Treasury fires a broadside at Kim Jong-un’s slave labor racket

This blog has promoted the outstanding investigative work and legal analysis of the Leiden Asia Center in exposing North Korea’s rental of forced labor to European shipyards and construction companies, under unsafe and exploitative conditions. That work, ably led by Remco Breuker, yielded this Vice documentary and reports filled with actionable information. 

Recently, Breuker wrote a long, sad, and funny opinion piece lamenting that LAC’s research has incurred much harassment from Pyongyang’s wacky bands of online sympathizers while having little apparent effect on the EU’s enforcement of its worker protection laws. That’s why I was so pleased to be the one to tell Mr. Breuker that, thanks in part to LAC’s work, the U.S. Treasury Department just froze the assets of several North Korean slave merchants LAC first identified.

OFAC designated the Mansudae Overseas Project Group of Companies, Korea General Corporation for External Construction, Namgang Construction, and Korea Rungrado General Trading Corporation for having engaged in, facilitated, or been responsible for the exportation of workers from North Korea, including exportation to generate revenue for the Government of North Korea or the Workers’ Party of Korea.  The Mansudae Overseas Project Group of Companies has been reported to conduct business in countries including Algeria, Angola, Botswana, Benin, Cambodia, Chad, the Democratic Republic of the Congo, Egypt, Equatorial Guinea, Ethiopia, Malaysia, Mozambique, Madagascar, Namibia, Senegal, Syria, Togo, and Zimbabwe.  Korea General Corporation for External Construction has worked to supply North Korean laborers in the Middle East for the purpose of earning hard currency for the North Korean regime.  Namgang Construction has worked to supply North Korean laborers in the Middle East and Asia for the same purposes.  The Korea Rungrado General Trading Corporation also works to supply North Korean laborers in Asia and Africa to earn foreign currency for the North Korean regime.  Some of the revenue generated by overseas laborers is used by the Munitions Industry Department, which was designated by the Department of State in August 2010 pursuant to E.O. 13382 for its support to North Korea’s WMD program. [U.S. Treasury Dep’t Press Release]

Leiden Asia Center’s work also had a greater impact on EU states’ policy than he acknowledges, even if that impact may be an indirect one. Poland and Malta have come under media and diplomatic pressure from the U.S. and South Korea over their acceptance of North Korean workers. Both have since stopped issuing visas to more of them. Per capita, Pyongyang’s slave laborers in the EU brought it its highest profits. There’s little question that the Leiden Asia Center’s work was the impetus for much of this change.

There are some notable exceptions. Mansudae Overseas Project Group was exposed by the 2016 report of the U.N. Panel of Experts for helping to build an arms factory in Namibia, a topic merits its own post). Treasury’s list also omits one of the North Korean entities exposed by LAC and Vice, the DPRK Chamber of Commerce, which lists two Pyongyang addresses: “c/o Ministry of Foreign Trade, Central District, micom@co.chesin.com,” and “Jungsong-dong, Central District, P.O.Box 89.”

Once again, Treasury’s authority for the designations was Executive Order 13722, And once again, the executive order implements section 104(a) of the North Korea Sanctions and Policy Enhancement Act. 

Sec. 2. (a) All property and interests in property that are in the United States, that hereafter come within the United States, or that are or hereafter come within the possession or control of any United States person of the following persons are blocked and may not be transferred, paid, exported, withdrawn, or otherwise dealt in: any person determined by the Secretary of the Treasury, in consultation with the Secretary of State:

[….]

   (iv) to have engaged in, facilitated, or been responsible for the exportation of workers from North Korea, including exportation to generate revenue for the Government of North Korea or the Workers’ Party of Korea; [EO 13722]

If diplomatic pressure was already starting to constrict Pyongyang’s slave trade before these new sanctions, it’s reasonable to expect that the freezing of the slave merchants’ assets and a new U.N. resolution expressing “concern” about the trade will give those efforts new impetus. Pyongyang still has some stubborn customers in Qatar, Kuwait, and Malaysia who might be persuaded to terminate those relationships.

Will Pyongyang simply shift those workers to China and Russia? Those markets may also be reaching the point of saturation. Employers of North Korean laborers in Russia have recently been embarrassed by a series of on-the-job deaths and defections, reports of torture and mutilation by local minders, video of a mass brawl with Russian workers, and at least one suicide by self-immolation. Even in China, Reuters recently suggested that the number of expatriate North Korean workers is declining. That, too, may be a function of defections, which have caused Pyongyang great embarrassment and forced it to plow some of its profits back into the deployment of more minders, and minders for the minders. The death spiral swirls.

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The U.S. may (finally) be serious about capping North Korea’s coal exports

For almost three months after North Korea’s fifth nuclear test, the U.N. Security Council remained deadlocked over how to respond, with the U.S. and its allies pressing to limit Kim Jong-un’s access to hard currency and China trying to shield its belligerent protectorate from the consequences of its behavior.

Among the most hotly debated questions was how to limit North Korea’s coal exports to China, one of His Porcine Majesty’s most important sources of hard currency. Although UNSCR 2270, passed in March after the fourth nuke test, banned most of Pyongyang’s mineral exports, there was a gaping loophole allowing exports of coal, iron, and iron ore for “livelihood” purposes. Unfortunately, it soon became clear that “livelihood” translated into Chinese means “whatever.” The exception soon swallowed the rule, and coal exports did not fall; they rose … by a lot. By September, China’s coal imports from North Korea had risen 12.8 percent over the same period last year, to a record high. The Obama administration clearly felt that China was cheating. (See also my posts from March, July, and October and Stef Haggard’s post from yesterday.)

The eventual compromise the U.S. and China reached in UNSCR 2321 was disappointing, to say the least. Rather than take any plausible steps to ensure that Pyongyang really used its coal money to provide for the livelihoods of its hungry people, the resolution simply capped coal exports at $400 million or 7.5 million metric tons a year, whichever is less. (In 2015, North Korea exported $1 billion worth of coal to China) On paper, Chinese power companies were also prohibited from buying any amount of coal from entities associated with North Korea’s WMD programs.

The flaws in this “solution” are obvious. How will we know how much coal North Korea exported, and at what price? By relying on Chinese customs statistics? How will we know which North Korean entities really sold the coal? And more fundamentally, given that cash is fungible and North Korean despots have consistently prioritized their arsenals and their own high lifestyles over the survival of their people, how can anyone verify how the world’s most financially opaque society spent the money? If China really gave a whit about the “livelihoods” of North Koreans — in fact, it holds the lives of North Korean men, women, and children in utter contempt — it would have agreed to pay for “livelihood” coal in the form of food, or to the World Food Program. An unverifiable cap is a license to cheat.

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But Treasury’s announcement last week of bilateral sanctions against certain North Korean coal exporters, who Treasury believes “may benefit the Government of North Korea or the Workers’ Part (sic) of Korea,” could go far to swallow the “livelihood” cap exception to the coal ban that swallows the rule.

OFAC designated Daewon Industries and the Kangbong Trading Corporation for having sold, supplied, transferred, or purchased, directly or indirectly, to or from North Korea, metal, graphite, coal, or software, where revenue or goods received may benefit the Government of North Korea or the Workers’ Part of Korea.  The Kangbong Trading Corporation’s parent is the Ministry of People’s Armed Forces.  Daewon Industries also operates in the energy industry in the North Korean economy, and may be subordinate to the Munitions Industry Department, which is sanctioned in UNSCR 2270, designated by the U.S. pursuant to E.O. 13382, and responsible for overseeing the development of North Korea’s ballistic missiles, including the Taepo Dong-2. [U.S. Treasury Dep’t Press Release]

With that action, Treasury’s clear message to Chinese buyers is that certain North Korean sources are off limits, cap or no cap. The recent example of the Dandong Hongxiang indictment and forfeiture complaint hovers over all of this, posing a credible threat that Chinese buyers could have their dollar assets frozen. And in case anyone thinks Dandong Hongxiang was a one-off, our diplomats have said it isn’t.

The United States has warned China it will blacklist Chinese companies and banks that do illicit business with North Korea if Beijing fails to enforce U.N. sanctions against Pyongyang, according to senior State Department officials. The tougher U.S. approach reflects growing impatience with China and a view that it has not strictly enforced existing sanctions to help curb Pyongyang’s nuclear program, which a U.S. policy of both sanctions and diplomacy has failed to dent.

U.S. Deputy Secretary of State Antony Blinken gave the message to Chinese officials in meetings in Beijing in October after North Korea conducted its fifth and largest nuclear test, the officials said. U.S. National Security Adviser Susan Rice and Secretary of State John Kerry stressed the importance of choking off financial flows to Pyongyang during a meeting with Chinese State Councilor Yang Jiechi in New York on Nov. 1. [Reuters]

There are some early signs that Chinese industry may have gotten that message, although it’s typical for Chinese companies to slow their trade with North Korea temporarily after the U.N. passes new sanctions. As I’ve pointed out here more than once, there is undeniable evidence that China has violated North Korea sanctions frequently and flagrantly for years. China will not wait long to resume its cheating and test our resolve. With demand for North Korean coking coal high, we’ll need a strong deterrent to enforce sanctions. If our President-Elect has done anything right, he has sent a clear (and apparently calculated) message that China’s sensitivities will not prevent him from acting decisively to protect U.S. interests. After all, it’s not as if our sensitivities have had much visible effect on China’s behavior.

This wasn’t the only energy sanction Treasury imposed last Friday:

OFAC designated the Korea Oil Exploration Corporation for operating in the energy industry in the North Korean economy.  The Korea Oil Exploration Corporation is a state-controlled enterprise of the North Korea Ministry of Oil.  The Korea Oil Exploration Corporation has reportedly worked to establish contracts with Iranian oil entities, in part to supply crude oil to two refineries in North Korea. [U.S. Treasury Dep’t Press Release]

Among others, that’s probably bad news for James Passin, a hedge fund manager who gambled his shareholders’ money on a refinery and oil exploration in North Korea. U.N. sanctions ban exports of aviation and rocket fuel to North Korea, but not crude. Until recently, China continued to export petroleum products to North Korea. (For the record, I oppose banning exports of gasoline, diesel, and heating oil to North Korea, for humanitarian reasons.)

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The Obama administration’s designation of the North Korean companies consolidates a U.S. shift to a harder line on sanctions enforcement, reflecting a bipartisan consensus for tougher action in Congress. It’s also satisfying to me personally, because the administration has adopted the strategy I advocated here in October.  Note that the language in the Treasury Department’s press release (“revenue [that] may benefit the Government of North Korea or the Workers’ Part of Korea”) does not match the language of UNSCR 2321 (“entities that are associated with the DPRK’s nuclear or ballistic missile programmes or other activities prohibited by [applicable U.N.] resolutions”), because the administration relied on the domestic legal authority of Executive Order 13722 instead:

Sec. 2. (a) All property and interests in property that are in the United States, that hereafter come within the United States, or that are or hereafter come within the possession or control of any United States person of the following persons are blocked and may not be transferred, paid, exported, withdrawn, or otherwise dealt in: any person determined by the Secretary of the Treasury, in consultation with the Secretary of State:

   (i) to operate in any industry in the North Korean economy as may be determined by the Secretary of the Treasury, in consultation with the Secretary of State, to be subject to this subsection, such as transportation, mining, energy, or financial services;

   (ii) to have sold, supplied, transferred, or purchased, directly or indirectly, to or from North Korea or any person acting for or on behalf of the Government of North Korea or the Workers’ Party of Korea, metal, graphite, coal, or software, where any revenue or goods received may benefit the Government of North Korea or the Workers’ Party of Korea, including North Korea’s nuclear or ballistic missile programs;  [EO 13722]

Those provisions, in turn, implement sections 104(a)(8) and 104(b)(1) of the North Korea Sanctions and Policy Enhancement Act. They may have also reflected Treasury’s interpretation of the coal export ban as passed in March, in UNSCR 2270. U.N. resolutions don’t enforce themselves. They require U.N. member states to implement their sanctions through legislation. Member states that want U.N. sanctions to work benefit from a U.N. imprimatur to globalize sanctions enforcement. Each level of authority needs and complements the other.

Tactically, it was wise of the administration to wait for the (undoubtedly difficult) negotiations with China to conclude before it acted. The clear message it sent at the conclusion of that negotiation is that, for the time it has left, it will hold China to its word. Let’s hope the next administration is equally serious.

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What the Treasury Department’s blocking of Air Koryo means

Last week’s North Korea sanctions designations by the U.S. Treasury Department’s Office of Foreign Assets Control — commonly known as OFAC — go far to explain why U.N. Security Council Resolution 2321 took so long to negotiate and pass. There were many reasons why I panned the terms of that resolution last week, including new and not-improved coal export limits, and the U.N.’s failure to designate North Korea’s state airline, Air Koryo.

Friday’s OFAC designations — which block any of the targets’ assets in the United States, and more importantly, any dollar assets that move through the U.S. financial system for international transactions — plug many of the holes UNSCR 2321 left. Treasury has sent a strong signal that when China blocks swift and effective consequences for North Korea’s provocations, the U.S. is (at last, at least for now) prepared to join with its allies and go beyond the United Nations. This almost certainly means that the U.S. made no sub rosa agreement to stay its hand.

I. There was strong evidence that Air Koryo had violated U.N. sanctions for years.

U.N. reports alone provided ample evidence to support the designation of Air Koryo. For years, the U.N. Panel of Experts that oversees (non-)compliance with U.N. sanctions had called Air Koryo out for lending its aircraft to the North Korean air force for military purposes, for arms smuggling, and for suspicious financial transactions. In 2014, for example, the Panel reported that Air Koryo was, for all intents and purposes, an arm of the North Korean military, and cited NK News’s reports that Air Koryo Il-76s were sometimes repainted for military exercises and shows. It published photographs of one Air Koryo Il-76 after an air show, with camouflage still showing through the white paint of its civilian livery.

141.  As previously indicated by the Panel, Air Koryo and all airports or airfields within the Democratic People’s Republic of Korea are controlled by the Korean People’s Air Force through its Civil Aviation Bureau. Reportedly, all personnel are members of the air force and all in-country maintenance is conducted by Air Force engineering staff.  The absence of boundaries between Air Koryo and the air force was further highlighted by the 27 July 2013 military parade during which three military Ilyushin (Il) 76 flew over Kim Il Sung square (see figure XXV). [UN POE]

Then, there is this language from the 2014 report, suggesting that Air Koryo may have been running an elaborate money laundering scheme, one that foreshadows its likely sanctions evasion strategy:

178.  An example of a transaction being financed in an unusually complex manner was an Air Koryo contract in 2012 to purchase new aircraft.  Payments were structured through eight Hong Kong, China-registered companies, which asserted that they were trading partners of Air Koryo and were wiring funds they owed it. The resolutions do not prohibit the purchase of civilian passenger and cargo aircraft. The Panel, however, was dubious of the explanation that debts were the source of the funds; some companies appear to be recently formed shell companies. It also finds remarkable the coincidence of all eight firms owing significant amounts to Air Koryo at the time funds were contractually due to be paid to the seller of the aircraft. The names of shells and activities of others appear to share a connection with gold trading. The Panel is suspicious that the Democratic People’s Republic of Korea may be using or considering the use of precious metal sales on credit terms to create “accounts payable”. Such sources for funds would not necessarily show as being under its control and even could be swapped with other firms to further distance its connection and thereby better evade sanctions and enhanced due diligence by banks. [UN POE]

There were also regular reports (and photographic evidence) that North Korean officials and couriers used Air Koryo to import luxury goods and smuggle bulk cash, in violation of U.N. sanctions. The 2016 Panel of Experts report published photographs of a consignment of SCUD missile parts shipped from North Korea to Egypt aboard an Air Koryo flight. In 2015, the Panel made this conclusion:

120. Given the evidence of military use, the Panel considers that providing financial transactions, technical training, advice, services or assistance relating to the provision, maintenance or use of Air Koryo’s cargo aircraft could constitute a violation of the embargo on all arms and related materiel as defined by paragraph 10 of resolution 1874 (2009). [UN POE]

Although it’s apparent that China blocked a U.N. designation of Air Koryo in UNSCR 2321, it’s also apparent that experts appointed to the panel by other nations saw ample justification for a designation of Air Koryo, and had been pushing for one for years. Pyongyang also used Air Koryo to transport slave laborers abroad and back, including the flight that brought home 100 mutinous workers from Kuwait, almost certainly to a very dark fate. Belatedly, UNSCR 2321 expressed “concern” about this exploitation, albeit with non-binding language.

That’s why OFAC’s designation of Air Koryo, two days after the U.N. failed to do so, was anything but “unilateral.” That matters, because we will need the cooperation of other states to make Air Koryo sanctions effective. For example, South Korea’s own designation of Air Koryo will have little direct effect, because Air Koryo doesn’t fly to South Korea, but (depending on how South Korea’s political crisis resolves) South Korean diplomats may soon call on Malaysia, Singapore, Thailand, Kuwait, and other countries to join the ban. (Singapore, an important North Korean trading partner, doesn’t have its own independent SDN list for North Korea sanctions; it just adopts the U.N. list.) The EU will probably also cooperate. Even before the OFAC designation, it had banned most Air Koryo planes over safety concerns.

If anyone in this story acted unilaterally — aside from North Korea, of course — it was China, in blocking Air Koryo’s designation despite all of the incriminating evidence. I don’t doubt that China will try to help Air Koryo continue operating with Renminbi transactions, although it remains to be seen whether Chinese banks will risk handling them. But with each new North Korean provocation, China will find itself increasingly isolated and pressured to yield to the consensus. That’s how Progressive Diplomacy should work.

Now, every venue that gives Air Koryo landing rights will come under diplomatic pressure to stop doing so. Expect Air Koryo’s itinerary and Pyongyang’s tourist income to continue to ebb, but past history (more on that below) suggests that Pyongyang will find ways to keep Air Koryo flying, even if only at a punishing financial loss. Viewed that way, sanctions won’t only be costly if they destroy Air Koryo. They may be even more costly if they don’t.

II. How U.S. sanctions will affect Air Koryo’s operations.

OFAC didn’t just designate Air Koryo last Friday; it also designated its offices and all its individual aircraft — well, almost all. Compare Treasury’s list of designated Air Koryo aircraft to Table 9 from the 2015 U.N. Panel of Experts report, and you’ll see that Treasury’s list is three planes short of the POE’s list — specifically, one Tu-134 and two Il-62s. Did Treasury spare the three remaining aircraft for some reason? Did it simply lack full identifying information about them? Probably not. First, note that the three aircraft are among the oldest in Air Koryo’s fleet. A more likely explanation comes from Paragraph 117 of the 2014 POE report, which says that Air Koryo bought two of its Il-62s from Cuba in 2012 and cannibalized them for spare parts. OFAC probably saw no point in designating two old hangar queens. It’s likely that the remaining Tu-134 aged out, too.

How will the OFAC designation affect Air Koryo? Let’s start by establishing its baseline. Two years ago, the Panel of Experts offered this summary of Air Koryo’s itinerary:

139.  The numbers of air carriers operating scheduled flights and routes to or from Pyongyang Sunan International Airport remain very limited. However, the number of flights per route has changed since May 2013. The number of weekly rotations to Beijing has increased from six to eight, with five rotations operated by Air Koryo and three by Air China, the only foreign airline regularly serving the Democratic People’s Republic of Korea.  Air Koryo now also operates two weekly rotations to Vladivostok. The number of rotations to Shenyang is unchanged (twice a week), while the number to Kuala Lumpur decreased (from twice to once a week). The status of its weekly rotation to Bangkok is unknown. This flight and others to Kuwait City, Moscow, Nanjing, Shanghai and Yanji, China, are most likely operated on an ad hoc and/or seasonal basis. [UN POE]

This is not the first time the Treasury Department has designated a rogue state’s flag carrier. Treasury designated Syrian Air in 2013 for smuggling weapons, and the EU soon followed suit. Syrian Air kept flying to the Gulf states with the help of front companies, money laundering, and bulk cash smuggling. Treasury designated Iran Air in 2011, after years of U.S. export controls made it difficult for the airline to buy spare parts. In 2010, the EU banned some Iran Air craft over safety concerns. After its OFAC designation, Iran Air’s flights to Western Europe had to make fuel stops in Eastern Europe, but the airline limped along until President Obama lifted its designation earlier this year. The 1998 designation of Sudan Airways, along with “financial troubles and mismanagement,” eventually reduced it to just six working (but aging) aircraft. In 2015, the U.S. government fined EgyptAir for leasing two 737s to Sudan Airways. But then, Sudan Airways’s two-letter flight code, “SD,” has long been said to stand for “sudden death.”

This history suggests that Pyongyang will try to keep its flag carrier flying, even if at great expense and inconvenience, to show its defiance and maintain its prestige. But like Iran Air and Sudan Airways, Air Koryo was already straining to maintain a fleet of aging aircraft before its OFAC designation. If North Korea runs an airline as ineptly as it runs, say, its food supply, over time it will be forced to drop routes and flights, which Chinese air carriers will try to pick up. Currently, Air China is the only other airline with regular flights to North Korea. (Spring Airlines had expressed interest in starting flights to Pyongyang, but later shelved that plan.) These airlines will have greater dollar exposure and more reluctance to risk ferrying luxury goods or slaves. They will feel more constrained by UNSCR 2321’s mandate to inspect all checked baggage to and from North Korea for, say, bundles of cash, stashes of gold, or big screen TVs.

Air Koryo may try to collect fares and buy parts in non-dollar currencies, but past history suggests it will simply try to evade the dollar sanctions. This will come with great costs and inconveniences. As we learned from the Dandong Hongxiang indictments, it’s almost impossible to operate in the global economy without dollars, and evading dollar sanctions requires working through shady middlemen who sometimes charge commissions of more than 20 percent. The more layers of protection you want, the more middlemen you need, and each layer adds to that cost. It will be hard, but still possible, for Air Koryo to keep flying with its dollar accounts frozen and its capacity to acquire spare parts and new aircraft curtailed. (UNSCR 2321 bans North Korea from purchasing or leasing new vessels and helicopters, but not fixed-wing civilian aircraft.) The operations of a national flag carrier aren’t easily concealed. Air Koryo will have to market itself to sell seats and operate profitably. Every destination where its planes land will come under investigative and diplomatic scrutiny. 

III. How the designation of Air Koryo will affect the North Korea tourist industry.

Much of the media interest in the designation of Air Koryo has focused on how the designation will impact tourism to North Korea — specifically, tourism to North Korea by Americans and Europeans. That interest, in turn, probably derives from the inexplicably popular idea that (overwhelmingly) white people who travel to North Korea will shine their gentle, warming rays on the local savages by “open speech and simple an hundred times made plain, to seek another’s profit and work another’s gain.” ICYMI:

For some people, visiting North Korea is like dating Madonna — plodding a tired, well-worn, loveless, and morally ambiguous path that gives some people an inexplicable feeling that they’ve entered an unexplored place. Except that Dennis Rodman and countless others already did. 

Designating Air Koryo will undoubtedly reduce Pyongyang tourist revenue, but it’s hard to say by how much. Yonhap has published an estimate that in 2014, tourism poured $43 million into North Korea. Some experts have told me that estimate sounds high, but Sheena Chestnut Greitens (who is, due to unrelated developments, about to become the First Lady of Missouri) previously cited an unnamed South Korean expert’s “high estimate” of $100 million. How much of this income is from Air Koryo’s ticket sales is anyone’s guess. The overwhelming majority of tourists who visit North Korea are Chinese who may find it more convenient to fly Air China or take the train.

Air Koryo’s designation will have a greater impact on Europeans and Americans, who pay a premium to travel to North Korea. Uri Tours, one of the companies that sells group tours of North Korea to slummers, inept evangelists, prospective hostages, and other unrequited masochists turns out to be a business partner of North Korea’s missile-part-smuggling, money-laundering, slave-ferrying airline.

Uri Tours is the exclusive General Sales and Ticketing Agent of Air Koryo in the Americas. We service tourists, business travelers, corporations, foreign workers and government officials to provide expedient Air Koryo ticketing in advance of your trip. We take credit card payment and we can offer same day ticketing.

Air Koryo is North Korea’s only airline and has a history of over 50 years in flight. Air Koryo operates internationally scheduled flights between Pyongyang, China (Beijing, Shenyang and Shanghai), Russia (Vladivostok), Thailand (Bangkok), and Kuwait. It also operates charter flights to and from Malaysia (Kuala Lumpur), Singapore and a handful of other countries. Domestic flights to Mount Paekdu and Mount Chilbo (and soon Wonsan) are also operated by Air Koryo. [Uri Tours]

Uri Tours reacted to OFAC’s designation of its North Korean partner with a blog post that tells us that as of last week, it was still in the denial stage.

Do these new sanctions affect tourism?

E.O. 13722 does not prohibit U.S. persons from engaging in transactions ordinarily incident to travel to or from any country. This means that U.S. persons can travel to North Korea. You are also still permitted to book tours to North Korea with a U.S. tour operator. It is our position that Uri Tours’ travel activities are covered under the IEEPA exemptions and moreover, we were an existing tour service to North Korea before E.O. 13722 which prohibits new investment in North Korea by a U.S. person. [Uri Tours]

To unpack Uri’s “position,” begin with OFAC’s specific legal authority for the designation of Air Koryo, Executive Order 13722, which authorizes sectoral sanctions against North Korea’s transportation industry (along with mining, energy, and financial services). Taking Uri’s arguments in reverse order, it claims that because its business relationship with Air Koryo predated the OFAC designation, its relationship is not affected. But section 1(b) of EO 13722 states as follows:

The prohibitions in subsection (a) of this section apply except to the extent provided by statutes, or in regulations, orders, directives, or licenses that may be issued pursuant to this order or pursuant to the export control authorities implemented by the Department of Commerce, and notwithstanding any contract entered into or any license or permit granted prior to the effective date of this order. [EO 13722]

If Uri Tours doesn’t have a lawyer, this would be a good time to invest in one. If Uri Tours has a lawyer, this would be a good time to invest in a better one. The penalties for violating the IEEPA include 20 years in one of these

Uri also cites an OFAC FAQ, Number 464, and characterizes it as opining that Americans are free to travel to North Korea for tourism. In fact, the FAQ only provides guidance on humanitarian travel (which is exempt from sanctions under a general license that doesn’t apply to tourism). The FAQ was published on March 16, 2016, the day after the President signed EO 13722, but long before the designation of Air Koryo. It says nothing about tourist travel.

Uri makes a stronger argument when it cites our old friend, the International Emergency Economic Powers Act, which creates the legal authority for sanctions executive orders and designations, but withholds (in section 203(b)(4)) “the authority to regulate or prohibit, directly or indirectly . . . any transactions ordinarily incident to travel to or from any country.” But if Uri Tours thinks the U.S. can’t designate an airline because of section 203(b)(4), I’ve already shown you ample precedent to the contrary. Whether an individual U.S. tourist can book an Air Koryo flight is an interesting question I’ll leave to the Treasury Department to resolve in a future FAQ, but good luck booking that flight if no bank will process your fare payment. Uri’s suggestion that 203(b)(4) allows it to go right on transacting with a blocked entity seems dangerously wishful, but Uri’s legal risk isn’t my concern. It misrepresents the law at its own peril. It misrepresents the safety and ethics of travel to North Korea at yours.

Clearly, 203(b)(4) doesn’t exempt airlines from the reach of nonproliferation sanctions. Just as clearly, Treasury makes a distinction between blocking one airline’s assets and a travel ban. Do proliferation sanctions that have incidental effects on travel exceed the authority of 203(b)(4)? I’d guess not, but I’ll let OFAC answer that for itself. But then, the fact that Treasury currently lacks the authority to impose a travel ban doesn’t mean that Congress won’t simply impose one, mooting Uri’s argument. Meanwhile, travel to North Korea all you want on a Chinese airline. All that’s stopping you is your intelligence and your conscience.

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In the end, the biggest winners from OFAC’s designation of Air Koryo will be Air Koryo’s passengers, and not just the slaves among them. One of them recently related his near-death experience when an Air Koryo crew ran up and down the aisle of his flight, shouting “no problem! no problem!” as the cabin filled with smoke, the plane plunged toward the earth, and the passengers wept for their dear lives. In that story, I saw a fitting microcosm of, and metaphor for, the entire North Korean condition. That was one of their newer planes, too. But if you really want to hear the definitive analysis of how Air Koryo’s designation affects the North Korea tourism industry, ask Otto Warmbier. Unfortunately, he wasn’t available for comment at post time.

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Why Seoul’s blacklisting of Air Koryo & Dandong Hongxiang matters

South Korea is the first of the Free Three (the U.S., South Korea, and Japan) to announce independent multilateral sanctions on North Korea following the approval of UNSCR 2321. Some of the measures, such as the blacklisting of Choe Ryong-hae and Hwang Pyong-so, will probably mean almost nothing until some future left-wing president tries to give one of them a ticker-tape parade along the Chongro.

An extension of South Korea’s ban on ships that have entered North Korean ports within the last 180 days will do more, by forcing shipping companies to choose between the modest trade with North Korea and the much more significant trade with Japan and South Korea. With North Korea’s own ships already under rising pressure even pre-2321, and now facing a loss of access to insurance, North Korea may soon find itself increasingly isolated from its export markets.

South Korea’s blacklisting of Air Koryo, while not directly significant by itself (Air Koryo doesn’t fly to South Korea) may foreshadow a corresponding action by the U.S. Treasury Department, which would freeze North Korea’s national airline out of the dollar system and seriously crimp its operations. (Update: That turns out to have been a pretty good guess. OFAC just released a new round of designations that includes North Korean banks, slave labor merchants, the Korea National Insurance Corporation, and Air Koryo. I’ll have more to say after work.) It could also clear the way for South Korean diplomats to lobby middle powers like Malaysia, Thailand, Kuwait, and Singapore to deny Air Koryo landing rights. That would be a severe blow to Pyongyang. South Korea’s diplomatic campaign against North Korea’s foreign clients has been highly effective this year.

The most important and courageous move, however, was this one:

In particular, Dandong Hongxiang Industrial Development and four of its executives were included on the list, marking the first time that a Chinese firm is facing South Korea’s unilateral sanctions.

The company is under investigation on suspicions that it exported aluminum oxide — a nuclear bomb ingredient — to the North at least twice in recent years. In September, the U.S. blacklisted it along with its owner and other company officials.

With the latest action by Seoul, a total of 79 individuals and 69 entities will be subject to sanctions in connection with the North’s nuclear programs. The government announced a blacklist in March as a follow-up move to the UNSC’s Resolution 2270 adopted in the wake of the North’s fourth nuclear test in January.

Any financial transactions with them will be prohibited, while their assets in South Korea will be frozen. The blacklisted people will also be banned from entering the country, which is seen as a symbolic action given that there are no exchanges between the two Koreas. [Yonhap]

This could be the first sign that the three allies, acting outside the U.N. and beyond the reach of a Chinese or Russian veto, are forming a coalition to combine their economic power behind secondary sanctions against Pyongyang. If Japan joins in this, it will mean that the Chinese trading companies that prop up His Corpulency’s misrule will now face not only the freezing of their dollar assets, but the loss of their trade relationships with the two most important non-Chinese markets in northeast Asia. If those Chinese trading companies think they can mitigate the risk of secondary sanctions by insulating themselves from the dollar, Seoul has just added an additional layer of risk for those that continue to trade with Pyongyang. If the Free Three have coordinated their sanctions well, Tokyo will soon add its heft to that risk. Trading companies’ shareholders, officers, and bankers may find that risk increasingly unacceptable.

Beijing knows that while Dandong Hongxiang is itself a dead letter, this sort of Progressive Diplomacy represents a dangerous precedent for its interests. I expect it to react furiously. Even a year ago, I could not have imagined Park Geun-hye antagonizing South Korea’s greatest trading partner this way. Today, with all the noise about impeachment and the North Korean crisis, the Chinese reaction could be crowded out of the headlines. But with Park having conceded that she cannot hold onto power for long, she has nothing to lose.

Not only does Park have no reason not to burn bridges, she may have her own reasons to punish China. If she’s at least as paranoid as I am, she may suspect China, or its North Korean dependent, of directly or indirectly supporting the media frenzy that led to her downfall. It seems plausible in the age of Wikileaks that foreign governments give clandestine support to media hostile to leaders who oppose their interests. She may even suspect them of having planted the tablet that first broke the scandal. Personally, I see no direct evidence of it, nor do I think it’s more than 20 percent likely, but I’ve yet to see anyone explain (or even inquire into) the remarkable coincidence by which a discarded device just falls into the lap of a hostile press and topples a head of state. It seems easier to pull off than, say, throwing Wisconsin to Trump.

Either way, Park Geun-hye isn’t going quietly, and she’s gambling that the actions she takes on her way out the door will have the support of a future President Trump. No matter how much the Hankyoreh rages, that will make those actions even harder for her successor to undo than for her to do. What we may be seeing here is the first brick in a multinational sanctions coalition in which the members concentrate their collective power against Pyongyang’s enablers. For now, the Free Three are the core of that coalition, but with skillful diplomacy and time, that coalition may soon include other middle powers, other issuers of convertible currencies, and key members of an increasingly fractious European Union.

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Yonhap: U.S., ROK & Japan to impose coordinated sanctions independently of U.N.

With reaction to UNSCR 2321 ranging from the skeptical to the unfavorable, U.S. and South Korean diplomats have been practicing their skills at porcine cosmetology this week. But if the generals in Pyongyang are already quaffing Hennessey to celebrate the latest advance for the byungjin policy, that may be premature. The Security Council may not have the last word on North Korea’s September 9th nuke test after all:

South Korea, the United States and Japan are preparing to announce their own sanctions on North Korea at the same time in a joint action to maximize their impact to the communist country, Foreign Minister Yun Byung-se said Thursday.

“Basically, (the three countries’ independent sanctions) will be announced concurrently or at a very similar time,” Yun told Yonhap News Agency, referring to the nations’ follow-up measures to the United Nations Security Council’s adoption of Resolution 2321. South Korea is set to unveil its own set of new sanctions on Friday. [Yonhap]

My two greatest concerns with 2321 are, first, that the surprisingly high coal export limits are a license to cheat that may actually raise the amount of coal Pyongyang can export, and second, that within the negotiations with China over the resolution was a sub rosa agreement by the U.S. to abstain from using the power of the dollar against Chinese banks and businesses that are propping up His Supreme Corpulency. This report doesn’t address the first concern, but it may palliate the second.

Obviously, how much the new bilateral sanctions would palliate my concern depends on what the sanctions are, and Yun didn’t say much about that, except that “[b]ilateral sanctions prepared by the U.S. side may be strong enough to hurt North Korea more than the recent UNSC resolution.” This article, however, gives some vague hints at the South Korean actions. Yun also didn’t say exactly when the new sanctions would be announced, because the different countries have different “internal procedures.”

I can certainly imagine what kind of sanction would have that sort of effect. So can the Obama administration, and so can the U.S. House and U.S. Senate, whose most vocal members and committee chairs are going to be pushing for just that for at least two more years. That the allies appear to be practicing Progressive Diplomacy is also excellent news.

I may not miss Park Geun-hye as much as I’d miss Yun Byung-se. I certainly hope he stays on in the banana republic that South Korea has recently become, but then, who am I? I’m writing this from Washington, D.C.

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The U.N.’s new North Korea resolution wasn’t worth the wait

Lest anyone think I’m blindly criticizing the Obama administration as it tries to cover its exit and legacy, start with my favorable comments on UNSCR 2270. That resolution might have been the baseline for a genuinely effective global sanctions program, but the text of the new resolution the Security Council will vote on tomorrow arguably lowers the high bar set by 2270. Indeed, because of our independent authority to enforce 2270 in tandem with our allies, we would have been better off with no resolution at all than a weak one.

Although the text contains some useful provisions, including a ban on shipping insurance and the expulsion of North Korean bank operatives, many of the nominally tough provisions are full of loopholes. For example, how many North Korean diplomats must each country expel? What prevents North Korean diplomats, now limited to one bank account each, from simply putting those accounts in the names of “private” trading companies?

The ban on North Korea using real property abroad for non-diplomatic purposes could, depending on how it’s interpreted, require it to shut down the Chilbosan Hotel, its Chinese base of operations for cyberattacks. And anyone who might have fantasized about reopening Kaesong or the success of Rajin should read paragraph 32 carefully.

The veiled threat in paragraph 19 to suspend North Korea’s U.N. privileges is interesting, but ultimately empty. China and Russia would veto any such move.

The new designations in the annexes are weak, mostly consisting of mid-level officials who will be easy to replace. The absence of Air Koryo, the Korea National Insurance Corporation, and Mansudae Overseas Project Group from the list are big disappointments.

But the biggest overall disappointment may be the text’s lack of hard, clear, enforceable follow-the-money provisions. There is no new requirement for member states to track and report beneficial ownership by North Korean nationals, which would have been a potential windfall of financial intelligence on North Korean money laundering and sanctions evasion.

Many of the provisions — such as the ban on dual-use items, helicopters, and technical assistance — were already prohibited under any reasonable interpretation of UNSCR 2270. Russia, India, and other states have violated those prohibitions.

The addition of two items — rugs and china — to the luxury goods list is laughable.

The most talked-about provision, the new cap on North Korean coal exports, will be difficult to monitor and enforce. How will the U.N. Panel of Experts really know what minerals China is importing, in what volumes, or at what prices? Even if they are enforced, the cuts in coal exports are not deep enough to create the kind of financial crisis in Pyongyang that will force it to reconsider its nuclear weapons program. Pyongyang exports $1 billion worth of coal in a typical year. This text would cut that amount in half. If you’d asked me in March to guess what “livelihood purposes” means, I’d have said it sets a much lower cap than what the Chinese extracted from us. (Update: Also, I’d have said that for “livelihood purposes” to be anything but a farce — a license to cheat, really — it would have required the Chinese to pay the North Koreans in food instead of dollars. But now, Pyongyang and Beijing can safely conspire to starve the North Korean people, while using the profits of their trade to terrorize Koreans on both sides of the DMZ.) Arguably, the Chinese won the right to sell North Korea more coal than we’d have allowed to pass through our financial system under the new U.S. sanctions law and executive order. For the sake of getting China to sign another piece of paper, we threw away that leverage.

Meanwhile, most of North Korea’s other revenue sources are untouched by any enforceable provisions (the text merely expresses “concern” about North Korea’s slave labor exports). A modest exception is a ban on the sale of North Korean crew services.

What hovers over all of this is that Chinese banks and businesses — encouraged by Beijing — have willfully and persistently cheated on the sanctions right up to this very minute. The new resolution would not have restated UNSCR 2270’s requirement to inspect checked baggage and cargo at land borders if China has not failed to enforce those provisions to begin with.

What’s needed much more than new measures is a stark demonstration to Chinese banks, businesses, and ports that those who cheat will suffer the same fate as Banco Delta Asia and Dandong Hongxiang. President Obama has decided to sacrifice the greater need, which is enforcement, for a lesser need, a new resolution. To the very last, this administration’s North Korea policy is much more tongue than tooth. At such moments, I sympathize with Donald Trump’s criticism that this administration doesn’t excel at negotiation. We’ll soon see if he can do any better.

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There’s no appeasing North Korea

North Korea has violated or summarily withdrawn from an armistice, the Nuclear Non-Proliferation Treaty, two IAEA safeguards agreements, an inter-Korean denuclearization agreement, two agreed frameworks, a joint denuclearization statement, the Leap Day agreement, and six U.N. Security Council resolutions — and yet, the most stubborn “engagers” of Pyongyang look on this clear historical record and declare that it calls for yet another piece of paper. Now that calls to negotiate a peace treaty with Pyongyang are metastasizing from the pro-North Korean fringe into far-left quarters of Washington academia, Pyongyang has presented further proof (not that any is needed) that the appeasement of Pyongyang is a fool’s errand. With delectable timing, it comes just after Joel Wit’s awkward call for Donald Trump to be the next POTUS to negotiate an unenforceable and unverifiable nuclear deal with North Korea.

The latest proof comes in the form of a nine-page bill of particulars against noted neocon collapsist Barack Obama, again clarifying (not that further clarification is needed) that Kim Jong-un will never give up the pursuit of a nuclear arsenal. (And to think what high hopes the North Koreans had for Obama before they called him “a wicked black monkey.”) The headline of the statement, “The DPRK’s Strengthening of its Nuclear Forces Is a Righteous Choice to Defend Itself from the Extreme Moves of the U.S. to Stifle It,” seems fairly conclusive to me, but then, I don’t work in a think tank.

But the real eyebrow-raiser is Pyongyang’s lengthy list of demands in exchange for — for what, again? Not even Wit can answer that, but for years now, the North Koreans have demanded that U.S. end its “hostile policy” toward North Korea, which raises the sensible question of just exactly what a “hostile policy” includes. According to the new North Korean statement, it includes U.N. and U.S. sanctions, South Korea’s defensive and deterrent military exercises, missile defense, criticism of Kim Jong-un’s crimes against humanity, and quite possibly the First Amendment right of private citizens to ridicule His Supreme Corpulency. To Joel Wit, the price would also almost certainly include vast amounts of money (money that Congress would almost certainly never appropriate).

But this obstructionist manifesto is also an invaluable insight into Pyongyang’s diplomatic strategy, because it helps us understand just how a North Korea “peace process” would play out in practice. Of course, a regime that constantly breaches the peace with acts of war doesn’t really want peace. A regime that uses war rhetoric to whip up xenophobic hostility to justify the isolation and poverty of its people, and whose stock in trade is to pile new and increasingly unreasonable demands on top of old ones can’t really want a peace treaty. That would not only truncate its list of demands, but would also undermine its martial propaganda narrative.

What North Korea really wants is a peace treaty negotiation — the longer and more inconclusive, the better. Its diplomatic strategy is to draw the U.S. and South Korea into an extended “peace process” in which it would make a series of up-front demands (the lifting of sanctions) in exchange for (at most) a partial freeze of its nuclear programs, which would effectively recognize it as a de facto nuclear weapons state. In short order, it would also demand the end to U.S.-South Korean military exercises, the curtailment of missile defense, and other demands that would ensure its nuclear and military hegemony over South Korea. Then, Pyongyang would demand an end to diplomatic and humanitarian criticism of its regime, censorship of anti-regime leaflets, demonstrations, and satirical films — in short, a limited recognition of its political supremacy over Seoul that would end in a one-country-two-systems Korea under North Korean domination, with Pyongyang gradually escalating its financial and political demands. We know this because it is already making those demands.

Pyongyang’s list of intolerable outrages includes “malicious slander and criticism,” military exercises, deterrent fly-pasts (mostly after North Korean missile or nuke tests), and (naturally) sanctions. They’re so pissed off about the North Korea Sanctions and Policy Enhancement Act that they mentioned it no less than four times, not even counting the many other executive actions that the NKSPEA required, and which this manifesto also lists.

If Pyongyang really believes all the things on this nine-page list really are unacceptable, it’s sure to add them as demands in any negotiation, and most of them are deal-breakers. As they say at the very end:

All the facts above clearly substantiate the truth that the root cause of escalated tension on the Korean peninsula lies with the U.S. hostile policy and nuclear threats against the DPRK, not the latter’s nuclear and missile tests.

The DPRK has chosen the road of possessing nuclear weapons as a self-defensive measure to safeguard its state and system from the constant nuclear threat of the U.S. We are strengthening our nuclear forces both in quality and quantity, holding fast to the line of simultaneously developing the national economy and nuclear forces as our strategic line.

The U.S. should face up to the new strategic position of the DPRK and take actual measures to show that they are willing to scrap its anachronistic hostile policy and nuclear threat against the DPRK.

This, and only this will be the first base of resolving all the issues. (emphasis mine)

Does North Korea really expect President Trump or a future President Ban to end what it calls the “human rights racket?” Granted, President Roh tried, a President Moon might try again, and candidate Trump expressed some fairly unconventional views of the First Amendment, but what Pyongyang is really demanding is that the U.S. and South Korea accept North Korea’s nuclear status, effectively abrogate their military alliance, and alter the constitutional foundations of their systems of government to make sure no one says mean things about His Porcine Majesty. They might as well have demanded that we revive Harambe, but a long “peace process” would leave ample opportunities to pile on more demands.

If the North Koreans found Barack Obama unforgivably insensitive, I wonder if they’ve read what Donald Trump and his advisors have said about them. I wonder if they’re expecting more diplomatic restraint and tact from Donald Trump than Barack Obama after their next nuke test. You can follow him on Twitter, by the way, at @realDonaldTrump. For your convenience, I understand he sometimes tweets during normal Pyongyang office hours. Full manifesto follows:

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China breaks N. Korea sanctions it says won’t work because it’s afraid they’ll work

In yesterday’s post, I linked to reports suggesting that China’s failure to agree on the terms of a new U.N. sanctions resolution responding to North Korea’s latest nuclear test may be motivated by a desire to wait out the end of President Obama’s administration. This theory would only make sense if China figures it can get better terms from President Trump next year, but my post pointed to evidence of the opposite of this — that what we know so far about the key people advising Trump is that some want to increase sanctions against His Supreme Corpulency and his Chinese backers, and others would prefer to terminate his command with extreme prejudice. 

First, I’ll offer an important caveat: it can be treacherous trying to divine President Elect Trump’s policy views by listening to his advisors.

With that caveat, then, if the present pattern of selections and nominations continues, differences between the U.S. and China over North Korea may have to get worse under a Trump administration before they can get better. Men like John Bolton, Mitt Romney, James Mattis, and Michael Flynn probably believe that President Obama’s deferential approach to China, rather than improving relations, likely contributed to China’s (correct) calculation that it could get away with grabbing vast areas of the South China Sea, bullying its neighbors, undermining North Korea sanctions, and doing other things to escalate regional tensions. They may see more pressure on China as a prerequisite to defanging North Korea. They may dismiss China’s explanations of its North Korea policy as mendacious and double-dealing, which is only natural, given that China actually has at least six of them — all of them risible, mutually inconsistent, or both.

First, there is China’s official diplomatic position, expressed in its vote for no less than six resolutions at the Security Council. Implicit in these votes are two ideas — that China wants a nuclear-free Korean peninsula, and that economic pressure is an important part of a policy for achieving that end.

Second, there is the reality of China’s material and financial support for the North Korean regime, often in violation of U.N. sanctions, including the sale of proliferation-sensitive technology (missile trucks, for example). China has spent the last decade violating the same sanctions it voted for because trade and engagement and all that. As I’ve pointed out more than once, those violations are much too extensive and long-standing to be anything less than willful state policy.

Third, there is the propaganda line advanced by China’s scholars and acolytes that sanctions — that is, the ones China has spent the last decade violating — never work. (Except, of course, when they do, but more on that in a moment.)

Fourth, when called on its years of flagrant violations, China says it’s afraid that sanctions will work so well they’ll destabilize the regime in Pyongyang. Here’s a typical example of something you’ve read at least a hundred times:

China fears that stricter measures against North Korea, such as cutting off provisions of oil and food, would lead to a humanitarian disaster with millions of refugees flocking across the border. The collapse of Kim’s government could also put soldiers from South Korea and its U.S. ally right on China’s border, a scenario Beijing’s leaders want to avoid. [Bloomberg]

A premise of that view is that China would rather have a nuclear-armed, genocidal North Korea along its border than a democratic one friendly to the United States, which it views with intense hostility. Usually, that premise goes unspoken, but not always.

“The United States cannot rely on China for North Korea,” said Shi Yinhong, a professor of international relations at Renmin University in Beijing. “China is closer to North Korea than the United States.”

China sees living with a Communist-ruled nuclear-armed state on its border as preferable to the chaos of its collapse, Mr. Shi said. The Chinese leadership is confident that North Korea will not turn its weapons on China, and that China can control its neighbor by providing enough oil to keep its economy afloat.

The alternative is a strategic nightmare for Beijing: a collapsed North Korean regime, millions of refugees piling into China and a unified Korean Peninsula under an American defense treaty. [N.Y. Times]

A fifth argument is that Beijing has little real influence over Pyongyang, which is spurious nonsense: 

China provides North Korea with most of its food and energy supplies and accounts for more than 70 percent of North Korea’s total trade volume (PDF). “China is currently North Korea’s only economic backer of any importance,” writes Nicholas Eberstadt, senior fellow at the American Enterprise Institute. [Council on Foreign Relations]

That argument looks especially spurious this year, as China uses trade as a blunt instrument against South Korea over its deployment of the THAAD missile defense system, and against the United States itself. China has made more threats against the U.S. and South Korea over missile defense this year than it has against North Korea in a decade over the missiles and nukes that gave rise to the threat itself.

Finally, China has a last line of defense: We are, too, enforcing sanctions!  If it comes under sufficient diplomatic pressure, for a few weeks or months, Beijing will encourage a few banks and companies to freeze a few accounts, arrest a few North Korean money launderers, or inspect some cargo entering or leaving North Korea. This compliance typically lasts for a few weeks or months until the trade returns to business as usual.

In 2013, and again this year, Chinese banks seemed (for a few weeks) to have frozen North Korean accounts right after a sanctions resolution passed. But by September, the Justice Department’s indictment and forfeiture action against Dandong Hongxiang proved that Chinese banks had gone right back to servicing His Porcine Majesty’s slush funds. At first blush, a new Washington Post report by Anna Fifield, indicating that Sino-North Korean trade dropped off suddenly in recent weeks, looks like the latest Chinese head-fake in response to pressure from the outgoing Obama administration.

[T]rading has become significantly harder in recent weeks, a dozen people involved in doing business with North Korea said in interviews, the result of a double-pronged attempt by Beijing to communicate its anger with the regime in Pyongyang. 

“Everything’s become tougher since September,” a Korean Chinese factory owner who employs North Korean workers here told The Washington Post. “This crackdown is because of the missile and nuclear tests, and it doesn’t look like it’s going to blow over.” [Washington Post, Anna Fifield]

This could be a head-fake, but it could also mean something entirely different and much more significant — Chinese companies may be showing their fear of U.S. secondary sanctions. Specifically, Fifield sees some evidence that the Dandong Hongxiang action had an in-terrorem effect on other Chinese trading companies. Indeed, she speculates that this action had a greater impact than the passage of U.N. sanctions:

But an equal or even bigger influence is the surprise detention of a prominent Dandong business executive, a member of the Communist Party no less, who stands accused of helping North Korea dodge sanctions and obtain materials for its weapons program.

“When business people hear this kind of story, of course we feel very constrained and it makes us very cautious,” a South Korean businessman trading in this area said on condition of anonymity. The atmosphere is so tense that none of the businessmen interviewed were willing to be publicly identified, even as they insisted everything was aboveboard.

Business is down, but no one knows how long that will last. And even now there are plenty of ambiguous signs: The annual trade fair here was canceled- yet coal exports from North Korea are breaking records. China holds the lever, and its intentions can only be speculated upon. [Washington Post, Anna Fifield]

This highlights a point that sanctions skeptics tend to miss or gloss over — that the goal of secondary sanctions isn’t so much to change the attitude of the Chinese government (probably a fool’s errand) but to threaten the divergent interests of the Chinese banks and business that are the instruments of Beijing’s sanctions-busting. Chinese banks and businesses are content to break sanctions if it’s profitable to do so, but not at the cost of their assets or their access to international markets, trade, or finance. 

Fifield treats these reports with justifiable skepticism, noting that the Chinese government’s interest in maintaining North Korea’s status quo (however horrific for North Koreans) probably hasn’t changed. Indeed, I see little clear evidence in Fifield’s report that this drop-off is the result of Chinese government action. What’s interesting and noteworthy is the timing of this change (in September). On September 9th, North Korea conducted its fifth nuclear test, which brought more diplomatic pressure on the Chinese government to enforce sanctions. The Dandong Hongxiang actions were announced on September 26th. One could argue that either event was a greater influence than the other.

Fifield and Andrei Lankov, whom Fifield quotes, then proceed to say that years of sanctions have failed, even as Fifield sees evidence that the Dandong Hongxiang action might have worked. But this is a false distinction. It misses the key point that U.S. authorities acted against Dandong Hongxiang for laundering money for Korea Kwangsong Bank, which was designated by both the U.N. and the U.S. for proliferation financing in violation of U.N. sanctions. This was an example of a Member State using its national laws to enforce U.N. sanctions, which is the only way U.N. sanctions can be enforced. Dandong Hongxiang is precisely what it looks like when someone bothers to enforce U.N. sanctions for once.

It’s difficult to believe that a single enforcement action — particularly one that failed to act against the Chinese banks behind Dandong Hongxiang’s violations — will be enough to put significant and lasting pressure on Pyongyang. Chinese businesses may be waiting to see how the new Trump administration responds. Or, we may be seeing the Chinese government’s latest head-fake. But for now, the report bears watching, and may eventually validate the effectiveness of secondary sanctions. 

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If China is gambling on Trump to blunt N. Korea sanctions, it could lose bigly*

By all outward appearances, President Obama never really had a coherent North Korea policy. While pursuing a deal that Pyongyang either didn’t want or wouldn’t keep, it reacted to each nuclear test by building on John Bolton’s work and nominally tightening the sanctions the U.N. initially imposed a decade ago, in Resolution 1718. The idea, apparently, was to deter Pyongyang by threatening its plans to develop Hamhung and Chongjin, something it no more intends to do than the Confederacy intended to institute a slave literacy campaign. Under President Obama, sanctions were always incremental, were never well-enforced, and never seemed to be part of any plausible broader strategy.

Still, if only to make a display of doing something after each test, the U.S. would expend much diplomatic energy on haggling with China (and Russia — let’s not forget Russia) over the terms of a new resolution. In due course, the Security Council would approve it, and for three or four months, everyone would pretend that this time was different before returning to business as usual.

As of today, 74 days have passed since September 9th, when North Korea conducted its fifth nuclear test, yet there is still no agreed draft resolution. For those keeping score, that’s the longest delay yet between a test and a resolution (the previous record of 56 days was set earlier this year, after the fourth nuclear test).

Three weeks ago, The Wall Street Journal reported that the P-5 were close to a deal on “[a] new sanctions package … that more effectively blocks the regime’s overseas funding sources,” and might narrow a “livelihood purposes” loophole that effectively nullified a ban on North Korea’s coal exports (see also). The U.S. side was also pushing China to agree to “crack down” on North Korea’s slave labor exports.

Meanwhile, Bureau 39 continues to rake in millions of dollars from higher coal prices, at the expense of military-controlled trading companies (but see this contrary report that coal prices are actually falling).

Reports today say that talks between the U.S. and China are in “their final stages,” but we’ve heard that before, and we still have no word that the two sides have agreed on a draft resolution. A few days ago, Obama had his last meeting with Xi Jinping. The meeting produced little more than a pro-forma agreement that the Korean Peninsula should be nuclear-free, a statement that increasingly becomes moot for North Korea as it gains relevance for South Korea. One of Obama’s priorities for that meeting was to push China to crack down on North Korea. If the result isn’t a significantly tougher resolution within a week, we can probably conclude that President Obama failed to achieve that goal.

That would lend credence to reports that China is stalling talks on a new resolution, perhaps until Obama leaves office. According to those reports, China is still smarting over the U.S. indictment of flagrant sanctions cheat Dandong Hongxiang Industrial Development (while sparing the banks that facilitated the violations). It may be calculating that a President Trump will be more focused on economic issues and won’t want to start off by antagonizing China over a low-priority issue like North Korea. That would be a big gamble.

trump-casino

If so, China may be miscalculating. Although the President-Elect has yet to name several key members of his national security cabinet, what we know so far doesn’t suggest that he’s likely to adopt a soft line or make North Korea a back-burner issue. The most talked-about contenders for Secretary of State are Mitt Romney and … John Bolton (enough said?). James Mattis, who recently spoke to the President Elect about North Korea and other issues, didn’t earn the nickname “Mad Dog” by calling for agreed frameworks. (Update: My favorite Mattis quote: “I come in peace. I didn’t bring artillery. But I’m pleading with you, with tears in my eyes: If you fuck with me, I’ll kill you all.”)

There is also direct evidence of what those close to President Elect Trump have said about North Korea policy. In a meeting with South Korea’s deputy National Security Advisor Cho Tae-yong, Michael Flynn, the selectee to be the next National Security Advisor, called the U.S.-South Korea alliance “vital” and said the new administration would make North Korea a priority. At the time, Flynn did not specify how, but Cho later said that Trump would adopt “stern measures,” and that his aides see “no momentum” for dialogue with North Korea. Flynn was previously quoted as saying, “We should not let the current North Korea regime … exist for a long time.” 

Despite Trump’s loose talk of talks with His Porcine Majesty, one Trump advisor, former congressman Pete Hoekstra, has already ruled them out for “the near future.” Heritage Foundation ex-President and Trump advisor Edward Fuelner has specifically said that the U.S. would impose a secondary boycott on Chinese firms that are propping up Pyongyang financially.

Even before Election Day, we knew that the next president could clash with China over North Korea. The result of the election doesn’t seem to have diminished the likelihood of that. I increasingly incline to the view that either the current President or the next one should signal to the Chinese that if they don’t agree to and enforce tough new sanctions, we’ll walk away from talks over a new resolution and act on our own. That strategy would use a combination of progressive diplomacy and the thinly veiled threat of Executive Order 13722 sanctions to get foreign governments to enforce UNSCR 2270. President Obama knows what he needs to do, but lacks the will. China would be ill-advised to assume the same of President Trump.

~   ~   ~

* Update: I couldn’t resist changing the title.

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If the CIA isn’t funding this covert communications network for North Korea, it should be

Many years ago, when I was a young engineering student at my small college in South Dakota, a grizzled CIA operations officer came to my school to recruit technical experts. To an aspiring man of the world living in a small, isolated island in a vast ocean of grass and sagebrush, before the arrival of the internet, the idea of meeting a real CIA man stoked an irresistible curiosity in me. You might as well have laid a trail of deer jerky from my dorm room to the student center.

I did not end up working for the CIA — readers in Pyongyang and Beijing and assorted tin-foil hatters, take note — but the grizzled operations officer did teach me some important nomenclature that I’ll share with the aspiring spies among you. One is that a CIA agent is an agency non-employee who provides information or assistance to the agency. An agency employee who works in intelligence collection or analysis is known as a CIA officer.

He also taught me the difference between the often confused words “covert” and “clandestine” with a crude-yet-effective example that went something like this:

If you break into your professor’s office, open his desk, write down the answers to the test questions, and sneak away without him knowing, that’s a clandestine operation. If you break into your professor’s office and take a dump on his desk, that’s a covert operation. He knows someone did it. He just doesn’t know who.

As God is my witness, yes, he really said that. But enough of this. You’re here to read about North Korea:

A group of North Korean defectors are seeking to change the Kim Jong Un regime with “raspberry pies,” but they’re not pastries for consumption. Instead the “pies” the activists are planning to smuggle into North Korea are portable personal computers. [UPI]

I’m no technical expert, but I think the correspondent means “Raspberry Pi.”

The “pies” are about the size of the palm of one’s hand, are cheap, and can be carried easily, according to the report. The computers can pick up wireless signals within a 1-mile radius. The defectors plan to retain a communications command center in an area of China close to the North Korea border. 

When thousands of the devices are smuggled into the country, they can automatically share information across a network that can extend all the way to Pyongyang and other areas more inland, the defector said.

“If in the past a North Korean would sing to himself as he listened to a South Korean pop song, now through the ‘raspberry pies’ he can learn about North Korea’s human rights violations and be moved to action and social change,” the defector said. 

The first step is to send in dozens of the “pies” as soon as funding becomes available, then seek the support of the international community to expand operations, according to Yonhap. [UPI]

Could it work? Yes, I think it could. The idea described here sounds very much like something called Mesh Networking, a concept that allows every wireless-enabled device to become a signal repeater for another device within range, which can be up to 5 or 10 miles, depending on various factors. Mesh networks are simple, cheap, and redundant. They’ve been studied for post-disaster communications, and as a way to frustrate state censorship of the internet. I’m not going to share all of the research I’ve done on them, but I will say that some of the ideas I’ve seen could be adaptable to North Korea’s conditions. They would allow Chinese (or South Korean) cell networks to enable communications across the length and breadth of North Korea. There would be so many nodes that the security forces could never find all of them. 

If the reports are accurate and Congressman Mike Pompeo of Kansas will be the nominee for CIA Director, he should take careful note of a few points.

First, anyone who hasn’t figured out by now that there is no appeasing Kim Jong-un is probably a lost cause. No matter how much we pay him, Kim is nuking up. Now matter how much we pay him, he’s pursuing a graduated, methodical plan to assert hegemony over South Korea, and what’s more, I’m convinced that a majority of South Korean voters may soon elect a man who would surrender their freedom to him in the name of a moment’s security from terror. (If that really is the will of the South Korean people, I would respect that. But I’m convinced that it’s not the will of the North Korean people, who know far better than they do how that would work out in practice.)

Second, much is made of the importance of getting outside information into North Korea to shift popular perceptions of their own government. I agree that this is important. At the moment, it is Jieun Baek who is emerging as the most powerful advocate of this idea. But outside information alone will not be enough to change North Korea. No amount of discontent or envy means anything if the discontented are too isolated and afraid to act on their aspirations.

Which brings us to a point I’ve flogged more than once — that North Koreans will not be able to challenge the state until they have the ability to communicate and organize with other North Koreans, and until information can spread among North Koreans from village to village, valley to valley, province to province, and country to country. I explained here, in detail, how these communications would evolve from the non-political to the political to the subversive to the revolutionary.

I’m convinced that nothing short of an overthrow of Kim Jong-un, or a slow capitulation toward One Slave Korea, can prevent another Korean War. Not only can a covert communications network bring us closer to the first of these objectives, it can also provide for the humanitarian needs of the people who need it most, provide invaluable intelligence and public-interest information about conditions inside North Korea, and pave the way for a less chaotic reunification between North and South.

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As Trump picks his cabinet, Congress flexes its foreign policy muscle

As we continue to watch Trump’s trial balloons float by on the selection of his national security cabinet, we still don’t know much about the foreign policy Donald Trump would have as President. On the other hand, most of Congress’s key players on foreign policy will still be around next year, and some of them have already begun to assert themselves. Committee chairs are (on one hand) pushing Trump to adopt more conventional foreign policy views, while (on the other) threatening to use their power to undermine any major policy shifts, specifically toward the Kremlin.

Some of the most powerful foreign-policy makers in the U.S. government are outside of President-elect Donald Trump’s control and are already signaling an early end to the honeymoon period over their fellow Republican’s security and diplomatic stances. [Foreign Policy, Molly O’Toole]

Ed Royce, the California Republican who conceived the North Korea sanctions bill that became law in February, and who stayed mostly quiet on Trump’s candidacy this year, will be back as Chairman of the House Foreign Affairs Committee next year. Hopefully, so will his Senate co-champion, Cory Gardner, at the helm of the Senate Foreign Relations Committee’s Asia Subcommittee. (Gardner’s rising star status was cemented this week by his selection to head the National Republican Senatorial Committee.) After some of Trump’s statements last year cast doubt on the alliance, both Royce and Gardner visited South Korea to reassure its leaders. Paul Ryan has also been supportive of the alliance.

Bob Corker, the current Chairman of the Senate Foreign Relations Committee, remains in the running for Secretary of State. Whether Corker is nominated or stays on as Chairman, he’d be a moderating influence. If Corker does leave the Senate, next in line, in terms of seniority, would be Idaho Senator James Risch, who called voting for Trump “distasteful,” but said he’d do it anyway. If congressional Republicans really want to put their stamp on foreign policy, however, they’ll pick the talented and highly intelligent Marco Rubio, who is fresh off a convincing reelection win. 

Also back at the Armed Services Committee is the newly reelected John McCain, who has joined with his close friend, Lindsey Graham, in making clear that any pivot to Moscow will face significant resistance in Congress.

“[Trump] wants to reset with Russia. Maybe he can do it, but here’s my view about Russia: They’re a bad actor in the world, they need to be reined in,” Sen. Lindsey Graham (R-S.C.) said Tuesday, adding that it would be up to Congress to let Russia “know the rules of the road pretty early,” even under a friendlier Trump administration.

“I think [Russia] should pay a price heavier than they’re paying now for what they’re doing in Syria and in eastern Europe,” Graham added. “I will consult with my colleagues what there is appetite for.”

Graham isn’t the only Trump critic who came out swinging on Tuesday on Russian involvement in global affairs. His close friend and colleague Sen. John McCain (R-Ariz.), who chairs the Senate Armed Services Committee, said that “the price of another ‘reset’ [with Russia] would be complicity in Putin and Assad’s butchery of the Syrian people. That is an unacceptable price for a great nation.” [Washington Post, Karoun Demirjian]

What can Congress do, aside from mere words? The Post’s report says that lawmakers are preparing “a battery of legislative measures to hold the line against Russia, regardless of what the president-elect tries to do.” Such as? First, words do matter, and Graham is threatening to hold “a series of hearings about Russia’s misadventures throughout the world” and cyberattacks. Although Republicans balked at holding pre-election hearings into Russia’s meddling in the election, Republicans haven’t dropped the issue, either.

“We cannot sit on the sidelines as a party and let allegations against a foreign government interfering in our election process go unanswered because it may have been beneficial to our goals for the moment,” Graham said Tuesday. 

In the House, Royce also said he would be interested in investigating Russia’s connection to the hacking incidents. “I would hope that all federal agencies are investigating,” Royce said. “If we can get evidence, it’s very worthwhile to pursue any information we have.” [WaPo]

Second, Congress can do what it did to force a reluctant President Obama’s hand on North Korea: impose mandatory sanctions. This week, the House passed the Caesar Syria Civilian Protection Act of 2016, which could force the next administration to sanction Assad’s Russian backers, among others. If the name of the bill sounds familiar, that’s because “Caesar” is the code name for the subject of a chilling Ted talk by his former CIA handler, a man who would later become a House staffer and independent candidate: Evan McMullin. Ordinarily, the calendar would make it difficult for the Ceasar Act to pass this Congress, but even Corker says “there’s going to be much more opportunity for bipartisan passage” of bills pertaining to Russia, and that lawmakers “plan to be aggressive” before the year ends. If the bill doesn’t pass this year, expect to see the same text introduced again in January.

“Regardless of perspectives on Syria, there’s some unanimity of opinion in sending a message on this kind of conduct,” House Foreign Affairs Committee Chairman Ed Royce (R-Calif.) said prior to the vote. [WaPo]

Ditto North Korea, if you’ve been watching the recent oversight hearings in the House and Senate.

Finally, Graham is promising “a package that would help our Eastern European allies better deal with the threats they face from Russia” that includes broad defense aid “to make it harder for Russia to advance beyond where they are today.” If Trump’s rhetoric on cost-sharing helps defray the cost, that aid package may be more palatable in Congress. Ed Royce thinks Trump’s public skepticism about NATO was nothing more than a “very successful negotiating tactic” to persuade NATO allies “to pay their share of the burden” in funding the alliance. Corker claims to have seen an “evolution” in Trump’s views on Russia and NATO.

If Trump can persuade Japan and South Korea to contribute more funds without harming the integrity of the alliance, I’d say all ends well, except that I have no confidence that all ends well if the left wins South Korea’s next presidential election. Another outbreak of anti-Americanism could erode congressional support for the alliance below a critical level, especially if South Korean politicians are seen as feeding or playing into that. 

Historically, the President has enjoyed great deference in the conduct of foreign policy. This Congress is already hinting that it means to push the envelope in that historic power struggle. If Trump prefers to prioritize other matters, we may see an early compromise, especially if Trump appoints a more conventional and moderate cabinet. If not, we may see a period of intra-partisan conflict and gridlock between the executive and legislative branches. If Congress prevails, the result could be a historic expansion of Congress’s power over the conduct of foreign affairs.

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Trump & Korea Policy: We Now Enter the Bargaining Stage

If South Korea’s most sober and cool-headed people are checking the prices of houses in Fairfax this week, there are some good reasons for that. Our next president-elect’s Korea policy could not be more unsettled if he had written it on an Etch-a-Sketch, set the Etch-a-Sketch on the bed of the honeymoon suite in Trump Tower, and fed four quarters into the magic fingers.

In his 2000 book, “The America We Deserve,” Trump advocated a surgical strike against the North’s nuclear facility before it’s too late. In this year’s campaign, he said the North is China’s problem to fix, though he also expressed a willingness to hold nuclear negotiations with the North’s leader while eating hamburgers. Trump has also called the North’s leader a “madman,” a “maniac” and a “total nut job,” but he’s also praised the young dictator, saying it is “amazing” for him to keep control of the country. [Yonhap]

On the U.S. side, then, it has never been so true that “personnel is policy.” The potential candidates for State, Defense, and Treasury are a Whitman Sampler — diverse and surprising, and in some cases, we’ll probably want to throw them away after the first bite. The New York Times lists the candidates for Secretary of State as John Bolton, Bob Corker, Newt Gingrich, Zalmay Khalilzad, and Stanley McChrystal. All of these men are well-qualified, experienced, and intelligent, and they’ve given much serious thought to foreign policy, although I’d have some misgivings about Gingrich’s temperament and judgment.

Also, Dana Rohrabacher’s name has been mentioned. So has Rudy Giuliani’s, although I can’t see what he really knows about foreign policy. 

Bolton’s nomination would throw the left and the isolationists into apoplexy. It’s tempting to say that this alone is a reason to nominate him (it isn’t). I’d be most reassured by the nomination of Bolton or Corker (who is blamed by some on the right for green-lighting President Obama’s Iran deal, but who played an essential role in passing the North Korea sanctions law this year).

Having met Bolton more than once, he’s a much more sophisticated thinker than his foes give him credit for. I was most surprised by his dry sense of humor — indicative of a capacity to digest contradictions and contraindicative of a one-dimensional ideologue. Bolton narrowly lost a tough confirmation fight to be U.N. Ambassador in 2005, due in part to his undiplomatically harsh characterization of North Korea. I’ve relished pointing out that at the time, one of the strongest critics of Bolton’s criticism of Kim Jong-il was John Kerry, who went on to say worse of Kim Jong-un, thus implicitly validating that Bolton was really right all along. On North Korea policy, I’ve defended Bolton’s record and pointed out that President Obama’s entire North Korea policy (such as it was) was a series of sand castles built on UNSCR 1718, which Bolton drafted and negotiated. 

For Treasury Secretary, candidates under discussion include Jeb Hensarling of Texas, the current Chairman of the House Financial Services Committee, Steve Mnuchin, a Wall Street banker who financed a string of successful Hollywood films and who holds conventionally conservative economic views, and Tim Pawlenty, a former Minnesota governor and darling of economic conservatives. For Defense, those under consideration include Michael Flynn (who has been accused of being too cozy with Putin), Jon Kyl, and Jeff Sessions. 

~   ~   ~

South Korea’s beleaguered President, Park Geun-hye is understandably terrified of this uncertainty and the risk that Trump’s election could endanger the country’s alliance with its long-standing security guarantor. For example, Victor Cha was quoted as suggesting that Trump might accelerate the transfer of operational control of alliance forces from the U.S. to South Korea. It’s a move first proposed by Donald Rumsfeld, but South Koreans have come to see it as a first step toward U.S. withdrawal. Nervous South Koreans have been trying to build bridges to Trump’s transition team, even as protesters have massed in the streets in an attempt to oust the first democratically elected South Korean President to have an effective North Korea policy since … ever.

Park must have been relieved when, in a ten-minute telephone conversation, Trump promised that America would continue to be a “steadfast and strong” ally, would stick by Seoul “all the way,” would “never waver,” and would be “with you 100 percent.” Reports of the conversation between Park and Trump suggested that Trump had backed away from some of his more isolationist rhetoric, and reassured jittery South Koreans. One subject Park probably brought up was sanctions against North Korea, maintaining the momentum toward cutting off Kim Jong-un’s hard currency, and confronting China’s long-standing and willful sanctions-busting. Here, Trump’s team has been saying the right things:

The United States should impose “secondary boycott” sanctions on Chinese financial institutions for doing business with North Korea, a senior member of the transition team of U.S. President-elect Donald Trump was quoted as saying Tuesday.

Former Heritage Foundation President Ed Feulner, considered a key policy expert in the transition team, made the remark during a meeting with a bipartisan group of South Korean lawmakers, according to Rep. Na Kyung-won of the ruling Saenuri Party.

Feulner’s remark suggests the U.S. is expected to intensify pressure on China. That’s also in line with Trump’s stance on how to resolve the North Korean nuclear issue. He has said that he would pressure Beijing to exercise more of its influence over Pyongyang because it is basically China’s problem to fix.

Feulner also strongly reaffirmed the alliance with South Korea, Na said.

“While stressing that there is no daylight in the alliance between the two countries, he said that there is no difference in the positions of the Republican Party and the Democratic Party or between the ruling party and the opposition party,” she said. [Yonhap]

Trump now denies that he ever suggested that South Korea and Japan should go nuclear. (I’m willing to give him a pass on that if it reassures people, but the idea of going nuclear doesn’t strike me as an insane view from the perspective of defense planners in Seoul, Tokyo, or Taipei. What strikes me as insane is the idea of letting Beijing and Pyongyang have a nuclear monopoly in Asia.) 

In any event, the reassurance won’t last.

First, North Korea immediately made it clear that it won’t denuclearize. This isn’t surprising, although even in his infamous “hamburger” gaffe, Trump still said of Kim, “[W]ho the hell wants him to have nukes?” That puts Trump and His Porcine Majesty on a collision course. 

Second, even assuming Trump nominates a competent foreign policy team, we’ll likely see some difficult negotiations next year over the next USFK cost sharing agreement. I had expressed the view that South Korea should pay a greater share of the cost of USFK long before Trump did. According to the World Bank, Israel spends 5.9 percent of its GDP on defense and the U.S. spends 3.5 percent. By contrast, South Korea spends 2.5 percent and Japan, just one percent. With the U.S. paying the cost of new THAAD batteries in South Korea, U.S. taxpayers will shoulder a higher cost. Given the insufficiency of THAAD as a defense against shorter-range missiles, South Korea may have to buy C-RAM and Iron Dome to protect Seoul and its surroundings. Clearly, South Korea and Japan will have to do more. It’s also true that the three countries are stronger together, and that by integrating their defense strategies, all three countries would spend less to protect themselves against a common threat. The U.S. can make a good deal for the taxpayers if South Korea and Japan pay something more than 50% of the cost, and something less than 100%.

The greater danger, however, lies in the convergence of North Korea’s nuclear hegemony and weak leadership in Seoul. Pyongyang is gradually losing control over the flow of information to its suffering people, and an impoverished North cannot coexist with a prosperous South. Kim Jong-un knows that this ideological competition is zero-sum, and that one system must eventually defeat the other. He cannot possibly believe that his starving conscript army could occupy South Korea today. Instead, since 2010, he has been fighting a war of skirmishes, instigating calculated provocations and sometimes winning important concessions on South Korea’s self-defense, its national policy, its sanctions-busting financial subsidies to Pyongyang, and even South Koreans’ freedom to criticize the North’s system of “government.”

It’s not hard to see how this war of skirmishes will escalate when Kim Jong-un gains an effective nuclear monopoly on the Korean peninsula, or how a future leftist South Korean government might yield to a slow-motion surrender, as part of an extended “peace process,” to the celebration of much of the world press and a few academic dullards who will not even understand what they’re witnessing. Indeed, the greatest Korea policy challenge that most Americans do not fully grasp is how deeply anti-American and anti-anti-North Korean — and in many cases, how pro-North Korean — the South Korean left really is. Today, it looks overwhelmingly likely that the left will end up winning next year’s South Korean presidential election. It’s difficult to see how the next Secretary of State will align with the next South Korean president on defense or North Korea policy. 

What all of this means is that the U.S.-South Korean alliance is about to face its greatest threat since the election of Jimmy Carter, only now, the potential consequences are vastly more terrible for Korea, and for us all: One Slave Korea, the end of nuclear nonproliferation, an increasingly direct North Korean threat to the U.S., and a vast range of geopolitical, humanitarian, and economic effects, all of them bad.

But on the bright side, I hear there are some great bargains in Loudon County. See it before the last leaves fall.

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No, Newt Gingrich did not call for us to invade Iran and North Korea

It’s faint praise to say that Newt Gingrich would likely be an improvement over John Kerry as Secretary of State. I hardly count myself as Gingrich’s greatest fan. He’s intelligent and qualified for the job, and he certainly has grand policy visions, although I’d have concerns about putting a man of his ego and temperament into the nation’s top diplomatic position. I also think he’d have more trouble than Bob Corker or even John Bolton in his efforts to bend the State Department civil service to his will. 

That being said, Gingrich deserves to be treated fairly, and it’s harmful to the interests of both the U.S. and South Korea when the state news services of allied nations raise panic in their capitals by mischaracterizing his views. So when I saw this written about Gingrich in Yonhap, something told me it couldn’t be right.

I can’t say where the reporter got this idea for certain, but if you google “Gingrich invade North Korea,” the first page of results includes a blog post of questionable credibility that makes a similar claim. I emailed the reporter and asked him for the source of the statement. The reporter didn’t respond, but a few minutes later, the sentence in question had been altered to this:

This still isn’t a quote, a correction, or even (as we’ll see) an accurate statement. It’s just a dilution of “invade” to “attack” and the insertion of the weasel-word “apparently.” This only made me more determined to find Gingrich’s original words. It probably took 15 solid minutes of googling before I found the original speech on video and sent it to the reporter (still no reply). It took 10 more minutes before I found a transcript of Gingrich’s speech on the Wayback Machine and suggested that a correction was in order (again, no reply). But for your edification, here is what Mr. Gingrich really said:

I think that in a sense, President Bush came very close to defining this twice. First was in the “Axis of Evil” speech, January 29, 2002, in the State of the Union, where essentially I believe he was right but in fact could not operationalize what he said. That is, it was an axis of evil; Iran, Iraq, North Korea. Well, we’re one out of three. People ought to think about that. If Bush was right in January of 2002 – and by the way, virtually the entire Congress gave him a standing ovation when he said it – then why is it that the other two parts of the axis of evil are still visibly cheerfully making nuclear weapons?

That’s because we stood at the brink, and looked over, and thought too big a problem. If Harry Truman had done that, the world today would be communist. If Franklin Roosevelt had done that in ’41, either the Japanese or the Germans would have won. If Lincoln had done that, we would’ve become two and then multiple countries. I mean there are moments in history when you have to stand up and say, okay, tell me the size of the problem, I’ll go get a solution of same size. I will overmatch the problem. That’s what Americans are all about; we overmatch problems with energy, creativity and drive. [Newt Gingrich, address at the American Enterprise Institute, July 29, 2010]

What Gingrich called for, then, was for President Bush to confront North Korea and stop its progress toward a nuclear arsenal. Gingrich never says how, exactly, we’re supposed to do this, leaving it to bloggers and reporters to simply stuff words into his mouth. This brings us to the reporter’s third amendment of the sentence, yielding this still-inaccurate statement:

But an invasion is only the most extreme possibility one could invent from what Gingrich said. Other equally plausible guesses include harder sanctions, a diplomatic deal with China to cut off financial support for North Korea, a limited strike against Pyongyang’s WMD facilities, information operations and other strategies to destabilize the regime from within, or some combination of these things. It’s a significant enough error that it demands an outright correction. Instead, we get weasel-words, mischaracterizations, and unjustified assumptions.

I’m a daily reader of this reporter’s writing, and I suppose (by default) I’ll continue to be. The slant on his reporting was always obvious from the way he’d make a news story of every solitary opinion by some “expert” who’d obviously never read a sanctions regulation — inevitably, a left-leaning or pro-engagement one — that sanctions wouldn’t work. This, however, is a whole new level of inaccuracy that has cost this reporter my respect. Is it any wonder that conservatives distrust journalists when journalists twist the words of conservatives this way?

Note that we haven’t even reached the greater absurdity — that the arch-conservative Gingrich cited the socialist free-love quasi-pacifist bon-vivant Albert Camus to justify a more muscular foreign policy, but I’ll let you work that one out on your own. 

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It’s time to help Donald Trump be a good president

Stop laughing, already; it isn’t funny anymore. It’s no secret that I opposed Donald Trump’s candidacy from the beginning to the end. My misgivings about his character, temperament, and qualifications remain. My precocious son, reading this over my shoulder, just asked me how much fallout shelters cost. But the election is over now, and we need to make an important distinction: how a patriotic citizen responds to a candidate, and how he responds to a president-elect.

If a citizen believes a candidate to be unfit for office — and also, that he’s even more unfit for office than the other candidates who are also unfit for office — then his patriotic duty is to oppose and vote against that candidate.

But the voters have now spoken in a free and fair election. Now, the citizen’s duty is to help the President be a good president, and to wield power wisely, justly, and effectively. That might mean opposing the President when he makes bad decisions. It also means helping the President to make the right ones, and to carry them out effectively. It doesn’t mean abandoning principle, or accepting words or actions the citizen believes to be unlawful, unconstitutional, or un-American. That is why we speak of a “loyal opposition.” That’s what makes democracy hard — too hard for some people. Too hard for the people who are protesting the fact that a majority of electors in a democracy are about to pick a candidate the protestors didn’t like.*

I have some news for those people — this year, most of us picked candidates we didn’t like. More than in any recent election in U.S. history, this election was about who we liked the least. That partially explains the low turnout. Some of my closest friends are good and decent people who didn’t so much vote for Trump as against Clinton. They aren’t bigots or alt-righters. Some believed Trump’s promise to appoint conservative justices to the Supreme Court, but for the most part, they just really disliked and distrusted her. I can see why. Those of us who remember the Bill Clinton years remember that there was always another Clinton scandal. Recent events have regurgitated all of those bad memories in front of us. That may also explain why so many people who notionally preferred Clinton over Trump still didn’t show up to vote for her.

To protest against Trump’s election isn’t unfair, but it is undemocratic. When Trump cast doubt on his acceptance of the election result in the last debate, pundits questioned his patriotism and raised concerns that his supporters would resort to violence. Now that the shoe is on the other foot, who is unpatriotic now? No matter how great a threat you may think Trump is to the republic, he won fairly under the rules established by the Constitution. These people are really protesting the outcome of a peaceful, free, constitutional election. By refusing to accept the result and reacting (in some cases) with violence, the protestors have become the undemocratic mobs they accused Trump and his supporters of being. And if Trump is really the authoritarian they fear he is, the left’s violence would be his best possible justification to fulfill their darkest fears.

I was relieved that Trump’s victory speech was conciliatory. His conduct during his visit to President Obama at the White House was civil and gracious. This, too, was a step in the right direction. 

I have my doubts that the clown mask is off and that a new, more presidential Trump is here to stay, but at least he’s making some effort. I suspect we’ll have to define the term “presidential” down for a few years. For now, his antics still feel novel and refreshing to some people, but they’ll get old fast.

Save the protests for when Trump makes unwise and unjust decisions. And if you consider yourself to be a smart person who thinks Trump is out of his depth, then offer him your wisest counsel. He might just need it. For the next four years, he’s the only president we’re going to have, and for most of us, this is the only country we’ll ever have.

Right now, Trump may feel invincible, but the men and women around him — Gingrich, Giuliani, Christie, Conaway, and Corker — aren’t stupid, whatever else you might say about them. They know that Trump’s supporters expect him to deliver an assortment of goals that are (variously) difficult, unobtainable, mutually contradictory, or absurd. In due course, they will make Trump understand what he can’t do at all, and what he can’t do alone.

For example, it is absurd to believe that Trump can reverse or stop the dislocating effects of automation. He can’t make manufacturing labor intensive again. He can’t save the Teamsters’ Union from self-driving trucks. He can’t make our wages competitive with wages in Indonesia. He can raise tariffs, but if he does, he can’t stop the consequent inflation and recession that will cost him reelection.

It is not absurd to believe that Trump could claw back some lost blue-collar jobs and raise wages by enforcing our immigration laws. All around Washington, I see men working in good paying jobs in the building trades, or driving trucks, who look and speak like recent immigrants from Central America. I made the same observation about the meat packing industry when I lived in Nebraska. I have no way of knowing how many of these workers came here legally, of course. Perhaps restoring our faith in our enforcement of the law would dispel the assumptions many of Trump’s voters (and many of us) probably make. Or, perhaps it would create more job openings and raise wages for workers here, albeit at a terrible cost to Central Americans.

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Building The Wall would be expensive, but the idea is not absurd. Long segments of the border are already walled. An interstate highway system is just a network of walls laid flat. If we can build highways and pipelines, surely building a few hundred miles of border wall is also possible. It’s not immoral or racist to argue that we have a sovereign right to protect our borders and choose who we allow to immigrate into our country. Many more people would like to live here than we have room for. It’s our right to choose those who will make the greatest contribution to our society and find the greatest happiness among us. Fewer poor, uneducated, illegal immigrants from Guatemala might allow us to admit more affluent, educated, legal immigrants from Hong Kong as its democracy fades away. Perhaps the best thing we can do for Guatemalans is to help Guatemala develop and improve the quality of its government.

Making Mexico pay for The Wall? Now that’s absurd, although the President could defray the cost by creating a special construction fund from the money forfeited from cross-border drug smuggling and money laundering. He could even tax remittances, although this would be highly regressive. 

Much is said about Trump’s alleged isolationism, but this probably gives him too much credit. “Bombing the shit out of” ISIS and stealing Iraq’s oil don’t sound like isolationist ideas to me. Trump doesn’t see doctrines; he sees inkblots. Speaking as someone who used to live here …

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and whose origins are in a very Trump-friendly demographic, I suspect that much of Trump’s appeal is that he projects strength and dominance to voters who tire of Obama’s dainty intellectualism and weakness, even as a species that abhors a vacuum descends into anarchy and madness. When Trump’s supporters say we have too many foreign entanglements and wars, they really mean we have too many foreign entanglements that don’t pay and wars we don’t win. They’re tired of losing. So, for that matter, am I. Trump craves the adoration of the mobs, and the mobs like the idea of “noninterventionism” in the abstract, right up until someone pisses them off. Then, they want a president who bombs stuff and wins wars. (This, of course, is more easily said than done.)

The point I’ll close with, then, is that Trump has made big promises, some of which he can’t keep, and some of which he can’t keep without a lot of help. He can’t pay for The Wall and more ICE officers without congressional appropriations. He can’t renegotiate trade deals without competent diplomats. He can’t nominate cabinet secretaries, officials, or judges without the advice and consent of the Senate. He won’t know which fights to pick without smart and competent advisors, and he won’t win the ones he does pick without the support of the military. The military will follow lawful orders, but that’s all the support he can count on without asking nicely.

Senate Republicans have a two-vote margin — plus Mike Pence — but the next Congress will include ten Republican senators who opposed Trump’s candidacy and several others (Cruz, Rubio, Paul) who have been critical enough of him in the past that Trump knows he can’t count on them if he overreaches. If he nominates Jeff Sessions or Bob Corker for a cabinet position, he takes the risk (a small one) of losing another seat. In the House, Republicans will have a 21-seat margin, but 24 of the returning GOP representatives openly opposed his candidacy, and many other Republicans only silently acquiesced to it. 

Trump must know that if he fails to deliver what his crowds want, his party will fracture, he will effectively lose his fragile congressional majorities, his agenda will falter, his poll numbers will collapse, his supporters will lose interest in him by the next mid-terms, and he might even get primaried. He overshadowed a divided field to win the primary, and drew an exceptionally weak opponent in the general. He may be the luckiest candidate in American political history, and he probably knows it. It’s in his interest that he be a good president, and — speaking as a Trump skeptic — it’s in our interest that, however long the odds against it, that he be a good president, too.

Those who withheld their support from candidate Trump were acting patriotically. But as long as President Trump acts in accordance with the law and the Constitution, the most patriotic decision we can make now is to help him govern and protect our country.

~   ~   ~

* Corrected, in view of Clinton’s popular vote majority.

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Treasury finalizes cutoff of N. Korean banks from U.S. financial system

After a long delay, the Treasury Department has issued its final rule prohibiting financial institutions operating in U.S. jurisdiction from providing direct or indirect correspondent account services to North Korean financial institutions. In English, that means North Korean banks are now denied a critical link for accessing the global financial system.

North Korea is now one of only three countries to be declared a Primary Money Laundering Concern by the Treasury Department, and is the only country subject to Special Measure 5. Under section 311 of the Patriot Act, the imposition of Special Measure 5 requires formal rulemaking — notice, comment, and publication of a final rule in the Federal Register — which explains some of the delay since late May, but not all of it.

You can read Treasury’s press release here, the Federal Register notice here, and also, press reports from Yonhap and The Wall Street Journal.

The skeptics will have several responses to this. The first, that North Korea is already heavily sanctioned, I’ve already debunked, and most experts who actually understand sanctions will agree with me here. The second, that North Korea stopped using the dollar system years ago, has been refuted by the Justice Department’s recent indictment and U.N. reports. Indeed, Bill Brown’s analysis tells us that North Korea has dollarized its economy to stabilize it. The most recent counter-arguments are that North Korea doesn’t directly access the financial system through its banks, and that it effectively hides its money using front companies.

The latter arguments are best addressed by pointing to the example of C4ADS’s exposure of hundreds of North Korean ships, agents, and front companies using open-source research. That, in turn, led to the indictment of, and forfeiture action against, Dandong Hongxiang Industrial Development, which used its own bank accounts to provide indirect correspondent account services to a sanctioned North Korean bank, Korea Kwangsong Banking Corporation. The new 311 rule expands the prohibition on providing such services to cover all North Korean banks, not just those designated by the Treasury Department.

The DHID case is illustrative of one of the main strategies North Korea has used to adapt to the BDA action. It uses front companies like DHID, Chinpo Shipping, and 88 Queensway, and others that operate as unlicensed money transmitting businesses, which is itself a criminal offense. Those businesses then use their own accounts in Chinese banks to provide North Korea with indirect correspondent account services. In other words, the DHID indictments reaffirmed that North Korea continues to rely on the dollar system, and we have legal tools that are perfectly suited to shutting down that use — or would be, if the Obama administration had the political will to use them.

One discouraging sign is that Treasury did not also impose Special Measure 2, as Bill Newcomb and I recommended, apparently claiming a lack of jurisdiction.

As described above and in the NOF, FinCEN shares the concerns raised by the comment regarding North Korea’s extensive use of deceptive financial practices, including the use of shell and front companies to obfuscate the true originator, beneficiary, and purpose behind its transactions. However, FinCEN’s authority, as granted by Congress in 31 U.S.C. 5318A(b)(2), applies only to information concerning the beneficial ownership of “account[s] opened or maintained in the United States” and thus would not extend to information relating to the beneficial ownership of property writ large, or to property outside the United States as the comment suggested. [Final Rule]

This is a blue answer to a green question. What we were suggesting, of course, was exactly what paragraph (b)(2) of Section 311 authorizes — that Treasury may “require any domestic financial institution or domestic financial agency to take such steps as the Secretary may determine to be reasonable and practicable to obtain and retain information concerning the beneficial ownership of any account opened or maintained in the United States by a foreign person.” To the extent that North Korea’s front companies transact in dollars and use banks that operate in U.S. jurisdiction, FINCEN has the jurisdiction to impose this measure. Either Treasury is conceding that it has no jurisdiction to enforce this entire provision, or it simply isn’t willing to use it. And when North Korea’s sanctions evasion strategy is all about hiding its money behind shell companies and front companies, exposing these interests will be key to making sanctions work.

The new 311 action thus has one potential advantage and one potential disadvantage over Treasury’s 2005 action against Banco Delta Asia, the effectiveness of which is beyond serious dispute. Unlike the BDA action, Treasury’s new 311 action covers all North Korean banks, not just one small Chinese bank that enabled them. But the advantage that BDA had over Treasury’s final rule is that it signaled a willingness to reach third-party enablers, including Chinese banks, that the Obama administration hasn’t shown. The BDA action was followed by a campaign of global financial diplomacy that sent a clear message to North Korea’s bankers everywhere. Today, in contrast, the designation of North Korea would never have happened had Congress not forced the administration to act through legislation, and Congress seems unanimous in its frustration that the administration isn’t willing to enforce the law.

In theory, the new 311 action could be the single most powerful sanction yet imposed on North Korea. In practice, however, it will amount to nothing if the administration continues to refrain from enforcing the new sanction, by simply looking the other way at Chinese banks’ laissez-faire compliance with Know-Your-Customer rules, and even flagrant cases of money laundering.

All of which promises to set up major tensions between the U.S. and China during the next administration, but I’ll let you read Josh Rogin’s take on that, along with this, this, this, this, and this, all suggesting that if Clinton wins, she’ll intensify sanctions against His Porcine Majesty and his Chinese bankers. Speculate on your own as to whether this is just talk. Also, speculate on your own as to which of Trump’s advisors really speaks for a potential President Trump.

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China’s real-name cell phone registration rules could further isolate North Koreans

North Koreans’ most important link to the outside world, signals from Chinese cell phone networks that reach over the border inside North Korea, may soon be cut off. China is starting to enforce real-name registration requirements designed to crack down on scams and harassment, and North Koreans could be hardest hit.

North Koreans with relatives outside the country depend on Chinese mobile phone networks to communicate internationally, as the state’s networks are limited to calls made within the country.

China’s three main cell phone carriers already require subscribers to undergo name verification. While some North Koreans can have a relative in China register the phone on their behalf before the device is used in North Korea, a second source told RFA the process is “not that simple.”

The China-based registrant could still be charged with smuggling the phone into North Korea or engaging in other illegal activity if caught, the source said. In North Korea, the regime has continued to crack down on Chinese mobile phone use and has at times blocked wireless signals along the China border. [UPI]

It’s all the more reason for the U.S. and South Korean governments to redouble their own efforts to break down the digital DMZ. Unfortunately, the ongoing implosion of Park Geun-hye’s government makes it unlikely that South Korea would do anything as brave as building cell towers along the southern border or increasing the range or effectiveness of its broadcasts to the North. That means North Koreans may have to rely on corruption to circumvent the new Chinese rules until new initiatives like Project Loon or Facebook’s Aquila drones are ready.

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The new North Korea engagement is about life after Kim Jong-un

By now, most sensible people have discarded the faddish illusions of 2012 that Kim Jong-un would be the Swiss-educated reformer they’ve been waiting for. Mainstream opinion is migrating to the view that the world would be a safer and happier place without Kim Jong-un, although one seldom hears these sentiments developed as concrete ideas. The practical obstacles to achieving them are obvious. How can we influence change in the world’s most isolated and terrorized society? How would our ally (and therefore, how would we) deal with the chaos that could follow certain overthrow scenarios?

But whether we wish it so or not, the evidence shows increasingly clear signs that the elites in Pyongyang have lost confidence in their new dictator. When His Porcine Majesty took power, about 25,000 North Koreans — mostly poor and downtrodden people from the country’s outer provinces — had escaped to South Korea. Countless others died along the way, or in prison camps after being repatriated by China. After Kim Jong-un took power in 2011, a security crackdown along the northern border halved the number of escapees.

Today, the number of North Korean refugees is the South approaches 30,000, but this year, the number of escapees is rising, and their backgrounds are changing. More of them come from the vetted elites in Pyongyang: overseas workers, officials, and even diplomats. According to the head of the Korea Hana Foundation, defections by members of the privileged classes rose more than 87 percent in the last two years. The reasons why they’re defecting are changing, too. More of the new arrivals report fleeing for political reasons, such as the fear of being purged, a desire for greater personal freedom, or a sense that Kim Jong-un’s regime holds no future for their children. There is no evidence that the elites have plotted or attempted to overthrow Kim, but for obvious reasons, newspaper readers would be the last to know that.

Are there ways to influence the thinking of the elites in Pyongyang? A few weeks ago, a U.S. Navy officer, Commander Skip Vincenzo, brought some of the world’s foremost North Korea experts together — including several intelligence officers and military officers — and also, me. The result of a day’s discussion and much editing is this very short, readable report: “An Information-Based Strategy to Reduce North Korea’s Increasing Threat: Recommendations for ROK & U.S. Policy Makers.” While I’ve done most of my thinking about directing information operations to the poor, this report focuses on the elites in Pyongyang. It calls for the U.S. and South Korea to adopt an information strategy to target the elites in Pyongyang, exploit their accelerating discontent, and ease their fears of the unknown consequences of a sudden regime collapse.

A strategy of calibrated communication to the many actors in the North Korean state will allow the United States to drive an unacceptable situation towards a conclusion with acceptable costs. It does not advocate for regime change outright, but if this strategy is having a visible effect, the likely outcome would be the end of the Kim regime.

Agnosticism aside, it reads like a strategy for encouraging a coup d’etat against Kim Jong-un. For obvious reasons, the authors left the specific methods and strategies out of their report. In September, the State Department submitted a classified report required by section 301 of the NKSPEA presenting “a detailed plan for making unrestricted, unmonitored, and inexpensive electronic mass communications available to the people of North Korea.” (Yonhap’s reporter thinks that means “such devices as small radios, USB drives and DVDs,” but USBs and DVDs are not “mass communication” devices; cell phones and smartphones are.) 

The information strategy the report advocates is meant to achieve a variety of objectives.

• Enhance our ability to de-escalate a crisis by ensuring that the regime’s elites fully understand the consequences of a war by continually demonstrating the U.S.-ROK Alliance’s advanced military capabilities.

• Reduce the potential for violence by formulating policies that provide credible assurances of amnesty to regime elites and, if they act in ways which support alliance efforts, a beneficial role after the Kim regime collapses or a conflict is resolved on Alliance terms.

• Reduce the humanitarian costs by formulating policies that inform ordinary North Koreans what to expect in a contingency and how to act.

• Reduce civil and military resistance by formulating policies that guarantee North Koreans full rights as citizens of South Korea.

• Mitigate collapse of the civil infrastructure by incentivizing bureaucrats, technicians, and local commanders to protect and maintain critical facilities. 

Can it work? No one really knows, but there are signs that North Koreans are ready to listen. Completely aside from recent high-level defections, Jieun Baek explains that South Korean culture has undermined the state’s political mythology. Children of the elites like to watch English lessons on South Korean educational broadcasts. Overseas workers are obtaining radios and smartphones to read the news about North Korea, and those smartphones apparently played a role in a recent group defection of construction workers in Russia.Recently, even the loyalty of the minder-minders has come into question. The Daily NK reports that foreign radio consumption is rising. In Pyongyang, it’s sometimes possible to watch South Korean television. Imagine the effect if the people of Pyongyang saw the face and heard the manifesto of Thae Yong-ho, or perhaps even the Ningpo 13

Obviously, an internal challenge to Kim Jong-un would have to overcome many interlocking layers of minders. Bob Collins recently described how that system works. But this was no less true of the regimes in Romania and East Germany, which also fell. It’s probably true that a diplomatic solution is unrealistic now, and the result of recent talks with North Korea should reinforce this. We must also accept the bitter truth that a nuclear North Korea will not just coexist with us, or with our allies. If that is so, then the only solution that does not involve war is to destroy the regime from within. 

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Why China and North Korea want Park Geun-hye gone

Nearly all of the news from Korea this week is about the scandal that has paralyzed President Park Geun-hye’s presidency, and may even end it. Going by Alastair Gale’s report in The Wall Street Journal, the scandal has three main elements, along with some other (mostly) unspoken elements.

First, Park has said that her “friend, Choi Soon-sil, had helped her prepare speeches early in her presidential term.” She has since apologized for this, although I can’t see why. Most American presidents have had confidants outside of government from whom they sought advice. Some presidents still call on members of think tanks to advise on specialized issues, and call on people outside of government to break through the insulation of presidential bureaucracy and security. It seems like just a week ago when everyone was talking about left-wing politician and former presidential candidate Moon Jae-in’s choice of confidential advisor: Kim Jong-il. So far, that seems like the greater scandal to me, but what do I know?

Second, “[a] South Korean broadcaster has alleged Ms. Choi was also given access to confidential government documents.” Ms. Choi has denied this. That’s obviously wrong no matter who does it — whether it’s Park Geun-hye, David Petraeus, or Hillary Clinton. Whether the evidence actually supports that charge, what the documents were, at what level they were classified, and whether “lock her up” is an appropriate response to whatever disclosure occurred remains to be seen. In the current third-world state of U.S. politics, most voters here no longer consider that disqualifying. (Given the alternative, I can’t say I do, either.)

Third, “Ms. Choi, 60 … is also the subject of an investigation by prosecutors into possible corruption at two charitable foundations.” Ask a Korean adds that news stories accused Choi of “running a massive slush fund [that] extorted more than $70 million from Korea’s largest corporations” and used her influence to get her daughter admitted to Ewha Womens’ University. I’ve yet to see any evidence that Park knew about this or used her influence to impede an investigation, or to profit from or support Ms. Choi’s effort. That would be serious if proven, but it would hardly be unprecedented in South Korea. Recall that when former President Roh Moo-hyun committed suicide, he was also embroiled in a bribery scandal involving his brother. As I said then, “For seasoned Korea watchers, presidential corruption scandals have all the zing and novelty of Kennedys driving drunk.” This is not to excuse anything, but to put it into context.

Then, there is also the weirdness of the allegation that Ms. Choi’s father was the founder of a religious cult. I’ve seen no proof that Park was an adherent of this cult, but religious beliefs ought to be a personal matter, absent evidence that they exerted an irrational or subversive influence on a leader’s policies. (See, e.g., Obama Muslim rumors.)

Lastly, there’s been some innuendo in circulation about whether Ms. Park may have been romantically involved with either Ms. Choi or her father. South Korea’s culture is very conservative on such matters; I’m not. I don’t give a damn whether President Park is attached or unattached, gay or straight, or neither. Here in the U.S., there are similarly nasty whispering campaigns about Hillary Clinton and Huma Abedin (if you care, google it; I won’t link it). If I saw evidence that those rumors were true, I’d wish them happiness, especially if they each divorced their no-good husbands and normalized their relationship through marriage. (Alas, Mrs. Clinton’s nature is to connive in grand conspiracies to conceal petty crimes, or matters that merely create negative perceptions.) Otherwise, I wouldn’t care until someone linked the relationship to the disclosure of classified information, corruption, or vulnerability to blackmail.

~   ~   ~

The greatest weirdness of South Korean politics, however, is how quickly these political firestorms seem to emerge from nowhere, and sometimes, from thin air. Also, without a single exception that comes to mind, they always target those hostile to Chinese and North Korean interests. A recent list includes the Sewol Ferry tragedy, the rumor that U.S. beef would cause Mad Cow disease, the Dok-do obsession, and the anti-American rage over the accidental death of two young girls in 2002. Of these, the slowness of the government’s response to the ferry disaster seems to be a legitimate scandal. The Mad Cow rumor was a myth spread by sloppy and biased journalists; Dok-do is already in South Korean possession; and the 2002 accident, while tragic, was an accident caused by defective equipment and involving a few individuals.

The fact that those who are opposed to Park’s North Korea policies have seized on the scandal, sometimes conflating rumor, innuendo, and fact, further fuels my skepticism. Some of the same observers who are quick to allege anonymously sourced NIS whispering campaigns about palace intrigues in Pyongyang now cite mysteriously sourced reports from The Hankyoreh, the adolescent bastard child of the Rodong Sinmun and The Daily Mail.

Although there is extensive evidence of North Korean influence operations inside South Korea, I’ve seen no evidence linking them to this specific case. I don’t know the precise origin of the reports that led to this scandal. Recently, however, Park’s North Korea policy has become a threat to the survival of Kim Jong-un’s regime. That’s why I hope Park survives. She’s doing what her predecessors should have done for years — she’s acting like a president for all Koreans, including those trapped behind the DMZ.

~   ~   ~

For more than a decade before her election, Park Geun-hye was the candidate of Sunshine Lite — calculating, triangulating, scripted, and cautious. She was a Korean Hillary Clinton — both inspiring and uninspired toward anything but the will to power. She seemed so numbed to righteous outrage that not even the murder of her own mother on national television made an apparent impression on her politically convenient appeasement of Pyongyang. She was calm to such a fault that she seemed detached and aloof during the Sewol disaster, the worst moment of her presidency.

There were moments that gave me hope — the glimpses of vision and principle when she addressed Congressor during the first Kaesong shutdown, and even after the admittedly flawed talks after last year’s mine incident. But until January of this year, Park always regressed to her politically cautious mean. Ideology aside, I can’t think of a Korean president who was less temperamentally predisposed to emerge as a bold, visionary leader of a Korean nation. Against all of the odds, Park Geun-hye enters the autumn of her presidency of South Korea by campaigning for the presidency of Korea, by inviting her brother and sister Koreans, who were unfortunate enough to have been born north of the DMZ, to “come and find a new home.” 

In recent months, Park has also concern-trolled Kim Jong-un about the instability of his regime, accused that regime of “driving the lives of its citizens into a hell through the brutal reign of terror,” and promised the North Korean people better lives and equal treatment after reunification. She has vowed to support more efforts to get outside information into North Korea. She acknowledges that her government must do more to support the 30,000 refugees who’ve already arrived. She has even openly called for North Korean soldiers and civilians to defect:

“We know the brutal reality that you are facing now. The international community is also seriously concerned about the North Korean regime’s human rights abuses.”

Promising that the South will do its best to end the North’s provocations and inhumane rule, Park said, “We will leave the path open for the North Korean people to find hope and life. Come to the free land of the Republic of Korea at any time.” [Joongang Ilbo]

Who is this person, and what has she done with Park Geun-hye? If this is the voice of Choi Soon-il, President Park’s alleged svengali, then I nominate her for Unification Minister. More of this, please! It should go without saying that the usual suspects hate such talk. For obvious reasons, North Korea hates it. It also hates Park’s closure of Kaesong, her diplomatic campaign to cut off Pyongyang’s overseas arms trade and labor exports, and her implementation of a new North Korea human rights law. It has reacted with an intensity of nasty, sexist invective it reserves for strategies that threaten the regime’s very survival.

“It’s ridiculous and foolish that Park Geun-hye flutters her feet to smear our dignified leader’s reputation with infamy by persisting hallucinations in her head as an established fact and mentioning a reign of terror as well as starvation and repression,” Rodong reported on Monday.

“Park Geun-hye has the gall to ignore the reality within her grasp and to doggishly and overtly utter ravings as saying the land of freedom and encouraging defection,” the article continued. “There is no such a barefaced and impudent bitch elsewhere.” [NK News]

(Christine Ahn and Gloria Steinem were not available for comment.)

China hates this talk because it prefers North Korea just the way it is, and because many of the North Koreans who answer Park’s call to defect might try to transit through China’s territory. Park (joined by the President of the Council on Foreign Relations) has responded by trying to assuage China’s fears about a reunified Korea. China also resents Park for agreeing to deploy the THAAD missile defense system to South Korea.

South Korea’s anti-anti-North Korean left also hates such talk, because North Korea hates it. Its key members ask how Park would deal with the consequent mass refugee exodus they accuse her of inviting. Park acknowledges that South Korea must be ready for this. But a mass exodus would only happen coincidentally with regime collapse, and if South Korea isn’t prepared for that by now, much responsibility must lie with the left itself. Under Roh Moo-hyun, the Blue House refused to contemplate or plan for a collapse. Then, there are the reactions like that of People’s Party leader Park Jie-won, who in his best KCNA imitation, accused Park of making “a proclamation of war,” and the Minjoo Party says she’s walking the “warpath.”

Well! Perhaps reporters should make a habit of asking Mr. Park to characterize the things North Korean state media say about South Korea, or about President Park, on any given day. (See, e.g., “barefaced and impudent bitch,” or this, or this, or this.)

Whether Park survives or not, if she continues to speak calmly and cogently of universal humanitarian principles and Korea’s dream of nationhood, she may yet win the national argument for which Koreans, north and south, are so long overdue. That makes her a threat to powerful interests, both within Korea and beyond its borders. That conversation doesn’t have to end when Park’s troubled presidency does. Polled in isolation, Park’s North Korea policies have been popular. To keep up the argument for a “tough love” policy toward North Korea may be the best way for her to recast her legacy. After all, who would have predicted Richard Nixon’s rehabilitation as an elder statesman in 1974? There may be nothing better Park can do to build that legacy than to keep talking about the lives and rights of North Koreans, and about North Korea policy, for years to come. 

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