Archive for July 2010

Plan B Watch: Clinton Announces Tightening of N. Korea Sanctions

Well, it’s about damn time:

The Obama administration announced Wednesday that it would impose further economic sanctions against North Korea, throwing legal weight behind a choreographed show of pressure on the North that included an unusual joint visit to the demilitarized zone by Secretary of State Hillary Rodham Clinton and Defense Secretary Robert M. Gates.

The measures, announced here by Mrs. Clinton after talks with South Korean officials, focus on counterfeiting, money laundering and other dealings that she said the North Korean government used to generate hard currency to pay off cronies and cling to power. [N.Y. Times]

Clinton announced the sanctions as she visited the DMZ, while accompanied by SecDef Gates, and while displaying her supernatural frost-projection powers against a hapless North Korean border guard. I count at least three priceless expressions in this photo.

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The Treasury Department announcement I linked here yesterday now looks to be just the first part of the Obama Administration’s dangerously overdue and initially weak response to the sinking of the Cheonan, using at least some of the legal and financial tools I’ve advocated using for the last several years.

“Today, I’m announcing a series of measures to increase our ability to prevent North Korea’s proliferation, to halt their illicit activities that helped fund their weapons programs and to discourage further provocative actions,” Clinton told a news conference in Seoul after high-level security talks with South Korean officials.

Clinton said Washington’s “new country-specific sanctions” will target the North’s “sale and procurement of arms and related material and the procurement of luxury goods and other illicit activities.”

“Let me stress that these measures are not directed at the people of North Korea who have suffered too long due to the misguided and malign priorities of their government,” she said. “They are directed at the destabilizing illicit and provocative policies pursued by that government.” [Yonhap]

With apologies to KCJ, this is encouraging — a strong opening message that will get the attention of the investors on whose cash North Korea depends. Unfortunately, Clinton offered few details about the sanctions, and via some inside sources, I’ve learned that the administration is still debating just what specific measures it’s going to announce. Until I see what those specific measures are, and how strong and comprehensive they are, I will reserve judgment. Or, as one observer put it:

Nicholas Szechenyi, a northeast Asia policy analyst at the Center for Strategic and International Studies in Washington, said the key to effective U.S. sanctions is how they are implemented.

“If the U.S. is doing this in isolation, doing this piecemeal, then I don’t think they’ll have much effect,” he said. “But if there’s a unified effort to not only announce these sanctions as an act of solidarity with our South Korean allies but also to apply some pressure on North Korea, then I think over time it might work.”

That sounds exactly right to me. Nick Eberstadt is more skeptical, and maybe he knows something I don’t:

The moves resemble piecemeal steps of the past, they add, and are unlikely to strike where it hurts: the regime’s access to under-the-table international funds.

“If I were in Pyongyang, I would not be trembling in my boots about this,” says Nick Eberstadt, a North Korea specialist at the American Enterprise Institute in Washington. [Christian Science Monitor]

The real question here is what the sanctions will be designed to achieve:

“The real question, if the talks resume, is so what?” says Mr. Lieberthal. Neither Republican nor Democratic administrations have been successful over two decades at curtailing the North’s nuclear ambitions, he says, adding that the Obama administration “shows no signs of being in the mood to reward North Korea” to prompt its cooperation, a pattern he says the North has become accustomed to.

“So even if the talks resume at some point, would they produce any serious results?” he asks. “I remain very skeptical about that. [Christian Science Monitor]

If the administration is looking for sanctions that are undone as easily as they’re done, this won’t work. Our financial power over North Korea is our power to scare away investors and sever its financial lifelines, including those that originate in China. If we try to spare Chinese entities and only target isolated investors like Orascom and various shady bankers here and there, this won’t work. If the administration nips at North Korea’s illicit financing at its fringes, a U.S.-led sanctions program will fail just as U.N. sanctions always have, because North Korea is very nimble at setting up new banks and companies to evade sanctions, and because Chinese entities will adopt a see-no-evil approach to transactions with North Korea unless it’s made clear to them that their own comingled assets are also at risk.

For what it’s worth, Hillary Clinton and Robert Einhorn will both be traveling to China to seek its cooperation. Wish them luck.

But if the administration goes all-in to hit North Korea’s finances hard before its big succession-focused party conference in September, this could be extremely effective, and might even disrupt Kim Jong Il’s plans to purge his and promote the next generation of apparatchiks to preserve his dynasty for another generation.

Will a North Korean Attack Win the Yellow Sea for China?

Is the Yellow Sea a Chinese lake? Under ordinary circumstances, I’d understand China’s complaints about a U.S. naval exercise in an inland sea near its shores. It’s not as if I’d want Chinese ships in the Gulf of Mexico, either, but these are not ordinary circumstances. This time, North Korea has sunk a South Korean warship, and China has both shielded North Korea from any consequences for that attack and continued to provide necessary financial support to the regime that carried it out. Argue among yourselves whether this makes China an accessory after the fact, but it certainly destroys the myth of China as a mature, responsible power promoting peace and stability. That’s why the U.S. Navy is now forced to deter without any help from China.

It now appears that China’s obnoxious protestations will get at least part of a joint U.S.-South Korean naval exercise moved to North Korea’s East Coast. Given China’s indefensible behavior, that would be a very bad concession for President Obama to make. Despite the U.S. Navy’s insistence, it’s clear that there’s a message for China in these exercises, too, as there should be. But instead of China suffering some vicarious liability for North Korea’s attack, it could stand to benefit from what amounts to thuggery by proxy. If the Navy moves its exercise out of the Yellow Sea, China will have achieved a great leap forward for its regional hegemony. And while a naval exercise in the Yellow Sea is useful for showing America’s commitment to its allies in the region, it still falls far short of the sort of economic and security consequences needed to deter North Korea and China from letting something like the Cheonan Incident happen again.

One deferential commenter asks, “Will the anti-submarine warfare exercises signal an expansion of the coverage area of the U.S.-(South Korea) alliance?” I hope the answer to that is “yes.” Whereas I’ve long believed that U.S. ground forces should be withdrawn from Korea, I believe having a U.S. air component in Korea is good for both countries’ security, and that if any part of the alliance has the potential to grow, it’s the naval component. Having U.S. infantry in South Korea is an anachronism and an inviting target, but creating a multinational naval alliance between the United States and the Pacific democracies will better protect those democracies against Chinese intimidation and proxy attacks.

Rather than showing contrition and doing its share to restore regional stability by dialing back its support for Kim Jong Il, China’s behavior is bombastic (but very helpful to my side of the argument about China’s intentions). I certainly do not suggest that Peter Lee speaks for Beijing, but I do suppose his writing probably reflects the way Beijing hopes to use this incident to advance its hegemonic ambitions and divert its suppressed domestic rage toward foreign demons.

Lee betrays his misunderstanding of South Korea by suggesting that there is “a wave of excitement” there over the possibility of immediate reunification (if only!). He then frets, needlessly, that this could frustrate China’s ability to “win recognition of its national interest in the future of the peninsula, especially since its national interest seems best served by the continued existence of an impoverished, anti-American buffer state.” I hope Koreans are listening carefully. This is the sort of honesty about China’s motives you’ll seldom hear from Washington’s Foreign Policy Industry, or Seoul’s. But in the next breath, Lee nonetheless protests that China’s influence over its North Korean dependent is overstated. China is always trying to play this both ways — claiming hegemony over North Korea while insisting that it has no influence over events there. But with the decline in inter-Korean trade, China is by far North Korea’s largest source of cash, fuel, food, and trade.

Lee acknowledges the wave of anger by the Chinese people against the corruption and lack of accountability of their own government (and also, bad restaurant service). Release the mobs!

Indeed, nationalism and a thirst for vigilante justice targeting anyone from rude waitresses to corrupt officials to countries deemed insufficiently friendly and respectful have emerged as a remarkable source of potential energy, particularly on the Internet. It is easy to imagine China permitting the expression and, through the media, “amplification” of anti-foreign feeling to threaten the economic interests of countries that challenge China’s interests and self-esteem.

The strategy would have the added benefit of using vociferous and intolerant nationalism to crowd out domestic criticism of Communist Party rule and its various shortcomings, which threaten to become a dominant theme on China’s lively, massive, and indignant domestic Internet despite extensive monitoring and censorship operations and the Herculean efforts of paid sock puppets to dilute and redirect unsuitable threads.

Lee then cites the example of a K-pop concert gone bad to support dark threats that Beijing will fall back on the tired tactic of redirecting this anger toward xenophobic nationalism directed against the United States and South Korea, and that Chinese, marching as the state leads them, will riot against the foreign devils (whether digitally or physically isn’t specified). But of course, Beijing has been doing this for years, and while that hasn’t made the people of China any more content, it’s not a tactic whose historical precedents augur favorably for China or anyone else.

Plan B Watch: Treasury Requires “Enhanced Due Diligence” for N. Korean Banks

The Treasury Department has announced that the governments of Sao Tome and North Korea will henceforth be subject to the “enhanced due diligence” requirements of Section 312 of the USA PATRIOT Act. The measures apply to U.S. financial institutions maintaining correspondent accounts for “foreign banks operating under a banking license issued by” North Korea.

By itself, this action is likely to have little effect, because it’s doubtful that any North Korean-licensed banks have U.S. correspondent accounts. The better question, however, is what effect this may have on banks in Europe and Asia, because the Treasury action was ordered in concert with the Financial Action Task Force. The FATF is the rarest of species in this world — an effective international institution. When the FATF speaks, it means that most of the world’s major finance ministries have promulgated guidance similar to Treasury’s, or soon will.

It will be weeks, and probably months, before we know whether this action will encumber the flow of laundered North Korean assets through European and Asian banks, but Treasury’s message should send a clear warning that non-complaint institutions will be targeted for the same treatment that Banco Delta Asia received in 2005 — the dreaded “fifth special measure,” which denies the offending institution access to its correspondent accounts in American banks and effectively cuts it out of the global financial system.

This is a hopeful sign, though by itself, it doesn’t necessary mean this administration has decided to turn Treasury and Justice loose to pursue the flow of illicit cash that sustains North Korea’s palace economy. But to do so now, just as the regime is purging old comrades and preparing for the succession of a new emperor, would be the most opportune timing imaginable.

The New Conventional Wisdom: We Have No Idea

I don’t recall ever seeing Victor Cha offer a view that was particularly original, imaginative, or likely to end in a successful result, but he is a reliable indicator of Washington conventional wisdom about North Korea, which in turn is heavily influenced by Seoul’s views about the North. And here is the new conventional wisdom: we have no idea what to do now. In Cha’s own words:

North Korean behavior has gotten so bad, according to East-West Center Visiting Fellow Victor Cha, that foreign policy experts are really at a loss about what to do.

“You do want to have some sort of diplomacy or engagement, but what do you do if a country just refuses to engage, and in the meantime it continues to build nuclear weapons and ballistic missiles?” Cha said during an interview at the EWC’s recent 50th Anniversary International Conference. “It’s a real dilemma. This is really a case of a country that is operating outside the normal bounds of international relations. And when use of force is really difficult to contemplate as an option, what are you supposed to do?” [East-West Center]

For years, the conventional wisdom has been based on mirror-imaged rationalizations of North Korean motives, rationalizations that failed to understand its irrational (to us) pathology. This was needless, of course. The pathology would have been evident to anyone who confronted is capable of doing to other human human beings, and the profound pathological implications of that capability. Our foreign policy establishment, accustomed to dealing with states that respond to ordinary economic and political incentives, assumed the same of North Korea — that it seeks better trade relations, more commerce with the outside world, the exchange of ambassadors, the reduction of tensions, and a better life for its people. The Foreign Policy Industry clung to them throughout the mutual partisan recriminations (yes, a cliche) that blamed everyone but Kim Jong Il for the collapse of two agreed frameworks.

Perhaps President Obama’s election was just the first necessary element of the destruction of these false assumptions. During the last year, I’ve watched them fall, starting with North Korea’s May 2009 nuclear test, and concluding (for everyone but Mike Chinoy and a few others) after North Korea sank the Cheonan. The new consensus is that talks stand no chance of disarming North Korea, and perhaps not even of preserving the peace. The new consensus is that China isn’t a “responsible partner” that will help us restrain Kim Jong Il within the range of what passes for acceptable provocations. And while sanctions have become more attractive as a policy option, there is no “accepted” view of what plausibly attainable objective they are supposed to serve, because the conventional wisdom still sees them as an accessory to diplomacy. Simply stated, the conventional wisdom is still trying to recover from the destruction of its fundamental assumptions. It has no idea what to do next.

The first step toward a better policy is to acknowledge that the last one didn’t work, and won’t work. The second step is just beginning.

And today’s Great Purge victim is …

2010septpartyconfposteriii.jpgKwon Ho Ung, who served as North Korea’s chief delegate to inter-Korean talks with the ATM known as Roh Moo Hyun from 2004 to 2007. Today’s winner will receive one execution, presumably by firing squad. Via Sonagi, here’s a blog post that provides a little more information about him.

A lot of North Korean officials must be very, very worried right now. I suppose we’ll continue to hear reports like this right up until the big September party conference. Speaking of which, the excellent North Korea Leadership Watch already has some of the graphically beautiful and ideologically repulsive propaganda posters advertising the event.

“[W]e traveled with poison, so that if we were caught, we’d take it and kill ourselves.”

Sue Lloyd-Roberts continues her look at North Korea by interviewing refugees in Seoul and asking them about the images her minders allowed her to film. At 13:00, Lloyd-Roberts interviews Young Howard, a/k/a Ha Tae Kyung, the founder of Open Radio. She even sits in as he interviews a source by telephone. She seems to presume (incorrectly) that Ha is North Korean, but in fact, he’s a South Korean and a former leftist political prisoner. It’s both unsurprising and striking how clearly North Koreans see things in their homeland, in contrast to most South Koreans.

Lloyd-Roberts’s effort to pierce the regime’s facade this way is the mirror image of the controversy between Amnesty International, which tried to do the same, and the W.H.O., which expects us to join it in believing that the regime showed it the true picture of medical care in North Korea. But then, you don’t get the backing of the Chinese government for a high-profile U.N. job by speaking the truths hidden behind the disinformation put out by repressive regimes, and Chan’s background suggests that her acquired talent for willful blindness has been career-enhancing for her.

Claudia Rosett proposes to kick North Korea out of the U.N.  This strikes me as a perfectly sound idea in theory and one that stands no chance of coming to pass in practice.  North Korea’s presence at the U.N. hasn’t contributed to peace or development; after all, U.N. membership isn’t a sine qua non for WFP aid, and most the focus of diplomacy is on the six-party talks, an opera that alternates between long intermissions and broken crystal.  The fact that states like North Korean can be members of the U.N. in good standing really only proves that the organization has no standards, and that’s the reason why it can’t accomplish anything.  But then, given all of the other bad characters and motives in the U.N., that’s probably a mixed blessing.  The real answer to the U.N.’s failings is its gradual replacement with an organization without permanent members, where membership is a function of the member state’s democratic legitimacy and past contributions to humanitarian and peace-keeping efforts.

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North Korea’s Priorities Again:  They’re building a big “birthplace” shrine to Kim Jong Eun in the district where this large palace sits, near the obviously faked Tomb of Tangun that North Korean archeologists “discovered” in 1993.  The Google Earth imagery is too old to show the new construction.

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Also, new photos of a Kim Jong Il statue, which makes considerable effort to morph Jong Il with his father.

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The latest casualty of the Great Purge of 2010:

“Railway workers suffering from the food shortage stole copper and aluminum parts from locomotive trains that were in store for wartime and sold them as scrap metal. As a result, about 100 locomotives were scrapped,” it claimed. “This was revealed in an inspection by the National Defense Commission in 2008.” [Former Railway Minister] Kim Yong-sam was then taken to the State Security Department and executed in March the following year, it added.

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Woefully Predictable:  South Korea’s government loses the message war over the Cheonan Incident to conspiracy theories and disinformation, many of them probably spread by China, North Korea, and their proxies in South Korea.  It’s times like these when I revert to my default view that there’s just no saving South Korea from itself.  But in the end, that’s up to South Korea, not America.

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A female North Korean spy will avoid criminal charges because she cooperated.  Good, if sincere.

“I think that what surprised me most here was that they could believe that we would believe that what they showed us was for real.”

The BBC’s Sue Lloyd-Roberts get the same old tour of Pyongyang, but doesn’t ask her minders the same old questions. The results vary from stony silence, to temper tantrums, to absurd protestations of economic progress as the lights go out.

North Korea Hit with $378M Judgment for 1972 Lod Airport Massacre

I haven’t seen this reported in the news yet, but standing alongside the Pueblo judgment, this creates a basis for American victims of North Korean atrocities to try to collect several hundred million dollars from North Korean accounts and entities in third countries, using international agreements that allow for the reciprocal enforcement of foreign judgments.

North Korea was held liable for its role in supporting the Popular Front for the Liberation of Palestine and the Japanese Red Army, which planned the attack together in North Korea. North Korea did not contest the suit. The award consisted of $78 million in compensatory damages awarded to the estates and surviving relatives of the victims, and $300 million in punitive damages.

You can read the decision here: calderon-order.pdf

I’ve assembled more information at this page about other civil litigation against North Korea in U.S. courts.

President Bush removed North Korea from the list of state sponsors of terrorism on October 11, 2008, to reward it for its anticipated progress toward complete, verifiable, and irreversible nuclear disarmament. President Obama reaffirmed Bush’s decision on February 3, 2010. Despite substantial evidence of North Korea’s recent sponsorship of terrorism and his own assurances that he would consider re-adding North Korea to the list, President Obama still has not re-added North Korea to the list.

Back to Gridlock?

Secretary of State Clinton will travel to Asia, including South Korea, next week. In announcing the visit, Assistant Secretary of State Kurt Campbell gave this July 15th on-the-record briefing. In contrast to the Bush Administration’s anytime, anywhere approach to the six-party talks, you can sense a subtle shift in tone:

Let me say that the United States and South Korea have always maintained, and our position is clear, that we are prepared under the right circumstances to sit down in a dialogue with North Korea. But as President Lee Myung-bak has said on numerous occasions, we do not want to talk for talking’s sake; there has to be a clear determination that North Korea rejects its provocative ways and embraces a path towards denuclearization on the Korean Peninsula.

I get a growing sense of polarization in the Obama Administration. On the one hand, they seem to have figured out that diplomacy is going nowhere, and accordingly, they’re backing away for the Bush Administration’s desperate pursuit of it. On the other hand, they seem to have found neither the will nor the means to punish, deter, or change to the behavior of the North Korean regime.

All of which sounds very much like the polarization that beset the Bush Administration, almost from the very beginning.