”

“While we understand that hiring North Korean workers may be legal in China,” said Connelly, “we are deeply concerned that any seafood companies could be inadvertently propping up the despotic regime.” [AP]

And lastly, lest this point be missed amid the other reasons to be outraged, North Korea’s poor have a severe protein deficiency in their diet. Why is Pyongyang allowed to export its main source of protein for cash while most of its people are malnourished?

~   ~   ~

* Previously said “Chinese seafood.” Since corrected.

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There is a North Korean resistance

A blog about North Korea never suffers from a shortage of material; rather, it is more likely to suffer from an insufficiency of time to curate such an abundance of material. A post that isn’t ready for publication when my train arrives at my stop may sit unfinished for hours, weeks, or even years. So it was last May, shortly after the assassination of Kim Jong-nam, when an intriguing video first emerged of Jong-nam’s son, Kim Han-sol, claiming that a group calling itself Cheollima Civil Defense had spirited him away to safety from Pyongyang’s agents.

Cheollima Civil Defense’s Korean- and English-language website is here, and has a link for financial contributions. Because this site has been eagerly watching North Korea for years for signs that organized resistance would rise (and instead found plenty of evidence of disorganized resistance) the story sounded almost too good to be true. But now, via the Wall Street Journal, comes a report that convinces me that Cheollima Civil Defense is a thing — and that thing is North Korea’s first organized resistance organization since the 6th Corps mutiny more than two decades ago.

When Kim Jong Nam, the exiled half brother of North Korean dictator Kim Jong Un, was killed with nerve gas in a Malaysian airport on Feb. 13, it was evident who might be targeted next.

His 21-year-old son, Kim Han Sol,  had similarly criticized the regime in Pyongyang, which was suspected of carrying out the attack. The son’s bloodline made him a potential threat to the Kim dynasty.

What followed was a secretive scramble by a group of North Korean dissidents to get Kim Han Sol, his mother and sister out of their Macau home and fly them to safety in a secure location.

Details have been largely a mystery since February, but the group that helped the trio get out agreed to discuss the evacuation with a media organization for the first time—and from its account it appears that Kim Han Sol was targeted.

There were “attempts by several parties to interfere” with the evacuation, a representative of the group, Cheollima Civil Defense, told The Wall Street Journal. [Wall Street Journal, Alastair Gale]

Read the rest of the story on your own. Recall that Kim Han-sol first came to the world’s attention in October 2012, when he sat down for an interview with Finnish former U.N. official Elisabeth Rehn (see reports here, via the Wall Street Journal, and here, via the Atlantic Wire). The most striking thing about Han-sol? He seems … nice. Normal. He speaks excellent English. His manner would not stand out as exceptional at a meeting of the Korean Church Coalition, where the young people I meet almost always seem cleaner and better-adjusted than the feral, mulleted, tobacco-spitting waifs I was raised with out on the prairie in South Dakota.

“I’ve always dreamed that one day I will go back and make things better,” Kim Han Sol said in the interview. He spoke fluent English with a British accent, and said he was interested in the revolution the previous year in Libya, as related to him by his Libyan roommate. [WSJ]

If you possess the spiritual certainty that I don’t, pray for the safety of this young man. He may have much to contribute to the future of his ancestral homeland. Among the more disappointing things we learn: how Pyongyang uses terrorism to its advantage. Canada refused to help Cheollima for fear of jeopardizing a hostage it was trying to convince Pyongyang to free.

But of course, there have been underground railroad groups helping North Koreans to escape through China for decades. What makes Cheollima something those groups are not? This:

The defector, who isn’t part of the group, said Cheollima is a small but well-connected organization that had helped North Koreans escape their country through China and into Southeast Asia.

The human-rights worker confirmed the group consisted of North Koreans and had good connections with foreign governments. “They moved very quickly and were verified at the highest level,” he said. Two Western diplomats said Cheollima was trusted to help defectors. [WSJ]

Does Cheollima represent a threat to Pyongyang? Not immediately, but over the long term, it is well-positioned to take advantage of rising disaffection among the elites, including the regime’s diplomats, and guide them to the protection of foreign embassies and intelligence services. For example, I’m convinced that we’ve yet to see the full political potential of the defection of Thae Yong-ho to sow doubt within the elites in Pyongyang. They may eventually help us make contact with key people in the armed forces to prevent war or split the regime’s internal cohesion. And of course, every defection by an official who brings his laptops, ledgers, and bank account numbers with him will have second-order financial impacts. If more defections cause the regime to distrust its diplomats and recall more of them, it could have almost as great an impact on regime finances and cohesion as the U.S. diplomatic campaign to get North Korean diplomats and workers expelled.

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The deterrence of North Korea has already failed

First, the North Korea commentariat told us that the Yongbyon reactor might be for no more nefarious purpose than generating electricity (never mind that it was never connected to the electrical grid). Then, it told us that the North merely wanted aid and recognition by the United States, to better provide for the people it had so recently starved to death in heaps, the dust of whose loves and aspirations now fills a thousand forlorn and forgotten pits in the barren hills of Hamgyeong. It told us that Pyongyang only wanted to open itself up to the world and bask in our gentle rays of glasnost and perestroika. It told us that if we were willing to disregard the good sense of the voting public and pay enough extortion money, surely Pyongyang could be talked out of its nukes.

What all of these theories had in common — aside from being wrong — is that they required a determined ignorance of the nature of the regime in Pyongyang. The appeal of these theories has always been greatest among those Americans who knew the least about its ideology and abuses of its own people (arms control experts, diplomats, and left-leaning academics), and among those South Koreans with the fewest objections to either. Overwhelming majorities of the commentariat in Washington and Seoul also embraced the reassurance these theories offered. Indeed, many proponents of these discredited theories still cling to the fantasy and they can talk Pyongyang into a nuclear and missile freeze, no matter how many times Pyongyang declares its unwillingness to discuss or consider any such thing.

At some point, we can’t confine the blame for this atrocious predictive record to the commentariat itself; some of that blame must also stain the journalists and policymakers who keep slogging back to this well of wisdom to fill their buckets and ladle it into the troughs of newspaper readers and presidents. Foreign affairs is not an empirical science; still, one wonders when a predictive record becomes catastrophic enough that the theories and their adherents get the Dick Cheney treatment. Surely, in the modern history of analytical folly, “They will open up and reform,” has to be right up there with, “He only wants the Sudentenland,” and, “They will welcome us as liberators.” For all my criticisms of President Trump — and there have been many of them, for many reasons, on many issues — he is the first president we’ve had in 30 years who possessed the instincts to reject this nonsense.

Now, the commentariat tells us that we must accept a nuclear North Korea as a fait accompli and fall back on deterrence. I’ve grown tired of rehashing all of the counterpoints to this — did we deter the sinking of the Cheonan, the Yeonpyong attacks, the Sony cyberterrorism, the 2015 landmine incident, Pyongyang’s multiple assassination attempts and threats against journalists, its nuclear and chemical proliferation, or the assassination of Kim Jong-nam with VX in the Kuala Lumpur airport? On what basis do we still deceive ourselves into believing that we’ve seen the worst of this behavior, or that this problem is a distant one?

“We cannot have a society in which some dictators someplace can start imposing censorship here in the United States because if somebody is able to intimidate us out of releasing a satirical movie, imagine what they start doing once they see a documentary that they don’t like or news reports that they don’t like. That’s not who we are. That’s not what America is about.” – Barack Obama, Dec. 19, 2014

If these recent incidents are in fact more indicative of Pyongyang’s new way of war and how it will escalate in the coming years than the 1950 Kim Il-sung strategy, on what basis do we believe that deterrence that was failing before will succeed now? On what basis do we doubt that a nuclear-armed North Korea will continue to escalate this war of skirmishes? On what basis do we believe that the crisis is already as bad it as it will get? If the commentariat ducks those questions, perhaps it hasn’t applied its imagination to the question of just how much worse things will get in five years if present trends continue. Illusions are stubborn things, and the commentariat’s predictive failures could make for a fine seminar on cognitive biases one day. That’s why I keep pushing back against this latest dangerous blandishment.

Beneath all of this is the long record of Pyongyang’s ideology and stated intentions to use its nukes to achieve reunification on its terms, an intention Pyongyang is increasingly brazen about. Brian Myers and Edward Oh make that case compellingly enough in new articles. I won’t repeat them here, though I can’t resist quoting this passage from Myers:

Also worth mentioning in this context are conservative reports of an academic proposal now circulating among higher-ups that proposes, as a transition to unification, a Kaesong Confederated State. This would be a swathe of jointly administered territory along the southernmost reaches of the North, from the port of Haeju in the west to the Geumgang mountains in the east, that would play host to five universities. That last word, I suspect, is meant about as seriously as the Associated Press’ use of the word bureau for its Pyongyang office.

Of course, one need not choose deterrence or unification as Pyongyang’s reason for sacrificing all the aid, money, prosperity, and recognition the commentariat told us it wanted — as it consistently sacrificed all of those things for the nuclear weapons it preferred, for some reason. If you want to be precise, the answer is both deterrence and reunification, because Pyongyang’s strategy is to deter Washington and Seoul from responding to its carefully calibrated attacks against American or South Korean interests and targets — attacks that will be designed to dissolve their increasingly uncertain alliance, but mostly to raise a chorus of calls from the usual commentariat for us to make a few “small” concessions that will be calculated to lower the South’s military and ideological defenses, skirmish by skirmish and crisis by crisis, against North Korean hegemony and remote control through a confederation.

To know whether we can deter Pyongyang, we must know what we’re deterring. It is as true — and as irrelevant — that we can deter a 1950-style invasion or a nuclear first strike on Seattle as it was true 80 years ago that the Maginot Line could protect Alsace-Lorraine from Hindenburg’s Prussian cavalry. Whether you believe that Pyongyang’s war-of-skirmishes strategy is plausible matters less than whether a petulant, impulsive, morbidly obese, and psychotic 33-year-old heir to a medieval dynasty who has never heard the word “no” does.

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Maximum Pressure Watch: Trump puts the squeeze on Kim Jong-un

Donald Trump hit Kim Jong-un with his first sanctions executive order today. The new EO partially implements UNSCR 2371, UNSCR 2375, and the KIMS Act, which the President signed in August. As a strictly legal matter, this EO will not affect anyone’s interests immediately because Treasury didn’t announce any new designations. As a practical matter, however, we may already be seeing the effects of the clear seriousness of purpose that Trump has already shown. You can read the full text here and a White House fact sheet here.

The New Authorities: A Summary

The new provisions broaden the administration’s authority to designate (and thus, freeze any assets within U.S. jurisdiction of) entities that engage in the conduct described below:

  • (i) Sectoral sanctions against anyone determined “to operate in the construction, energy, financial services, fishing, information technology, manufacturing, medical, mining, textiles, or transportation industries in North Korea.”

Treasury previously authorized sectoral sanctions against anyone operating in North Korea’s the mining, energy, transportation, and financial services industries. The newly designated industries include those sanctioned under the new U.N. resolutions and the KIMS Act. Sanctions on the medical industry are a notable exception. This will draw gasps of horror from some, but remember, there’s still a humanitarian general license that exempts “medicine distribution” and “the provision of health services.” Section 7 of the EO exempts UN operations entirely. So why say “medical” at all? The feds may suspect Pyongyang of hiding behind “medical” uses to make biological weapons, but that’s only a guess.  

  • (ii) Shipping sanctions against anyone who owns, controls, or operates any seaport, airport, or land port of entry in North Korea.
  • (iii) Import-Export: “to have engaged in at least one significant importation from or exportation to North Korea of any goods, services, or technology.”

Executive Order 13570 previously banned unlicensed imports and exports between the United States and North Korea. This provision, by contrast, bans any transactions through the U.S. financial system, or by U.S. persons, that facilitate imports to or exports from North Korea by anyone, to or from any country. In effect, if you trade with North Korea now, you have to use a non-dollar currency or get an OFAC license.

  • (iv) Status-based: “to be a North Korean person, including a North Korean person that has engaged in commercial activity that generates revenue for the Government of North Korea or the Workers’ Party of Korea.”

This effectively cuts the Gordian Knot around the spurious claims of China (or this one, by Tanzania) that the North Koreans they’re dealing with aren’t representatives of the North Korean government. Hopefully, Treasury will now start mining names out of the U.N. Panel of Experts reports and designating the members of Pyongyang’s overseas proliferation and money laundering networks, thus putting the banking industry on notice to freeze their accounts.

I’m glad Treasury exempted North Koreans (including refugees) who are legally in the United States. I would have preferred that Treasury had clarified that North Korean refugees in Europe and South Korea are also exempt. I realize that Treasury has no intention of enforcing sanctions against refugees in England or South Korea — and I hope the banks realize this, too. Some clarifying guidance from Treasury might be useful. Refugees in South Korea, in particular, often keep their family members alive by remitting money to them. As I’ve argued before, remittances might be a rare case of financial interaction with North Korea that actually does drive reform, by helping the poor start businesses and achieve financial independence from the state. Thankfully, a general license covers noncommercial, personal remittances.

Things start to get more interesting in Section 2, which provides for a secondary boycott on ships and aircraft. Under the EO, any ships or aircraft that have been in North Korea in the last 180 days can’t land in the United States. This both overlaps with and complements section 315 of the KIMS Act. It is also the same concept that Japan and South Korea had previously applied to North Korean ships, meaning that ships that visit North Korea will now incur a six-month ban from the waters of China’s three largest trading partners. Furthermore, any ship that has done a ship-to-ship transfer with a ship that has been in North Korea in the last 180 days also gets banned from U.S. ports for 180 days. Shipping trackers suggest that a fair number of these transfers are happening off the Chinese coast. A concern, however, is that the existing humanitarian general license may not cover shipments of commercial food imports (which we should want to encourage).

Section 3 contains some very tough secondary financial sanctions. Section 3(a) freezes any funds controlled by a “North Korean person,” or in which a North Korean person as an interest. This is very powerful — much like its ancestor, section 104(c) the NKSPEA, which blocks all property of the “Government of North Korea,” a term that the NKSPEA defines in roughly similar terms to this EO’s definition of “North Korean person.” The EO also extends the blocking to any person who finances, approves, facilitates, or guarantees a transaction that would be frozen under this paragraph.

Section 4 contains some additional penalties that are tailored to the financial industry. Any person who knowingly conducts or facilitates a transaction in property blocked under a North Korea-related executive order, or who knowingly conducts or facilitates a significant transaction in trade with North Korea, can lose access to the U.S. financial system. That potentially means no correspondent accounts, or the freezing of all of the bank’s assets in the United States. This amounts to a mini Patriot Act section 311 just for North Korea. And of course, banks that knowingly deal with Pyongyang could also face prosecution for money laundering, criminal or civil forfeitures, or the kind of civil penalties that were applied to BNP Paribas for violating Iran sanctions.

Which is to say, this section mostly does what section 104(b) of the NKSPEA does, now that President Trump has signed the KIMS Act section 311 amendments into law.

 We sound like we really mean it this time.

The effects of previous, strong-on-paper EOs fell short of their potential because President Obama never showed the world that he was serious about enforcing them (or rather, until the very end of his administration, he showed the world that he wasn’t serious about enforcing them at all). Let no one accuse Donald Trump of indecision or paralysis.

“A new executive order will cut off sources of revenue that fund North Korea’s efforts to develop the deadliest weapons known to humankind,” Trump said at the start of a trilateral luncheon meeting with South Korean President Moon Jae-in and Japanese Prime Minister Shinzo Abe in New York….

Trump said China’s central bank had just told the country’s other banks to “immediately” stop doing business with North Korea, and thanked Chinese President Xi Jinping for that “unexpected” decision.

“For much too long North Korea has been allowed to abuse the international financial system to facilitate funding for its nuclear weapons and missile programs,” he said. [Yonhap]

Take note, humanity: Donald Trump just said the right thing in the right tone, and it all appears to be true, right down to “unexpectedly.” Then, Treasury Secretary Steven Mnuchin said this at the U.N., just to be sure the whole world heard him:

For far too long, North Korea has evaded sanctions and used the international financial system to facilitate funding for its weapons of mass destruction and ballistic missile programs. No bank – in any country – should be used to facilitate Kim Jong-un’s destructive behavior.

This new Executive Order will authorize Treasury to impose a range of sanctions, such as suspending U.S. correspondent account access to any foreign bank that knowingly conducts or facilitates significant transactions tied to trade with North Korea or certain designated persons.…  Foreign financial institutions are now on notice that, going forward, they can choose to do business with the United States or with North Korea, but not both….

We call on countries around the world to join us by cutting all trade and financial ties with North Korea in order to achieve a denuclearized Korean peninsula. [link]

Finally, in a conference call this afternoon, a senior National Security Council official and a senior Treasury Department official (whom we weren’t allowed to name) emphasized the administration’s seriousness. Some key points:

  • This EO goes further than any other sanctions EO — implicitly, including even Iran. He might be right. I might have to shelve my “not the most sanctioned” refrain, assuming the administration enforces this.
  • Treasury will unravel the front companies and shell companies to get to any shipping company that smuggles to or from North Korea in violation of this EO.
  • Treasury is investigating financial institutions that have been involved in facilitating trade with North Korea, and will start enforcing this EO in the near term.
  • Treasury won’t only enforce the EO against Chinese banks. Before the President signed the EO, the administration discussed it with EU, Japanese, and South Korean officials. Oh, and Treasury would really like the South Koreans to use the full extent of their legal authority to publish their equivalent of SDN designations of North Korean enablers.
  • Also, it welcomes the investigative work of NGOs, specifically C4ADS (which single-handedly exposed much of Pyongyang’s money laundering network in China). I hope that means the government will offer them grant funding or rewards, as authorized in section 323 of the KIMS Act. (Leo Byrne and The Beard of Knowledge also received well-deserved praise.)

 Signs of impact on North Korean trade

So, you ask, will the Chinese banks finally listen? I’ve cited the evidence that they already are. Fuel prices in North Korea have spiked, North Korean workers are flooding back over the border to China, and trading companies in China are effectively out of business and unhappy about the freezing of their bank accounts. The coal industry, which has taken some hard hits from the Treasury and Justice Departments lately, is also showing the strain. These things could be consequences of the banks telling their customers to de-risk North Korea. We may soon find out just who’s right here.

Today, Reuters reports that the Chinese government has directed its banks to stop dealing with North Koreans entirely, to include winding down loans with existing customers. If that’s true — and if it lasts — that will be fatal. The timing is curious. One of the “senior administration officials” said that President Trump had only notified President Xi about this EO today, yet the reports of the alleged Central Bank order — the bankers say they received it Monday — come a week after multiple press reports of Chinese banks closing North Korean-controlled accounts. Could Beijing be making a virtue of necessity by ordering banks to do what they’re already doing for their own sake? As I’ve said before, there isn’t just one “China.” Various ministries and industries have diverse and conflicting interests.

This week, President Trump acted strongly, decisively, publicly, and with a deliberate seriousness of purpose. Banks and governments around the world will disregard his words at their peril (meaning, very few of them will). His misbegotten threats against North Korea (as opposed to its regime) shouldn’t distract us from what he did right, if only because his predecessors could not do it right. His words and actions, and in tandem with other governments’ actions to cut their trade and diplomatic ties to North Korea, should be difficult for Pyongyang to withstand for long. We may soon conclude the sanctions-never-work portion of our narrative and enter the sanctions-are-starving-North-Korean-babies portion of our narrative fairly soon. In fact, it looks like we already have.

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Save North Korean Refugees Day: This Friday, September 22nd

What sort of place could be so horrible that a family of five would choose to die together rather than be sent there? The answer, of course, is this place, or this one, or this one, or this. Here is the story of a family that made that choice.

A North Korean family of five, including a former senior official of the Workers Party, committed suicide last week after they were caught by Chinese police and faced deportation to the North. They were heading to South Korea.

Activist Kim Hee-tae told the Chosun Ilbo on Sunday, “Fifteen defectors who were on their way to South Korea were caught by police in the Chinese province of Yunnan a week ago.”

“They killed themselves by taking poison after they were taken to Shenyang, Liaoning Province three days ago and faced deportation to the North,” he added. They were a 50-something senior official of a regional agency of the Workers Party, his wife, son and two daughters.

“Right after they were caught in Yunnan, they tried to bribe their way out through a local fixer, but once they were taken to Shenyang they probably lost hope and killed themselves,” Kim speculated. [Chosun Ilbo]

The story was also reported by Radio Free Asia. Otherwise, the U.S. and foreign press almost completely ignored the story. Did they fail to even investigate it, or did they run into a stone wall in trying to find the truth in China? I wonder if we will ever even know their names. Try to imagine the moment of that terrible choice. Imagine the words they spoke to one another as they prepared for that possibility. Imagine their thoughts as they all realized that they would have to go through with it. Imagine their last words to each other. Imagine what dreams, aspirations, and potential the children might have had to live lives that we, in our ingratitude, refer to as “normal.” They are not alone in making that choice.

China’s long-standing policy of forcible repatriation of North Korean refugees only complicates the dangers and difficulties faced by refugees. China does not consider North Koreans refugees but illegal economic migrants to be sent back to their home country, under a border protocol agreed upon in 1986.

“Many of the refugees carry razor blades to slit their wrists or arsenic with which to commit suicide in case they are forcibly repatriated,” Peters said. [S. China Morning Post]

Now, imagine the cruelty of governments that inflict this on people for no greater crime than aspiring to eat, to survive, to live a life that is better than slavery. Imagine the cruelty of a government — of China’s government — which sends them back to a fate this family judged to be far worse than the death it chose instead.

Then, come out Friday and protest against it, on Save North Korean refugees day.

Even in China, where the government has increased its repatriations of refugees to North Korea, and even pays bounties for their arrests — repatriations that a U.N. Commission of Inquiry has described as complicity with crimes against humanity — there are signs that public anger at North Korea’s belligerence is growing.

In South Korea, there are also growing doubts about the government’s commitment to the protection of North Korean refugees. The president himself is a former member of a hard-left lawyers’ group that is trying to violate refugees’ right to confidentiality. One South Korean official was recently charged with selling refugees’ personal information — information that could be used to identify and intimidate North Korean refugees by threatening their families inside North Korea, and to force them to “re-defect.” Hundreds of North Korean refugees who had made it to South Korea are unaccounted for. Most are believed to be in foreign countries, but which countries?

Our news media hardly paid any attention to the tragedy of the Yunnan Five, but Pyongyang certainly did. It launched a massive security crackdown to cover their story up, to punish those who failed to prevent their escape, and to track down anyone who might have helped them escape. In North Korea, any lapse in brutality begets greater acts of brutality, and everyone is a hostage to the obedience of everyone else. Truth is the greatest enemy of the state, because even the most repressive states know that the truth will eventually destroy them.

In the last year, the number of defectors from the military and the elites has risen. The defectors now include even diplomats, senior officials from the internal security forces, and workers posted overseas. If only for utilitarian reasons, we should look on refugees as potential allies. Consider, for example, the Justice Department documents that have cited the testimonies of refugees in forfeiture suits against regime funds. If the humanity of North Korean refugees isn’t reason enough reason to support their cause, the fact that they can help us bankrupt Kim Jong-un and break his hold on power should be. But for now, the regime is winning its war against its people. Although more members of the elites are escaping, the overall number of North Koreans who successfully escape continues to fall because of Kim Jong-un’s border crackdown.

That is why Pyongyang is so desperate to intimidate Seoul into returning refugees, or to intimidate the refugees themselves into “re-defecting,” so that it can put them on display as examples to other North Koreans, and as propaganda props to deceive gullible journalists (and thereby, us). Koreans — don’t turn away from your brothers and sisters. Americans — don’t let our government forget these people. Doing so is short-sighted. It is against our interests. It is against our values. It is not who we are. Please share this post, and join us this Friday.

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Organized crime enters North Korea’s markets

From the perspective of North Korea’s poor, the era of Kim Jong-un has been a time of increasing state control over information and borders, but also a time when the state has taken a relatively (by North Korean standards, anyway) laissez-faire approach to market trade. There are exceptions, of course, including crackdowns on South Korean imports and on the Chinese mobile phones that could have made cross-border trade so much more efficient, but the general trend is for State Security Department officers to collect taxes — and bribes, of course — and let merchants work out affairs among themselves.

Inevitably, that has led to the rise of an industry of men who will, for a price, help people “work out affairs” among themselves. In this sort of system, the litigant with the most wealth and power has the advantage and invariably uses it to suppress competition.

“Wealthy and powerful donju and merchants often hire mob members to secure their business interests. The mobs have contacts in powerful organizations, so as long as they pay bribes to various officials, they are untouchable by ordinary citizens.”

According to the source, there is an unwritten rule in North Korea’s markets to not intrude in each other’s business areas. There are also frequent cases in which trust has been established between merchants who acquire products and donju who provide cashflows, featuring transactions with ‘post-payment systems’ for half of their trade money. [Daily NK]

Local merchants also use violence to control prices, including by beating up merchants who undercut their competitors’ prices. The police don’t care, so “muscle has become the rule of law in the markets.”

“In July, a woman in Pyongsong City requested a mob member take care of a merchant who stole the donju she was trading with. The merchant was attacked with a knife and left with an ugly scar on his face, although he was not seriously harmed,” a separate source in South Pyongan Province reported. As such, she explained, locals are increasingly saying that in order to survive in the markets, one needs to be fiercer than wolves without a conscience, and that the law is useless and safety is only assured via close relations with mob members.

The Daily NK reports that sanctions are exacerbating the ferocity of competition for certain products, like solar panels, and causing “frequent conflicts” among merchants. That is too bad, because solar panels help people to achieve a degree of independence from state control. There are no U.N. or U.S. sanctions that prohibit the export of solar panels to North Korea, but it’s possible that de-risking by banks and the freezing assets of state-connected trading companies is having spillover effects. That’s to be expected, I suppose. One hopes that in time, small independent traders will find ways to supply this demand.

The real story here, however, may be that Pyongyang is starting to cede its monopoly on the use of violence, a subject that Thomas Hobbes and Max Weber both wrote about extensively. This is not to say that organized crime in North Korea is entirely new. Pyongyang has long partnered with organized crime groups in Japan to skim off pachinko revenue or the Russian mob distribute counterfeit $100 bills. Some scholars believe that Pyongyang largely outsourced its drug trade to organized crime groups a decade ago. Others say that North Korea’s government is itself an organized crime family with a flag and a seat at the U.N.

What is new is that ordinary, non-elite North Koreans are now going around the state to seek justice, or injustice, through violent means from providers that the state itself does not tolerate, but which its corrupt police do, for a fee. The inevitable reaction to this will be, first, a loss of legitimacy by the state, and eventually, the rise of vigilantes, perhaps backed by mediators and informal courts, to keep the peace that the state will not. As with the rise of guerrilla journalism and guerrilla clinics, the rise of guerrilla justice would be an important step toward the creation of undergovernments like the ones I wrote about here.

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The State Department’s efforts to isolate Pyongyang are starting to pay off

The reviews of Rex Tillerson are in, and most of them aren’t good. We could have predicted this ten months ago; after all, most of the commentariat harbors center-left or pro-“engagement” views and it wasn’t going to agree with Trump’s policies anyway. Still, it’s hard for me to accept at face value the criticisms of those who have defended, to varying degrees, the self-evidently disastrous North Korea policies of Barack Obama and second-term G.W. Bush — policies that have more similarities than differences. It’s an additional challenge to separate one’s views of this President and his Twitter habits from an assessment of his North Korea policies, or how competently his administration has executed them. Still, one can agree with Trump’s decision to break from the failed policies of his predecessors, which brought us to this crisis, and still acknowledge that some of the criticism has merit. Overall, this administration is getting more things right than its predecessors did, but let’s start with the areas that need improvement.

~   ~   ~

First, an effective Secretary of State speaks articulately for his country. Tillerson isn’t a vocal or charismatic advocate of our interests or of the values that serve those interests. I can understand why Tillerson might be more concerned than his predecessors about upstaging his boss, or about saying something his boss might contradict later on Twitter. Maybe the recent diminution of the nationalist wing in the White House will liberate Tillerson, but his reticent personality may also be part of the problem. 

The State Department’s hiring freeze, which continues months after it was lifted for the rest of the government, retards the pace at which State can review and approve sanctions designation packages and dispatch envoys to persuade other nations to cut their ties to Pyongyang. I don’t yield to anyone as a critic of the State Department’s performance on North Korea policy or in agreeing that State needs some profound cultural and personnel changes. Agreed Frameworks I and II and the Leap Day Agreement have justly cost it credibility it may never regain. Even so, the President needs a strong diplomatic corps to build a global coalition against Pyongyang and, when the time is right, to know how to leverage that pressure to achieve our core interests in negotiations with our frenemies and our foes. We need good diplomats for both tasks.

Tillerson has also sent mixed signals on its willingness to negotiate with Pyongyang. His recent statement complimenting North Korea for not launching a missile against Guam resulted in a predictable embarrassment — he might as well have dared Kim Jong-un to test a nuke.

Tillerson’s greatest error on North Korea policy, however, has been to overlook the importance of human rights as a key element of U.S. policy, and as an argument for a global coalition against Pyongyang (for more on that point, see this by the Heritage Foundation, no less). Tillerson himself referred to the “moral dimension” of isolating Pyongyang, saying, “These first steps toward a more hopeful future will happen most quickly if other stakeholders in the region and the global security (sic) join us.” 

Yet by merging the duties of the Special Envoy for human rights into another full-time position, and by explicitly disavowing any efforts to destabilize the regime, Tillerson is throwing away the very leverage he imagines he’s clinging to when he says, “All options are on the table.” Pyongyang dismisses this as a bluff, but friends whose support we’ll need don’t. It’s our talk about human rights that really terrifies Pyongyang. What Kim Jong-un and his generals see in their nightmares is a day when they’ve lost control of the minds of the North Korean people, and can’t afford to pay, equip, or maintain the security forces to suppress 70 years of grievances from those they’ve cheated, abused, and bereaved.

By ceding human rights, Tillerson is missing an opportunity to build a global coalition around the principles articulated in the U.N. Charter. And no one has a greater need of a persuasive public advocate than a Secretary of State who isn’t one himself. Also, Pyongyang thinks we’re trying to overthrow it anyway. If anyone asks us if we’re encouraging the North Korean people to overthrow His Porcine Majesty, we shouldn’t say we are or that we aren’t. We should just be vague.* Let our frenemies and foes use their imaginations and be afraid of what we’ll do if diplomacy fails.

~   ~   ~

Still, let’s give Tillerson credit where it’s due. He can boast of some successes here that build on the significant gains that Yun Byung-se achieved before Park Geun-hye’s impeachment. He probably deserves some credit for getting two useful resolutions (2371 and 2375) through the U.N. Security Council, although Ambassador Haley and the USUN staff probably deserve most of it. Liberals tend to overestimate the moral authority of U.N. resolutions, while conservatives tend to underestimate their utility in getting wavering, reputation-conscious states to put economic and diplomatic pressure on Pyongyang. In fact, U.N. and U.S. national sanctions are mutually complementary. Neither works very well without the other.

There has also been significant progress toward isolating Pyongyang internationally, consistent with what Tillerson called for in this April 28th speech to the U.N.: first, to implement existing U.N. Security Council resolutions; to suspend or downgrade diplomatic relations with North Korea; and third, to isolate North Korea financially — a request Tillerson delivered with an explicit threat of secondary sanctions.

Recently, State’s efforts to disconnect North Korea’s diplomatic and trade links to the global economy have gained momentum. Start with this post from February and this one from June on Tillerson’s slow start. This post from August documents the first public signs of the administration’s efforts, through the spring and summer, to get southeast Asian nations to cut their ties with Pyongyang. Although State Department people say that much of this work is being done quietly and without publicity, in recent weeks, there have been more public reports that those efforts are starting to pay off — in some cases, because we’re backing them with threats.

  • 8/31: Spain says it will reduce the number of North Korean diplomats in its country.
  • 9/7: Mexico expels North Korea’s ambassador over its latest nuclear test.
  • 9/8: The Philippines’ Foreign Secretary says his country, which had recently become one of Pyongyang’s largest trading partners and a haven for drug dealing and money laundering — including the proceeds of the Bangladesh Bank/SWIFT hack — will end all trade with North Korea.
  • 9/9: Trump and Abe ask the President of France to increase pressure on North Korea.
  • 9/10: Japan’s Foreign Minister asks Qatar to stop using North Korean slave labor, before visiting Saudi Arabia and Egypt.
  • 9/11: Peru announces that it will expel the North Korean ambassador.
  • 9/11: Japan’s Foreign Minister, having failed to extract commitments from Saudi Arabia and Qatar to stop buying slave labor from North Korea, takes his appeal to the Arab League.
  • 9/12: President Trump meets with the Prime Minister of Malaysia, a haven for North Korean money laundering, and says (for what it’s worth) that Malaysia had agreed to stop doing business with Pyongyang.
  • 9/12: Egypt, a major and long-standing North Korean arms client, says it will cut its military ties to Pyongyang after the U.S. withholds an aid payment (more here).
  • 9/18: Vietnam expels another representative of the U.N.-designated Tanchon Commercial Bank.
  • 9/18: Kuwait says it will expel North Korea’s ambassador and reduce the size of its embassy staff from nine to four.
  • 9/28: Poland halts temporary residence and work permits for North Koreans, Sri Lanka restricts visas for North Koreans, Malaysia bans most travel to North Korea.
  • 10/1: Italy expels North Korea’s ambassador.

Reducing North Korea’s diplomatic presence abroad is essential to any campaign of diplomatic pressure, because North Korea’s diplomats do double-duty as arms dealers and money launderers. Of course, some important caveats apply. First, take any government’s promise to cut ties with North Korea with several grains of salt. For example, last November, Sudan said it would cut its military ties to North Korea, but as of July, the U.S. was still urging Khartoum to keep its promise and threatening to cut aid. Namibia promised to cut its military ties to North Korea, but we later learned that this wasn’t true, either. Second, Rex Tillerson cannot take full credit for this strategy, merely for his part in executing it. In the final months of the Obama administration, State Department official Danny Russel said that the U.S. has asked governments around to “downgrade or sever” their diplomatic relations with North Korea.

I’ve long argued that diplomacy would play a critical role in addressing the collection of crimes and crises collectively known as “North Korea.”  The theory I’ve advanced is what I call “progressive diplomacy,” which means that we should build coalitions with friendly and persuadable nations before we attempt to negotiate with hostile ones. Our objective should be to isolate Pyongyang and its allies until we have sufficient leverage for negotiations to have a chance of achieving our interests. Rather than approach Pyongyang now, while its leverage exceeds our own, we should approach friendly states (South Korea, Japan, Canada, the UK, the EU, Singapore, Panama) first and ask them to cut their economic and diplomatic ties to Pyongyang. Our next targets should be wavering states (Malaysia, Zambia, Namibia), then Pyongyang’s more willful enablers (China, Russia) and finally, Pyongyang itself. That sequence maximizes our leverage at each stage of this diplomatic process by approaching hostile states only after they are relatively isolated.

For the last 20 years, we’ve had that sequence entirely wrong. Give Rex Tillerson credit for getting it right, and for what he has done in the last several months to translate that strategy into policy. If the unplugging of Pyongyang’s diplomatic and financial links to the world is starting to cause it pain, and there are growing signs that it may be, I would expect Pyongyang’s provocations to escalate. Contra the pro-engagement critics who characterize each new nuclear and missile test as proof that sanctions aren’t working, it’s at least as likely that those escalating provocations are signs that they are. 

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* I don’t advocate a declared policy of “regime change.” First, what those words mean to most people (as in, invasion) would be disastrous for Korea. Second, it’s no use proclaiming a policy that can’t be explained or defended publicly, and a subversion project would necessarily include overt, covert, and clandestine elements. Our public position should be that nations are obliged to consider what their trade is supporting, that our financial system is closed to those who aid and abet crimes against humanity, that we will prioritize giving the North Korean people freedom of information, and that it is for the North Korean people to decide how they will use that information.

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Updates:

  • 7/19: Spain says it will expel the North Korean ambassador.
  • 7/19: Kuwait and Qatar both say they will stop issuing visas to North Korean workers. Qatar reportedly hosts 1,000 workers whose contracts will expire in 2018. Kuwait hosts 3,000 more.
  • 7/19: Taiwan says it will halt oil and LNG exports to North Korea, and will also halt textile imports (as required by UNSCR 2375).
  • 7/22: Taiwan adds that it will end all trade with North Korea. Taiwanese suppliers have previously exported dual-use machine tools to North Korea.

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South Koreans like Moon Jae-in personally, but are uneasy with his North Korea policies

If Moon Jae-in and his inner circle are, in the pits of their souls, as extreme as I think they are, why hasn’t Moon moved forward with his plans to reopen Kaesong, or Kaesongograd? Probably because he can read a poll, such as this one from the center-left Korea Herald:

A recent poll by Gallup Korea, conducted from Sept. 5, after the Sept. 3 nuclear weapons test by the North, shows a clear sign of hardening attitudes among South Koreans.

Of 1,004 respondents, 76 percent considered the sixth atomic detonation as a threat to security. But when asked if they thought the North would initiate a war, only 37 percent answered it was possible, while 58 percent responded that that was little to no chance of such an outcome.

However, 60 percent approved of South Korea rearming with nuclear weapons to respond to the North Korean threat, while 35 percent opposed the idea.

US tactical nuclear weapons were withdrawn from South Korea in 1991, when the two Koreas signed an agreement on denuclearization, non-aggression and reconciliation. While the South has clung to the principle of a neclear-free (sic) Korean Peninsula, the North has abandoned it, conducting six nuclear tests so far.

While nuclear rearmanent (sic) is mainly pushed by conservatives that pursue tougher policies against the North, more liberal voters also appeared to be in support of the idea, the data showed. Of the 353 respondents who viewed themselves as liberals, 47 percent approved of stationing nuclear weapons here, while 48 percent of the group opposed the idea.

What is more surprising perhaps is that more Koreans even said that humanitarian aid should be cut if the North does not give up its nuclear program.

In 2013, a Gallup poll showed that 47 percent of South Koreans said that humanitarian aid should continue even if North Korea continues its nuclear program.

In the latest poll, the figure dropped to 32 percent, while the proportion of South Koreans opposed to the idea rose to 65 percent.

Left-leaning respondents were also skeptical of offering any kind of humanitarian aid, with 52 percent of them calling for a halt. [Korea Herald]

The Asan Institute’s latest update also cites a Gallup Korea poll indicating that 60 percent of Koreans want nukes, with just 35 percent opposed. Oh, and Moon’s approval rating has fallen into the low 70s (!). According to Asan, this modest decline “appears to be driven by his failure to address the North Korean nuclear problem.”

I’ve never questioned that Moon is an extraordinarily talented politician. He’s clearly no fool. He carefully avoided the extreme rhetoric espoused by just about everyone around him throughout his career while casting himself as a nice, sensible person. Nice goes a long way in politics, but after every honeymoon comes laundry day.

When a politician takes office, the mainstream wants to believe the best about him. For its own sake, it wants him to govern well and succeed. The base wants to believe that he will do the extreme things he promised (or implied) when no one from the Chosun Ilbo was listening. For a while, that means that both the base and the mainstream will align. Both will favor the politician, and there will be a window of irrational exuberance. Then, the politician takes a few polls and realizes that if he goes where the base wants him to go, the mainstream will repossess his parliamentary majority. The politician hesitates and the base feels betrayed (and in Korea, that tends to mean roadblocks, Molotov cocktails, tear gas, and billy clubs — and a lot of nasty, misogynistic invective from Pyongyang).*

Moon can’t please everyone. And increasingly, his positions on security will cost him political support. Late word is that Moon has ruled out the acquisition of South Korean nukes; his people, who justifiably question the wisdom of entrusting their freedom to a mercurial and intermittently isolationist guarantor half a world away, want them. Moon wants to reopen Kaesong or open Kaesongograd; the majority does not. Moon wants to give the North humanitarian aid; the majority does not. And the crazy old uncle in Moon Jae-in’s attic just keeps coming downstairs to talk about the freeze proposal that the rest of Moon’s cabinet was so recently forced to disavow.

What’s unfortunate is that Moon could be remembered as one of Korea’s most popular and effective presidents if he’d focus his attention on needed social, economic, and legal reforms — breaking up the chaebol, increasing competition and free trade to lower consumer prices, shortening the work week and letting workers spend Saturdays with their families, reforming libel laws, increasing welfare programs for the disabled, limiting the powers of police and prosecutors, introducing the right to trial by jury, and improving worker protections like overtime pay. I’m not sure you can call 41 percent a mandate, but a 72 percent approval rating certainly translates to political power of some kind. Moon is at the height of his popularity and power. A decision to squander that power on quixotic and unpopular policies to appease an unappeasable Kim Jong-un beggars a rational explanation. It even suggests not-so-rational ones.

Ever since it became inevitable that Moon Jae-in would become South Korea’s next president, it was clear that our next POTUS would need a Moon Jae-in mitigation plan. The best possible mitigation plan is to defer to a voting public that hasn’t completely taken leave of its senses. The public’s moderation is all the more impressive in light of the fact that Moon has no credible political opposition to speak of. These polls are also a useful check against overinterpreting the policy views of the millions of Koreans who took to the streets so recently to oust Park Geun-hye from office.

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* Now here’s an interesting study in media bias for you. The Daily Beast and Xinhua cover the same protests. The Daily Beast says “violent protests,” and Xinhua says “violently dispersed.” Let me take this occasion to thank Xi “Winnie the Pooh” Jinping for all he has done to provoke this moderate backlash by South Koreans. We truly couldn’t have achieved this impressive result without him.

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Chinese banks are cracking down on N. Korean money laundering again. Will it last this time?

Several news sources are reporting that Chinese banks, particularly in China’s northeast, have started to freeze or close accounts held by North Korean individuals and businesses. The Daily NK, citing unnamed local sources, was the first to report this potentially important development. It says both large state-owned banks (such as the China Construction Bank) and regional banks (such as Pudong Bank) recently banned all North Koreans from opening new accounts and ordered the closure of existing accounts. It also quotes a March 2017 report by Radio Free Asia that “[p]rivate Chinese banks are beginning to close bank accounts held by North Korean nationals” and that “North Korean laborers earning foreign currency in China have been issued an emergency alert.”

Kyodo News, citing “sources familiar with the situation,” says that the new measures have made it “nearly impossible to do business between the two countries.” It reports that the Bank of China, the China Construction Bank, and the Agricultural Bank of China branches in Yanji, have all banned North Koreans from opening accounts. The banks have not yet frozen the accounts, meaning that the North Koreans can still withdraw cash, but they can’t make deposits or remittances. According to an unnamed employee of one of the banks, “This is being influenced by international sanctions against North Korea.”

Kyodo speculates that either “China may have become more serious about curbing its nuclear ambitions,” or that the measures were “intended to help major Chinese banks avoid being hit by sanctions imposed by the United States and other countries,” like the Bank of Dandong was. Interestingly, it also attributes a 75 percent decline in North Korea’s imports of refined petroleum products over three months, and a corresponding rise in fuel prices inside North Korea, to the fact that “North Koreans were having difficulty paying for petroleum product imports because of the banking restrictions.”

Reuters, citing a bank teller in Liaoning, reports that the China Construction Bank “completely prohibited business with North Korea” starting on August 28th. A customer service representative for the Industrial and Commercial Bank of China also told Reuters that the bank “had stopped opening accounts for North Koreans” and (for good measure) Iranians on July 16th, but didn’t explain further. Those dates closely follow a series of forfeiture complaints, seizures, and designations by the Justice and Treasury Departments, most of them targeting financial flows through Chinese banks, involving North Korean front companies, which turn out to be less well hidden than many “experts” had assumed.

The Bank of China, which became a bête noire for Congress much earlier than other Chinese banks over revelations that its Singapore branch willfully helped Chinpo Shipping facilitate money laundering (and indirectly, arms smuggling) for His Porcine Majesty, stopped allowing North Koreans to open accounts at the end of last year. Or so says an unnamed teller at the BoC’s Dandong branch, who adds that the BoC also froze existing North Korean accounts. A teller at the Agricultural Bank of China branch in Dandong also said that BoC was refusing to open new accounts for North Koreans.

The Financial Times also reports that “multiple bank branches,” including those of China’s big five banks, “had imposed a freeze on new accounts” for North Korean individuals and companies, and that some of the banks were also “cleaning out” existing North Korean accounts and banning North Koreans from making new deposits. Officials at all of the banks refused to comment.

Both the FT and the Daily NK note that the banks’ new measures exceed what new U.N. sanctions require, but all of the reports fail to note that these actions would be completely consistent with stricter U.S. financial regulation on North Korean money laundering, along with the aforementioned recent actions by the Treasury and Justice departments, showing that the feds can trace North Korean transactions through specific Chinese banks — including those named in these reports — and are willing to take legal action against them. Some sources told the FT that corporate told them to freeze North Korean accounts in August; others said they were told in January.

Unfortunately, the Daily NK reports that North Koreans affected include not only “consular officials” and state trading companies, but also “laborers,” who may be either illegal (and increasingly scarce) migrant workers or state-contracted slave laborers (the report didn’t specify). Either way, that’s an unfortunate and unavoidable consequence of what would be an extremely important development — if it lasts. The FT quotes a Chinese professor of North Korea studies, who puts a brave face on the actions, saying that the actions benefit China, and that “China takes sanctions very seriously.” Stop laughing, dammit — this is a serious, adult conversation about banking regulation.

~   ~   ~

The FT calls this “unprecedented,” but it really isn’t (of the five news sources I cite here, only the Daily NK gets this). There is, of course, the example of Banco Delta Asia and what we too easily forget — the Bush administration’s global campaign of financial diplomacy that persuaded banks around the world to close North Korean accounts. We now know that that strategy put Kim Jong-Il’s regime under severe financial strain, until Bush lost his nerve, lifted the pressure, and exchanged invaluable sanctions relief for a handful of worthless North Korean promises.

Then, in 2013, after Pyongyang’s third nuclear test, after Treasury sanctioned the DPRK Foreign Trade Bank, and after Ed Royce first introduced the bill that would later become the NKSPEA, which mandates secondary sanctions, big Chinese banks began to freeze and close North Korean accounts. It didn’t last, because the banks soon saw that Xi Jinping wanted those accounts open more than Barack Obama wanted them closed. The same pattern repeated itself in early 2016, and again (as Justice Department filings later showed) it was right back to business as usual a few month later, again because the Obama administration wasn’t willing to back its sanctions with enforcement actions.

Is this time any different? The answer depends on why the banks are doing this. As noted, what the banks are doing here doesn’t exactly align with what the U.N. resolutions require, but it aligns perfectly with what I’d expect inexperienced Chinese compliance officers to do to protect their banks from rising legal risks under U.S. banking and sanctions laws. In this post, I explained the importance of distinguishing the interests and actions of the Chinese government from those of individual Chinese banks, which are actually global corporations with global exposure. In other words, “Chinese” banks may be bending to Treasury’s will for the same basic reason that U.S. tech companies have collaborated with Chinese censors. My belief that the Chinese security establishment is fundamentally hostile to U.S. interests and thus willfully weaponizing North Korea remains unmoved. On balance, it seems more likely that the banks are doing this to protect their own reputations, credit ratings, and share prices — just as the Chinese Finance Ministry wants them to, and just as the Defense and Foreign ministries don’t.

Also, when is the last time an American Secretary of the Treasury said anything like this?

“If China doesn’t follow these sanctions, we will put additional sanctions on them and prevent them from accessing the U.S. and international dollar system — and that’s quite meaningful,” Mnuchin said during an event at CNBC’s Delivering Alpha conference in New York on Tuesday. [….]

“North Korea economic warfare works,” Mnuchin said. “We sent a message that anybody that wanted to trade with North Korea — we would consider them not trading with us.” [Bloomberg]

Next, read this excerpt from the written testimony of Assistant Secretary of the Treasury Marshall Billingslea before the House Foreign Affairs Committee yesterday. Billingslea first explains that Treasury works closely with U.S. allies, the intelligence community, and the State Department to “conduct detailed forensic investigation and analysis” to “deny North Korea its current, principal source of funds.” He goes on to say that while we prefer to have Beijing’s voluntary cooperation, we’re also perfectly willing to hit Chinese targets we don’t get it.

For instance, on August 22, we struck at the heart of North Korea’s illegal coal trade with China.  Treasury designated 16 individuals and entities, including three Chinese companies that are among the largest importers of North Korean coal.  We estimate that collectively these companies were responsible for importing nearly half a billion dollars’ worth of North Korean coal between 2013 and 2016.  These funds are used to support the Government of North Korea and the Workers’ Party of Korea, including its nuclear and ballistic missile programs.  On top of that, we know that some of these companies were also buying luxury items and sending an array of products back to the North Korean regime.  On August 22 we sent two clear messages.  The first was to North Korea: we intend to deny the regime its last remaining sources of revenue, unless and until it reverses course and denuclearizes.  The second message was to China.  We are capable of tracking North Korea’s trade in banned goods, such as coal, despite elaborate evasion schemes, and we will act even if the Chinese government will not. [….]

China is even more central to a successful resolution of the crisis caused by Kim Jong-Un.  China accounts for at least 90 percent of North Korea’s exports.  North Korea is overwhelmingly dependent upon China for both trade and access to the international financial system.  China’s full and effective enforcement of UN sanctions is therefore essential.  Unfortunately, I cannot assure the Committee today that we have seen sufficient evidence of China’s willingness to truly shut down North Korean revenue flows, expunge the North Korean illicit actors from its banking system, and expel the North Korean middlemen and brokers who are establishing webs of front companies.  We will continue to work with the Chinese to maximize economic pressure on North Korea, but we will not hesitate to act unilaterally.  If China wishes to avoid future measures, such as those imposed on Bank of Dandong or the various companies sanctioned for illegal trade practices, then it urgently needs to take demonstrable public steps to eliminate North Korea’s trade and financial access. [Treasury Dep’t]

Then, watch his testimony on video.

Mr. Billingslea shows great promise. Let’s hope we have the next Stuart Levey or Juan Zarate on our hands, because we’ve never needed one more than we do now.

Of course, it’s The Boss, House Foreign Affairs Committee Chairman Ed Royce, who has been pushing for this strategy for years. Two laws, one presidential election, and three nuclear tests later, Royce looks to have finally gotten his way. Speaking at a hearing of his Committee yesterday, Royce called on the feds to “target major Chinese banks, including Agricultural Bank of China Ltd. and China Merchants Bank Co., for aiding Kim’s regime.” Royce was referring to a letter he sent to Mnuchin listing some of the banks that keep showing up in Justice Department indictments, forfeiture complaints, and seizure warrants as having effectively provided sanctioned North Korean banks with indirect correspondent account services in violation of this Treasury Department regulation, and asked the Treasury Department to sanction them.

Personally, I don’t expect Treasury to do anything as blunt or binary as a total asset freeze or a 311 action to most of those banks (on that point, Billingslea told the Committee that the 311 action on the Bank of Dandong had “a very clear effect” on its operations, but didn’t elaborate). Instead, I expect Treasury to start auditing the big banks and their correspondents for compliance with its new North Korea-specific regulation, with an eye toward civil penalties and fines like those imposed against European banks that skimped or cheated on anti-money laundering compliance on behalf of Iran and other sanctioned countries. Those fines often amounted to hundreds of millions of dollars (or, in the case of BNP Paribas, $9 billion). There may be such a thing as “too big to fail,” but there is no such thing as “too big to fine.”

~   ~   ~

The Daily NK reports that small traders are already adapting to the new measures by going to a cash-based business model. Reporters are fond of saying that Pyongyang can easily evade financial sanctions by carrying around briefcases full of cash, but that’s mistaken on several levels. First, a typical briefcase only holds just over $2 million, which is enough to fuel the sort of cross-border trade in food and consumers goods that we shouldn’t want to stop, but hardly an efficient way for a Syrian arms client or Burmese middleman to pay a KOMID dealer for a shipment of machine tools or vacuum dryers. Needless to say, it’s not nearly enough to feed a million-man army or sustain an entire government. After all, China may not really care about policing bulk cash smuggling — notwithstanding its occasional, short-lived pretenses to the contrary — but countries like Bangladesh and Sri Lanka do.

That is to say, one potential outcome of these restrictions could be to break up larger, regime-controlled trading blocs in favor of smaller traders whose wares are more likely to end up in the homes and bellies of the poor. That would be a largely positive development. Our goal should not be a complete embargo of North Korea, which is why I was actually relieved that the U.N. didn’t impose a total fuel ban in its latest sanctions resolution. Our goals ought to be to expose and destroy Pyongyang’s state-controlled overseas trading networks, to freeze its cash reserves (which sit in Chinese banks, and which Pyongyang may be depleting rapidly), to de-fund its military and security forces to give the North Korean people a little breathing space and freedom from fear, and to create the “death spiral” that will cause money launderers who can’t make their kick-up payments to defect and bring us yet more valuable financial intelligence, which will help us find and freeze yet more assets.

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Moon Jae-in, Putin & Kaesong 2.0: Why the state of the U.S.-Korea alliance is not strong

Of the many reasons why the U.S. and South Korea failed to prevent North Korea from acquiring nuclear weapons, one of the most important is that, despite their nominal alliance, Washington and Seoul have been fundamentally misaligned on North Korea policy since Bill Clinton and Kim Young-Sam led their respective nations. The most important of these differences was their mutually canceling economic policies toward Pyongyang. As the U.S. moved (however slowly and haltingly) toward isolating Pyongyang economically to slow and reverse its nuclear weapons development, Seoul opted to catapult billions of dollars over the DMZ, no strings attached. The most financially significant subsidy came through the Kaesong Industrial Complex, where Seoul subsidized South Korean companies that paid “wages” to North Korean workers (wages that Pyongyang mostly confiscated). Seoul’s policy, in tandem with Beijing’s trade and aid, filled Pyongyang’s coffers with billions of dollars in regime-sustaining hard currency — currency that, as far as anyone can tell, went directly to the development of nuclear weapons and ballistic missiles.

Together, the policies of Seoul and Washington amounted to the incoherent approach of sanctioning and subsidizing the same target at the same time. The clearest illustration of that incoherence is U.N. Security Council Resolution 1718, drafted and passed under John Bolton’s leadership in 2006, which required member states to “ensure” that their money wasn’t paying for Pyongyang’s nuclear weapons.

(d)   all Member States shall, in accordance with their respective legal processes, freeze immediately the funds, other financial assets and economic resources which are on their territories at the date of the adoption of this resolution or at any time thereafter, that are owned or controlled, directly or indirectly, by the persons or entities designated by the Committee or by the Security Council as being engaged in or providing support for, including through other illicit means, DPRK’s nuclear-related, other weapons of mass destruction-related and ballistic missile-related programmes, or by persons or entities acting on their behalf or at their direction, and ensure that any funds, financial assets or economic resources are prevented from being made available by their nationals or by any persons or entities within their territories, to or for the benefit of such persons or entities; [UNSCR 1718]

In reality, Pyongyang has the most opaque finances of any government in the world, and Seoul hadn’t the slightest idea where its $100 million-a-year Kaesong subsidy went. Instead, it has willfully misread the resolution and reversed its burden of proof, denying that it has evidence that Pyongyang is providing this cash to, say, its General Bureau of Atomic Energy. If pressed, senior U.S. officials would admit that they were “concerned” about this.

“Precisely what North Koreans do with earnings from Kaesong, I think, is something that we are concerned about,” said Cohen. “All of the hard currency earnings of North Korea are something I would say that we should be concerned about. There are a number of thousands of workers at Kaesong who get paid for their services, so I think it is a complicated situation.” [VOA]

Whatever former President Park Geun-Hye’s other sins, in her last year in office, she managed to achieve an alignment of U.S. and South Korean policies that the two nominal allies had lacked for a quarter of a century. The legacy of that year was the termination of South Korea’s subsidies to the North through the Kaesong Industrial Complex, significant diplomatic pressure on Pyongyang’s trading partners, and U.N. Security Council resolutions that now present a high bar to resuming operations there.

“32.  Decides that all Member States shall prohibit public and private financial support from within their territories or by persons or entities subject to their jurisdiction for trade with the DPRK (including the granting of export credits, guarantees or insurance to their nationals or entities involved in such trade), except as approved in advance by the Committee on a case-by-case basis; [UNSCR 2321]

That is to say, any government’s support for trade with North Korea requires the approval of a U.N. committee that operates by consensus, and where the U.S. holds an effective veto. That puts Moon Jae-in’s campaign promises of reviving the Sunshine Policy on a direct collision course with the U.S., which now sees itself as under an increasingly direct North Korean threat for having been Seoul’s security guarantor.

Before Donald Trump was inaugurated or Moon Jae-In was elected, I predicted that behind the diplomatic pleasantries and joint press releases, the two presidents would (like their predecessors) be fundamentally misaligned on North Korea policy, and that each capital and cabinet would deeply distrust the leader of the other. More than two years before the election of Donald Trump, empirical evidence showed that the American news media leaned much further to the left than the voting public. One may safely say that the news media dislike this president with an intensity that goes far beyond their antipathy toward “ordinary” Republican presidents, even if one harbors sympathy for some of that criticism. Critics who pounced on Trump’s election-eve demand that Seoul pay for THAAD, and his more recent threats to terminate the U.S.-Korea free-trade agreement — even as Seoul resists China’s unilateral sanctions over THAAD — were right to view those statements as erratic and harmful to the relationship, although the South Korean public’s support for the U.S. and Korea’s alliance with it has proven remarkably resilient.*

I don’t live in Seoul or mix within the policy circles favored by Moon Jae-in’s administration, so I can only imagine how deeply Seoul distrusts Washington and Trump. I do live in Washington, however, and it’s apparent to me from my conversations with well-placed people here that Washington’s distrust of Moon runs very deep. In contrast to the media’s tendency to amplify every misstep by Trump on Korea, they have largely embargoed the very real reasons for Washington’s distrust of Moon. These include a career spent inside the brain trusts of South Korea’s most anti-American and anti-anti-North Korean movements and his appointment of (sometimes violent) pro-North Korean and anti-American characters into key positions in his administration. It should give Americans pause, for example, that President Roh’s Chief of Staff once spent years in prison for organizing Lim Soo-kyung’s propaganda tour of Pyongyang, and once led a student group that tried to firebomb the U.S. embassy. A man who, if he were to immigrate here, couldn’t pass a U.S. government background check to deliver your mail now has access to some of our most secret operational plans. If that doesn’t concern you, it should.

When Moon Jae-in came to visit Trump at the White House three months ago, there was reason to fear that the meeting would be a fiasco. Presidential advisor Moon Chung-in’s pre-summit tour of the Washington think tank circuit mostly horrified conservatives who are in power in Washington today and was an especially inauspicious sign. Thankfully, the two presidents did not feud publicly, but it was almost immediately apparent that their visit bridged none of the allies’ fundamental differences. Trump is now revealing that privately, the two leaders disagreed on the most contentious of them — how to deal with Kim Jong-un.

As if to affirm the accuracy of Trump’s assessment, Moon has just returned from a cozy summit with Vladimir Putin, where the two leaders agreed to build what sounds a lot like Kaesong 2.0 near North Korea’s border with Russia.

South Korea’s unification ministry said Friday it plans to seek trilateral economic cooperation involving the two Koreas and Russia after taking into account international sanctions and public sentiment.

President Moon Jae-in has unveiled the so-called new Northern Policy designed to expand economic cooperation with northern states including North Korea.

The Ministry of Unification said that the initiative involving the two Koreas and Russia will help implement Moon’s another vision to build a new economic belt with North Korea. [Yonhap]

See also. So far, details of this scheme are scarce, but if it involves the use of North Korean labor outside North Korea, it faces an additional obstacle from the UN’s newest resolution.

11. Expresses concern that DPRK nationals frequently work in other States for the purpose of generating foreign export earnings that the DPRK uses to support its prohibited nuclear and ballistic missile programs, decides that all Member States shall not exceed on any date after the date of adoption of this resolution the total number of work authorizations for DPRK nationals provided in their jurisdictions at the time of the adoption of this resolution unless the Committee approves on a case-by-case basis in advance that employment of additional DPRK nationals beyond the number of work authorizations provided in a member state’s jurisdiction at the time of the adoption of this resolution is required for the delivery of humanitarian assistance, denuclearization or any other purpose consistent with the objectives of resolutions 1718 (2006), 1874 (2009), 2087 (2013), 2094 (2013), 2270 (2016), 2321 (2016), 2356 (2017), or this resolution; [UNSCR 2371]

To amplify the absurdity of this, the Joongang Ilbo reports that Moon “failed to sway” Putin on enforcing sanctions against Pyongyang. But that report and the Moon administration’s new proposal can’t both be true. Reread the resolutions I quoted above and tell me how, even arguably, one can interpret such a proposal as (a) consistent with the resolutions, or (b) doing anything other than undermining the economic pressure Washington is trying to exert on Pyongyang right now. The most generous interpretations of Moon’s misreading of U.N. sanctions would attribute it ignorance, illiteracy, or incompetence. But coming less than a week after North Korea’s sixth nuclear test, while rumors of a long-range missile test swirled through Twitter, this latest proposal seems too spectacularly ill-timed to be inadvertent. Moon is showing Kim and Putin his outreached hand, even as he shows America his middle finger.

Give Trump credit where it’s due. His policy instincts about Moon and the South Korean left hew closer to reality than those of the last several American presidents. A good president doesn’t always need a mastery of fine detail; he simply needs to have good enough policy instincts to select advisors who do (and then, stay off Twitter and let them do their jobs).

Now the question that confronts Washington is how to mitigate the damage that Moon is willing to do to core U.S. national security interests. Moon knows the weakness of his position — his people like him personally, and wanted a change after ten years of conservative rule, but are deeply uneasy with his North Korea policies. No doubt, the signs of decoupling of the U.S.-South Korea alliance are cause for celebration in Pyongyang and Beijing. But if Moon means to finlandize South Korea and undermine sanctions yet again, why should Washington let him do so on his own terms? A strong demonstration that this will cause a breach in the alliance will undermine Moon’s political support, and may discourage him from undermining sanctions that Seoul’s representatives have supported at the U.N. Perhaps having a president with a Twitter account and a reputation for spontaneity isn’t all bad.

~   ~   ~

* Analysts tend to underestimate the appeal of a confident, “strong”-looking leader to voters. This appeal transcends culture.

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Buzzfeed is out of its depth on Egypt and North Korea sanctions

If journalism can be reduced to its most fundamental purpose, that purpose is to tell the reader important things he does not know. Be mindful of this purpose as we review one example of the slapdash reporting one tends to see whenever North Korea intrudes into the headlines.

As the Trump administration scrambles to respond to North Korea’s nuclear ambitions, it is trying to coax the country’s smaller trading partners, from Sudan to the Philippines, to ramp up the pressure on Kim Jong Un’s regime. Last week, the Trump administration announced that it would cut $96 million in aid and delay $195 million in military funding to Egypt, citing human rights concerns — and, according to reports, over the country’s robust relationship with North Korea.

One of the largest recipients of US aid, Egypt has also had a longstanding relationship with the isolated regime in Pyongyang, particularly trading in weapons. It’s unclear, though, what aspects of Egypt-North Korea relations the administration is displeased with, and whether it includes commerce not prohibited by sanctions. [Buzzfeed, Megha Rajagopalan & Maged Atef]

Not clear which aspect, you wonder? Might Buzzfeed have found some relevance in Pyongyang’s history of selling ballistic missiles to Egypt, no doubt to fund other missile programs that threaten the U.S. directly? Or that in 2015, the Obama administration sanctioned an Egyptian trading company for its ties to KOMID, North Korea’s principal arms exporter?

Buzzfeed’s reporters do finally get around to mentioning — near the very bottom of their piece, by which time wiser readers will have moved on — that “North Korea has even helped Egyptian scientists develop missile systems.” They do not mention that this is a long and ongoing relationship, that it flagrantly violates a U.N. arms embargo that has been in place for eleven years, that this embargo has been reaffirmed and strengthened by at least half a dozen resolutions since then, or that Egypt’s violation of it has been mentioned repeatedly by the U.N. Panel of Experts. Given the reporters’ emission of an inky cloud of confusion about what commerce is or isn’t prohibited by sanctions, wouldn’t more competent journalism have taken a moment to find the resolutions, read them, and explain them to its readers?

“The question is, if this North Korean issue is so important for the US, why didn’t they ever mention it with us before?” said Emad Gad, a member of the Egyptian parliament’s foreign affairs committee. “The Egypt-North Korea relationship is an old one, so why are we suddenly hearing they have problems with our relations with North Korea?”

Hey, I’m no human polygraph, but I know what bullshit smells like. A 30-second Google search yields this New York Times article (I know) noting that “[s]uccessive American administrations have privately raised the issue of North Korea in talks with Cairo, but with little success.” Suddenly?

Egypt makes up a very small part of the value of North Korea’s total trade — but it attracted headlines in 2008 when Orascom, an Egyptian telecom firm, set up the first North Korean 3G network. And Egypt is a well-known buyer of North Korean missiles and other weapons.

Again, Buzzfeed is out of its depth, leaving out revelations by better reporters that Orascom’s venture in North Korea was a likely violation of U.S. law, a fiasco for its shareholders, and a career-discriminating event for its CEO, Naguib Sawiris. All of which also goes unmentioned.

In Cairo, the development was met with confusion, and in some quarters, frustration.

“The North Korean-American issue is a conflict between the US and its allies against North Korea — not the whole world against North Korea,” said Gen. Hamdi Bakhit, a member of parliament who sits on the powerful Defense and National Security Committee. “China, for example, has a balanced relationship with both the US and North Korea … America is just fishing for a mistake to pressure Egypt.”

All of which Buzzfeed takes at face value, uncritically, without further inquiry or elucidation of its readers that a government’s mouthpiece has just lied to them like Anthony Weiner talking to a vice squad detective. Yes, we are but a simple junta leading a government that rules over almost 100 million people! We sing, we dance, we smoke our hookahs, and we craftily expunge all traces of shadowy extremist sects from every slum in Cairo, and that is all! We cannot be bothered to read U.N. Security Council resolutions or U.N. Panel of Experts’ reports, or file an implementation report that even fills a single sheet of paper.

Meaning, the Egyptian government knows damn well where to find these resolutions, what they mean, and what they prohibit. Which is more than I can say for Buzzfeed’s reporters.

Look, I understand that many journalists despise Donald Trump. I can understand why. It isn’t hard to find conservative pundits who share that sentiment. It isn’t hard to find journalists who would clearly despise a President Kasich almost as much for the sole reason that he’s a Republican. But something is terribly wrong with anyone whose moral lens is so monochromatic that she defaults to a certain sympathy for anyone whom Trump is against, even when that anyone is a sanctions-busting military junta. Or Kim Jong-Un.

In this case, however, the Trump administration is doing precisely what Barack Obama, George W. Bush, and Bill Clinton ought to have done over the last 24 years — diplomatically, nonviolently, and consistently with a sheaf of U.N. Security Council resolutions — working to end a grave and direct threat to the United States and all of the world, and to prevent a nuclear war in Korea. Does understanding that really require extraordinary moral agility, or might a willingness to use Google suffice?

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Sung-Yoon Lee: Nukes are Pyongyang’s “nonnegotiable means of isolating & exercising dominance over Seoul.”

Professor Lee raises, if ever so briefly, the standards of a newspaper that is simultaneously America’s most prestigious, and in terms of its North Korea coverage, easily its worst.

But a nuclear North Korea is unlike a nuclear China or Russia. During the Cold War, neither Beijing nor Moscow faced an existential threat in the form of an alternate Chinese or Russian state. Pyongyang, on the other hand, has had to live with a far more prosperous and legitimate Korean state across its southern border.

This internal dynamic of the Korean Peninsula compels Pyongyang to continue to threaten war and perfect its weapons of mass destruction. The regime’s logic is that the more advanced its nuclear capability, the less likely the United States will be to defend South Korea at the risk of sacrificing millions of American lives at home.

Hence, for the North, menacing the United States is a nonnegotiable means of isolating and exercising dominance over Seoul. This is how the regime of Kim Jong-un seeks to ensure its long-term survival. [Sung-Yoon Lee, The New York Times]

I often wish that I could write as well in my first language as Professor Lee can write in his second language. I always look forward to his op-eds — not only because they’re a pleasure to read, but also because off-hand, I can’t think of anyone else who writes about North Korea in the English language, who also reads North Korean propaganda in the original Korean, who possesses the additional understanding and context of having been raised in the Korean culture, and who is possessed of the good judgment to interpret that evidence usefully for the reader. If you’re as devoted a NYT non-subscriber as I am — I say this as someone who has co-written two op-eds (both with Prof. Lee) that the Times has published — this is well worth spending one of your free clicks.

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Some N. Koreans grow weary of a war that is forever imminent, as others yearn for it.

For the last 60 years, the people of North Korea have been told that they must sacrifice all their wants — and too many of their needs — for the sake of a holy war with Oceania that has always been imminent. Pyongyang’s media manipulation strategy shows the world’s most gullible journalists (and I mean you, Will Ripley) images of subjects who are (or who appear to be) united in fanatical, robotic devotion to the state’s war propaganda. Yet out in the provinces, the people have stopped believing it.
People have also been overheard complaining among themselves about how the government has to take such actions to create an artificially tense atmosphere, as without them, the people would show no real concern. “North Korea would suffer unspeakable destruction if war breaks out, so are they really going to attack the US?” one resident said to the source.
Evidence suggests that the regime does not have any such intentions, and is merely focusing on creating an atmosphere of war without undertaking any significant military maneuvers. Years of false claims of a coming “total war” and threats of annihilation have damaged the government’s credibility among the people. [Daily NK]
Or, in the original German, “Wollt ihr den totalen Krieg?” And the people said “nein.”*
“These latest measures do not represent any change in the regime’s strategy, and their failure to even respond to this week’s joint US-South Korea military drills with exercises of their own is further proof. They will just continue with their saber-rattling, forcing the people to the streets for daily demonstrations, taking pictures and putting on a show, but nobody at this point believes they will really start a war,” the source said. [Daily NK]
But whether this confidence is an expression of weariness or reassurance (or some combination of both) may depend on the individual. Some North Koreans say “when the war comes” as code talk for “after the regime ends.” A former member of the Pyongyang elite told me this in a conversation more than a decade ago. Here is more evidence of that.

“An increasing number of residents are pointing out that, for them [the North Korean people], provoking the US is a losing battle. We are the ones who suffer from the regime’s belligerent behavior with no consideration for reconciliation and cooperation,” he added.

Some residents are said to be welcoming the regime’s propaganda that a war is imminent, a source in North Hamgyong Province said. We want the suffering to finally end even if it means losing a war,” he said.

“Kim Jong Un is using the same old strategy of his grandfather (Kim Il Sung) and father (Kim Jong Il) to consolidate the population with threats of war, but it is not really effective anymore.” [Daily NK]

Often, I think we underestimate how intelligent, and how perceptive some North Koreans are in seeing through the state’s propaganda, yet at the same time, they may not be nearly perceptive enough about the cost of the war Kim Jong-Un is leading them into. Are their circumstances so desperate that they would gamble everything to reset the future? I suspect we’d find different answers to that question in Pyongyang, in the provinces, and in the barracks. We should help all of them understand that cost in vivid terms, along with who will bear it, and who profits from this regime’s endless war hysteria and all of the hard labor it is used to justify. History is often written by people who see only their desperation, who yearn to erase the future, and who damn all consequences. But if the North Korean people are waiting for us, they are waiting in vain. No matter the circumstance or the scenario, the cost of rebooting their future will be great. It will be far greater for them if it involves war with us. If they want a future, they must take history into their own hands.

~   ~   ~

* The rhetorical similarities between Goebbels’s words and Pyongyang’s rhetoric today are uncanny. Said Goebbels in 1943: “Do you believe with the Führer and us in the final total victory of the German people? Are you and the German people willing to work, if the Führer orders, 10, 12 and if necessary 14 hours a day and to give everything for victory? Do you want total war? If necessary, do you want a war more total and radical than anything that we can even imagine today?” You see what I mean? But war fever and Stakhanovite exhortations have short shelf lives — historically, no longer than ten years. A state can only sustain the ideological fervor for this level of self-sacrifice for so long before the people tire of it.

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Kim Jong-Un’s Moonshadow Policy is eclipsing free thought in S. Korea, and beyond

As we begin rehashing the time-worn policy arguments about responding to a nuclear North Korea, it’s useful to inform those arguments with further evidence of just how Pyongyang is leveraging its nuclear hegemony, by escalating its control over speech in South Korea. Last week, a few of us noticed that KCNA published a “death sentence” against four journalists (two reviewers and two newspaper presidents) over a review of “North Korea Confidential” by James Pearson and Daniel Tudor, asserting further that “the penalties will be enforced at an arbitrary point in time at an arbitrary point, without any additional procedure.”

President Bush removed North Korea from the list of state sponsors of terrorism on October 11, 2008. Discuss among yourselves.

I’ve posted the full text of KCNA’s threat below the fold (click “continue reading.”) The threat drew a mild condemnation from Seoul. What, do you suppose, are the odds that KCNA made this threat without the personal approval of His Porcine Majesty? No doubt, Pyongyang found the cover of the Korean edition to be provocative:

I don’t know if the reviewers would have even seen this cover. Pearson, an affable person who has done some excellent investigative journalism about North Korea’s money laundering in Malaysia and Singapore, also sent me a review copy when the book came out in English. My copy doesn’t have that cover. Other authors who’ve sent me review copies have done so by .pdf, and none of those texts showed a cover image. But then, the North Korean judicial system isn’t known for its evidentiary rigor or protections of due process.

Why else might Pyongyang target “North Korea Confidential?” It’s certainly a useful snapshot of how provincial North Korea in 2015 differed from the circa-1985 impression that most foreigners have of its society, culture, and economy, although a regular (or obsessive) Korea-watcher won’t read much there that she hasn’t read somewhere else. The book is hardly an indictment of North Korea’s political system. Pearson and Tudor don’t ignore the existence of the political prison camps or other human rights abuses, but those things aren’t the main focus of their book. They mainly focus on economic and cultural changes in North Korea since the Great Famine, and on evidence supporting the implication (of which I’m skeptical) that these things will necessarily drive political change. In their conclusion, they are “doubtful about the possibility of regime collapse” and skeptical of the proposition that “sanctions could push the DPRK to the breaking point.” They ultimately conclude that “the most likely scenario for North Korea in the short and medium term is the gradual opening of the country under the current regime.”

Of course, things don’t seem to be working out that way. Indeed, Kim Jong-Un’s greatest domestic achievement may be his success in sealing North Korea’s borders and implementing a moderately effective digital censorship regimen, perhaps with the technical assistance of well-meaning engagers here.

None of which is really my point. My point is that compared to any number of other North Korea books one can read in Korean, “North Korea Confidental” is mild stuff. It’s not half as inflammatory, subversive, or acerbic as most of what you might read at this blog, or at B.R. Myers’s Sthele Press. Having mostly finished this post last week, I decided to hold it for a few days while I emailed some other authors to ask whether their works are published in Korean. Professor B.R. Myers informs me that “The Cleanest Race” is; so is Kang Chol-hwan’s “The Aquariums of Pyongyang;” Yeonmi Park’s, “In Order to Live;” and most of Marcus Noland and Stephan Haggard’s books. All of these books are more ideologically dangerous to Pyongyang than “North Korea Confidential.” Why not them?

The key to explaining this, I think, is that the authors themselves were not the targets of this threat; the Korean journalists who reviewed the book’s Korean edition were. And here, we find the makings of a pattern and an escalation, because a reader brings to my attention that KCNA has also published this threat against centrist and right-of-center Korean media — sorry, make that “Puppet Reptile Writers.” Apologies for the long quote, but this is worth reading and archiving in full:

Pyongyang, September 1 (KCNA) — Yonhap News, Chosun Ilbo, Dong-A Ilbo, Maeil Kyongje, Munhwa Ilbo and other vicious conservative media of south Korea professing to represent the south Korean media are speaking ill of the Korean People’s Army’s resolute warning for mounting enveloping fire on Guam and the will of the Korean people to wage death-defying resistance against the U.S. and are unhesitatingly trumpeting about such rhetoric as “enhanced war atmosphere” and “creation of tensions for maintaining social system”.

A spokesman for the Central Committee of the Journalists Union of Korea in a statement Friday says this clearly proves that the puppet conservative media are made up of hack writers, servants of bellicose forces at home and abroad and group of traitors with whom we can not live together.

The Central Committee of the Journalists Union of Korea sternly declares as follows reflecting the towering grudge and hostility of the mediapersons of the DPRK against the puppet conservative media going reckless to hurt the dignity of the DPRK while pointing an accusing finger at the dignity of the supreme leadership of the DPRK:

We will sharpen the just writing brushes to defend our leader, our party and our social system and win a final victory in the confrontation with the U.S.

No matter how loudly the hostile forces may cry out, they can never check the advance of the DPRK dashing toward the bright future of humankind along the straight road of independence, Songun and socialism.

We will track down the puppet conservative reptile writers fostering discord within the nation under the auspices and at the instigation of the anti-reunification forces at home and abroad, and throw overboard all of them.

The puppet ultra-right conservative hack writers without elementary conscience as writers have to be completely stamped out. This is the unanimous will of the mediapersons of the DPRK, and this will be put into practice.

Our grime and merciless pen will sight the bases which commit hideous crimes against the DPRK by spreading misinformation about it, and beat them to pieces.

The puppet conservative media escalating confrontation with the DPRK while dare challenge the annihilating spirit of the army and people of the DPRK will never be able to evade the shower of retaliatory blows. -0- [link]

Let’s call all of this precisely what it is: terrorism. See also Pyongyang’s extraterritorial censorship of “The Interview” in the United States, Europe, and Asia. See also (in no particular order) its series of attempts between 2008 and 2014 to murder North Korean dissidents in exile, its 2012 threat to shell the offices of conservative South Korean newspapers, its 2014 threats against defector-activists who launch leaflet balloons over the DMZ, its approval of the 2015 slashing attack on the U.S. Ambassador, its 2016 threat to murder the President of South Korea, its 2017 threat to murder the ex-President of South Korea and just about anyone who angers it, and its 2017 murder of Kim Jong-Nam in Kuala Lumpur.

I offer that evidence for the benefit of anyone who is tempted to believe the palliative that we can just “learn to live with” a nuclear North Korea, to view our own acknowledgement of Pyongyang’s nuclear status as the end of this crisis, or to find reassurance in the belief that Pyongyang, having achieved nuclear hegemony at such cost, will rest contentedly within its own borders. On the contrary, from now until the end of Kim Jong-Un’s life, every book review, editorial, film, conference, and U.N. vote will be cast as a choice between the offending thoughts, on one hand, and assassination or war on the other. How much of your freedom of thought will you give up for the sake of “peace?” The problem with that question is that no one ever asks it just once.

I have written before about how the generals in Pyongyang believe they can gradually subjugate South Korea into submission and remote control by confederation, rather than attempt to occupy a country with twice its population and many times its wealth. I have written about how Pyongyang’s attempts to censor opinion in South Korea and elsewhere, including the United States and Europe, are at the vanguard of those plans, because Pyongyang knows that to control people, you must first control their thoughts. Pyongyang’s thought control takes many forms, from death threats, to hacking the email of scholars here, to threatening the organizers of conferences. So does the thought control of its simpaticos in South Korea, who use the courts to intimidate refugees, use South Korea’s oppressive libel laws to suppress parliamentary and political speech, send thugs from state-subsidized labor unions to attack their critics, and (as Roh Moo-hyun did) use selective and ideologically motivate tax audits against unfriendly newspapers. And these are just the things we know about.

It may be a complete coincidence that at this moment, Moon Jae-in and the hard-left labor unions are now using threats of criminal prosecution to assert ideological control over Yonhap and other state-owned media. Then again, it may not be a complete coincidence. Whatever this is, it is not “liberal.”

North Korea and the anti-anti-North Korean left in South Korea have many instruments for controlling the thoughts of South Koreans. Recently, I argued how various forms of censorship have gravely damaged South Korea’s liberal democracy and the quality of its political debate. Meanwhile, the fawning coverage that foreign and Korean journalists have given Moon Jae-in is enough to make Kim Jong-un envious of his treatment by KCNA. These are the journalists who are supposed to be the guardians of a free press. But at the critical moment, they are almost as derelict as (though less corrupt than) the Associated Press was when it made its Faustian bargain with the North Korean government. You won’t hear a critical word from the AP about the fact that its business partner just published a threat to murder four fellow journalists. Remember that the next time anyone from the AP makes a self-serving soapbox argument about its important role as a guardian of your freedom (which is exactly what the AP and journalists should be).

As for most foreign and Korean journalists, they’re so personally and ideologically enamored of Moon Jae-in, and so invested in the narrative of Pyongyang as David besieged by Goliath, that they’ve blinded themselves to this partial eclipse of South Korea’s freedoms. Pray that Kim Jong-Un’s Moonshadow Policy is no more successful than Kim Dae-jung’s Sunshine Policy was. You can try to reassure yourself that this is South Korea’s problem, but recent history suggests that while the path of totality will eventually cover all of Korea, the path of the partial eclipse will be global. And so far, Pyongyang’s campaign seems to be working. By the way, when was the last time you saw a movie about North Korea? I’ll bet it wasn’t made after 2014.

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