Sanctions Diplomacy: Yesterday Uganda, today Namibia, tomorrow Cambodia

Earlier this week, when a senior Namibian official who had defended her government’s military cooperation with North Korea showed up in Pyongyang, I conceded that she could be there to terminate that cooperation, but didn’t assess that possibility as very likely. But yesterday, the Namibian government announced it was ending its joint projects with North Korea, including a North Korean-run arms factory, to comply with new U.N. sanctions:

“The Government of the Republic of Namibia, in fulfilling her international obligations to abide by UN Security resolutions, has decided to terminate the services of KOMID and MOP in Namibia, for as long as the UN Security Council sanctions against the DPRK are in place,” the statement read. [NK News, Hamish Macdonald]

See also Reuters and Namibia’s own New Era Newspaper. Namibia’s announcement follows Uganda’s termination of its contracts with North Korea to train its police forces.

Presumably, this is the work of good diplomacy by someone, although I couldn’t tell you who. Africa had become an important arms market for North Korea in recent years — and continues to be —  but with the Namibian announcement, it’s clear that diplomatic efforts to get African countries to terminate their military relations with North Korea are gaining traction. Seoul has publicized its efforts — including outreach to Ethiopia, Kenya, and Tanzania — but Washington hasn’t publicized its own, perhaps for perfectly sound reasons, and perhaps because they’re non-existent.

One point that comes through clearly is that the threat of secondary sanctions is a part of why countries that ignored U.N. sanctions against North Korea for years are enforcing them now. Just look what I found in my visitors’ log after I first posted about the sanctions against Namibia that would be mandatory under the North Korea Sanctions and Policy Enhancement Act:

[Now that I have your undivided attention ….]

In retrospect, the Namibian official’s visit to Pyongyang was probably meant to express regret at the termination of mil-mil cooperation with North Korea, and to express Namibia’s desire to maintain good relations anyway. That is, Namibia complied with U.N. sanctions reluctantly, but it still complied. Sometimes, the diplomat’s velvet glove works better with a regulator’s iron fist. So, to the anonymous diplomat who (I assume) presented that stark choice to the Namibian government, you may redeem a copy of this post for the beverage of your choice.

This isn’t the full extent of the public reporting on Seoul’s diplomatic offensive against Pyongyang’s arms dealers. Its diplomats have recently lobbied the governments of the EU, France, Bulgaria, and Russia. This week’s visit by a large, high-level delegation of South Korean diplomats to Laos and Cambodia could be even more critical.

“During the talks with senior officials, (Hwang) plans to request cooperation in dealing with North Korea’s nuclear issues, including efforts to push for the implementation of a United Nations Security Council resolution,” according to the ministry statement. [Yonhap]

The diplomats will come bearing gifts.

“Hwang will meet with Cambodia and Laos’s senior defense officials and discuss bilateral defense cooperation,” the ministry said in a press release.

Hwang is the highest ranking South Korean defense ministry official ever to visit the two countries. The delegation comprises working-level officials from Cheong Wa Dae, the Ministry of Foreign Affairs as well as the Ministry of National Defense.

During his visit, Hwang will also make a courtesy call to Cambodian Prime Minister Hun Sen.

“In the talks with senior officials, Hwang plans to request cooperation in dealing with the North Korean nuclear issue, including efforts to push for the implementation of UNSC resolutions,” the ministry said.

Hwang will also meet with senior defense officials in Laos to discuss a wide range of issues, including cooperation in demining, according to the ministry. [Korea Times]

Both countries, with their lax and corrupt regulatory environments, have become key links in North Korea’s access to global shipping and finance. The strange North Korean happenings in Cambodia include the recent deaths of two North Korean doctors, the arrests of 15 North Koreans in Phnom Penh for running an illegal gambling website, the hosting of North Korean restaurants that are suspected havens for money laundering, and many reports of North Korean ships flying the Cambodian flag, a practice that was recently banned by UNSCR 2270. If Cambodia doesn’t fall into line with U.N. sanctions, the U.S. should impose sanctions against its shipping registries, and then perhaps some of its banks, under section 104(a) of the North Korea Sanctions and Policy Enhancement Act. Laos, with its record of repatriating North Korean refugees, should lose its tier status under the Trafficking Victims’ Protection Act.

Previously, President Obama had urged Vietnam, a long-time North Korean arms client, to implement new U.N. sanctions, which will impact its exports to U.S. markets.

The news is not entirely good. For example, almost five months after the U.N. Panel of Experts named dozens of North Korean operatives, front companies, and third-country enablers, the Treasury Department hasn’t designated a single North Korean target since March 15th. I’m frustrated by the fact that, contrary to rumors I’d heard, there are still no human rights designations of North Korean officials, weeks after a statutory deadline to name names under section 304 and apply designations under section 104(a)(5).

All that is deeply disappointing and may soon draw unwanted attention from Congress, but at least we can say that the results of our progressive diplomacy are promising. As our Ambassador in Seoul, Mark Lippert, has said, sanctions enforcement is a long diplomatic game. Fortunately, North Korea’s friends tend to be poor countries, tied to Pyongyang by little more than fading Cold War memories and convenience. With continued effort and patience, those ties can be undone, and we’ll continue to see good results.

Continue Reading

How happy are Kim Jong-un’s slaves? It depends on which slave you ask.

There may be no story on earth where the answer to a question is so dependent on who you ask as North Korea. Take the case of this NK News story from February, by an anonymous correspondent who went to Vladivostok, wandered into a local North Korean cafe, and found some North Korean construction workers who were — surprisingly enough! — willing to speak “freely” to a foreign journalist. Ready for your first clue?

He grins through a mouthful of gold teeth which, combined with his black shiny jacket, leather man-pouch and black wooly hat, gives him the air of someone it would be unwise to argue with.

But as so often with DPRK-related matters, a menacing external impression conceals a much more nuanced and complex picture. Mr. Cho is very friendly and talkative.

“Yes, that’s right it’s construction we do at Snegovaya,” he says as we discuss the men’s place of work. [NK News]

Here comes your next clue.

“We live in a dormitory on the building site. I’m an engineer and supervisor and Mr. Pak is one of my workers.”

The seniority is evident: Mr. Cho, who is in his 50s, is better dressed and appears more self-assured than the younger and still rather green-looking Mr. Pak. This is not surprising given how long the older man has been in the country.

The correspondent’s harsh questioning elicits that the men live in a comfortable dormitory, have the run of the city, are fed and treated well, and spend their weekends relaxing in cafes and shopping for cozy boots. The resulting story, however, does not mention the obvious possibility that the men are minders for the North Korean security forces.

North Korean workers, whose jobs are much sough-after back in the DPRK, can often be seen in small groups walking around Vladivostok, much freer than imprisoned “slaves” they have sometimes been labeled.

Although the observation of a Russian journalist that the North Korean workers “make unreasonable demands for extra food, cigarettes and vodka” suggests that the state does not quite provide for all of the workers’ needs, it isn’t exactly the Gulag Archipelago, either. Still, a review of the record reveals some niggling contradictions, such as the North Korean worker in Vladivostok who had set himself on fire just a month before. Or the very need for a new treaty between the two countries, to ensure the prompt repatriation of North Koreans who try to flee from their splendor.

But before you conclude that Russia is the workers’ paradise for North Koreans — well, for most of them, anyway — read what a Daily NK correspondent found in the logging camps near Khabarovsk more recently.

According to testimony given to Daily NK at the end of the month by a North Korean laborer in Russia, escapees who are apprehended face extremely ruthless punishment in order to deter future attempts by others. In one such example, a laborer had his Achilles tendon severed by the authorities. In another case, the laborers were forced to lie down and had their legs broken with a construction excavator. Upon their return to North Korea, these handicapped laborers and their families are sent to political prison camps.

Another laborer sent to the coastal province of Khabarovsk, Russia, at the beginning of the year testified to Daily NK that, “Previously, a worker fled from the worksite and hid out in a nearby church, where he was later discovered and caught. The SSD agents used a huge excavator to crush him. He was denied proper medical attention thereafter and became disabled. It’s impossible for these SSD agents to forgive an escape attempt and so they made an example out of him.”

He continued, “The last time we saw our colleague in question, he was skin and bones, injured, and had nothing but a simple bandage on his leg. He was forcibly repatriated in that condition. This is not an unusual or rare occurrence. Some laborers who try to escape have their Achilles tendon cut, and others are beaten with pieces of lumber. These kinds of escape attempts happen from time to time, but even if the laborers manage to flee, it is very difficult for them to survive. They have no choice but to wander about.” [Daily NK]

The Daily NK isn’t the only source to find horrific conditions in the Siberian camps.

Lee Yong-ho, a defector who was a truck driver at a Russian logging camp, said he often worked 12 to 14 hours per day but never thought about his working conditions.

“Slaves? Well, I didn’t actually think about something like that. I only thought how much I could earn each month,” said Lee, now a manual laborer in South Korea.

Kim, who worked at a different Siberian logging camp with about 900 other North Koreans, said dozens of workers died during his stay, many after being hit by falling trees. He said dead workers were stored for months in some vacant houses, with their entire bodies except their heads wrapped by blankets.

“It was so cold there that they hadn’t decomposed. Their faces looked just the same as before,” he said. “I once touched some of their faces and it was like touching ice.”

Lee Yong-ho also saw frozen bodies stored. It was cheaper to them home in groups. [AP]

And so forth.

So, how can we reconcile these jarringly different accounts? For one thing, NK News‘s story relied heavily on the account of at least one “supervisor” who fed the correspondent a narrative and found his mark willing to swallow it without much further investigation. NK News‘s story doesn’t specify how widely its author ranged to question that narrative, or what efforts he made (like, say, those of Vice’s correspondent in Poland) to speak to workers surreptitiously. There’s no indication that he pulled pay or employment records, or did any of the commendable leg-work Vice’s reporter did that exposed the lies of the North Koreans’ Polish employers. Indeed, several years ago, Vice’s Shane Smith visited logging camps in Siberia and, though he found none of the horrors the Daily NK did, also found some extraordinary efforts at secrecy and control designed to keep prying eyes away. In other words, the greater the depth of the reporting, the more credible it is. The same obviously applies to the Daily NK, which has just begun publishing a series of articles on overseas workers.

Second, and whatever our concerns about the depth of the reporting, conditions for construction workers in Vladivostok might just be very different than conditions for loggers in Khabarovsk. After all, abuses in the middle of a city would be less likely to escape notice and exposure than abuses out in the taiga. This brings us to a second problem with NK News‘s report: the implication that its findings are representative of conditions for North Korean workers in Russia overall. I don’t want to overstate this; after all, the report does distingish the accessibility of its North Korean subjects in Vladivostok from those in China. But in the end, it pursues a narrative popular among “engagers” and other anti-anti-North Korean types — that overseas work is better than work inside North Korea, and ergo, not slavery. The latter doesn’t quite follow from the former, of course, but as they did in the American South, conditions for North Korean slaves undoubtedly vary. It’s never a safe thing to build a narrative on a single interview. In the end, the report’s greatest flaw may be its failure to take note of the many other reports finding conditions for North Koreans in Russia to be subhuman.

The lesson here? Several come to mind. First — as the AP’s humiliation in Pyongyang has repeatedly reinforced — never accept a North Korean minder’s narrative at face value. Second, question everything you’re told by hunting for documentary evidence to confirm or refute it. Third, make an effort to show us the bigger picture. And finally, semantics matter. As Lee Yong-ho says, North Koreans are so conditioned by their experiences at home that they probably don’t think of themselves as slaves. Asking a North Korean — especially a North Korean minder, whose living conditions may be just fine, and also grossly atypical — isn’t very useful for our conclusions about the implications of these arrangements under international law. If you’re going to argue that someone is or isn’t a “slave,” at least take the trouble the Leiden Asia Center did and try to define the term meaningfully.  In the end, what makes a slave a slave is whether he has the choice to sell his labor freely.

Continue Reading

N. Korean counterfeiting surges as Bureau 39’s checks bounce.

When the Secret Service first found high-quality counterfeit dollars circulating in the Middle East over three decades ago, North Korea wasn’t the prime suspect; Iran was. The counterfeits were so good that experts could only tell them from the originals by the superior quality of their printing, so the Secret Service named them “supernotes.” The Secret Service’s suspicions shifted to North Korea in 2000, after Cambodian authorities arrested Yoshimi Tanaka, a Japanese Red Army hijacker who had taken refuge in North Korea and was traveling in a North Korean diplomatic vehicle, on counterfeiting charges. Those suspicions eventually converged on Bureau 39 of the Korean Workers’ Party. Bureau 39’s job is to launder money. It earns money overseas, both legally and illegally, commingles it all together to make the dirty money untraceable, and launders the proceeds through slush funds that the regime uses to buy just about everything starving kids can’t eat. North Korean diplomats also help launder supernotes.

~   ~   ~

Since 2000, North Korea’s involvement in currency counterfeiting has been well documented. In 2004, the Justice Department indicted Sean Garland, the leader of a breakaway Marxist faction of the IRA, for buying supernotes from North Korean embassies and reselling them for a profit (an Irish court later refused to extradite Garland to the U.S. to stand trial). In 2005, the passing of supernotes was the principal basis for designating Banco Delta Asia as a primary money laundering concern and blocking it out of the financial system. In 2006, the Federal Reserve estimated that “approximately $22 million in supernotes has been passed to the public […] and approximately $50 million in supernotes has been seized by the U.S. Secret Service.” In 2008, a Las Vegas jury convicted Chen Chiang Liu of passing supernotes through casinos.

Although the supernote story invariably drew the usual assortment of conspiracy kookshack journalists, and North Korean sympathizers out of the woodwork, better quality investigative journalism makes a strong case against Pyongyang. In a 2006 report for the New York Times, Stephen Mihm explained how North Korean buyers went to the same Swiss suppliers who sold our own Bureau of Engraving and Printing, or BEP, its intaglio printing presses and optically variable ink. (The North Koreans’ interest ought to have raised immediate suspicions with the Swiss; after all, why would North Korea, whose own currency is non-convertible and worthless, need top-of-the-line presses and ink designed to foil counterfeiters?) 

David Rose followed Mihm’s reporting with a detailed 2009 story for Vanity Fair, explaining how the feds linked the counterfeits to North Korea, how North Korea smuggles supernotes into the United States, and how Condoleezza Rice’s State Department suppressed a Justice Department indictment of Kim Jong-il for the counterfeiting operation. The International Consortium for Investigative Journalists has also reported on the smuggling of supernotes into the United States. Other reports have pinned control of the supernote operation on General O Kuk-ryol

North Korean counterfeiting costs Americans money. The BEP redesigned the $50 note in 2003 and redesigned the $100 note twice since 1996, in part to stay ahead of the supernote’s criminal craftsmanship. In a 2009 report, the Federal Reserve said that it “budgeted an average $610 million for printing, shipping, counterfeit deterrence and other currency-related costs,” and that a currency redesign would also cost “up to $390 million for nonrecurring equipment upgrades for manufacturers of cash-accepting devices.” The current design of the $100 note is from 2013. (The BEP’s website doesn’t mention a botched 2010 redesign.) All of these costs are passed on to American taxpayers and consumers.

Kim Jong Il counterfeit

In recent years, reports of supernote arrests waned, although the problem never went away entirely. In 2012, South Korean authorities arrested a woman for “attempting to infiltrate South Korea by pretending to be a defector, and … circulating some $570,000 worth of supernotes in Beijing and Shenyang from 2001 to 2007.” This was still old news, but in 2013, the Undersecretary of the Treasury for Terrorism and Financial Intelligence confirmed that North Korea continued “to try to pass a supernote into the international financial system,” although it was “less of an issue than it was a few years ago” and had “calmed down to some extent.” As recently as March of this year, Vice News figured that the supernotes had vanished. It quoted Michael Madden as saying, “I don’t think they’re currently involved in counterfeiting anymore.” According to Kathy Moon, supernotes are “not something people are seeing.”

~   ~   ~

Perhaps they spoke too soon. This week, Yonhap reported that authorities in Hong Kong recently found supernotes on a businessman arriving from Pyongyang. Last week, The Joongang Ilbo reported that “a North Korean agent was arrested in the border city of Dandong in Liaoning Province, northeastern China,” for his involvement in “distributing counterfeit U.S. dollars.” The story quotes an unnamed source as saying that the agent “brought $5 million in cash into China from North Korea” to buy “household goods and home appliances” as gifts for North Korean elites for Kim Il-sung’s birthday (April 15th) and the Workers’ Party’s congress (May 7th). The paper notes that because of new sanctions, “Pyongyang is being blocked from financial transactions giving it access to U.S. cash.”

“The $5 million was exchanged at the Industrial and Commercial Bank of China and the Agricultural Bank of China for some 30 million yuan [$4.6 million] and then deposited,” the source said. “But a number of the notes were found to be counterfeit $100 bills when they were run through the banknote counter by a bank employee, so Chinese authorities ordered the relevant account be frozen and arrested the North Korean agent.” [Joongang Ilbo]

In February, I posted about reports that the Industrial and Commercial Bank of China, China’s largest bank, had “suspended cash deposit and transfer services for accounts owned by North Koreans.” Either that report wasn’t true, the bank quietly unfroze some of those accounts, or China’s largest bank isn’t taking its Know-Your-Customer obligations very seriously and needs to fire its compliance officer. (On June 2nd, Treasury dramatically raised the risk to banks that service North Korean clients by designating North Korea as a primary money laundering concern, and banning all direct and indirect correspondent account services for North Korean banks.)

Picking up with our story, Chinese authorities then went to the North Korean’s home in Dandong, where they confiscated 30 million yuan and an unspecified quantity of gold bars. The agent’s use of counterfeit dollars, yuan, and gold provides further evidence that they are having serious cash flow problems. Last week, I posted about a Daily NK report that North Korean agents were defaulting on their debts to Chinese creditors, and an NK News report that some North Korean purchasers had inexplicably stopped buying goods from their Chinese suppliers in March. According to the Daily NK, those experiencing cash flow problems include Bureau 39 agents.

Intriguingly, the Daily NK also reported that a North Korean agent couldn’t raise the cash to buy flat-screen TVs from China to dole out as highly coveted swag for the elites (in violation of U.N. sanctions, which prohibit North Korea from importing “luxury goods”). I speculated then that the North Korean agents’ accounts may have been frozen by their Chinese bankers. These reports support that speculation and offer one possible explanation.

“North Korea’s economy is entering a state of paralysis because of a shortage of dollars, and there is a high likelihood that it is systematically counterfeiting notes and in the process of wide-scale distribution,” the source added.

“Starting from March, a large amount of supernotes were found in border regions between China and North Korea and China’s three northeastern provinces [Liaoning, Jilin and Heilongjiang], and many have pointed to North Korea as the source of production and circulation,” Park Byung-kwang, a senior researcher with the Seoul-based Institute for National Security Strategy, said.

A follow-up report from The Joongang Ilbo — which has historically done some outstanding reporting on North Korean money laundering — identified the North Korean agent arrested in Dandong as an officer in an agency “responsible for major espionage missions against Seoul.” That’s a good description of the Reconnaissance General Bureau, or RGB, which is also responsible for acts of international terrorism, including abductions, assassinations, and a 2014 cyberterrorist attack against the United States. Consistent with the Daily NK‘s report last week, the agent “was going to pay that businessman for trade goods but could not do so apparently because of his arrest.”

~   ~   ~

So why, after allowing Bureau 39 and RGB agents to operate on their territory for years, would the Chinese suddenly crack down? For one thing, counterfeiting harms the interests of China’s banking industry, which hasn’t seemed so steady recently.

Here’s an even better reason: a defector organization, North Korea Intellectuals’ Solidarity, says that North Korea is distributing “massive quantities” of “counterfeit Chinese currency under the supervision of Kim Jong Un.” Or so says “a source based in North Korea.” The Korea Times also reports that Chinese authorities are on alert for counterfeit renminbi after multiple Chinese press reports that counterfeits “have recently been circulated in several Chinese cities, including Shaoxing in Zhejiang Province.” Local press speculation has pointed fingers at North Korea. The state-run Global Times, known for its nationalism and anti-Americanism, has also reported that counterfeit renminbi found in Dalian “were identified as North Korean.”

The yuan has circulated widely in North Korea since a disastrous 2009 currency reform — really, a mass confiscation — backfired and obliterated the market value of the North Korean won. Printing fake yuan would be an easy way for the North Korean government to cheat the donju — the well-connected traders who obtain most of Pyongyang’s needs from Chinese vendors, and the Chinese vendors themselves. Bureau 39 agents who are under intense pressure to fund Kim Jong-un’s priorities may be tempted to use supernotes and superyuan to meet their quotas.

NKIS’s allegations are somewhat consistent with previous reports. Its source in North Korea says that the superyuan are printed in Pyongson. Stephen Mihm’s 2006 report for the New York Times identified Pyongsong as the city where supernotes were printed. On the other hand, NKIS also claims that North Korea started printing yuan in 2013, which contradicts a 2007 report by the journalists Hideko Takayama and Bradley Martin that North Korea was printing counterfeit renminbi nearly a decade ago. What seems more likely is that North Korea printed small amounts of yuan before 2007 and stopped when the story broke, given the obvious danger Kim Jong-il would have seen to his relationship with his principal backer. 

Today, with China’s banks having finally been forced to choose between their North Korean clients and their access to the U.S. financial system — and having largely opted for the latter — Kim Jong-un may feel less compunction about sticking it to China.

We can add these reports to the evidence that North Korean agents are under significant financial pressure, although I can’t say whether the chicken or the egg came first.* Did the North Koreans turn back to counterfeiting just because it’s their nature, thus causing their accounts to be frozen, or did sanctions and the freezing of their accounts cause the North Koreans to turn to counterfeiting out of financial desperation? Whatever the reason, dumping funny money into the Chinese economy will further strain Sino-North Korean relations, and will add fuel to arguments to expel the North Korean trading companies and agents who pass the counterfeit bills. This time, North Korea’s criminal activities are an even greater threat to China than they are to us.

~   ~   ~

* Of course, the egg came first, silly. Dinosaurs laid eggs millions of years before the first chicken did, after all.

Continue Reading

U.S. to sanction N. Korean officials, possibly to include His Porcine Majesty, for human rights abuses

The Treasury Department has sanctioned the presidents of Belarus and Zimbabwe and their cabinets for undermining democratic processes or institutions and has frozen their assets in the international financial system. It has sanctioned top officials of the Russian government for Russia’s aggression against its neighbor, the Ukraine.

cheonan

It has sanctioned the president of Syria for human rights violations, censorship, and corruption, among other reasons. It sanctioned Iranian officials for censorship and human rights abuses. It has even sanctioned officials in tiny Burundi for human rights abuses.

Camp 16 HQ @4500

[Camp 16, where prisoners are forced to dig their own graves and killed with hammers.]

As of the time of this post, there are still no human rights sanctions against a single North Korean official. As bad as things may be in any of the aforementioned places, are they worse anywhere than in North Korea?

starving children

The Chairman of the U.N. Commission of Inquiry that investigated human rights abuses in North Korea has said that “the gravity, scale and nature of these violations reveal a State that does not have any parallel in the contemporary world” and described the abuses there as “strikingly similar” to those perpetrated by the Nazis during World War II.

Camp 25 crematorium

[The crematorium at Camp 25]

The Commission’s detailed 372-page report found the North Korean government responsible for “crimes against humanity, arising from ‘policies established at the highest level of State,’” including “extermination, murder, enslavement, torture, imprisonment, rape, forced abortions and other sexual violence, persecution on political, religious, racial and gender grounds, the forcible transfer of populations, the enforced disappearance of persons and the inhumane act of knowingly causing prolonged starvation.”

The lesson for every despot on earth is that nuclear weapons will immunize you from the consequences of your crimes against humanity.

Seeking to rectify this outrage, this year, Congress passed a law that gave the President 120 days to submit a report on human rights abuses in North Korea, along with a list of those responsible. The provision requires the President to make specific findings with respect to Kim Jong-un’s individual responsibility. Those found responsible must then be designated under section 104(a) of the law, which freezes their assets and threatens secondary sanctions against those who transact with them. The 120 days ran out on June 11th.

Even before the law passed, the administration could see the overwhelming bipartisan support for human rights sanctions and began hinting at imposing them. It still didn’t act, but after the law passed, it began dropping increasingly strong hints that it would finally impose human rights sanctions on top North Korean officials. North Korea’s latest missile launch now gives the White House new impetus to increase pressure on Pyongyang, as if that impetus was lacking after the U.N. Commission released its report.

According to rumors circulating in the press and in human rights circles, the President will finally sanction “about ten” top officials of the North Korean government today. [Update: Now we know that Monday wasn’t the day. Watch this space.] The rumor I heard last week is that His Porcine Majesty Kim Jong-un, the morbidly obese despot who rules over millions of malnourished and stunted children, will be among them.

His Porcine Majesty

That could be the first step in blocking the billions of dollars he maintains in slush funds in China, Switzerland, and elsewhere. It will be the first concrete action our government — or any other government — will have taken in the more than two years since the Commission of Inquiry led by Justice Kirby released its report.

The Obama administration will now speak with gravity and sagacity about the horrors in North Korea and its seriousness about addressing them. It will make a virtue of necessity and claim the mantle of moral leadership in holding North Korea’s rulers accountable for their crimes against humanity. I’d be content to let them carry it for their remaining months in office … if they really do lead. But this is not a moment for relief that our government may finally act, at least a decade after it should have. It is a moment to mourn for the victims, both living and dead, and for the forfeited moral leadership of a nation that acted so late, and only after Congress forced the President to act.

Continue Reading

Top Namibian official visits Pyongyang

 

In March, this blog reported on the revelation by the U.N. Panel of Experts that the African nation of Namibia, a desert country in the southwest corner of the continent, had hired North Koreans, including representatives of U.N.-designated KOMID, to build an arms factory near Windhoek. At the time, Deputy Prime Minister Netumbo Nandi-Ndaitwah came to her government’s defense, admitting that her government was the site of a North Korean-run arms factory, but denying that the arrangement violated U.N. sanctions.

Today, NK News reports that Ms. N-N arrived in Pyongyang last Friday for a state visit, where she posed for photographs with Kim Yong-nam.

Namibia

[via NK News]

Now, I can’t say whether the purpose of the visit itself is inappropriate unless I know what those present will discuss. After all, not all diplomatic interactions with North Korea are prohibited. I suppose the purpose of the visit could be to “sever ties and wrap things up,” as Daniel Pinkston suggests, but the level of the interactions and the coincident publicity don’t give me much confidence in that theory.

As noted above, Ms. Nandi-Ndaitwah is well aware of the North Korean arms factory in her country, but has denied that it violates U.N. sanctions. The U.N. Panel of Experts has correctly concluded that it’s a violation.

106. The construction of any munitions factory or related military facilities is considered to be services or assistance relating to the provision, manufacture or maintenance of arms and related materiel and therefore prohibited under the resolutions.

Here are the relevant provisions of UNSCR 2270:

“6. Decides that the measures in paragraph 8 (a) of resolution 1718 (2006) shall also apply to all arms and related materiel, including small arms and light weapons and their related materiel, as well as to financial transactions, technical training, advice, services or assistance related to the provision, manufacture, maintenance or use of such arms and related materiel;

“9. Recalls that paragraph 9 of resolution 1874 (2009) requires States to prohibit the procurement from the DPRK of technical training, advice, services or assistance related to the provision, manufacture, maintenance or use of arms and related materiel, and clarifies that this paragraph prohibits States from engaging in the hosting of trainers, advisors, or other officials for the purpose of military-, paramilitary- or police-related training;

Investigative journalist John Grobler later did an outstanding report on the factory for NK News, revealing the extent of the factory’s operations. Ms. Nandi-Ndaitwah has argued, however, that because the arms factory deal predates U.N. sanctions it’s permitted. Nonsense. UNSCR 2270 even has a force majeure clause in paragraph 47, clarifying that no claim shall lie for the termination of preexisting contracts that violate the sanctions. The resolutions clearly have retroactive effect.

The 2016 POE report found that the North Korean company running the arms factory is KOMID, which is designated by the U.N. and the U.S. Treasury Department — either “in cooperation with, or using the alias of, Mansudae Overseas Project Group companies.” The Namibian government is obligated to expel all KOMID representatives and freeze all KOMID property immediately:

13. Decides that if a Member State determines that a DPRK diplomat, governmental representative, or other DPRK national acting in a governmental capacity, is working on behalf or at the direction of a designated individual or entity, or of an individual or entities assisting in the evasion of sanctions or violating the provisions of resolutions 1718 (2006), 1874 (2009), 2087 (2013), 2094 (2013) or this resolution, then the Member State shall expel the individual from its territory for the purpose of repatriation to the DPRK consistent with applicable national and international law. . . .

[….]

“32. Decides that the asset freeze imposed by paragraph 8 (d) of resolution 1718 (2006) shall apply to all the funds, other financial assets and economic resources outside of the DPRK that are owned or controlled, directly or indirectly, by entities of the Government of the DPRK or the Worker’s Party of Korea, or by individuals or entities acting on their behalf or at their direction, or by entities owned or controlled by them, that the State determines are associated with the DPRK’s nuclear or ballistic missile programs or other activities prohibited by resolutions 1718 (2006), 1874 (2009), 2087 (2013), 2094 (2013) or this resolution, decides further that all States except the DPRK shall ensure that any funds, financial assets or economic resources are prevented from being made available by their nationals or by any individuals or entities within their territories, to or for the benefit of such individuals or entities, or individuals or entities acting on their behalf or at their direction, or entities owned or controlled by them, and decides that these measures shall not apply with respect to funds, other financial assets and economic resources that are required to carry out activities of the DPRK’s missions to the United Nations and its specialized agencies and related organizations or other diplomatic and consular missions of the DPRK, and to any funds, other financial assets and economic resources that the Committee determines in advance on a case-by-case basis are required for the delivery of humanitarian assistance, denuclearization or any other purpose consistent with the objectives of this resolution.

Either Ms. Nandi-Ndaitwah hasn’t read the resolutions or has chosen to defy them. If strong diplomatic appeals still haven’t secured commitments to bring that violation to an end, the State and Treasury Departments should act swiftly to sanction the North Korean and Namibian entities involved under section 104(a) of the North Korea Sanctions and Policy Enhancement Act. Anything less would signal to North Korea’s arms clients elsewhere in Africa that the U.N. Security Council’s resolutions are mere suggestions. This time, an example must be made.

Continue Reading

HRNK exposes N. Korea’s sale of crew services to Taiwanese ships, via Uruguay (Update: A violation of EO 13722?)

The HRNK insider blog carries a fascinating story that begins with “a recent speaking tour in South America.” Recently, a North Korean sailor arrived at the airport in Montevideo, Uruguay, from Beijing. The sailor and his minder must have been in quite a hurry to get to the port. They forgot his suitcase, which the airport authorities eventually declared unclaimed. The suitcase contained evidence that North Korea is renting crew services to third-country vessels via a Uruguayan broker. (HRNK claims it “has also received information on a similar operation being conducted in Peru, but has so far been unable to verify such reports.”) The scheme works like this:

Sources in the country have confirmed that a Uruguayan company is cooperating with the North Korean authorities to dispatch North Korean sailors and fishermen to work on foreign ships. Based on luggage tag information, prior to landing in Montevideo, the sailors transit through Beijing and Paris. Although HRNK hasn’t yet been able to independently verify this information, the company has been identified as “Grupo Christophersen Organizacion Maritima,” headquartered in Montevideo. In order to avoid scrutiny by locals and to deny the sailors contact with the outside world, the North Koreans are picked up as soon as they land in Montevideo. They are then taken to a foreign fishing vessel by taxi. Practically, unless they are accompanied by watchful North Korean minders, the sailors can’t set foot on Uruguayan soil. According to local sources, it is primarily Taiwanese ships that make port in Uruguay and take on groups of ten to twenty North Korean sailors. Two of these Taiwanese fishing ships identified by local sources are reportedly “Shengpa” and “Samdera Pacific.” [HRNK Insider]

Greg Scarlatoiu’s entire post is a must-read, if only for the photographs of the propaganda poems the heavily indoctrinated sailor wrote (or rewrote) by hand. The extensive maternal references strongly support Brian Myers’s analysis of North Korean propaganda.

If confirmed, such a scheme falls into a gray area in U.N. sanctions against North Korea. In March, the U.N. Security Council approved Resolution 2270. Although the resolution does not ban the provision of crew services by North Korea to other U.N. member states, it does call on (but does not explicitly require) member states “to de?register any vessel that is owned, operated or crewed by the DPRK.” HRNK’s post does not name the North Korean entity Grupo Christophersen contracted with, but if it’s designated by the U.N., the transaction would be a violation. For now, this warrants further investigation by the U.N. Panel of Experts, and some polite visits by State Department officials to the Uruguayan Embassy and TECRO.

If the Security Council is looking to impose an additional cost on Pyongyang for its latest missile tests, perhaps it can also ban the provision of crew services by North Korea to U.N. member states. If the Panel of Experts can’t figure out how His Porcine Majesty ultimately spends Grupo Christopherson’s money, it could add that partner to its blacklist. The Security Council is long overdue to ban labor-export arrangements that violate internationally accepted labor standards.

But the real lesson we learned today? Never forget your suitcase at the airport.

~   ~   ~

Update: What didn’t occur to me until after I posted this is that if the transactions are denominated in dollars, they’re subject to blocking under this provision of Executive Order 13722, which the President signed in March to implement 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;

So, who knows the name of the North Korean company involved? In what currency does it accept payments, as if I have to ask?

Continue Reading

North Korean trading companies can’t pay their Chinese creditors because of sanctions.

Lately, the news about the implementation and impact of sanctions has come in so thick and fast that I’ve been unable to follow it all, and have instead bookmarked it until I can identify patterns and put it into context. A report I saw yesterday, however, demands immediate attention. According to the Daily NK, starting in April, the trading companies the North Korean regime sends to China to earn hard currency began defaulting on payments to their Chinese creditors because of the effects of the new sanctions.

“Companies under the Ministry of External Economic Affairs and other trade agencies have recently been experiencing a severe foreign currency crisis,” a source from South Pyongan Province told Daily NK on Wednesday. “Even those under the Central Party’s Office No. 39 have insufficient liquidity (in foreign currency), and this is creating obstacles for trade with China,” he added.  [Daily NK]

This is a reference to Bureau 39 of the Korean Workers’ Party, which is effectively Pyongyang’s official money laundering agency, and is designated by both the U.N. Security Council and the U.S. Treasury Department.

Cross-border transactions had been proceeding relatively unhindered until just a few months ago. However, an increasing number of conflicts have been arising with Chinese trade companies over payments, reported the source. “A lot of trade companies in Pyongyang and provincial areas have not been able to pay on time after bringing in goods from their Chinese counterparts,” he explained.

“In the past, the principal at least was always paid on time for goods that had been brought in past customs. But foreign currency is drying up, so the settlement dates are being dragged out,” the source said. “Up until early May, payments normally wouldn’t be any later than 15 days, but now there are a lot of cases where companies have been unable to pay even half the amount owed over a month past the due date.”

Clear signs of payment difficulties started to become noticeable in mid-April. The North Korean leadership had traditionally secured funds through arms and other illicit trade, but sanctions have made that increasingly difficult, leading to a shortage in money to pay for transactions.

The word has now spread among Chinese creditors that North Korean trading companies are bad credit risks. As a result, other regime trading companies are also finding it harder to get lines of credit.

“Having faced this situation for two months, Chinese companies are now asking for cash payments only and have become extremely reluctant to allow deferred payments,” the source said. “If this lasts for a few more months, all of the previously amicable Chinese traders will start to avoid further business with the North,” he speculated.

Trade banks in Pyongyang have seen their foreign currency supplies dry up, making it particularly challenging for even official trading firms to obtain credit. Trade company heads have been overheard remarking that borrowing from banks is even harder than borrowing money from individuals at exorbitantly high interest rates (loan sharks), said the source.

The effects, so far, appear to be limited to companies that fund the regime. Food prices in North Korea have been stable since April and through North Korea’s spring lean season, despite the liquidity crisis experienced by the trading companies.

Although market prices in the North have remained stable, active trade directly tied to the leadership’s funds has plummeted, suggesting international sanctions targeting the regime may be proving effective.

The Daily NK claims to have multiple sources for its report, including “[a]dditional sources” in South Pyongan and North Pyongan provinces of North Korea. It shows discipline that the Daily NK waited this long to find multiple sources to corroborate an important story that began to emerge in April. I’d love to know who their source was for this anecdote:

“Not so long ago, the Cabinet Premier Pak Pong Ju failed to make a payment of 30,000 USD for a Chinese vessel that arrived at Nampo Port with some 1,000 flat screen televisions, thereby forcing him to return to Pyongyang empty-handed,” the source said, explaining that rumors of the incident quickly made the rounds, igniting concerns about the implications for the economy if even the regime’s trading bodies cannot follow through on a prearranged transaction.

So, how does this report jibe with other sources? Up until mid-April, I read a spate of reports observing that trade across the Yalu River looked outwardly normal, except for the lack of coal and ore shipments. From this, most of the reports concluded that sanctions weren’t working, although those reports didn’t do much to parse sanctioned from non-sanctioned trade. The Daily NK did, however, find evidence that sanctioned cross-border trade in bulk cash, military items and titanium continued through early April.

But when this NK News report dug deeper into the mechanics of the China-North Korea trade, it found something interesting. At the time, I bookmarked the report and decided I’d come back to it if a possible explanation emerged.

There have been interruptions to their business, however these stoppages came purely at the request of their North Korean partners. The two major interruptions to their business occurred in September and October 2011, prior to the announcement of Kim Jong Il’s death and again this year in March, coincidentally (or perhaps not) after the passing of the latest round of UN Security Council sanctions.

“Now, we have stopped and we will come back on the last week of this month (May) and the last shipment made was the second week of March of this year,” Whang told NK News. UN Resolution 2270 was passed March 2.

Whang received no further explanation for the interruption in business, which is the longest he has experienced. It is perhaps surprising given the type of trade he is involved in, as he said, Whang is not “selling Playstations … or Saddam Hussein’s rockets.” Whang has another theory.

“I think it was a security level appreciation, I think for the Party Congress … they would like to reach a (quieter) situation to restart again,” he told NK News. [NK News, Hamish Macdonald]

A few possible explanations for this come to mind. One is that sanctions are making it harder for the trading companies to trade and earn revenue. Around mid-April, Chinese customs reportedly increased its inspections, causing some North Korean trading companies to shift from sanctioned trade to the non-sanctioned trade in importing food into North Korea. Trade statistics also tell us that China is importing less North Korean coal and other goods, although this trend predates sanctions, and may be due to the slowing of China’s economy.

North Korea has also found it harder to buy Swiss watches directly from the makers. Although North Korea can ordinarily turn to Chinese suppliers to circumvent luxury goods sanctions, the anecdote involving Pak Pong-ju reminds us that not even Chinese merchants will sell North Korea luxury goods if its checks won’t clear.

This suggests a second and more likely explanation — that the trading companies’ bank accounts may be frozen. That is also consistent with reports we’ve seen from China as early as February. You wouldn’t necessarily observe the effects of that at border crossings. It would explain why North Korean regime-affiliated buyers can’t pay creditors despite the imperfect enforcement of border controls. While it’s too early to conclude too much, it bears careful watching.

Continue Reading

U.N. aid isn’t solving North Korea’s hunger problem

Two years ago, a U.N. Commission of Inquiry cited estimates that North Korea’s Great Famine of 1993 to 1999 killed up to 2 million people.* All of those deaths were needless — the regime spent those years wasting more than enough money to feed everyone who starved. By 1995, when Kim Jong-il finally let U.N. aid agencies in, hundreds of thousands (or more) had already died. The aid agencies, most prominently the World Food Program (WFP) and the Food and Agriculture Organization (FAO), never left, and have now been operating in North Korea for 21 years.

No other industrialized country in a temperate zone has “needed” international food aid for so long. Yet last year, U.N. aid agencies estimated that more than 80 percent of North Korean households have poor or borderline food consumption, and last month, the WFP estimated that one in four North Korean children at the nurseries it funds are malnourished. I don’t doubt that many of North Korea’s children are malnourished, but to project that figure onto the broader population, you have to believe that the WFP has enough access to the population to do a credible needs assessment. For reasons I explained here, I don’t believe that.

I believe that many North Koreans really are hungry and/or malnourished, but beyond this fundamental truth, it gets harder to know what to believe. North Korea blames its hunger on droughts and floods, but no one starved in South Korea during this same period. Pyongyang’s apologists blame sanctions, of course, but there are no U.N. or U.S. sanctions on food, only on the weapons and luxury goods Pyongyang buys instead of food. The apologists also overlook the sanctions the North Korean government imposes on its own people, by preventing them from growing, importing, and selling food on their own.

The conclusion that becomes harder to escape each year is that North Korea’s food crisis is man-made, and man-made problems demand man-made solutions. Year after year, aid agencies have failed to confront (and at times, have actually misrepresented) the real causes of hunger in North Korea. Thus, despite the good international aid undoubtedly does for a lucky few, it may be doing more harm than good for the broader North Korean population. 

The aid agencies can’t get their stories straight.

What inspired me to write this long rant? The last straw came when I read these two Yonhap headlines:

June 4: “N. Korea’s rice production to rise in 2016: U.N. report

June 11: “N. Korea’s 2016 food shortage may reach worst level since 2011: report

The first story cites a report in Radio Free Asia, which in turn cites a South Korean expert’s conclusion based on favorable weather, and supplies of water and fertilizer, “after quoting a report by the U.N. Food and Agriculture Organization.” It cites the FAO as saying that the North Korean government will import 100,000 tons of rice commercially, will have a total rice supply of 1.6 million tons, and will produce 2.5 million tons of corn. Although Yonhap’s headline hypes the FAO’s conclusions, the FAO is upbeat about North Korea’s overall food situation:

Early prospects for 2016 main season food crops favourable

Planting of the 2016 main season food crops, including rice, maize, soybeans and potatoes, normally starts in April and continues until mid-June. Normal to above-normal rainfall since April over central and southern ‘’food-basket’’ provinces of the country, coupled with improved supplies of irrigation water, benefitted planting operations and early crop development. Assuming favourable precipitation for the remainder of the season, the 2016 main season cereal output is expected to recover from the drought?affected harvest of 2015.

Production of 2016 early season crops expected to recover from last year’s sharply reduced level

Latest official production forecasts from the Ministry of Agriculture (MoA) put the 2016 early season potatoes, wheat and barley crops, currently being harvested, at 363 000 tonnes (cereal equivalent), 21 percent higher than the sharply reduced 2015 level. The expected production gain is the result of favourable weather during the cropping season and improved water availability in the main reservoirs that boosted yield prospects. Early season potato production in 2016 is forecast by FAO at 297 000 tonnes, 27 percent above the previous year’s level, while the combined production of wheat and barley is expected to almost double from last year’s level and reach 66 000 tonnes. [U.N. FAO]

The second Yonhap story also quotes an estimate by the FAO. It says the government will import 300,000 tons of food — not just rice — but will still have a shortage of 394,000 tons, because last year’s rice harvest fell by 26 percent to 1.95 million tons, and its corn harvest fell to 2.3 million tons, representing a 9 percent decline in total grain harvest. Yonhap’s story then cites the very same South Korean expert as the first story, but this time, the expert says that North Korea “may have given up rice production, which requires a large quantity of water, and instead planted other crops amid a water shortage.” Although Yonhap’s headline arguably hypes the FAO’s conclusions, the FAO is downbeat about North Korea’s overall food situation:

North Korea’s total  food production – including cereals, soybeans and potatoes in cereal equivalent – is estimated to have fallen in 2015, the first drop since 2010, and is expected to worsen food security in the country, according to a FAO update issued today. [….]

Given the tight food supplies in 2015/16, the country’s food security situation is expected to deteriorate from the previous year when most households were already estimated to have poor or borderline food consumption levels.

Besides severely affecting the rice crop, the dry conditions during the 2015 main season, coupled with low irrigation water availability following recurrent dry spells since July 2014, also impacted negatively on the production of maize, the country’s second most important cereal crop. Despite an expansion in plantings, maize output is estimated to have decreased by 3 percent to 2.29 million tonnes in 2015. [U.N. FAO]

If you can find any consistency in those reports, enroll in law school. At times like this, I wonder whether the WFP and FAO have a clue what’s going on in North Korea. Again, the overwhelming evidence from refugees, clandestine reporting, and aid workers all aligns to support the contention that there really is a serious, chronic food crisis in North Korea. Yet U.N. agencies — which have been frustrated at every turn by the North Korean government — focus on short-term “emergencies,” perhaps because they, too, find it hard to escape the conclusion that Pyongyang’s policies are the cause of the long-term crisis, and because in the end, they aren’t willing to challenge those policies. 

Aid agencies’ claims aren’t always supported by the evidence.

A less generous interpretation, which Marcus Noland has raised here, is that aid agencies are deliberately hyping North Korea’s food supply problems. Aid workers — who are compassionate, well-meaning people — need more funding to keep their programs going. This creates the understandable temptation to exaggerate the crisis and misrepresent each new crisis as transitory, but only at the cost of their long-term credibility. The U.N.’s donors are staying away in droves, maybe because they’ve come to the same realizations I have, and maybe because they just think their money can feed more people elsewhere. 

So how much of what the FAO says is really true? There’s reliable evidence that last year was a dry year in North Korea, yet despite alarmist headlines earlier in the year, there was no drought, and food prices stayed relatively stable. Evidently, there will be better weather this year, which we can predict because it’s late enough to see how global weather patterns are shaping up. Because last year was dry, the FAO may suspect that leftover food stocks are diminished, which could have a domino effect on this year’s food supply. Unless it won’t, of course.

First, the actual reported numbers aren’t that alarming in historical context. For 2016, FAO expects North Korea to produce around 4.8 million tonnes of cereals (requirements of 5.49 million minus a shortfall of 694,000). By comparison, North Korea’s 2010 harvest was either 4.3 or 4.5 million tonnes (not tons) of cereals. The figure for 2009 was 4.1 million tonnes; in 2008, 4.21 million tonnes; in 2007, 3 million tonnes; in 2006, 4 million tonnes; in 2005, 4.5 million tonnes in 2005; and in 2004, 4.24 million tonnes. Et cetera. All of these were lean years to be sure, and certainly featured terrible, preventable malnutrition for millions of North Koreans, but they were also years when North Korea was recovering from famine. If we believe these figures — and I stress that they rely on the North Korean government’s official food production statistics — they represent a slow-but-steady recovery in food production.

As it happens, I don’t believe anything based on North Korean government statistics and neither should you. Still, the bigger trend (slow-but-steady recovery) is consistent with a source that I’m more inclined to believe. The Daily NK’s reporting tells us that food prices stayed stable throughout this year’s “barley hump” (North Korea’s traditional spring lean season) and sanctions scares.

Do aid agencies really know what the food supply is?

One of the biggest problems with WFP and FAO estimates is that the North Korean government has impeded their access to the population so much that it’s difficult to do credible needs assessments. That leaves WFP and FAO dependent on North Korean government statistics, which are prone to manipulation. The fact that North Korea placed a spy inside WFP’s Rome office certainly suggests it has an interest in manipulating the narrative.

An even greater problem with WFP/FAO assessments is that they can’t possibly assess the growing role of private agriculture in supplying the markets on which nearly all North Koreans rely for their daily sustenance. Private agriculture operates in that penumbra between tolerance and illegality, a space that is often filled by bribery of, and extortion by, state officials. North Koreans are understandably reticent about telling foreigners about how much they grow in their private gardens and farms. If you’re estimating caloric intake based on North Korean state statistics about the latest cut in rations, you’re not only vulnerable to manipulation, you’re only telling part of the story. The quiet, steady rise of private agriculture is the untold “good news” story about North Korea’s food supply.

The aid agencies blame the weather (wrong).

I’ve argued before that U.N. agencies working in North Korea act as if they’re afraid of losing access if they blame Pyongyang’s policies for causing food shortages. Instead, FAO blames the weather, as if we’re supposed to believe that by some meteorological miracle, 23 consecutive years of drought or flood have caused food shortages in North Korea, but not South Korea.

Aid agencies blame sanctions (also wrong).

Rural North Koreans, who don’t understand sanctions any better than most Washington academics or journalists, don’t know that the trade in food isn’t sanctioned. They’re understandably worried that China will impose a trade embargo and that they’ll go hungry. 

In fact, U.S. and U.N. sanctions have humanitarian exemptions allowing them to adjust their targeting to avoid adverse impacts on the food supply. The U.N. resolutions stress that the sanctions “are not intended to have adverse humanitarian consequences for the civilian population” of North Korea. Unlike the aid agencies, the Security Council has called on Pyongyang to “respond to other security and humanitarian concerns of the international community.”

People who don’t understand this, including plenty of journalists, see all cross-border trade as evidence that sanctions are failing. Scholars who should know better fan the same fears outside North Korea. (Naturally, so does the know-nothing rabble-rouser Doug Bandow, citing as “evidence” a Russian diplomat, a Chinese scholar, and Andrei Lankov, who knows many things about North Korea, but is no sanctions expert. Bandow might just be the most easily disinformed person in this town.)

For now, however, there’s more evidence that sanctions have improved North Korea’s aggregate food supply than harmed it. One dynamic we’ve seen is that because the North Korean government can’t export luxury food products like seafood for cash, it temporarily dumped it on the local markets (later, it just idled much of the fishing fleet). Another is that trading companies that have found more difficulty trading in sanctioned goods have shifted to the profitable business of importing food, because the trade in food isn’t sanctioned.

The continuation of a healthy trade in food and consumer goods means that for now, the targeting and the exemptions are working as intended. That’s important, because if sanctions really do impact the food supply, political support for sanctions enforcement would suffer. One concern we should keep watching closely for is whether recent banking cutoffs and asset freezes have spillover effects on cross-border trade. And of course, the North Korean government will hype any food supply problems to use its poor as human shields. That’s a key flaw in the FAO’s methodology, which relies on statistics from the North Korean government to arrive at its estimates.

And still, the World Health Organization — you will recall that its head, the incompetent global laughingstock Margaret Chan, has praised North Korea’s health care system and the lack of obesity there — still feeds us bullshit like this:

“International sanctions have also indirectly contributed to resistance among donors to provide funds to DPRK. Factors such as disruptions to fund transfers, as well as lengthy procurement processes and slow delivery of equipment and supplies has influenced donor?s attitudes and decisions on the allocation of funding,” the report read. [NK News, Hamish MacDonald]

U.N. sanctions do discourage giving Pyongyang cash that it will certainly misuse, but there’s nothing in them that discourages donations of in-kind aid. Is there no one in the U.N. who can resolve this non-existent inconsistency between the Security Council and the aid agencies?

Pyongyang could feed its own people, but chooses not to.

The most fundamental question about hunger in North Korea is why North Korea needs food aid at all, when it could afford to feed all of its hungry. This may be the most succint and damning summary of the problem:

When the country finally admitted in 1995 that it was facing famine, the international community responded with considerable generosity, at one point feeding roughly a third of the population. But the North Korean government has never accepted the international norms in the provision of aid, impeding normal assessment, monitoring, and evaluation functions of the relief organisations.

Critically, with assistance ramping up, the government cut commercial grain imports – in essence using humanitarian aid as a form of balance of payments support, freeing up resources to finance the importation of advanced military weaponry.

Even at the famine’s peak, the resources needed to close the gap were modest, in the order of $100-$200m, or about five to 20% of revenues from exported goods and services, or one to two per cent of contemporaneous national income.

We evidently care more about hungry North Koreans than their government does

Today, the gap could be closed for something in the order of $8-19m — less than 0.2% of national income or one per cent of the military budget. [Marcus Noland, The Guardian]

Not once have I heard a U.N. aid agency or agency official say anything like this. As I’ve pointed out in the New York Times and repeatedly on this blog, North Korea has more than enough money to meet its food gap by spending less on big screen TVs, watches, yachts, ski resorts, and missiles. The latest evidence of those skewed priorities is an estimate that Pyongyang spent $200 million on its recent party congress. That seems like a pretty low estimate to me, but just consider that $200 million is enough to fully fund World Food Program operations in North Korea for two years.

Even more troubling is the fact that Pyongyang sometimes reduces food imports even as aid agencies make emergency appeals. There’s some evidence that the North Korean government reduced spending on food imports again, earlier this year. Why? Noland thinks Pyongyang prefers to let the aid agencies buy its food so that it can spend its hard currency on other priorities.

You can’t solve a problem if you aren’t willing to name it.

What discourages in-kind aid is the grim reality that 21 years of U.N. aid haven’t solved North Korea’s food crisis, and the other grim fact — that U.N. agencies are still overlooking the real causes of the crisis and blaming weather and sanctions, just as Pyongyang demands of it. And if the aid agencies are so cowed by Pyongyang that they’re willing to lie to the world, what other compromises have they made with the truth?

At what point does it become inescapable that the North Korean government’s own policy decisions are to blame? I can certainly point to a number of those policy decisions, including the refusal to carry out broad reforms in how land or crops are distributed, the refusal to fundamentally open North Korea’s economy, the prioritization of weapons over development and trade, arbitrary restrictions on humanitarian aid workers, the diversion of aid, and the diversion of national resources into palaces, yachts, and nukes instead of food. The point that I’ve flogged here again and again is that what North Korea spends on missiles or luxury goods is many times what it would cost to feed every hungry North Korean. Until the U.N. abandons its fear of expulsion and confronts that, we aren’t going to solve the greater problem.

What’s needed is a top-to-bottom review of international aid policy, and why that policy has failed to solve North Korea’s food crisis, despite the best of intentions. It might begin with the work of Nobel Prize-winning economist Angus Deaton, finding that aid can actually encourage the policies that cause poverty and hunger. It should then take a harder look at private agriculture, and whether pushing for market-based solutions — including land reform that gives land back to the tillers — are better solutions than those that prop up on a broken system of collectives and rations. Above all, aid agencies should raise international pressure on the North Korean government to take more responsibility for feeding its own people.

~   ~   ~

* Previously said that the report estimated that the famine killed up to 2.4 million people; since corrected. The report also cites higher estimates, but allows that some of the “missing” population in these estimates may be due to migration.

Continue Reading

House Committee marks up bill calling for N. Korea’s re-listing as a terror sponsor

Last month, when it was introduced, I wrote about H.R. 5208, the House bill that would require the Secretary of State to acknowledge some of the extensive evidence — including final U.S. federal court judgments — of North Korea’s sponsorship of terrorism, and to go on the record as to whether North Korea has repeatedly provided support for acts of international terrorism. Yesterday, the House Foreign Affairs Committee took the next step on H.R. 5208, approving it in a committee markup. You can watch the whole markup on video:

At 35 minutes in, Rep. Ted Poe (R, Tex.), the bill’s author, speaks powerfully for the bill’s passage. Chairman Royce (R, Cal.), Ranking Member Engel (D, N.Y.), and subcommittee Ranking Member Brad Sherman (D, Cal.) also spoke in favor of the bill.

The bill that emerged from that markup, as an amendment in the nature of a substitute, is tighter than the original.* The committee staff’s challenge was that there is so much evidence of North Korea’s arms sales to terrorists, terrifying cyberattacks on civilian targets, and plots to kill or kidnap dissidents and activists abroad, that the bill could easily have been 20 pages long. As a rule, a bill’s speed through Congress is inversely proportional to its length. 

After some technical corrections, the bill will go to the Speaker’s office for placement on the congressional calendar. This being an election year, the odds against that would seem rather long, although I’m not quite as pessimistic as the Associated Press’s correspondent. If His Porcine Majesty acts up again, Congress might just reach for the first heavy object to throw at him, and this bill is now within easy reach. Given the bipartisan support for H.R. 5208 in yesterday’s markup, and the reversed polarity of Hillary Clinton espousing much tougher rhetoric on North Korea than His Orange Majesty, this one doesn’t seem so likely to cleave along partisan lines.  

Frankly, I’m pleasantly surprised that the markup went (1) forward and (2) smoothly despite this being an election year, with all the complications that brings (a truncated congressional calendar and the inevitable partisan divisions). Yet the full Committee’s Ranking Member, Elliot Engel, and the subcommittee’s Ranking Member, Brad Sherman, both spoke in favor of the bill. Engel also called Bush’s 2007 Agreed Framework II “a bad deal.” So even if H.R. 5208 doesn’t pass this Congress, much like H.R. 1771, we’re likely to see it again in the next Congress as bipartisan support for it builds.

~   ~   ~

Another bill that was marked up yesterday also deserves attention — H.R. 5484, the State Sponsors of Terrorism Review Enhancement Act. The bill makes some necessary procedural reforms to the SSOT rescission (de-listing) process by (1) increasing Congress’s time to review a rescission from 45 to 90 days, and (2) requiring the President to certify that the state hasn’t supported terrorism for two years (currently, that period is a ridiculously short six months). You can read more about how the SSOT rescission process works at page 29 of my report

An additional provision, providing for a congressional resolution of disapproval of a SSOT rescission, could run into constitutional problems. I caught this issue immediately, and later saw that at the 38-minute mark in the markup, so did Rep. Alan Grayson (D, Fla.)). Chairman Royce correctly noted that there are similar provisions in existing laws, although Grayson responded that those provisions haven’t yet been challenged in court.

Grayson is something of an enigma. He has earned a well-deserved reputation for his bombastic rhetoric and personal conduct. Even Harry Reid loathes him openly. But Grayson has also earned my grudging respect for his intellectual rigor. He reads every word of every bill sent to him, and sometimes, he catches serious legal defects in them. (If Grayson would raise those issues privately instead of in full committee hearings, he might be more effective.) Also, despite Grayson’s own abrasive personality, his staffers are some of the nicest people on the Hill.

Despite the problem with one of its provisions, H.R. 5484 makes necessary reforms. Back in 2008, I wrote about my frustration with the ridiculously short congressional review process for SSOT rescission, when the Bush administration and the State Department cynically announced North Korea’s rescission from the terror list just before the summer recess in a presidential election year, which effectively nullified the 45-day review.

The biggest surprise about this bill is its author — Republican Ted Yoho of Florida. Yoho has a reputation as an isolationist and is a made member of the Ron Paul-inspired Republican Liberty Caucus. He was one of the few GOP members of the Foreign Affairs Committee who wasn’t among the 147 co-sponsors of H.R. 1771, the predecessor to H.R. 757. Two Liberty Caucus members, Tom Massie (R, Ky.) and Justin Amash (R, Mich.), were the only votes against H.R. 757. Clearly, then, not even all Liberty Caucus members agree with Doug Bandow‘s policy objections to the list of state sponsors of terrorism.

H.R. 5484 stands almost no chance of passing in the current Congress. Ranking Member Elliot Engel didn’t oppose it, but he expressed discomfort that it could tie the administration’s hands in the future, and noted that the administration was opposed to it. Even so, the pressure for reforms to the terror listing process will continue to build as long as Congress thinks the State Department is abusing its discretion.

~   ~   ~

* The legislative counsel will make a technical correction of the repeated language about one of the attempted hits on Hwang Jang-yop.

Continue Reading

North Koreans find leaks in Kim Jong-un’s information blockade

Until 2011, the erosion of North Korea’s border control and the infiltration of foreign ideas may have been the only hopeful trends in a country where just about all of the news is bad. When Kim Jong-un came to power, however, he launched an allout effort to seal North Korea’s leaky border with China. Most of the evidence tells us that that effort has had considerable success. It cut the flow of refugees from North to South Korea in half, and (with the help of cell phone locators, reportedly imported from Germany) made it extremely risky to make cross-border phone calls. Those calls were one of North Koreans’ few fragile links to the outside world.

Yet despite Kim Jong-un’s best efforts, the border isn’t completely sealed. After years of decline, the number of refugees arriving in the South is inching up again. North Koreans were still able to find out about the recent group defection of 13 restaurant workers from China — news that the state must have been very eager to suppress — using illegal cell phones.

NK News reports that some younger North Koreans are now sharing “multimedia files, with content often influenced distinctly from Japanese and South Korean culture,” over their government-controlled Koryolink phones. This is, of course, a risky proposition over a monitored network, but in time, marginally subversive content has the potential to overwhelm the state’s capacity to monitor and censor it. Here, I find myself agreeing with Andrei Lankov:

“The horizontal connections” provided by the growing cellphone network should be welcomed, Dr. Andrei Lankov, a long-time North Korea watcher told NK News on Monday.

“The massive arrival of cellphones provide North Koreans with many opportunities to interact

with their peers, often living far away.

“It is new, since for generations North Korean society has been compartmentalized, with people having little communications outside their work unit and neighbourhood,” he added.

The greater danger to the regime, however, is that North Koreans have apparently found a way to evade both the regime’s cell phone detectors and the monitored state-run networks, by using hard-to-trace messenger apps like on their Chinese cell phones. 

North Korean users of foreign messenger applications such as Kakao Talk, Line, and WeChat will be arrested on the spot on suspicion of espionage, according to a new order handed down from the authorities. Sources inside the country interpret the move as Kim Jong Un’s aggressive reaction to the capability of Chinese cellphones to facilitate the import and export of information into the isolated country.

As recently reported by Daily NK, the North Korean authorities have ramped up efforts to label Chinese cellphone users as traitors and pursuing strict punishments against them. To this end, North Korean authorities doubled down on the use of signal detectors to trace illicit international calls and zero in on the location of foreign phone users.

However, the messenger apps allow users to circumvent detection by this equipment, prompting the regime to respond with new threats specifically targeting users of these communication applications. [Daily NK]

I’m not a technology expert, but I’d guess that’s because text messages transmit only a small amount of data in an instant — too little time for detection equipment to zero in on the location. The regime has responded by ordering the immediate arrest and harsh punishment of anyone caught using a messenger app.

“Offenders who are apprehended will be processed according to the discretion of the arresting agency– i.e. the State Security Department or the Ministry of People’s Security. Those taken in will be charged with espionage associating with the enemy and dispatched to a political prison camp.”  [….]

“These days, Line and Kakao Talk are explicitly mentioned in lectures [routinely delivered to residents by the authorities]. That’s how serious the crackdown has become,” a separate source in Ryanggang Province said.

The regime has been worried about Kakao Talk since 2014, which is also when I first read reports of its use to evade regime censorship. Jieun Baek has written about its evolution into a guerrilla banking system for North Koreans. By late 2015, North Korean refugees in the South were already using it to send messages and money to their families back home and set up clandestine hawaladars inside North Korea. Kakao Talk has also won a license from the South Korean authorities to operate as an online bank.

The obvious limitation of these apps is that Chinese cell phones have limited range — just a few miles inside North Korea. But if the signal range problem can be solved, messenger apps could give North Koreans the ability to spread news and make payments from city to city and province to province. I can foresee a dynamic under which these apps could play a significant role in shifting North Korea’s internal balance of power. Apps like these could help North Korea’s poor become richer and better fed, even as a heavily sanctioned regime’s security forces increasingly turn to corruption to feed their own families.

Continue Reading

Meet the “Libertarians” who would surrender our liberty & our security to Kim Jong-un’s censors

I doubt that America has fully come to terms with the damage done to its freedom of expression by the Sony cyberterrorist attack of 2014, or by the increasing willingness of Muslim supremacists to extinguish our civil liberties through violence. It is an easy thing to be a civil libertarian when the subject is, say, the limits of a proposed law allowing the FBI or NSA to eavesdrop on suspected terrorists’ communications or monitor their social media posts. Even if we acknowledge the legitimacy of these debates, it is a modern marvel of hypocrisy to watch ardent, self-described civil libertarians quietly slink away from the defense of our civil liberties from greater and less restrained threats, particularly when doing so requires actual courage, whether physical, political, or professional.

Some would cede to the censorship of “Islamophobia” or “hate speech” or blame the targets and victims of terrorism for inciting attacks against themselves. Others still deny North Korea’s responsibility for cyberattacks that the FBI and the NSA watched unfoldNext time you meet one, ask a Sony conspiracy theorist (among whom we may count David Duke) what incentive President Obama had to blame North Korea for an attack on the United States. So that he would have an excuse to do nothing about it, and to face criticism from both political parties for the inadequacy of his response? To corner the market in North Korea’s vast riches of coal, meth, and refugees? In which case, why not secure an endless supply of two of those things by invading Wyoming?

To see a free society yield to its most cowardly impulses is to realize that our liberty will never be taken from us without the help of collaborators among us. Sadly, North Korea’s injury to our freedom to express ourselves in our own country has healed slowly. It may last as long as North Korea does.

The Museum of Modern Art has acknowledged it wrongly canceled the New York debut of “Under the Sun,” a documentary about North Korea that has been criticized by that country and Russia.

A slyly subversive look at the reclusive state by the Russian filmmaker Vitaly Mansky, the film had been scheduled to be shown at the museum’s 2016 Doc Fortnight festival on Feb. 19-29. But an email exchange provided by the film’s German producer to The New York Times shows that a festival organizer, Sally Berger, an assistant curator at MoMA, expressed concern in late January about screening the film after reading an article suggesting that any organization that did so risked retribution from North Korea.

In the emails, Ms. Berger referred to a major hacking attack on Sony Pictures that the United States has described as retaliation by North Korea for a 2014 film satire of the country, “The Interview.”

She followed up a few days later to tell the documentary’s distributor that it would not be included in the festival. “It just simply came in too late to review all the possible ramifications of showing it here at MoMA,” she wrote.

Asked about the decision to withdraw the film, Rajendra Roy, the chief curator of MoMA’s film department, said Thursday in a written statement: “‘Under the Sun’ is a remarkable documentary that was wrongly disinvited.” He added that the decision was “made by the festival’s curator without my knowledge or input.”

The museum said on Friday that Ms. Berger was no longer working there. Margaret Doyle, a spokeswoman for the museum, declined to elaborate, and Ms. Berger, reached by telephone, said she would not comment. [Robert Boynton, New York Times]

Kudos to the MoMA for firing this quisling, although it gives me little comfort to wonder how many other galleries, publishers, and film studios have quietly and vicariously surrendered our freedom. If our choices are to live in a society where North Korea controls what we are allowed to see and read, or to live in a world without North Korea, please record my vote for the latter option. North Korea acknowledges no such concept as freedom of political expression. It does not respect our borders as inviolable. Its censorship knows no limits or boundaries, and to surrender to it is to forfeit our freedom. Judging by the frequency of North Korea’s cyberattacks since then, nothing President Obama has done since 2014 has persuaded Kim Jong-un otherwise.

Which brings us to some of America’s most ostentatious and uncompromising civil libertarians, who are also among the first to slink away from the greatest threats to our security, our liberty, and our rights to speak, live, and love as we choose. Take the case of some fellow called Jacob Hornberger, a lawyer, Fox News contributor, and collaborator of Ron Paul’s racist muse Lew Rockwell:

There are all sorts of suggestions as to how to get North Korea to abandon its nuclear weapons program, but all of them involve one form of interventionism or another. A popular idea of late is for the U.S. government to pressure China to induce North Korea to comply with U.S. wishes. How can the U.S. pressure China? Well, maybe by threatening to impose sanctions on China or maybe by threatening a trade war.

I’ve got a different idea: How about just leaving North Korea alone for the first time in more than 50 years? How about immediately lifting all sanctions against the North Korean people and immediately bringing home all U.S. troops stationed in Korea?

No negotiations.  Just unilateral withdrawal. Just unilaterally lifting all sanctions? How about establishing normal diplomatic relations with North Korea and leaving Americans and the rest of the world to trade with and visit that country?

In other words, how about treating North Korea in much the same way that the U.S. government is now treating the communist regime of Vietnam? . [Jacob G. Hornberger]

Hornberger then proceeds to explain that the tongue bath he would thus give Kim Jong is not a literal one:

No, I’m not suggesting that U.S. officials have to kiss, hug, and make nice with the North Korean communist officials, as they are currently doing with Vietnamese communist officials. And no, I’m not suggesting that the Pentagon plead with the North Korean communist regime to establish U.S. military bases there, as Pentagon officials are doing with the Vietnamese communist regime.

I’m just suggesting that the U.S. government leave North Korea alone. No more U.S. troops in South Korea. No more sanctions. No more B-52 flyovers. No more joint military exercise with South Korea. No more U.S. warships in the area. No more insults. No more provocations. Just come home and leave them alone. [Jacob G. Hornberger]

How Hornberger proposes to get North Korea to leave us alone, he does not specify. Specifically, I want to call your attention to where Hornberger calls for “[n]o more insults.” He manages to get through his entire argument without using the words “cyber” or “Sony,” neatly avoiding denialism and conspiracy theories by conceding that even if one accepts North Korea’s responsibility for the attacks, he’d still shake the hand at the end of the long arm of Kim Jong-un’s censors. I wonder what “insults” he might possibly mean if he doesn’t mean films and books that offend His Porcine Majesty. Would he censor the statements of our leaders and allies that Kim Jong-un should feed North Korea’s children? Votes in the U.N. General Assembly condemning his crimes against humanity, or investigations of those crimes by U.N. field offices? Academic conferences about government policy toward North Korea? Or what if, as a private citizen, I were to simply ask you to picture Kim Jong-un trying to put his own socks on? 

Which of these things does Hornberger suppose to be inviolable rights of citizens in free societies, and why does he suppose that Kim Jong-un would recognize the same fine distinctions? Why does Hornberger suppose that His Corpulency would be more respectful of our rights and boundaries after we cede him an effective nuclear arsenal?

Thankfully, Libertarian presidential candidate Gary Johnson does not appear to share Hornberger’s view of North Korea policy, although I can’t say much for his coherence on the subject, either. Still, it’s concerning that most of the diverse viewpoints that fit inside the “Libertarian” circus tent advocate some form of surrender to Kim Jong-un. Take, for example, noted sanctions not-at-all-expert Doug Bandow, who is ready to pronounce sanctions a failure in the very same month that U.N. member states and banks around world have finally begun to implement them in earnest — something that never happened in the case of Cuba. 

Washington could intervene by maximizing unilateral sanctions. However, such penalties have yet to force political change in any nation. For a half century, Cuba resisted U.S. pressure, even after the U.S. imposed secondary controls. Sudan survived decades of financial isolation. North Korea almost certainly would do the same, especially if the China continued to support its frenemy. [Doug Bandow, The National Interest]

Why, it’s almost as if Bandow enters the discussion with a preconceived conclusion before the evidence comes in! So how, then, does Bandow propose to secure our vital domestic and international interests, such as our freedom of expression and the global nuclear nonproliferation framework? Spoiler: he doesn’t:

One is to initiate both bilateral and multilateral talks, and determine if there is any kind of deal to strike. Forget convincing North Korea to give up its existing arsenal. Instead, consider limits on future production, proliferation activities and conventional threats. At the same time the U.S. and its allies should emphasize steps which would reduce any perceived threat to North Korea. [Bandow]

Bandow never explains how he’d defend our civil liberties from North Korean censorship from afar, although he has previously written that we should do so by — wait for it — canceling annual military exercises in South Korea, and withdrawing from Korea. That would create a sudden power vacuum in a region that has long been stabilized by our alliances and which has, consequently, become an engine of economic growth that employs millions of Americans.

Not that I would deny that the force structure of U.S. Forces Korea should change, by withdrawing more ground forces while raising our stand-off air and naval power in the region, our capacity to supply our allies logistically, and by building a Pacific analog of NATO. Not that it would be a bad thing for South Korea and Japan to spend a greater share of their GDPs on their own defense. Not that it’s a bad thing for South Korea, in particular, so see that America feels taken for granted, or that the anti-American rhetoric of some of its own demagogues has costs. That is a far different thing from abandoning allies that have recently started acting like allies again.

Look — I can see why big-“L” Libertarians and Paulies get the idea that Americans want isolationist foreign policies in the post-Iraq era. Ask Americans a sufficiently simplistic, reductive, and loaded question, and most of them will agree that “we should mind our own business.” From this, some academics and politicians conclude that isolationism is politically profitable, but such abstract agreements almost never survive contact with specific crises.

Jacksonians who want us to mind our own business in the abstract are the first ones to demand that we bomb something when they feel provoked by something concrete. Liberals who take quasi-pacifist positions in the abstract will (if only briefly) support interventions in response to specific humanitarian crises, such as in Bosnia, Libya, Rwanda, or even Mount Sinjar in Iraq. And in the case of North Korea, while almost no one wants war, the strongly negative sentiment Americans harbor toward its government suggests that they don’t favor the Hornberger or Bandow “solutions,” which would effectively recognize it as a nuclear power. 

Americans don’t like paying for alliances, but they like the alliances themselves, and they’re capable of calculating the consequences of letting totalitarianism go unchecked. We’ve just finished eight years of the most non-interventionist foreign policy the American electorate would tolerate. It currently burdens President Obama with an approval rating of minus eight points, although it has usually been between minus ten and minus twenty points. If Obama’s foreign policy has done us a service, however inadvertently, it has been to temporarily dispel the idea that you can solve great and complex international problems by ignoring them (much less by just letting in everyone who arrives at your doorstep, including the terrorists among them). Syria is gone. Maybe Iraq and Jordan can be saved, and maybe they can’t. Now, the question is whether Europe will survive. Who thinks that a similar crisis couldn’t happen in Japan and South Korea five or ten years from now if America withdraws from Asia and leaves Kim Jong-un with an effective nuclear arsenal? Or that the consequent crisis wouldn’t come to our shores, too?

Continue Reading

A strike by North Korean workers in Kuwait portends a dark fate for them, and for Kim Jong-un.

I first learned that North Korea had exported laborers to Kuwait when I heard that those workers were providing thirsty locals with a valuable public service by brewing black-market moonshine for them. Then, in April, a report emerged that seemed almost too remarkable to be true — 100 North Korean workers in Kuwait had mutinied against their minders to protest the extra work and unpaid wages coincident to the “70-day battle” leading up to North Korea’s party congress in May. (In nearby Qatar, two more workers also fled from their worksite to a local police station.)

At the time, I speculated that the workers in Kuwait may have been driven to perform extra labor because of the seizure, by Sri Lankan authorities, of $150,000 in “wages” being carried from nearby Oman to China, cash that presumably would have been deposited in a Bureau 39-controlled account there. I also took note of reports that the North Koreans were having difficulties accessing the banking system and smuggling bulk cash across the border from China to North Korea. I hoped that U.S. and South Korean diplomats in Kuwait would intervene to help rescue as many of the workers as possible from repatriation to an uncertain fate. And regardless of whether the workers escaped repatriation, I worried (and still do) about the welfare of the workers’ families back in North Korea.

Obviously, not all defection stories about North Korea hold up under closer scrutiny, and hearing nothing about this one for so long, I’d begun to harbor doubts about it. Now, however, an independent source is corroborating the initial report and adding new facts:

“As people began to disobey orders and desert their workplaces, North Korean authorities belatedly took steps to tackle the issue,” RFA said. “On May 17, they quickly summoned dozens of North Korean workers who had caused problems by resuming Air Koryo flights between Pyongyang and Kuwait, which had been halted on Feb. 23.”

In March, some North Korean laborers demanded they be paid properly when their employer urged them to earn more money to send to the Pyongyang regime ahead of a large congress of the North’s ruling Workers’ Party in May, RFA added.

[….]

Seoul’s Unification Ministry, which handles inter-Korean affairs, said North Korea appears to be checking on the situation of its overseas workers.

“We think the strikes and various actions of North Korean workers abroad could be the result of sanctions on the country,” ministry spokesman Jeong Joon-hee said during a regular press briefing. [Yonhap]

Via KBS, we also learn that Air Koryo flights between Pyongyang and Kuwait were suspended shortly after the President signed H.R. 757 and shortly before the U.N. Security Council approved Resolution 2270, but that North Korea has resumed those flights for the purpose of repatriating its rebellious workers to God-only-knows-what fate.

I’d be most grateful to anyone who can provide me a copy of the original RFA report. The report has three important implications, which I’ll take in ascending order of importance. 

First, this is another sign that the regime’s overseas cash-earning operations may be entering the “death spiral” I first spoke of here. As sanctions and diplomatic pressure cut the flow of hard currency to Pyongyang, enterprises that had once been profitable will terminate or become unprofitable, and Pyongyang will squeeze its remaining overseas workers harder to keep up “loyalty” payments. There is recent evidence that the restaurant business isn’t bringing in as much cash as it did previously. Other examples of this pressure include the termination of profitable labor exports to the Ugandan police and Polish shipyards. You can expect Pyongyang’s overseas income to diminish further in the wake of the Treasury Department’s 311 designation, as even profitable enterprises face increased difficulty repatriating their profits. 

As the profits fall or become harder to repatriate, the benefits to Pyongyang of maintaining those overseas enterprises will fall, and the risks will also rise. As workers are pushed to their emotional breaking points, the risk of defections and mass protests will increase. To preempt that risk, the regime will withdraw workers from high-risk locations, which will further depress its revenues and raise pressure on the earners that remain. Examples include the withdrawal of North Korean students from China and a report that the regime is keeping its fishing boats in port to prevent defections, or perhaps more of those embarrassing “ghost ship” incidents. (Seafood exports had been a key source of revenue for Pyongyang, but evidently, if the state can’t export seafood for cash, the nutritional needs of the North Korean people don’t justify sending the fishing fleet out.)

As Pyongyang withdraws its overseas industries, the trading companies and workers in the remaining cash-earning industries will then come under increased stress. The “200-day battle” Pyongyang just announced to a people who are already exhausted and demoralized by the last “70-day battle” will further exacerbate this. It could instigate more dissent and defections, or cause North Korean operatives to make mistakes that will get them arrested or expelled. The remaining industries then become attractive targets for the South Korean NIS or NGOs offering to help them escape, or for legal attack, such as through the use of Executive Order 13722. And so on.

Second, to an even greater extent than the defection of 13 restaurant workers from Ningpo, China, the Kuwait incident illustrates the very real potential for North Koreans to organize mass political action despite close surveillance by the world’s most totalitarian state. As with the restaurant workers, presumably, these workers would have been hand-picked and vetted by the state for loyalty and obedience, yet desperation not only drove them to dissent, but to share their dissent and organize a mass act of resistance against the state. This report contradicts every expert who says, “It can’t happen.” On the contrary, it has already happened plenty of times, and will continue to happen. The real question is whether the regime can continue to contain, localize, and suppress incidents like these (and as long as North Koreans can’t communicate with each other, it will).

Third, even if Pyongyang can contain each of these mass incidents and survive the coming financial siege in the short term, these workers have shown us the potential for a long-term strategy to subvert the regime’s political control within North Korea itself. In this manifesto, I proposed such a long-term strategy for building clandestine, yet initially apolitical, civil organizations at the town, village, and factory level throughout North Korea as a foundation for (1) a post-reunification civil society and (2) a non-violent resistance movement. That movement would start by building clandestine farms, humanitarian NGOs, churches, newspapers, factories, and unions, taking on an increasingly political character with time. Once new, hard-to-censor methods of communication become available, these could overwhelm the state’s apparatus of censorship, facilitate regional and nationwide organization, and even apply some of the resistance methods the Albert Einstein Institute advocates. The ultimate objective of that strategy would be a nationwide general strike. While those tactics are still unthinkable today, Kuwait has provided a laboratory that has performed a limited, but successful, experiment with this theory.

Or, Pyongyang could bow to the inevitable and negotiate its peaceful, gradual transition to normalcy.

Continue Reading

Barack Obama disappointed Kim Jong-il. Donald Trump will disappoint Kim Jong-un.

We will see a better relationship between the U.S. and the Korean Peninsula with Obama, who sternly criticizes Bush and who would meet the leader of Chosun without pre-conditions, than with the “Bush clone” and scarecrow of the neocons McCain.

                             – from the pro-Pyongyang Chosun Sinbo, June 9, 2008 (original Korean here)

Like most of you, I slept uneasily on the night after the New Hampshire primary results came in. When sleep finally did come, dreamed I was tending an empty bar in Aspen during the off-season, as Wolf Blitzer droned in the background about the Democratic front-runner’s historic negative likability ratings. I contemplated closing the bar early when two vaguely familiar-looking men staggered in, sharing the swaggering, manic laugh of newly divorced junk bond traders on a weekend bender in Cartagena.

“Garcon, a bottle of Johnny Walker Red!”

In my dream, I brought a bottle and two glasses of ice. Squinting through the dim light, I realized that my patrons were none other than James Carville and Sydney Blumenthal. They were engrossed in somber, brooding discussions of their least-favorite subject (their hapless candidate) and more raucous discussions of their favorite subject (Republicans). Over Wolf’s sonorous rambling, I heard the unmistakeable sound of a wager offered — that a plurality of GOP primary voters was so blinded by its rage at Barack Obama that it would vote for his nearest temperamental opposite, no matter how comically stupid, racist, and neurotic he might be to the majority of the U.S. electorate. To this plurality of a minority, it wouldn’t matter how substantively ignorant he was, or how glaringly unfit he was to control the FBI, the NSA, the FCC, judicial appointments, and the nuclear codes.

“There are two sides to every Bell Curve.”

“In fact, I know just the guy. So do you. Think about it.”

They shared a knowing look, peals of loud laughter, and (if I’m not mistaken) a line of coke. “Hell, even she couldn’t lose to him!” Hands were shaken. Unspeakable services were promised to the winner. I shuddered as I thought that here were the sort of men who kept few promises, except for promises like these. 

And then, I awoke. I’d fallen asleep with the TV on and awakened from one nightmare into another.

Much overanalysis of Donald Trump this year has described him as a new species of political savant, but there’s nothing new about his species. Vast swaths of Africa, Latin America, and the ‘stans are governed by men just like him. I incline to the view that Trump’s success, so far, is mostly a function of the civic nihilism of our news media and the idiocy of the ovine masses who bleat at his trough. He is to politics what Lord Arthur Scoresby is to tactics. Until now, he has been lucky enough to be the firmest stool in the fecal smorgasbord that is this year’s ballot. If, five months from now, the polls in my state dictate that it is my solemn duty to vote for Mrs. Clinton to preserve our republican form of government, I’ll close my eyes and think of America, and of how much garden-variety, devil-I-know incompetence and mendacity it has already survived, without interruption, since January of 1993.

ratched

[Good morning, Ma’am. I’ve come to check myself in and entrust myself to your care.]

By now, you may be wondering if I’m coming to a point about North Korea. You may already have forgotten that two weeks and several Donald Trump outrages ago, Trump casually sharted out that he’d be willing to talk to Kim Jong-un. He has since reaffirmed that he’d “negotiate” with Kim. This drew immediate and heavy criticism from conservatives with views as diverse as Mark Levin, Gordon Chang, Michael Green and Adam Kinzinger. Even the pro-Trump Breitbart didn’t quite seem to know how to react.

How shocked we should really be depends on some unknowns. Of course Trump would negotiate with Kim Jong-un. So did Hillary Clinton, through her diplomats. So did Barack Obama. George W. Bush and (of course) Bill Clinton talked to Kim Jong-il. And at the right time, so would I. That right time is at least two years in the future, after sanctions, subversion, and information operations force Kim (or, more likely, a junta of generals) to breach North Korea’s isolation and accept fundamental transparency, disarmament, and reform as the price of survival. (The sanctions, however, would stay firmly in place until he performed. The conditions for suspending and lifting them are now written into statute.)

From there, however, the questions proliferate. Does Trump’s offer mean he won’t ask China to assassinate Kim Jong-un (as if), or that he’d defer that part of the discussion for later? Does he still think Kim Jong-un is a “madman” who is “sick enough to use” a nuke? Would he still conspire with China to “close down” North Korea’s nuclear weapons program, or ask China to make Kim “disappear”? Would these be direct talks or would he use, you know, diplomats for that? Would Trump go to Pyongyang? (He later said he wouldn’t, thus preempting the question of whether he’d stay.) Does he have any sense of what he’d hope to achieve through talks, how his objectives would fit into a coherent policy, or how that would advance our national interests? And most importantly:

Personally, I wouldn’t waste too much time on these questions. Any serious effort to derive a coherent policy from Trump’s election-year statements is to confuse aromatherapy with flatulence. Nothing Trump says is coherent. Everything he says is meant to please the half of the mob that’s content to overlook the completely contradictory thing he said ten minutes before to please the other half of the mob. He’s a dark cloud that pisses and throws thunder wherever the wind blows him. By the end of July, he’ll be threatening to bomb Pyongyang. If a promise to talk to Kim Jong-il was meaningless when the guarded, thoughtful, and feckless Barack Obama made it, surely one of Trump’s witless ejaculations means even less.

But would Trump at least try to negotiate? Probably, and it is worrying that Trump seems as easy to manipulate as he is to enrage. In fact, I can almost imagine that first Trump-Kim negotiation going a little like this:

[From there, things would only go downhill.]

The caliber of mind that enrolls in the Trump University School of Foreign Relations doesn’t survive in a place like Pyongyang. North Korea’s ambassador to Switzerland initially dismissed Trump’s offer “a gesture for campaign purposes,” “propaganda,” and “nonsense,” while wisely allowing that “[i]t is up to the decision of my supreme leader.” Since then, however, the China-based, North Korean controlled “news” site DPRK Today has warmed to Trump, or pretended to. But if the West has nothing to teach North Korea about profiteering, then surely Donald Trump has nothing to teach North Korea about how to run a confidence game.

North Korea has backed presumptive U.S. Republican nominee Donald Trump, with a propaganda website praising him as “a prescient presidential candidate” who can liberate Americans living under daily fear of nuclear attack by the North.

A column carried on Tuesday by DPRK Today, one of the reclusive and dynastic state’s mouthpieces, described Trump as a “wise politician” and the right choice for U.S. voters in the Nov. 8 U.S. presidential election. [Reuters, Jack Kim]

Just when I thought Trump couldn’t do worse than the endorsements of David Duke and the Ku Klux Klan, he has. But although news sites are crowing that North Korea has endorsed or offered its support to Trump, or that its state media has endorsed or “backedhim, it would be more precise to say that a pro-North Korean website based in China, which obeys Pyongyang’s writ and probably expresses its views, has praised him and criticized his opponent, and also, Trump seems to be totally fine with that. And that is bad enough.

DPRK Today called Trump a “wise” politician, saying that if the United States withdraws its troops from the Korean Peninsula, the two Koreas will seek peace and reconciliation. [….]

“There are not a few positive aspects about what Trump said,” the propaganda website said. “If the U.S. does not interfere in affairs on the peninsula, the two Koreas will reconcile and cooperate.” [….]

“The candidate whom Americans should select is not (Democratic candidate) Hillary Clinton who seeks to apply the Iran-model to the nuclear issue on the Korean Peninsula, but Trump who hopes for direct talks with us,” the North’s outlet said. [Yonhap]

In these dreary times, you take your joy where you find it. The most delightful absurdity in this year of depressing absurdities has been watching Hillary Clinton — the wife of the man who presided over Agreed Framework I — tag Donald Trump as Kim Jong-un’s candidate and “unfit for office.”

U.S. Democratic presidential candidate Hillary Clinton on Thursday accused her Republican rival Donald Trump of “praising” North Korean leader Kim Jong-un, saying it is one of a series of statements that show the real-estate tycoon is not qualified to be president. Clinton made the remark in an interview with CNN, calling the North’s leader “a despotic dictator.”

“Whether it’s attacking Great Britain, praising the leader of North Korea, a despotic dictator who has nuclear weapons, whether it is saying, ‘Pull out of NATO,’ let other countries have nuclear weapons, the kinds of positions he is stating and the consequences of those positions, and even the consequences of his statements, are not just offensive to people, they are potentially dangerous,” Clinton said.

[….]

She did not elaborate on Trump’s praise of the North’s Kim. But she was believed to be referring to remarks Trump made in January. Even though Trump at the time described Kim a “total nut job” and a “madman playing around with the nukes,” he also said it was “amazing” for the young leader to keep control of the country. [Yonhap]

It consoles me some to think that when Clinton wins the presidency this fall, she’ll have done so by positioning herself as tough on Kim Jong-un. I’d love to believe that she would be, and hey, it’s just possible. It isn’t her partisan affiliation that makes me skeptical. Democrats in Congress voted overwhelmingly to support tough new sanctions against North Korea. A realignment of Democrats to stronger views will be important if Trump’s nomination puts Democrats in control of the White House, the Senate, and maybe even the House.

But while tough rhetoric will complicate Clinton’s path to Agreed Framework III, it won’t bar it, either. Only Congress can do that. As tempted as I am by the Clinton Accommodation Syndrome that has understandably afflicted some Trump rejectionists, let’s be realistic enough to temper our hopes with an examination of the historical record. Mrs. Clinton, as I’ve pointed out before, has an impeccable record for making “safe,” consensus-backed, and catastrophically terrible decisions. The axiom that politicians will always disappoint you surely goes double when the politician is a Clinton. 

But if there is no God (or if there is, and He hates us) and Trump does win, no one is likely to be more disappointed than Kim Jong-un and the electorally insignificant number of alt-right fans they both have in common. Why? First, the percentage of Americans who are masochistic enough to meet Kim Jong-un’s demands is too insignificant to be useful to Trump. As with David Duke, every vote Kim Jong-un delivers costs Trump five or six others. Second, that small percentage is split between perhaps three percent of Americans on the far right, and another ten percent on the far left, who would are no more likely to vote for Trump than I am. Americans consistently rate North Korea as among their least-liked countries. Last year, it rated 8 percent favorable, below Russia, China, and Iran. And by my reckoning, if you asked that 8 percent why, an absolute majority would say it’s because they like their Hyundais.

Most importantly, talks with Kim Jong-un won’t get Trump the only thing he cares about — the adoration of the mobs. Trump’s mob appeal is all about his projection of dominance. His supporters are angry, weak, insecure men who feel cheated by life. They roar when Trump calls other people “losers,” because they’re so overjoyed that for once, the speaker isn’t talking about them. The obsession (see “cuck”) some of them have with the idea that their economic and genetic betters are secretly seeding the wombs of their wives — or their imagined wives — surely has some basis in their darkest inadequacies. Trump makes them feel strong and respected. Attaching themselves to him makes them feel like winners. 

And that’s what makes North Korea such bad politics for Trump. Any deal Kim Jong-un would give him would make him look like the one thing his supporters won’t tolerate: a loser. Weak. Kim Jong-un may want Trump to lift sanctions, but he will still want nukes, and he still needs conflict with America to justify his misrule. Without America as his enemy, Kim Jong-un is just the guy who inherited the browner, shittier Korea you can’t see from space at night. He still won’t coexist with an America that feels at all free to produce films, TV shows, op-eds, laws, scholarly reports, or conferences that offend him. And as much as isolationism polls well here in the abstract, Americans are quick to demand action — and often, overreaction — when they feel provoked. That’s especially true of Americans for whom the politics of simple, neat, and wrong have the most appeal.

Kim Jong-un can’t afford to look weak in the eyes of his inadequate and insecure subjects for the same reason that Trump can’t afford to look weak in the eyes of his supporters. In that sense, each is a political mirror image of the other. That sets them on a collision course. 

So in the end, Pyongyang’s hopes for a Trump presidency will end at least as badly as the hopes it once expressed for an Obama presidency. In the end, not even Obama, the most restrained American President since Jimmy Carter, could resist the political pressure to hold North Korea accountable for its outrages. Support for his North Korea non-policy finally collapsed after Pyongyang’s fourth nuclear test, with stunning swiftness and bipartisan unanimity. If elected, Trump would inherit a Congress where he’s an embarrassment to his own party and anathema to the other, which means that he’d have nothing to offer or bargain with. Independently of Congress, Trump’s murine instincts or impulses would drive him toward conflict with a pathologically belligerent North Korea. Does anyone think this is Kim Jong-un’s last nuclear or missile test? Or that Trump would then ignore the same angry mobs who’d hoisted him onto their shoulders?

That’s why a Trump-Kim axis couldn’t last. That’s why I’m less worried that Trump would give the store away to North Korea than I am that he’d invade it. 

Screen Shot 2016-06-07 at 10.33.55 PM

[Not that these possibilities are mutually exclusive.]

Donald Trump’s North Korea policy is the least of my worries about him. If we elect Donald Trump to the presidency of the United States, we’ve got much bigger problems than North Korea.

~   ~   ~

Update: But I’ll give Clinton’s people credit for this much — they’re saying the right things.

Sharply increasing pressure on North Korea would be the only way to get the communist regime to authentic negotiations over its nuclear program, a top adviser to Democratic presidential front-runner Hillary Clinton was quoted as saying.

Jake Sullivan, head of the Clinton campaign’s foreign policy team, made the remark during an Asia Society discussion in New York earlier this week, stressing that North Korea will be a top priority for the next president and Clinton will deal with the problem in a similar way she dealt with Iran’s nuclear program.

“This is a paramount security challenge of the United States. It will have to be right at the top of the agenda for the next president to deal with,” Sullivan was quoted as saying by the Bloomberg View. “It’s hard for me to underscore how important it is that we place urgency behind this.”

Sullivan, considered the No. 1 candidate for national security adviser under a Clinton presidency, also said that the only way to get North Korea to negotiate in good faith about its nuclear program will be to drastically increase pressure on the already heavily sanctioned regime, according to the report.

That’s what happened with Iran, he said.

“Those negotiations were set up by a comprehensive, highly tailored, highly resourced effort that involved basically every significant economy in the world getting together and putting real pressure on that regime in a concentrated, sustained way,” Sullivan said. [Yonhap]

Which means that my disappointment will be that much deeper when they sign Agreed Framework III.

Continue Reading

RFA: Poland to stop granting work visas to N. Korean laborers

Last month, I wrote about Vice’s must-see investigative documentary on North Korean workers in Poland and the exploitative and unsafe conditions in which they work for little or no pay. Via Yonhap, Radio Free Asia now quotes South Korean Foreign Ministry Spokesman Cho June-hyuck as saying that Poland will stop granting new work visas and renewing existing visas to workers from North Korea.

“The issue of overseas North Korean workers has increasingly caused concern within the international community from the perspective of human rights abuses and the flow of money into the North,” Cho said during a regular press briefing. “The Polish government also decided early this year to halt the issuance of new visas to North Korean workers.”

North Korea is believed to have more than 50,000 workers stationed in some 50 countries, including China and Russia, to earn money for its cash-strapped regime.

Several hundred North Koreans are currently estimated to be working in Poland. Under the new measure, they will not be allowed to renew their visas.

Cho said other countries in Africa, the Middle East and Europe have also taken steps to reduce the number of North Korean laborers they receive by cracking down on illegal immigrants and not renewing work contracts.

“Our government takes note of such efforts by the international community to address the issue of overseas North Korean workers and plans to continue to seek possible steps in cooperation with the international community,” he said. [Yonhap]

That’s not a bad start, although it falls short of the better answer — revoking the existing visas, and blocking the assets of the North Korean firms involved in this trade. According to the Leiden Asia Center, whose research contributed to Vice’s documentary, those firms include the Rungrado General Trading Corporation, the Korea Cholsan General Corporation, the Korea South-South Cooperation Corporation (which seems a deliberate effort to confuse researchers), and the Korean-Polish Shipping Company (a.k.a. Chopol). For good measure, blocking the assets of the Polish wholesalers of this labor would serve as a useful example to others. The Leiden Asia Center’s report also contains other newsworthy information, including the fact that some shipyards that use this slave labor receive EU subsidies … and repair NATO warships.

The end of Poland’s use of North Korean laborers would be financially significant. The Leiden Asia Center reports that Poland issues around 500 visas to North Korean workers each year, “one of the highest numbers of work permits issued to North Koreans” in Europe. Between 2008 and 2015, that amounts to more than 2,700 work permits. That’s still a small percentage of the estimated total of 50,000 North Korean overseas laborers, but each North Korean worker in Europe earns nine times as much as a North Korean worker in Africa.

North Korean workers are active all over the world, but mainly in China, Russia, the Middle East, the African continent and the EU. General statistics from the ILO show that on average US$3,900 is earned in Africa per victim of forced labour; US$5,000 per victim in the Asia-Pacific region; US$15,000 per victim in countries in the Middle East; and US$34,800 per victim in so-called developed economies. While the actual amount will vary according to the particular situation, the overall relative distribution of profits is correct. The ILO further notes that “[total] profits are highest in Asia (US$ 51.8 billion) and Developed Economies (US$ 46.9 billion), mainly for two reasons: the high number of victims in Asia and the high profit per victim in Developed Economies.” [Leiden Asia Center]

RFA’s report attributes Poland’s decision to sanctions — implicitly U.N. sanctions — but nothing in the Security Council’s resolutions directly bans the use of North Korean laborers. There is, however, a requirement to ensure that U.N. member states prevent the transfer of funds to North Korea that could be used for its WMD programs. (For years, I argued that the Kaesong Industrial Complex’s see-no-evil payments violated this requirement, and this year, after a decade of denying it, the South Korean government finally admitted that I was right all along.)

The more direct sanction against North Korea’s labor exports, however, is a unilateral U.S. sanction, found in Executive Order 13722, signed in March of this year. That provision allows the Treasury Department to block the assets of any person found to have “engaged in, facilitated, or been responsible for the exportation of workers from North Korea, including exportation to generate revenue” for the North Korean government or its ruling party.

It’s possible that sanctions played some role in forcing Poland’s hand, or even in deterring the users of the laborers, but it’s more likely that the terrible publicity of Vice’s documentary and the Leiden Asia Center’s publications caused the Polish government to make this decision than sanctions.

Like Kaesong, the restaurant trade, tourism, and arms sales to Uganda, the termination of the labor trade by one country will not, by itself, bankrupt Pyongyang. But since this year began, we’ve seen many of North Korea’s external revenue sources come under pressure.

The loss of all of these revenue sources collectively would cause serious financial distress, the loss of elite confidence in His Porcine Majesty’s rule, and inter-factional competition over increasingly scarce resources. We’re a long way from hearing Ri Chun-hee sing “A Bicycle Built for Two,” but this is how things start.

Continue Reading

Obama Administration, GOP Congress join forces in N. Korea sanctions push in Asia

It’s a rare day in any election year, much less this one, when anyone could write a post title like that about a major public policy issue. Now, for the first time since I began writing this blog, all of the cylinders — the President, the Congress, the U.N., South Korea, and Japan — are all firing in the same sequence to raise the pressure on Pyongyang and Beijing. Over the last week, we’ve seen the Republican Congress’s key foreign policy leaders and President Obama’s key cabinet secretaries all delivering the same message in Asia, calling for the strict and rigorous enforcement of sanctions against North Korea.

Ed Royce, the Chairman of the House Foreign Affairs Committee and the architect of the legislation that was the impetus for the Treasury Department’s 311 designation of North Korea last week, is in Seoul this week, where he emphasized that “all financial institutions, anywhere, who now have a choice to make between doing business with North Korea and being cut off from financial transactions with the United States and the international financial system.” Royce added, “Given the threat posed by North Korea, now is the time to make it really difficult for Kim Jong-un to pay his generals, make it difficult to keep the production lines open for missiles, and make it difficult for him to acquire parts on the black market … and we must move in unison to take decisive action.”

Senator Cory Gardner, without whom Royce’s legislation would never have passed the Senate, and who is just back from his own visit to Seoul, also welcomed the 311 designation of North Korea.

“I’m pleased the Treasury Department, as required by my bill, acted to apply additional pressure to North Korea through this important designation that will send a strong message to Pyongyang and its enablers,” Sen. Cory Gardner (R-CO), a key author of the sanctions legislation, said in a statement.

“I encourage Treasury to continue to vigorously pursue and implement additional sanctions outlined in my legislation, including designations against North Korea for cyberattacks and human rights violations,” the senator said.

Gardner said he held a meeting in April with Acting Under Secretary for Terrorism and Financial Intelligence Adam Szubin, who is responsible for enforcing U.S. economic sanctions policy, to call for vigorous implementation of the sanctions law.

“I urged him to fully implement NKSPEA, and particularly with regard to entities outside of North Korea whose illicit actions enable the regime’s survival,” he said. [Yonhap]

This is all good, but it’s the executive branch that enforces the sanctions authorities Congress gives it, and an important lesson from the 2005 squeeze on North Korea is that financial diplomacy and demonstrations of political will are essential to making sanctions work. Then, the Bush Administration dispatched senior Treasury Department officials to meet with bankers and finance ministers around the world to urge them to cut off Pyongyang’s cash flow.

I’d started to worry that the Obama Administration wasn’t demonstrating the same political will to enforce the new sanctions. The sum total of our financial diplomacy until this week had been one visit to the region by Adam Szubin in March, and a comment by the President in Vietnam since then. What is most essential is a strong demonstration to China that this is a U.S. national security priority. But after a slow start, this week, the secretaries of Treasury, Defense, and State are all in Asia, making it very clear to Tokyo, Seoul, and Beijing that this is a priority for us.

The U.S. will urge China to put further pressure on North Korea to give up its nuclear program during meetings in Beijing next week, a senior U.S. Treasury official said on Friday, days after Washington took fresh action to cut North Korea off from global finance.

“China has the ability to both create pressure and use that as a leverage that is a very important part of global efforts to isolate North Korea and get North Korea to change its policies,” said the official, speaking to journalists during a visit to Seoul by Treasury Secretary Jacob Lew.

U.S. officials, including Secretary of State John Kerry and Mr. Lew, will head to Beijing early next week for the U.S.-China Strategic and Economic Dialogue, an annual meeting on economic and security issues. [Wall Street Journal, Kwanwoo Jun]

So far, so good. When the Secretary of the Treasury and the Secretary of State are both in Beijing, directly pressuring China to enforce sanctions against North Korea, the Obama Administration really does appear to be making this a priority. If only it had begun doing so seven years ago.

In Seoul, Mr. Lew said the U.S. move builds on Congress legislation from earlier this year as well as Chinese-backed United Nations sanctions put in place in March to put the brakes on Pyongyang’s nuclear ambitions after the country conducted a fourth nuclear test in January.

“It reflects the fact that the global community will not just tolerate North Korea’s actions of developing nuclear weapons,” Mr. Lew said, while declining to elaborate on what specific steps will follow to sever global banking relationships with Pyongyang. [WSJ]

China’s banks and businesses will feel the most direct effects of the new sanctions. Kerry and Lew probably hope to secure China’s face-saving, voluntary cooperation to avoid the unpleasantness of directly sanctioning Chinese banks and businesses that continue to enable Pyongyang, either by adding them to the SDN list or the 311 list, or by imposing civil or criminal penalties on them. As the New York Times explains in a detailed, must-read report, disengaging from North Korea will cost small Chinese banks billions of dollars, but the sanctions make the risks of continuing to deal with North Korea are even greater.

Chinese banks that do business with North Korea stand to lose several billion dollars in the wake of new United States Treasury Department sanctions on all such foreign institutions, analysts said on Friday.

[….]

The Chinese banks most affected by the sanctions will be comparatively small regional ones that facilitate the bulk of North Korea’s business in China, the analysts said. Major banks in China suspended their North Korean accounts in 2013 after the Chinese president, Xi Jinping, criticized a nuclear test conducted by the North that year, the analysts said. [N.Y. Times, Jane Perlez]

Not quite, but go on.

The Bank of China, for example, which has been expanding its operations in the United States and did not want its American business tainted by cooperation with North Korea, closed the account of North Korea’s most important financial institution, the Foreign Trade Bank, in May 2013. [N.Y.T.]

Yes, except for the flagrant and willful violations of sanctions by the BoC’s Singapore branch.

The smaller banks in the northeast area of China that borders North Korea would probably not want to risk continuing to do business with the North because the cost of sanctions by the United States would far outweigh the benefits of such commercial ties, said Jin Qiangyi, dean of the institute of Northeast Asian Studies at Yanbian University in Yanji. [N.Y.T.]

Now, cue China’s objection to these “unilateral” sanctions, which the Times answers perfectly.

The Chinese government said on Thursday that it opposed the Treasury action, although Beijing signed onto a tough new round of United Nations sanctions imposed on North Korea in March as punishment for a nuclear test it conducted earlier this year.

“We consistently oppose imposing unilateral sanctions on other countries based on one’s domestic laws,” said a Foreign Ministry spokeswoman, Hua Chunying. Instead of creating new sanctions, countries should “fully implement” the United Nations sanctions established in March, she said.

The United Nations resolution called on member states to terminate “joint ventures, ownership interests and correspondent banking relationships” with banks in North Korea within 90 days. The Treasury move goes a step further with its prohibition against United States banks’ allowing North Korea access to the American financial system via third-country banks.

If China were committed to enforcing the United Nations sanctions it agreed to, then the Treasury move would not affect it.

The Foreign Ministry spokeswoman’s pointed use of the word “unilateral,” however, raised questions about Beijing’s commitment to the March sanctions. [N.Y.T.]

One question I’ve been asked multiple times since last week is how Treasury’s latest action will compare to the 2005 designation of Banco Delta Asia. I think this is mostly right, too.

The collective impact on the regional Chinese banks by the Treasury action will probably be much greater than the losses incurred by Banco Delta Asia, a bank based in the Chinese special administrative region of Macau, when it was designated a money-laundering concern in 2005 because of its dealings with North Korea, said Cho Bong-Hyn, an analyst at the Industrial Bank of Korea’s Research Institute in Seoul.

[….]

“The impact would amount to approximately a few billion U.S. dollars, considering most of North Korea’s foreign bank accounts are in China,” Mr. Cho said. Even so, he said, few of these banks are entirely dependent on North Korea’s business. He doubted that many banks had North Korean deposits amounting to more than 10 percent of the bank’s total deposits. 

“I don’t think these Chinese banks will be shaken by the said losses,” he said. “They may, however, worry about loss of future transactions.”

Most of them are in the major trading cities of Dandong and Hunchun on the border with North Korea, he said. These banks will now have to ensure that North Korea does not open bank accounts with them by using conduits.

“If such illegal accounts are detected, it could be fatal for these banks,” he said. “So both Korean and Chinese banks will have to do their best to prevent North Koreans from opening these irregular bank accounts with them.” [N.Y.T.]

But on the other hand, as Jim Walsh and John Park argued recently, North Korea has also done much work to diversify and conceal its financial flows since 2007, so it will likely take longer for sanctions to have as great an effect. As a senior Treasury official told the Wall Street Journal, “It will take a lot of continued, focused attention to make an impact,” that this will be a challenging year for the U.S. government to apply continued, focused attention to much of anything.

Inevitably, some Chinese banks, shadow banks, and non-bank institutions will play see-no-evil with customers they pretend not to know are North Korean. That’s where Treasury (specifically, its Financial Crimes Enforcement Network, or FINCEN) will have to show that it’s willing to drop some steel on target by enforcing its Know Your Customer rules strictly. (Note to FINCEN — your North Korea KYC guidance dates back to 2005 and may be in need of a refresh.)

It is not clear where North Korea might seek alternative places to conduct financial transactions outside the normal banking systems, the analysts said.

Certainly, North Koreans would want locations far away from financial hubs. Recently, North Korean businesspeople have mentioned Cambodia and Indonesia as possible channels, said a Singaporean analyst who declined to be identified because of the sensitivity of the matter.

Soon after the United Nations sanctions were imposed in March, Chinese traders in Dandong, the main gateway for transportation of Chinese goods into North Korea, were using alternatives to the Chinese-run Bank of Dandong.

In order to receive payments from North Korea, one major trader in Dandong said in April that he would receive a 50-percent down payment before a shipment. The money would be deposited in the Dandong office of the Korea Kwangson bank. [N.Y.T.]

Which may explain why Treasury singled that bank out in its 311 Notice of Finding.

That bank is North Korean and does business out of unmarked offices on the 13th floor of an office tower on the banks of the Yalu River. It was described as the last North Korean bank operating in the city.

The trader would pick up the remaining 50 percent payment once the goods arrived in North Korea, he said. The transactions would usually be in renminbi, although sometimes they were in dollars, he said.

In March, the Treasury singled out the Korea Kwansong bank for using front companies to gain access to the United States financial system and process transactions that supported weapons of mass destruction and ballistic missiles.

Previously, the Treasury had said that North Korean leaders had used one of the bank’s front companies to open accounts at a major Chinese bank under the names of Chinese citizens and to deposit millions of dollars in 2013. [N.Y.T.]

The Times also reported on Treasury’s 311 designation of North Korea here.

Separately, Defense Secretary Ashton Carter is in Singapore for the Shangri-La Dialogue, where he met with his Japanese and South Korean counterparts to talk missile defense, improving the coordination of their defenses against North Korean provocations, and ensuring that they don’t undercut each other diplomatically through side deals with Pyongyang. To that end, South Korea’s Defense Minister is saying his government isn’t interested in “meaningless” dialogue with North Korea until Pyongyang commits to nuclear disarmament. Until then, it will continue to push for “watertight” sanctions. It most recently did so in a meeting between President Park and French President Francois Hollande.

So the good news is that this time, the State Department isn’t going to undercut Treasury anytime soon, our Korean and Japanese allies are solidly behind the effort, and U.N. member states are finally beginning in earnest to implement new U.N. financial sanctions against North Korea. The bad news is that the election is certain to distract the U.S. government. Key administration officials will depart for private sector jobs. The next administration’s North Korea policy is an even greater uncertainty, as is the North Korea policy of the South Korean president who succeeds Park Geun-hye.

A final must-read is this Wall Street Journal editorial, commending the 311 designation. I’ll give the last word to North Korea, whose reaction undercuts its argument that it doesn’t care about sanctions and that sanctions never work. Only time will tell, but the signs so far are good.

Continue Reading

Congress asked for a real report on North Korean terrorism. The State Department hit CTRL-V and called it good.

As regular readers of this site have heard a few times by now, President Bush removed North Korea from the list of state sponsors of terrorism on October 11, 2008, and despite overwhelming evidence, the Obama Administration’s official view is that North Korea is “not known to have sponsored any terrorist acts since the bombing of a Korean Airlines flight in 1987.” A few years ago, a less inquisitive Congress might actually have bought that, but in recent years, as North Korea’s sponsorship of terrorism has become increasingly brazen and undeniable, Congress has made its views plain — members of both parties want North Korea back on the list.

Last year, Chairman Ted Poe (R, Tex.) and Ranking Member Brad Sherman (D, Cal.) of the House Subcommittee on Terrorism, Nonproliferation, and Trade called in the State Department to ask about (among other things) one of the several federal court decisions finding North Korea responsible for sponsoring terrorist acts against U.S. persons. State’s performance at that hearing was an embarrassment for the ages, with the key witness appearing to know nothing about the subject matter and essentially repeating, “We’ll have to look into that,” on an endless loop.

Understandably dissatisfied with that, Poe and Sherman introduced H.R. 5208, which listed two dozen or so things North Korea has done since 1987 that sure as hell sound like terrorism to me, to Chairman Poe, and to Ranking Member Sherman. I mean … kidnapping human rights activists? Sending hit-men to kill dissidents? Shipping arms to Hezbollah by the boat-load? Threatening terrorist attacks against movie theaters all across America? For each of these acts, H.R. 5208 asks the State Department to say (1) whether North Korea did it, and (2) whether it counts as the sponsorship of terrorism. Then, the bill asks the Secretary of State to go on the record as saying whether North Korea has “repeatedly provided support for acts of international terrorism.” After all, similar or lesser conduct counted as terrorism in the State Department’s view when Saddam Hussein, Ayatollah Khomeini, Hafez Assad, and Moammar Qaddafy did it. Does North Korea enjoy some sort of undisclosed transactional immunity from the consequences of its actions? Its dictator could be forgiven for believing it did.

Today was the day by which the State Department really should have “looked into that,” when it released its annual Country Reports on Terrorism covering the events of 2015. And here is the entire North Korea section:

DEMOCRATIC PEOPLE’S REPUBLIC OF KOREA

Overview: The Democratic People’s Republic of Korea (DPRK) is not known to have sponsored any terrorist acts since the bombing of a Korean Airlines flight in 1987. In October 2008, the United States rescinded the designation of the DPRK as a state sponsor of terrorism in accordance with criteria set forth in U.S. law, including a certification that the DPRK had not provided any support for international terrorism during the preceding six-month period and the provision by the DPRK of assurances that it would not support acts of international terrorism in the future.

Four Japanese Red Army members who participated in a 1970 jet hijacking continued to live in the DPRK. The Japanese government continued to seek a full accounting of the fate of 12 Japanese nationals believed to have been abducted by DPRK state entities in the 1970s and 1980s. In May 2014, the DPRK agreed to re-open its investigation into the abductions, but as of the end of 2015 had not yet provided the results of this investigation to Japan.

Legislation, Law Enforcement, and Border Security: In May, the United States recertified North Korea as a country “not cooperating fully” with U.S. counterterrorism efforts pursuant to Section 40A of the Arms Export and Control Act, as amended. In making this annual determination, the Department of State reviewed the DPRK’s overall level of cooperation with U.S. efforts to counter terrorism, taking into account U.S. counterterrorism objectives with the DPRK and a realistic assessment of DPRK capabilities.

Countering the Financing of Terrorism: The DPRK is not a member of any FATF-style regional body. In July 2014, it was admitted as an observer, but not a full member, of the Asia-Pacific Group (APG) on Money Laundering, a FATF-style regional body. Nevertheless, the DPRK failed to demonstrate meaningful progress in strengthening its anti-money laundering/ combating the financing of terrorism (AML/CFT) infrastructure. While encouraging the DPRK’s continued engagement with FATF and APG, the FATF highlighted continuing concerns about North Korea’s “failure to address the significant deficiencies in its [AML/CFT] regime and the serious threat this poses to the integrity of the international financial system.” For further information on money laundering and financial crimes, see the 2016 International Narcotics Control Strategy Report (INCSR), Volume II, Money Laundering and Financial Crimes:  http://www.state.gov/j/inl/rls/nrcrpt/index.htm.

So, nothing about the murder of Pastor Han Chung-ryeol, even if only to say they’re looking into that, too? Or the hit the North Koreans reportedly ordered on defector-activist Ko Young-hwan? Or the promotion of terror master Kim Yong-chol, the hacking of the Seoul subway, or continued kidnappings of refugees from China? What about those drug dealers the North Koreans paid $40,000 to kill Hwang Jang-yop, or any of the various threats to nuke Washington or Seoul? Or Pyongyang’s directive to its overseas workers to assault journalists investigating their working conditions? Or its threat to shell defectors for floating harmless leaflets to its isolated and half-starved citizens? Or its expression of support for the slashing attack on Mark Lippert, the U.S. Ambassador to South Korea, an honorable man and a highly effective diplomat whom the bureaucrats who wrote this report have so casually dishonored?

Do none of those things merit a passing mention? The brave young North Korean refugee-activist Hyeonseo Lee says, “I am human also. I am scared.” Does anyone in Foggy Bottom give a fig? Do we stand with North Korea’s refugees, and its brave dissidents in exile, or with their persecutors?

Hyeonseo Lee

[“We’ll have to look into that and get back to you.”]

But there’s something else about the report that looked drearily familiar to me. That’s because it’s an almost verbatim copy of the 2014 report. See for yourself. I’ve underlined the very small differences in language.

DEMOCRATIC PEOPLE’S REPUBLIC OF KOREA

Overview: The Democratic People’s Republic of Korea (DPRK) is not known to have sponsored any terrorist acts since the bombing of a Korean Airlines flight in 1987. In October 2008, the United States rescinded the designation of the DPRK as a state sponsor of terrorism in accordance with criteria set forth in U.S. law, including a certification that the DPRK had not provided any support for international terrorism during the preceding six-month period and the provision by the DPRK of assurances that it would not support acts of international terrorism in the future.

Four Japanese Red Army members who participated in a 1970 jet hijacking continued to live in the DPRK. The Japanese government continued to seek a full accounting of the fate of 12 Japanese nationals believed to have been abducted by DPRK state entities in the 1970s and 1980s. In May 2014, the DPRK agreed to re-open its investigation into the abductions, but as of the end of 2014 had not yet provided the results of this investigation to Japan.

Legislation, Law Enforcement, and Border Security: In May, the United States recertified North Korea as a country “not cooperating fully” with U.S. counterterrorism efforts pursuant to Section 40A of the Arms Export and Control Act, as amended. In making this annual determination, the Department of State reviewed the DPRK’s overall level of cooperation with U.S. efforts to combat terrorism, taking into account U.S. counterterrorism objectives with the DPRK and a realistic assessment of DPRK capabilities.

Countering the Financing of Terrorism: The DPRK is not a member of the Financial Action Task Force (FATF). In July 2014, it was admitted as an observer, but not a full member, of the Asia/Pacific Group (APG) on Money Laundering, a FATF-style regional body. Nevertheless, the DPRK failed to demonstrate meaningful progress in strengthening its anti-money laundering/countering the financing of terrorism (AML/CFT) infrastructure. While encouraging the DPRK’s continued engagement with FATF and APG, FATF highlighted continuing concerns about North Korea’s “failure to address the significant deficiencies in its [AML/CFT] regime and the serious threat this poses to the integrity of the international financial system.” At each of its plenary meetings throughout the year, the FATF renewed its call on members to “protect their financial sectors from money laundering and financing of terrorism risks emanating from the DPRK.” For further information on money laundering and financial crimes, see the International Narcotics Control Strategy Report (INCSR), Volume 2, Money Laundering and Financial Crimes: http://www.state.gov/j/inl/rls/nrcrpt/index.htm.

Notice anything missing? That report didn’t so much as mention the threats that drove “The Interview” from cineplexes in towns and neighorhoods across America, and which President Obama personally attributed to North Korea, saying, “We cannot have a society in which some dictators someplace can start imposing censorship here in the United States.” After all, “if somebody is able to intimidate us out of releasing a satirical movie, imagine what they start doing once they see a documentary that they don’t like or news reports that they don’t like.” But censor they did, and “The Interview” wasn’t the only movie affected. Also unworthy of a mention by our State Department was North Korea’s 2014 hacking of South Korean nuclear power plants, with the intention of causing reactor malfunctions.

Go back another year to the 2013 report and it’s the same story. That report is an almost verbatim recitation of the same mendacious pabulum. In fact, much of the slight variation in language between the 2014 and 2015 reports is language that State copied from the 2013 text and pasted it into the 2015 text.

If I were a member of the Subcommittee on Terrorism, Nonproliferation, and Trade right now, I’d be livid. I’d have the strong impression that I’d been dismissed, played, and insulted. The word “contempt” is difficult to put down. I’d demand a real report. And if I didn’t get it fast, I’d call a hearing. Mostly, I’d want someone to dignify my intelligence by telling me the truth. (This happens to be the very thing I also want, as a common citizen.)

As the Treasury Department begins to impose serious sanctions on North Korea, perhaps the financial importance of sanctions for North Korea’s state sponsorship of terrorism has receded some. Perhaps that means that the legal consequences of sponsoring terrorism are too slight. Whatever your views of that question, we deserve better than a government that lies to us. We deserve a government that values and defends our freedom to speak, and our freedom from fear.

Continue Reading
1 2 3 427