Plan B Watch

A year ago, who would have suspected that we’d be celebrating the replacement of a liberal accommodationist named George W. Bush with a hard line neocon named Barack Obama, who would finally show signs of grasping not just the reality of North Korea’s bad faith, but some of the very best tools for breaking it? Christine Ahn’s misery (and Selig Harrison’s, and Leon Sigal’s) is my pleasure:

The Treasury Department’s 2005 blacklisting of Macau’s Banco Delta Asia, which held a large number of North Korea accounts, is viewed today as a model for how the private sector can punish rogue states. The Treasury didn’t initially ban U.S. firms from engaging the bank, but simply warned that such transactions risked skirting U.S. law. The result was a run on the bank’s accounts and a contagion effect that nearly froze North Korea out of the international banking system in 2006, said current and former U.S. officials.

Mr. Bush eventually eased the clampdown as an incentive for North Korea pushing ahead with disarmament talks.

Senior Obama administration officials say this decision was a mistake that eased pressure on Pyongyang before it took irreversible steps to dismantle its nuclear program. They also said it reaffirmed Pyongyang’s belief that it could use international diplomacy to win economic concessions from the U.S. [Wall Street Journal, Jay Solomon]

How many layers of irony can you identify there? For one, Christopher Hill was not available for comment. For another, it should be a caution to ignore those who analyze Korea policy in strictly partisan terms, as shallow observers (Klein, Froomkin, etc.) tend to do when North Korea hits the headlines and their editors task them with writing about something they don’t really know much about. In practice, the partisan affiliation of the president in power has been a very poor predictor of the president’s actual policy.

The White House isn’t playing coy about its implementation of Plan B, as demonstrated by the fact that yesterday, the White House brought in some “senior administration officials” to the Press Secretary’s office and held a briefing for reporters. The full text of that briefing is below the jump (thanks to a reader and friend). That’s an unusual step, and one clearly designed to generate news coverage — such as the Wall Street Journal story I’ll quote momentarily — and show the American people that President Obama is “getting tough” with the North Koreans. The test will be Obama’s persistence, but for now, his people are certainly saying the right things:

“We want to get out of the mindset where the North Koreans are conditioned that these are somehow temporary measures that we’ll renegotiate with them at various occasions,” said a senior Obama administration official involved in the diplomacy.

They’re also saying that this time, sanctions will be more comprehensive:

U.S. officials said Treasury’s targeting of a wider number of North Korean banks could potentially have a much more punishing effect on Kim Jong Il than the lone BDA action. These officials also said Pyongyang’s recent second nuclear test and a string of missile tests have hardened the resolve of the international community to punish Pyongyang.

Yesterday, I said one of the things to watch was whether Treasury would go on tour, talking to foreign bankers and officials about avoiding North Korea’s business. We learn today that they are, and “they,” specifically, means the same people who went on tour in 2005 and 2006:

Two of the architects of Mr. Bush’s action against Banco Delta Asia, the Treasury Department’s Stuart Levey and Daniel Glaser, are overseeing President Barack Obama’s financial clampdown on North Korea, said U.S. officials.

Last week, the White House named Ambassador Philip Goldberg, who served in Bolivia before his expulsion by the government there last year, to head an interagency body focused on implementing the North Korea sanctions. Messrs. Goldberg and Glaser are scheduled to travel to China and Southeast Asia in the coming week to seek consensus on targeting Pyongyang’s finances.

For now, with respect to the creation of a more effective diplomatic strategy, all the stars are aligning correctly. Now, all President Obama has to do is stick with it until (a) North Korea is verifiably disarmed, which I don’t expect; or (b) the regime, probably for a combination of reasons, finally cracks. The question now is whether President Obama is prepared to press this plan to either alternative.

THE WHITE HOUSE

Office of the Press Secretary

________________________________________________________________________________________________

For Immediate Release June 26, 2009

PRESS BACKGROUND BRIEFING ON NORTH KOREA

BY

SENIOR ADMINISTRATION OFFICIALS

Press Secretary’s Office

9:23 A.M. EDT

SENIOR ADMINISTRATION OFFICIAL: Hey, guys. How’s everybody doing? Thanks for coming by. So we have some special guests today, on background, senior administration officials. They have just some opening comments for you and then we’ll take your questions, try to make sure you have a good understanding of everything we’re doing on the North Korea situation.

SENIOR ADMINISTRATION OFFICIAL: Thanks. What I want to try to do is give you kind of an overview of our approach to dealing with the North Korea nuclear and missile program, give you a little bit of context and some of the specific things that we’re about to do.

I think it’s pretty clear to us following the April missile test and the main nuclear test that the international community is very strongly united in its condemnation of these decisions and a renewed commitment to try to do something about it. The decision of the North to take these actions in the face of a clear willingness by both the United States and the other members of the six-party talks to continue to implement the agreement that was reached in 2005 to denuclearize North Korea was such a kind of shocking defiance of the international community that it’s really galvanized very strong support.

After the missile launch many people thought that other countries would sort of try to excuse it because the North Koreans said it was a space launch, not a missile launch — but instead we got agreement in the Security Council that all launches, even when they were characterized as a space launch, would violate the old resolution, 1718. And then following the nuclear test in May we got the adoption of Resolution 1874, which has a much more comprehensive set of restrictions on North Korea and was enacted with strong unanimity in the Security Council with a lot of speed, which really reflected the strong reactions. And the fact that even in the initial hours after the test we got very strong condemnations from China, from Russia, and others really reflects the fact that the North Koreans have profoundly isolated themselves at this point, that they don’t have any friends, they don’t have any champions left in the international community.

So now we have some very powerful tools, and the challenge is to make effective use of them. The nature of trying to implement these things means we’re obviously not going to change North Korea overnight, but they are such strong tools that we believe that working with the other key countries that we can make a difference in the North Korean’s calculation and get them to rethink the direction that they’re going.

To do this we really do need a comprehensive effort to take advantage of the full range of the tools that are available, and my colleague is going to talk a little bit about the financially-oriented ones. But for us, what we have done is — first of all, given the range of actors that are involved here in the United States, we’ve now organized ourselves and created an interagency committee, chaired by Ambassador Phil Goldberg, to focus on a broad-based effort the lessons we can bring together and to organize all of our resources in the U.S. government to have an impact.

Some of us who have been down this road before, I can see how an organized effort can make a difference. For those of you who were around back then, you may recall that Leon Fuerth, who worked for Vice President Gore, organized a similar group in dealing with the sanctions on Serbia during the Balkan wars, and a very powerful and effective set of tools, and we’re trying to learn from that experience to bring together all our resources in the federal government here. And then we’re going to use that as a way of interacting with key counterparts around the world.

And so in the coming days Ambassador Goldberg is going to lead an interagency team to interact with key countries, beginning with China, to talk on the nuts and bolts of implementing these resolutions.

As many of you know, I traveled to China, as well as Japan and South Korea, right after the North Korean nuclear test. And what we found there was a strong determination to work together to try to find ways on the one hand to avoid a confrontation with North Korea if possible, but to see that these resolutions are implemented. And although we didn’t stop in Russia on that stop, I subsequently met with the Russian representatives here. So there’s a broad consensus about the need to have a focus and engaged effort to see that these sanctions are implemented, to make sure that each of the elements are implemented, and that we’re sharing information with each other.

But it’s not just the five members of the North Korea nuclear talks. We’re deeply engaged with countries of Southeast Asia, that’s obviously a major transit area if the North Koreans were to try to avoid the sanctions. And so we’ve been talking with the leaders in ASEAN. There was a strong statement yesterday coming out of the G8 foreign ministers, strongly condemning the North Korean actions and calling on all countries to implement and assure the transparency in all their dealings with North Korea.

So I think what we really want to do here is to shine the spotlight on North Korea, to make sure that everybody is watching very carefully about what they’re up to, to make sure that everything that is done with North Korea is fully transparent, aboveboard, and that they can’t find ways to skirt around the resolution.

As I say, it’s going to take time to actually have a bite, but we’re trying to get out of the box very fast. And my colleague will talk a little bit about some of the specific measures that we’re beginning to take on the financial side, and that we’ll be working with our international partners to deal with.

SENIOR ADMINISTRATION OFFICIAL: As my colleague laid out, there is a financial piece of this as part of the broader effort, the financial piece is part of the broader effort, but I think it’s an important part. What we’re trying to do is work with our partners around the world to prevent North Korea from misusing the international financial system to support its nuclear missile proliferation activities and its other criminal and illicit conduct it engages in.

The financial provisions in the Security Council resolution and the financial measures we can take in the United States are designed to target the illicit activities of the North Korean government without precluding the humanitarian assistance and other transactions that are designed to ease the situation of the North Korean people.

We’re fully engaged in this interagency effort that my colleague talked about. We’ll be sending Deputy Assistant Secretary Glaser on this trip — who, as some of you know, is one of the world’s leading experts on illicit finance — to represent Treasury on Ambassador Goldberg’s trip. And one of the things that he’ll start to do and that we’ve already started to do is to talk with our partners around the world about how we can implement the resolution and how we can protect the financial system in this context.

And there are a number of tools that we have at our disposal, even since the passage of 1718 in 2006. One is that after the April launch there is designations of key entities at the United Nations that some of you already have been following, namely KOMID, Tanchon Bank, and Ryongong. These are three big entities in North Korea that they use for their illicit activities, especially their arms sales and missile activities.

In 1874, itself, I won’t go through the details, but there are some very powerful financial provisions in 1874. The key point, probably the most prominent one is that it specifically says that in addition to the asset freezing that you’re already obligated to do under 1718, that it calls for the prevention of all financial services that could contribute to North Korea’s nuclear missile or other WMD-related programs. It’s a very powerful provision that I think we want to enforce robustly.

And that sort of provision meshes with an ongoing international commitment to protect the integrity of the financial system. And in recent years we’ve seen a growing coalition taking steps to prevent the misuse of the system for this sort of proliferation of illicit conduct. So we intend, as the President has said, to implement those provisions robustly and collaboratively. And if I could just give you a couple of minutes about how we’ve already started to do that and where we think we’re going on that.

The key point I think is that it’s not just about governments here. Governments, of course, will be implementing the resolution, but there’s a really important private sector component, which is that the private sector wants to protect itself from this illicit financial activity, they have a stake in the integrity of the system, and they have a stake in their own reputations.

In order to help the private sector around the world, we put out an advisory on June 18, which I have copies of — in case you’re not all checking our Web site every 15 minutes, I have these that we can pass around. You can read the advisory for yourself, but I’m just explaining it on a very high level, which is that we both explain the new resolution, the risk of North Korean activity to evade the resolution. We tie it to ongoing concerns that we’ve had for a long time about North Korean illicit activity and ways in which the North Koreans try to get financial institutions to engage in transactions that they wouldn’t engage in if they knew the whole truth about the transactions.

By giving this information to the private sector as a first step in a broader effort that we’ll do globally to share this sort of information, we think that we’ll empower the private sector to act with us. And we have learned over time that they are very powerful partners in this sort of thing, and that when they — in the process of protecting themselves from illicit activity, they can amplify the effectiveness of these sorts of governmental measures like the Security Council resolution.

I think that’s sort of the summary. Happy to take your questions.

Q What intelligence do you have on the latest missile or the next missile test? And are there any signs that —

SENIOR ADMINISTRATION OFFICIAL: I’m going to surprise you by sharing with you all of the intelligence that we have — (laughter.)

Q Well, are there any signs that they’re preparing for a nuclear test? I mean, they —

SENIOR ADMINISTRATION OFFICIAL: I’m obviously not going to share intelligence with you guys. I would simply say that they have publicly threatened to do things, and so we’re watching it very carefully.

Q Well, how about July 4? Wouldn’t you expect them to do it on July 4?

SENIOR ADMINISTRATION OFFICIAL: You know, Bill, as I say, they have publicly threatened to take additional steps, so we watch this very carefully and we will continue to watch it carefully and do what we need to do to stay well informed.

Q In terms of the sanctions, FinCEN seems to be where the real muscle is, given all of the potential problems with ship boarding or interceptions. Can I ask you, on the Congress side, I was in Pyongyang in 2006 when you were trying to unwind financial sanctions and use an exchange of money to get remains back. And we found that they are harder to take off, in some cases, than to put on, because, you know, no banks were willing to extend the money for fear of international retribution.

And so, in putting these on, have you figured out —

SENIOR ADMINISTRATION OFFICIAL: Let me —

Q I mean, I know that’s a strange question.

SENIOR ADMINISTRATION OFFICIAL: No, no, it’s not a strange question. I mean, the thing is, the reason the private sector reacts powerfully to these sorts of financial measures is for the reasons I said, which is that they want to protect themselves from the illicit conduct. So long as they’re persuaded that the illicit conduct is going on, they will continue to protect themselves and they will not want to handle transactions unless they’re asked by governments to do so. And that was the experience that we had at that time, which was that financial institutions were — saw the evidence of the illicit conduct, they want to protect themselves from it, and they therefore shied away from North Korean financial activity.

I think that that can be a very powerful dynamic, but as long as the conduct is ongoing, you’re right that the private sector will continue to protect itself from the illicit activity, and the only way to overcome that is for the governments to intervene, which is what we had to do.

SENIOR ADMINISTRATION OFFICIAL: Can I just make a point, just generally, about that, which is that I think you’ve heard the President and the Secretary say that we want to get out of the mind set where the North Koreans are conditioned that these are somehow temporary measures that we’ll renegotiate with them at various occasions, regardless of whether they take irreversible steps, verifiably irreversible steps.

I think the President and the Secretary, my colleagues, others are being very clear on this question, which is that we are in a situation where we are going to demand verifiable, irreversible steps on denuclearization here going forward, and that goes to the strength of my colleague’s measures, the intention of this effort as a interagency, all-of-government approach to send that clear message.

Q But, if I may, does this become infinitely more complicated in a period of succession? You don’t know with whom you’re dealing.

SENIOR ADMINISTRATION OFFICIAL: I think, first of all, I think — people speculate a lot about what’s going on in North Korea, but I think that the record and the experience on these things is that there are people in control, they’re making decisions, and they need to understand what the choices are. And I think it’s rather than trying to micromanage what’s inside that black box, what we’ve sent is a clear message to the leadership in North Korea that they have a set of choices and that they’re a big set of choices, that they can either change course and agree to take the irreversible steps that they need to implement the agreement they made back in 2005 or they’ll face a much more difficult environment for them, and I think that’s true irrespective of whether there’s change or not change going on. The same calculation is going to apply to any leadership in North Korea.

And I think what’s important, just to amplify on what my colleague said, is that this sense that we have to have a much more forthcoming response by the North Koreans, there’s no more rebuying the same deal second, third, and fourth times is something that’s totally shared by all of the other members of the six-party talks. This was reinforced to me not just in Japan and Korea, but also in China. They recognize that this is no one’s interest to keep going back down the path. They use the same words that we use, in terms of what we seek to do — we are prepared to go and talk to the North Koreans again, if they’re prepared to really do the steps that are irreversible, and not things where we pay and then they undo.

And so this undoing issue, when and if there is a comprehensive agreement that involves them actually implementing irreversible steps, then I think we can deal with unwinding the sanctions. But there’s very broad consensus with Russia, China, and Japan and South Korea that we need a much more durable approach if there’s going to be a real day of negotiation.

Q Can I just clarify one factual thing? Your colleague I think mentioned a trip. Is Ambassador Goldberg going on a specific trip, and if so, when and where, who is he meeting —

SENIOR ADMINISTRATION OFFICIAL: We don’t have the specific — I mean, he will be leaving soon —

Q For China?

SENIOR ADMINISTRATION OFFICIAL: First stop will be China. He, I’m sure, will be going to other places, as well. We’re working out the details now.

Q What’s the status of the ship that we’re shadowing?

SENIOR ADMINISTRATION OFFICIAL: It’s heading south. It’s sort of, I guess, south of Hong Kong.

Q South of where?

SENIOR ADMINISTRATION OFFICIAL: Hong Kong.

Q But on that, if you attempt to stop them and they refuse — they also refuse to go into a port, does it return to the U.N., then, or is there something else you can do?


SENIOR ADMINISTRATION OFFICIAL: Well, again, I don’t want to speculate on this particular ship. But in terms of the procedures that are outlined in 1874, if they decline to be inspected then they have to put into a port.

Q But if they decline to do that?

SENIOR ADMINISTRATION OFFICIAL: And if they decline to put into port, then it does get reported back to the U.N.?

Q So nothing happens directly?

SENIOR ADMINISTRATION OFFICIAL: Well, but there are obviously options in how we might to respond once that report is done. The Council has reserved a right, obviously, to take further steps if it finds noncompliance. But what was agreed was that there would be an opportunity to make the case back in New York about the information.

Q Is there a sense that it can be, given the no-refueling provisions of the U.N. Security Council resolution, actually prevent it from getting to port?

SENIOR ADMINISTRATION OFFICIAL: Again, I don’t want to speculate on this specific one, but there are — what is clearly happening is that there’s a very bright spotlight being shined on all of the activities of the North Koreans. People are watching. And it’s not just us. And everybody is recognizing, for the same reason my colleague said, on the financial stuff, that anybody who’s dealing with North Korea needs to be very transparent about it, because people are watching what’s going on.

And that’s part of what we’re trying to do is to flood this whole set of activities — financial, commercial, and otherwise — with a lot of light and a lot of transparency and to raise the question for anybody who wants to deal with North Korea — do you really want to deal with them? And if you are, what kinds of transparency and assurances are you prepared to give in dealing with them? And we think this can be a very powerful tool.

Q I have a question. In 2005 you guys had a very successful operation against Banco Delta Asia. A lot of the stuff you’re describing now sounds similar to what you did back then as far as going to Southeast Asia or Hong Kong to warn people about the risk. Are you, in a lot of ways, kind of borrowing from that textbook that you used back then sort of on a broader scale? Because, I mean, it really did seem to choke them off, and then we unwound it.

SENIOR ADMINISTRATION OFFICIAL: Well, I think this is not just something that we did in the one instance that you refer to. This is something that we’ve done in a lot of contexts. We’ve done it in the Iran context, we’ve done it in a lot of contexts, which is that we have found, as I said, if you provide information to the private sector, that they will amplify your actions, they will protect themselves from this activity, they will ask themselves, do I really want to do business with this — with, in this case, North Korea? And how can I assure myself, if I do do business with North Korea, that I’m not involved in illicit activity? It’s very difficult in this context because the North Koreans engage in conduct that’s specifically designed to obscure what the true nature of the transactions are.

So in that sense, yes, it’s similar in large part because the activity that we were focused on at that time remains of concern and remains ongoing.

Q Have you talked to any of the private sector, financial institutions? Have they said, yes, we’re onboard, yes, this is going to work? I mean, have you had those kinds of discussions?

SENIOR ADMINISTRATION OFFICIAL: Those are the sorts of discussions that I have all the time, but I don’t want to comment on any particular conversations because we tend to keep those kinds of communications confidential.

Q Just send me the names when we’re done. (Laughter.)

Q Could you talk about —

SENIOR ADMINISTRATION OFFICIAL: We’ll get that right after —

Q Could you talk a little bit more about, when you talk to the Chinese, what was your sense for how far their thinking on North Korea has evolved? And there still does seem to be a sense that some of the things that you’d like to do, particularly in the hailing and boarding side, they’re still balking at some of the most aggressive stuff. Can you give me a sense whether that’s true or not?

SENIOR ADMINISTRATION OFFICIAL: Yes, well, first — I mean, as I said, I came away with a strong sense, both from the immediate reactions by the Chinese following both the missile launch and the nuclear test, and in our conversations in Beijing — that they are deeply concerned about what’s going on.

The sentiment that was expressed to me there was that a nuclear North Korea is at least as threatening and maybe more threatening to us than it is to you. And I took that very seriously. I mean, I think there is a real recognition that the consequences of North Korea going nuclear is not just a question of whether they’re going to use a nuclear weapon against any one of us, but what it means for the whole security of the region. And the Chinese are profoundly aware of that. They know that an operational nuclear capability in North Korea changes the game in Northeast Asia in ways that they don’t want to see. So I am absolutely confident that they understand the importance to them of trying to achieve denuclearization.

What we are working on is what’s a comprehensive strategy to get that done. And I think what we’ve agreed with them is that what we are most interested in is an effective, across-the-board approach — and that they’ve raised concerns about various aspects. What we’ve said is it’s not in any specific element of the sanctions, but more the broader sense that North Korea is not going to be allowed to do business as usual — and that they have agreed with us on. And there are measures that are unprecedented measures that they agreed to here without having to push very hard on it.

And so what we want to see and the real test now will be in implementation. They have set up their interagency committee to work on this issue. Ambassador Goldberg will be interacting with them. And now we’ll see. But they are certainly saying quite strenuously that they are deeply committed to full implementation of the provisions that are in the resolution. That’s now what we’re going to be working with (inaudible). We’re going to obviously take their word seriously, but we’ll see in the end what they’re prepared to do, and that’s —

Q Where’s the most daylight between the U.S. position and the Chinese position?

SENIOR ADMINISTRATION OFFICIAL: I don’t think there’s daylight. I think the question right now is it’s just to get into the working level of us looking — what do we know about how they do business, who they do business with, through whom, through what vehicles, through what routes, and sharing information — and to the extent that we see the Chinese working hard with us, taking our information seriously, sharing information that they have, that will be a sign that they want to work with us. But they certainly said that’s what they want to do.

When I spoke with them to tell them that we’ve created this team with Ambassador Goldberg, they immediately welcomed him to come and bring his team. They told us about theirs. And all those are good signs, but again we need to get into the hard-nosed business, the practical day-to-day implementation work that needs to go forward. And that’s true not just with China — the Chinese are obviously critical — but with the Russians, with the Japanese, with the South Koreans, and with anybody else who has any kind of significant opportunity to be a partner.

Q Have you gotten any feedback from the Chinese military? I know in recent years there’s been a real frustration here that the U.S. is trying to sort of reach out to the Chinese military, at least for some contingency planning, as North Korea seems more unstable, and there’s just not much interest on their part.

SENIOR ADMINISTRATION OFFICIAL: Let me do that. Without commenting on the specifics, Under Secretary Michele Flournoy is — I think she may be on her way out now, but she’s been in Beijing for the last couple of days talking about the situation in Northeast Asia with her military counterparts, and the reports back is that they’ve had very good and very engaged conversations.

Q Can you talk about what is the realistic goal of the policy right now, not just the sanctions, but the policy? Is it nonproliferation? Is it squeezing them financially toward regime change? Is denuclearization even a realistic goal, given how far along they are?

SENIOR ADMINISTRATION OFFICIAL: It is a realistic goal. We know from history that countries in the past have changed course on nuclear programs at various degrees of nuclear development, from proto programs to actual nuclear capability. So there is precedent in history, ranging from small programs in Latin America to even in Northeast Asia back in the ’70s — both South Korea and Taiwan both looked at and began down the road of nuclear programs — and of course you know the case of South Africa.

So we don’t rule this out. And the one thing that everybody is quite explicit of is that this is not just about proliferation. We’re obviously concerned about proliferation, but that’s not enough. As I said, what everybody understands is that an operationally nuclear capable North Korea is a game-changer in Northeast Asia and has profound consequences for the security of South Korea, Japan, China, and Russia, and they all recognize it, as well as the United States.

So one thing we found everywhere we went — nobody was for reducing their horizons or reducing the ambitions of what we’re trying to do. We don’t expect this to happen overnight. But there’s no question that the only acceptable outcome from our point of view is a return to the commitments that the North Koreans made in 2009 —

Q — if that’s their only card, and it appears to be —

SENIOR ADMINISTRATION OFFICIAL: You know, Bill, the thing about this is that it’s their only card to what end. I mean, I accept the fundamental proposition that —

Q — regime stabilization.

SENIOR ADMINISTRATION OFFICIAL: But this is going to be enormously costly for the regime. And the consequences for them of having all of these transactions, which are the kind of (inaudible) of this regime, not being available to them, I think — there’s no guarantees, but there’s at least a serious chance that the people who benefit from these transactions are the regime. The people who benefit from these arms deals and the transfers and stuff are not the starving people of North Korea, it’s the regime. And so this is — this is going to hit where we want it to hit, which is in terms of the people who have to make the choice, which is, are they better off in terms of their own objectives by continuing down this course, isolating themselves and burying the consequences, or do they need to rethink their —

Q So just to nail this down, recognizing them as a nuclear power and moving on is off the table.

SENIOR ADMINISTRATION OFFICIAL: Off the table.

Q Okay.

SENIOR ADMINISTRATION OFFICIAL: It’s important to underscore two points my colleague made: One, in 2005 the North Koreans made this commitment themselves; and secondly, the whole comprehensive policy that these guys have just talked through is designed with a simple purpose — pressure with a purpose — to make clear to the North Koreans that the only way out is verifiable, irreversible denuclearization.

Q Can I just ask from a practical standpoint, if these financial things work, what kinds of things will the North Koreans not be able to do? What kind of things will they not be able to buy? Is it only the missile parts and the military stuff or will it affect other things that would sort of destabilize the regime and make their lives personally more difficult, as well?

SENIOR ADMINISTRATION OFFICIAL: One of the things that’s in the first resolution in 2006, which has been now reaffirmed in 1874, is a prohibition on the procurement of luxury goods. That is a big part of how the regime stays in control and how they dole out favors within North Korea. So if that is seriously enforced, I think that can have a big effect, as well as the other things that you mentioned.

SENIOR ADMINISTRATION OFFICIAL: I think it’s important to understand that there’s a limited amount of business activity that the North is able to conduct. They’re heavily dependent on imports because they don’t have food and fuel and things like that, and they have very little to sell. And so an important source of income for them has been not just missiles but just small arms and all these other things that are banned by 1874. And these are the kinds of things that really do go to — to the extent that there are people in the regime who feel that they’re getting benefits of being part of it, this is what basically funds their activities.

Q Just to be clear, you guys aren’t announcing any new sanctions. You guys are talking about detailing — detailing here the coordinated response on 1784?

SENIOR ADMINISTRATION OFFICIAL: 1874.

Q Sorry, 1874.

Q Are you still studying the possibility of reinstating North Korea on the list of state sponsors of terror? Is that off the —

SENIOR ADMINISTRATION OFFICIAL: No, no, it’s — I mean, this — one of the things about the terrorism list is that we have — not just with respect to North Korea, but with respect to any country — we have an ongoing responsibility under the law to review any evidence that we have. And we’ve made very clear that if we have evidence — the terrorism statute is very specific, which is if you have evidence of terrorism, you are obligated to make that determination. So we review their activity on an ongoing basis. It’s not like a periodic review.

Q Well, it seems, though, that when members of Congress had wrote a letter to Secretary Clinton, she responded publicly by saying, we’re going to look at that.

SENIOR ADMINISTRATION OFFICIAL: We are, but what I’ve said is, absolutely —

Q You’re going to do something — a review of something?

SENIOR ADMINISTRATION OFFICIAL: But we’re going back just to make sure that we haven’t missed anything. But I just want to make clear that even without a review, if we got a piece of information that suggested they were engaging in terrorist activity or anybody else was, we would immediately have to make a determination on that list. But we’re very alert and attentive to anything that would —

SENIOR ADMINISTRATION OFFICIAL: You should take a look at the transcript. I mean, what the Secretary said was exactly what my colleague said.

Q — see that as another bargaining chip, though, another temporary measure, which is precisely what you don’t want Pyongyang to see?

SENIOR ADMINISTRATION OFFICIAL: They may see that and a lot of things, but that’s not what they’re going to get.

SENIOR ADMINISTRATION OFFICIAL: The other thing, just important to say, we take the terrorism response very seriously, but it’s also the case that even if we are to find evidence of terrorism and redesignated it, as a practical matter, all of the sanctions under the terrorism statute are already employed against North Korea. So as a practical matter, a further designation would not significantly change the calculation.

Q But under the statute, you can’t — you would need evidence of terrorism. You can’t — these things are not latent.

SENIOR ADMINISTRATION OFFICIAL: That’s correct.

Q They could do a nuclear test and you can’t —

SENIOR ADMINISTRATION OFFICIAL: Right, but what I’m saying is that the measures we have in response to the nuclear test and the things we’ve already implemented are essentially identical — in some cases, go further — than the terrorist designation. So we’re not —

Q This is the reputational thing that they resent so deeply?

SENIOR ADMINISTRATION OFFICIAL: That’s a judgment, maybe, but —

Q As part of the 1874, I think by some time next month there’s supposed to be a list of people and entities that are going to get designated. I’m just trying to get a sense — I know under the last resolution, I guess three firms. Are we expecting, you know, dozens, or is this going to be —

SENIOR ADMINISTRATION OFFICIAL: We’re working it through. We have a — we’ve suggested a number. Other countries have suggested a number. It’s hard to predict at this point, but I would be fairly confident that we will see additional designations.

Q And these can be broader? I think under 1718 it was just missile-related, but this can be much broader, I assume?

SENIOR ADMINISTRATION OFFICIAL: It’s nuclear missile or other WMD program-related entities and individuals, is the formulation in the new resolution. And that is actually the tracking from 1718.

SENIOR ADMINISTRATION OFFICIAL: Just to be clear, the ban is on the activities. That is, this is about all arms transfers of any kind. But the entity designations are proliferation, nuclear missile, et cetera.

Q And this has to be by July 12, or something? I heard that’s kind of the —

SENIOR ADMINISTRATION OFFICIAL: It’s the 12th, yes.

SENIOR ADMINISTRATION OFFICIAL: It’s 30 days.

SENIOR ADMINISTRATION OFFICIAL: Let’s do one more and —

Q What are Ambassador Goldberg’s qualifications for the job? I mean, I know he was — I guess the Ambassador was kicked out of Bolivia, is that right?

SENIOR ADMINISTRATION OFFICIAL: He’s a very experienced senior — served a lot of different posts and has worked on a range of issues related to our relations with both countries in the region and elsewhere. I mean, the main thing here is to have a coordinated interagency effort with somebody who has got a lot of experience in running a complex interagency process, which he has a lot of.

SENIOR ADMINISTRATION OFFICIAL: And he also has the full support and backing of the President of the United States and Secretary of State.

Q Is your sense that you’re going to need to ramp up and have someone more full-time than Steve Bosworth on this front?

SENIOR ADMINISTRATION OFFICIAL: Steve’s role has been focused on diplomacy right now, which is — and we will continue to do that. We will continue to talk with our partners about what we would do if the North Koreans indicated they will willing to do. What we have is Ambassador Goldberg now working full-time just on sanctions implementation. So, I mean, that’s part of the reason why we asked Ambassador Goldberg to do this is because Ambassador Bosworth will be working on the other aspects of it.

We wanted somebody who woke up every morning and thought about nothing but sanctions implementation. The reason I mentioned the experience with Leon is that one of the reasons, which I had a fair degree of involvement is that we recognize that it’s a huge difference when you have somebody who isn’t worried about any of the other aspects of this; that the only thing that Goldberg and his team are going to be worried about is sanctions implementation; what we need to do here and what do we need with our partners to make sure that we’re getting full and complete implementation of 1874 and 1718.

That’s a full-time job. They’ve got a team that’s working with him from all the different agencies — Treasury, Commerce, Defense, NSC, and elsewhere. And, as I say, our experience with Leon’s task force was that when you have people who are only thinking about that you get a lot of creativity and a lot of focus.

Q Will this complicate getting the two journalists out?

SENIOR ADMINISTRATION OFFICIAL: I think — you know, our view is that this has nothing to do with the journalists; that they should release the journalists as a humanitarian gesture. The families have made clear that they’re anxious to have them back, and we would like very much to see as a humanitarian gesture that they get released.

SENIOR ADMINISTRATION OFFICIAL: Thanks a lot, everybody. I think what you’ve just heard is a wholly government-sustained, comprehensive approach that’s drawing on our international partners. We’ll continue to be in touch with you, and several of you have already sat down with these guys a couple times now, and we’ll continue to do that. This is obviously a high priority for the administration. And we appreciate your coming by.

END 9:57 A.M. EDT