The big headline this week is the U.N.’s agreement on a list of entities to be sanctioned under UNSCR 1718 and 1874 (see links on my sidebar for the texts). Frankly, I think that’s a story that’s getting a great deal more attention than it merits. The sanctioned entities have largely been sanctioned under Executive Order 13,382 for years. I doubt that the U.N. imprimatur is going to fend off many of North Korea’s WMD clients that the Treasury Department’s icy glare didn’t before, and North Korea is probably more agile at renaming and restructuring those entities than the Security Council is at listing them. The main point to take from that story is that the U.N. is taking some action, which is more than can be said of how it enforced UNSCR 1718 in 2006. I like the may Marcus Noland put it:
“We’re now into a game of Whack-A-Mole,” said Marcus Noland, an economist at Washington-based Peterson Institute for International Economics, referring to the game in which moles keeping popping up from their holes randomly.
“What’s going to happen is that the North Koreans are going to try to reconstitute their entities and form new shell companies, new front companies, to continue these activities,” he said. “If there’s really going to be comprehensive efforts on this, they’re going to have to go after the financial intermediaries, some of which are in China, and after the customers.” [AP, John Heilprin]
And as I pointed out to a friend on Capitol Hill this week, that’s what money laundering and forfeiture statutes are for.
For those who never expected much from the U.N. and what we’ll call “certain member states,” the news still more good than bad. The Obama Administration, which turns out to be more unilateralist than you’d have guessed a year ago, continues to say and do most of what it should be doing when it comes to North Korea, particularly by “strengthening efforts to cut North Korea off from the international financial system.” At least for now, the policy continues to be disarmament first, concessions later. I especially liked this part:
“We’re not really interested in halfway measures,” one official said. [….]
U.S. officials now are encouraging countries and businesses to avoid doing business with North Korea, alleging it engages in deceptive practices to shield the true motivations of its transactions. “It’s virtually impossible to distinguish between legitimate and illegitimate North Korea business,” a senior Obama administration official said. [Dow Jones, Meena Thiruvengadam]
All of which is in some discord with the words of whichever unnamed U.S. official told Reuters that Treasury continues to tour “key world capitals to warn governments and banks that North Korean practices make it ‘virtually impossible to distinguish between legitimate and illegitimate business,'” yet also claimed that their goal was “to bring scrutiny and thwart suspicious activities, not to hit all North Korean trade.” Whatever you say. Even so, I’d be happy with even that mixed message if the administration sticks with it until it works.
We also have some new estimates of what North Korea earns from its banned weapons trade, and it might very well be as much as the North earns from “legitimate” trade. Clearly, there’s some room for adjusting the definitions and questioning the precision of all the figures I’m going to quote here. First, the much-respected Larry Niksch of the Congressional Research Service, speaking at the Cato Institute, put forward a very high estimate of what North Korea earns from selling weapons to Iran alone:
North Korea earns over US$2 billion annually in arms deals with Iran, according to Larry Niksch, a specialist in Asian affairs with the U.S. Congressional Research Service. [….] Scientists and engineers as well as missiles, missile parts and technical drawings for missiles are being transferred by air between the North and Iran, he claimed, adding flights between Pyongyang and Tehran should be a key target for sanctions against the North.
Niksch said Iran, Syria, and Burma have recently become major customers of North Korea. Given the scale of arms deals between North Korea and Iran, China should block such deals by banning overflights, he said.
He claimed all food aid from China to North Korea has been diverted to soldiers, and therefore if China reduces food aid to the North, this will have a substantial pressure effect. [Chosun Ilbo]
The U.S.-based Institute for Foreign Policy Analysis estimates North Korea earns some $1.5 billion a year from missile sales. Other studies said the figure may be in the hundreds of millions of dollars and prior sanctions have cut into exports. [….]
North Korea’s annual legitimate trade is estimated at about $3.8 billion, with China being its largest partner with exchanges of about $2.8 billion a year. Previous U.N. sanctions have not dented trade. [Reuters, Patrick Worsnip and Paul Eckert]
Take these estimates as what they are — the product of educated guesswork and, in Niksch’s case, some unknown quantity of actionable intelligence. Oh, and Niksch called on China to enforce sanctions and block direct flights between Pyongyang and Tehran. Good luck with that, unless we’re willing to attach a price to China’s bad faith, such as a green light for Japan and Taiwan to go nuclear, too, or perhaps to sell a large arsenal of PAC-3 PATRIOTs to China’s only elected legitimate government. (No, I really don’t worry about Japan and Taiwan having nukes. Frankly, a nuclear-armed Taiwan might keep the U.S. Navy out of a war in the Taiwan Strait, and a nuclear Japan might just shift some of the responsibility to deter an increasingly bellicose China to someone else.) So when I read things like this, I really wonder if the people who actually say this stuff really believe it:
Firms and governments in China, Hong Kong and other places North Korea does business were taking seriously the U.S. warnings about Pyongyang’s practice of using front companies and unusually large cash transactions, he added. [….]
“There’s a broad consensus, including by China, that this is the right way to go and I don’t think the Chinese would take this stuff lightly,” said a second U.S. official. [Reuters, Patrick Worsnip and Paul Eckert]
For just those of you who actually do believe this, please be advised that a close associate of mine is a former Nigerian general who is looking to facilitate a favorable transaction of mutual benefit to all of us by transferring the sum of $50 million into your checking account. Just e-mail me for the details of this remarkably easy, profitable, and secure transaction!
The latest evidence of China’s bad faith is its shipment of “[o]ver 500 Chinese-made vehicles suspected of being intended for military use” across the river border crossing at Dandong during the past month. The Chosun Ilbo claims that the vehciles consisted of “over 300 trucks and 50 jeeps.” By the way, don’t miss Andy Jackson’s comments on Iran, North Korea, and proliferation.
The G-8 is also giving President Obama an object lesson in why multilateralism is a sucker’s diplomacy: Jake Tapper reports that the G-8 won’t impose additional sanctions, but promised to issue a statement.