After a near miss in the Senate, the KIMS Act heads for the President’s desk

While the rest of you talk about missiles, I’m going to talk about responses. Last night, by a vote of 98 to 2, the Senate passed H.R. 3364, a bill imposing new sanctions against Russia, Iran,* and North Korea. The bill previously passed the House by a vote of 419 to 3, and now goes to the President’s desk. The North Korea sanctions are contained in Title III, which previously passed the House as the KIMS Act by a vote of 419 to 1. Most of Title III’s key provisions amend and expand the North Korea Sanctions and Policy Enhancement Act of 2016.

Section 311 of the bill requires the President to freeze the assets of (and imposes other sanctions on) any person who —

  • “(10) buys gold, titanium ore, vanadium ore, copper, silver, nickel, zinc, or rare earth minerals from North Korea;
  • “(11) sells rocket, aviation, or jet fuel (except for use by a civilian passenger aircraft outside North Korea, exclusively for consumption during its flight to North Korea or its return flight);
  • “(12) facilitates a significant transaction or transactions to operate or maintain, a vessel or aircraft that is designated by the U.N. or the Treasury Department; 
  • “(13) facilitates the registration of, or maintains insurance or a registration for, a vessel owned or controlled by the Government of North Korea.

All of those provisions mirror U.N. sanctions from UNSCRs 2270 and 2321. This is implementing legislation of the kind that our diplomats are currently asking their counterparts in dozens of other countries to enact and enforce. Section 311 also authorizes discretionary sanctions against anyone who —

  • “(D) buys coal, iron, or iron ore from North Korea, in excess of the limitations provided in applicable United Nations Security Council resolutions;
  • “(E) buys textiles from North Korea;
  • “(F) facilitates a significant transfer of funds or property of the Government of North Korea that materially contributes to any violation of an applicable United Nations Security Council resolution;
  • “(G) transfers bulk cash, precious metals, gemstones, or other stores of value to or from North Korea;
  • “(H) sells crude oil, condensates, refined petroleum, other types of petroleum or petroleum byproducts, liquified natural gas, or other natural gas resources to North Korea (except for heavy fuel oil, gasoline, or diesel fuel for humanitarian use;
  • “(I) facilitates North Korea’s online commercial activities, including online gambling;
  • “(J) buys fishing rights from North Korea;
  • “(K) buys food or agricultural products from North Korea (whose people go hungry while Kim Jong-Un exports what they grow for hard currency);
  • “(L) facilitates the exportation of workers from North Korea;
  • “(M) engages in transactions involving North Korea’s transportation, mining, energy, or financial services industries;
  • “(N) facilitates the operation of any branch, subsidiary, or office of a North Korean financial institution.”

Some of those provisions (the coal cap) mirror U.N. sanctions, while others (food and textile exports) go beyond them. Other key provisions:

  • Section 314 imposes a potentially severe sanction on ports that don’t inspect North Korean cargo as required by UNSCR 2270, by authorizing enhanced customs inspections of shipments from those ports. Many shippers might prefer to ship through compliant ports instead of taking the risk that their merchandise might be held up in customs.
  • Section 315 imposes a sanction on shipping registries that reflag North Korean ships, in violation of UNSCR 2321. Ships flying those flags of convenience can be banned from U.S. waters. Shipping companies may well switch to other flags of convenience to avoid that consequence. That creates an incentive for registries to avoid North Korea’s business.
  • Section 321 allows the President to freeze the assets of companies that employ North Korean forced labor, and to sanction governments that permit the use of North Korean forced labor under the Trafficking Victims Protection Act. Goods made with North Korean labor or materials are presumed to be banned from the United States as products of forced labor, which may cause manufacturers to cleanse North Korean sources from their supply chains.

Most of the media attention is now on whether the President will veto the bill because of the Russia sanctions, but given the veto-proof margins by which it passed, it will probably become law sooner or later.

Before the Senate voted, there was also briefly a threat by Senator Corker to strip the North Korea sanctions out of the bill. Other than my own speculation, which I’ll keep to myself, I really don’t understand how the most popular part of this bill ended up becoming its most controversial part. I can’t credit the notion that “[n]ot a word of the North Korea bill” that the House passed by an overwhelming margin on May 4th “has been looked at” on the Senate side. It was also suggested that the Senate wanted a stronger bill, with resolution-of-disapproval language limiting the President’s authority to lift sanctions without Congress’s consent. But Congress previously wrote strict presidential certification conditions into the NKSPEA, and resolution-of-disapproval language may also be an unconstitutional legislative veto that would not be enforceable, and consequently, not worth fighting about. The only winners of an intra-partisan, inter-cameral fight are America’s enemies.

To the extent that the Senate would also like the House to vote on more of its legislation, that’s a perfectly reasonable request. For example, I hope (and believe) that the House will offer its strong support when Senator Van Hollen and Senator Toomey’s bipartisan BRINK Act comes up for a vote. The BRINK Act is easily the equal of either the NKSPEA or the KIMS Act in its toughness and sophistication, and I’m surprised that it hasn’t attracted the media attention it merits.

But it’s in the areas of human rights and freedom of information where the leadership of the Senate Foreign Relations Committee is now needed most. It will have another opportunity to set the agenda when the North Korea Human Rights Reauthorization Act comes up for a vote this year. A House version of that reauthorization finally made it through committee markup yesterday and now heads for the full House floor. If the Senate amends the House’s bill to add language similar to former Congressman Salmon’s DPRK Act, calling for the administration to step up its information operations in North Korea, I’m absolutely confident that the House would support it.

So, despite this near miss, there is good news in yesterday’s vote. Just as Congress built the legislative framework for Iran sanctions in several layers, it has now added a second layer to its North Korea sanctions, identifying and closing off Pyongyang’s sources of hard currency, loophole by loophole. The third layer, the BRINK Act, is ready when Congress is. So for all the talk of North Korean money launderers’ indefatigable cunning, swiftness, and flexibility, Congress has (however improbably) shown that it can act in a bipartisan way with even greater speed, sophistication, and adaptability than Pyongyang. The greater shock to Pyongyang may be that small knots of sophisticated amateurs and investigative journalists have exposed much of its money laundering network. It is now up to the administration to destroy it.

Here, we arrive at my greatest concern. Last year, when Congress passed the NKSPEA by similarly overwhelming margins, my concern (well founded, as it turned out) was that the President would slow-walk enforcement. This year, we have an administration that seems to have the will to use the legal tools Congress has given it, and those tools are nearly all in place. Now, my concern is that the administration lacks sufficient time and resources to execute the strategy. It has not put enough intel analysts, investigators, lawyers, and diplomats on the job of enforcing the new sanctions, and the political appointees who must direct and coordinate it aren’t in place. No strategy can succeed unless this presidency overcomes the bureaucratic anarchy that has consumed it thus far. Who sees that happening now? When a presidency fails, the country fails with it.

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* For those wondering why new Iran sanctions don’t violate the Joint Comprehensive Plan of Action, take a look at the Treasury Department’s F.A.Q. on this subject. The JCPOA does not affect sanctions on Iran for, among other things, its sponsorship of terrorism, its proliferation, or its support for the Assad regime or the Houthis in Yemen.

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