As Trump picks his cabinet, Congress flexes its foreign policy muscle

As we continue to watch Trump’s trial balloons float by on the selection of his national security cabinet, we still don’t know much about the foreign policy Donald Trump would have as President. On the other hand, most of Congress’s key players on foreign policy will still be around next year, and some of them have already begun to assert themselves. Committee chairs are (on one hand) pushing Trump to adopt more conventional foreign policy views, while (on the other) threatening to use their power to undermine any major policy shifts, specifically toward the Kremlin.

Some of the most powerful foreign-policy makers in the U.S. government are outside of President-elect Donald Trump’s control and are already signaling an early end to the honeymoon period over their fellow Republican’s security and diplomatic stances. [Foreign Policy, Molly O’Toole]

Ed Royce, the California Republican who conceived the North Korea sanctions bill that became law in February, and who stayed mostly quiet on Trump’s candidacy this year, will be back as Chairman of the House Foreign Affairs Committee next year. Hopefully, so will his Senate co-champion, Cory Gardner, at the helm of the Senate Foreign Relations Committee’s Asia Subcommittee. (Gardner’s rising star status was cemented this week by his selection to head the National Republican Senatorial Committee.) After some of Trump’s statements last year cast doubt on the alliance, both Royce and Gardner visited South Korea to reassure its leaders. Paul Ryan has also been supportive of the alliance.

Bob Corker, the current Chairman of the Senate Foreign Relations Committee, remains in the running for Secretary of State. Whether Corker is nominated or stays on as Chairman, he’d be a moderating influence. If Corker does leave the Senate, next in line, in terms of seniority, would be Idaho Senator James Risch, who called voting for Trump “distasteful,” but said he’d do it anyway. If congressional Republicans really want to put their stamp on foreign policy, however, they’ll pick the talented and highly intelligent Marco Rubio, who is fresh off a convincing reelection win. 

Also back at the Armed Services Committee is the newly reelected John McCain, who has joined with his close friend, Lindsey Graham, in making clear that any pivot to Moscow will face significant resistance in Congress.

“[Trump] wants to reset with Russia. Maybe he can do it, but here’s my view about Russia: They’re a bad actor in the world, they need to be reined in,” Sen. Lindsey Graham (R-S.C.) said Tuesday, adding that it would be up to Congress to let Russia “know the rules of the road pretty early,” even under a friendlier Trump administration.

“I think [Russia] should pay a price heavier than they’re paying now for what they’re doing in Syria and in eastern Europe,” Graham added. “I will consult with my colleagues what there is appetite for.”

Graham isn’t the only Trump critic who came out swinging on Tuesday on Russian involvement in global affairs. His close friend and colleague Sen. John McCain (R-Ariz.), who chairs the Senate Armed Services Committee, said that “the price of another ‘reset’ [with Russia] would be complicity in Putin and Assad’s butchery of the Syrian people. That is an unacceptable price for a great nation.” [Washington Post, Karoun Demirjian]

What can Congress do, aside from mere words? The Post’s report says that lawmakers are preparing “a battery of legislative measures to hold the line against Russia, regardless of what the president-elect tries to do.” Such as? First, words do matter, and Graham is threatening to hold “a series of hearings about Russia’s misadventures throughout the world” and cyberattacks. Although Republicans balked at holding pre-election hearings into Russia’s meddling in the election, Republicans haven’t dropped the issue, either.

“We cannot sit on the sidelines as a party and let allegations against a foreign government interfering in our election process go unanswered because it may have been beneficial to our goals for the moment,” Graham said Tuesday. 

In the House, Royce also said he would be interested in investigating Russia’s connection to the hacking incidents. “I would hope that all federal agencies are investigating,” Royce said. “If we can get evidence, it’s very worthwhile to pursue any information we have.” [WaPo]

Second, Congress can do what it did to force a reluctant President Obama’s hand on North Korea: impose mandatory sanctions. This week, the House passed the Caesar Syria Civilian Protection Act of 2016, which could force the next administration to sanction Assad’s Russian backers, among others. If the name of the bill sounds familiar, that’s because “Caesar” is the code name for the subject of a chilling Ted talk by his former CIA handler, a man who would later become a House staffer and independent candidate: Evan McMullin. Ordinarily, the calendar would make it difficult for the Ceasar Act to pass this Congress, but even Corker says “there’s going to be much more opportunity for bipartisan passage” of bills pertaining to Russia, and that lawmakers “plan to be aggressive” before the year ends. If the bill doesn’t pass this year, expect to see the same text introduced again in January.

“Regardless of perspectives on Syria, there’s some unanimity of opinion in sending a message on this kind of conduct,” House Foreign Affairs Committee Chairman Ed Royce (R-Calif.) said prior to the vote. [WaPo]

Ditto North Korea, if you’ve been watching the recent oversight hearings in the House and Senate.

Finally, Graham is promising “a package that would help our Eastern European allies better deal with the threats they face from Russia” that includes broad defense aid “to make it harder for Russia to advance beyond where they are today.” If Trump’s rhetoric on cost-sharing helps defray the cost, that aid package may be more palatable in Congress. Ed Royce thinks Trump’s public skepticism about NATO was nothing more than a “very successful negotiating tactic” to persuade NATO allies “to pay their share of the burden” in funding the alliance. Corker claims to have seen an “evolution” in Trump’s views on Russia and NATO.

If Trump can persuade Japan and South Korea to contribute more funds without harming the integrity of the alliance, I’d say all ends well, except that I have no confidence that all ends well if the left wins South Korea’s next presidential election. Another outbreak of anti-Americanism could erode congressional support for the alliance below a critical level, especially if South Korean politicians are seen as feeding or playing into that. 

Historically, the President has enjoyed great deference in the conduct of foreign policy. This Congress is already hinting that it means to push the envelope in that historic power struggle. If Trump prefers to prioritize other matters, we may see an early compromise, especially if Trump appoints a more conventional and moderate cabinet. If not, we may see a period of intra-partisan conflict and gridlock between the executive and legislative branches. If Congress prevails, the result could be a historic expansion of Congress’s power over the conduct of foreign affairs.

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Introducing the OFK sanctions explainer and law library

For those who’ve wanted a compilation of the key U.N. documents, U.S. statutes, regulations, executive orders, general licenses, and third-country sanctions laws, along with a brief explanation of how those authorities work, start here and click your way around. It’s still a work in progress, but the most important authorities are there. I also added section-by-section links to the key provisions of the NKSPEA and an FAQ. Enjoy!

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H.R. 6281, banning N. Korea from SWIFT, would be a powerful sanctions upgrade

Via Yonhap, we learned last week that Rep. Matt Salmon (R, Ariz.), the Chairman of the House Asia-Pacific Subcommittee, has introduced a bill to cut North Korea off from the “specialized financial messaging services” that banks use to send wire transfer orders around the world. The industry leader for financial messaging is SWIFT, whose headquarters is in Brussels, but which also has operations in Geneva and Manassas, VirginiaIf you don’t know what SWIFT does and why it matters, I’ll refer you to this post.

“What we can do is deny them access to services designed to quickly and easily transfer money worldwide. Without access to these services, we can force the North Koreans to purchase supplies and receive support in the way typically favored by state sponsors of terrorism: shipments of anonymous, small denomination bills.” [Yonhap]

You may be able to run a mid-size drug cartel that way, but not a country with a population of 23 million and a large, mechanized army. Although a SWIFT cutoff would be based on a different legal authority from the authority Treasury used against Banco Delta Asia in 2005, Yonhap compares the proposed legislation to BDA.

Should the legislation be enacted, it would have powerful impacts on the North, possibly similar or even greater than the 2005 U.S. blacklisting of a Macau bank for doing business with Pyongyang.

By designating the bank in the Chinese territory, Banco Delta Asia (BDA), the U.S. not only froze $24 million in North Korean money held in the bank, but also scared away other financial institutions from dealing with Pyongyang for fear they would also be blacklisted.

The measure hit Pyongyang hard, and reports at the time said North Korean officials had to carry around bags of cash for financial transactions because they were not able to use banks. The sanctions were later lifted in exchange for a denuclearization agreement that later fell apart. [Yonhap]

A better analogy would be the effect SWIFT sanctions had on Iran’s economy more recently. 

Without SWIFT, global trade and investment would be slower, costlier and less reliable. [….]

The earlier SWIFT ban is widely seen as having helped persuade Iran’s government to negotiate over its nuclear programme. The ban was one of the first sanctions Tehran asked to be lifted, points out Mark Dubowitz of the Foundation for Defence of Democracies, a Washington-based think-tank. Though some of the banks blocked from SWIFT managed to keep moving money by leasing telephone and fax lines from peers in Dubai, Turkey and China, or (according to a Turkish prosecutor’s report) by using non-expelled Iranian banks as conduits, such workarounds are a slow and expensive pain. And the sanctions prompted Western banks to stop conducting other business with the targeted banks. [The Economist]

Keep reading that article to understand some of the good reasons to exercise great restraint in using SWIFT as a sanctions tool. I agree with those reasons; I just happen to believe that there are two cases compelling enough to be deserving exceptions — Iran and North Korea. (In the case of Russia, I’m not yet convinced that this is the right tool; I’d rather see us arm and train the Ukrainians.)

As of posting time, the text of H.R. 6281 was not yet available at Congress.gov, but I’d expect it will bear some resemblance to section 202 of the original introduced version of H.R. 1771, the North Korea Sanctions Enforcement Act, a later version of which the President signed into law in February as H.R. 757, the North Korea Sanctions and Policy Enhancement Act (Public Law 114-122, codified at 22 U.S.C. Chapter 99). The bill already has nine original co-sponsors, including three Democrats.

If you own a calendar and had a television in your home in the 1970s, you already know that the obstacles to getting this bill to the President’s desk this year are signficant. The administration has hinted, however, that it may be asking the European Union, which regulates SWIFT, to effect its own cutoff.

“The SWIFT system which is what I think you are referring to is not a U.S. system, and therefore not under our direct control. I believe it’s an EU system up housed [sic] in Brussels,” Daniel Russel, the Assistant Secretary of State for East Asian and Pacific Affairs at the U.S Department of State said, when asked by how the U.S. administration planned to further penalize North Korea. [NK News, Dagyum Ji]

I’m all for doing things diplomatically if that achieves our objective. No doubt, our diplomats’ work has been made easier by the conduct of the North Koreans themselves, who are suspected of hacking SWIFT to rob its client banks of $80 million and laundering the loot through casinos in the Philippines (Rodrigo Duterte, call your office). Russel’s written testimony is here.

The necessity of far-reaching financial sanctions rose to the surface after the North was suspected to be connected to Bangladesh Bank heist back in May.

“We are in discussions with our partners, including the EU, about tightening the application of sanctions and pressure, including and particularly to deny North Korea access to the international banking infrastructure that it has abused and manipulated in furtherance of its illicit programs,” Russel said.

“I think that our hope is that we will in fact ultimately be able to reach an agreement that would further restrict North Korea’s access.” [NK News, Dagyum Ji]

If this bill doesn’t pass in this Congress and diplomacy can’t achieve the same result, I’m sure it’ll be back in the next Congress. In fact, for reasons I’ll explain below, it might be back even if the EU enacts a SWIFT ban. With the arrival of a new U.S. administration and an election year in South Korea, there will be no shortage of provocations to help pass it. North Korea loves to act up during election years. It makes certain kinds of people write op-eds calling for talks and concessions. 

More recently, however, Kim Jong-un’s election-year antics have made him one of Washington’s most effective lobbyists — for new sanctions laws.

This post by Stephan Haggard has sparked some debate as to whether SWIFT is still servicing North Korean banks. According to Haggard’s post, SWIFT’s processing for North Korean banks fell from 50,000 a year in 2011 to a mere 5,000 a year by 2012. Haggard is always very careful with his sourcing and relied on published SWIFT data, but for reasons I shouldn’t share here, I don’t believe the statistics are accurate. I can’t rule out the possibility that SWIFT cut the North Koreans off in mid-2013 or later, however. By then, UNSCR 2094, paragraph 11, prohibited SWIFT from servicing (at the very least) U.N.-designated North Korean banks.

But in the end, whether North Korea is still using SWIFT or not, H.R. 6281 is still useful. If SWIFT is still providing services to North Korean banks, H.R. 6281 can give the Treasury Department and our diplomats more leverage to persuade the EU and SWIFT to cut the North Koreans off now. If SWIFT isn’t providing services to North Korean banks, someone else is. It would make sense that North Korea’s hacking of SWIFT software to steal from foreign banks was both a way to make money and retribution for a SWIFT cutoff.

Either way, North Korean banks need financial messaging services. One of the strongest arguments against the overuse of SWIFT sanctions is that they might give a less responsible service a competitive advantage. If some less responsible competitor has emerged to take on North Korea’s financial messaging business, then H.R. 6281 would enable the Treasury Department to either “reason with” that upstart service or sanction it to extinction. In which case, the potential rise of a SWIFT alternative turns one of the strongest arguments against H.R. 6281 on its head.

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The Senate does North Korea oversight right; also, sell your Bank of China stock now

It took a few weeks for the Senate Foreign Relations Committee’s Asia Subcommittee to put a hearing together after North Korea’s fifth nuclear test, but when that hearing finally happened on Wednesday, I actually found myself feeling sorry for the State Department witnesses, Danny Russel, the Assistant Secretary Of State at the Bureau Of East Asian And Pacific Affairs, and Daniel Fried, the State Department’s Coordinator for Sanctions Policy. A few years ago, they might have gotten away with showing up unprepared, with index cards filled with stock phrases. For example, after Chris Hill’s confirmation hearing, I wrote, “The degree to which the ‘august’ senators on the Committee have paid no attention to the conduct of policies they are charged with overseeing is depressing and stupefying, and yet it all somehow still makes for dreadfully dull viewing.” Thankfully, this Senate — or rather, this part of it — is a very different and much better body.

Under the leadership of Cory Gardner, at least one part of the Senate is doing policy oversight right. You can watch the whole thing here, and although it’s two hours long, it will hold the interest of anyone interested enough in North Korea policy to read this site. Do what I did and watch it in increments as time permits. 

The main headline from the hearing is that the State Department officials said that they are investigating more Chinese companies for sanctions violations, but it’s clear from the questions that the senators will not be placated by the sacrifice of mere goats anymore. Their mood is of equal parts alarm and fury — both in front of and behind the scenes, and among both Republicans and Democrats — that Chinese banks are breaking our laws, and that this administration is letting them get away with it. As they did before the hearing, they want the administration to sanction the Chinese banks that launder Kim Jong-un’s money.

By now, everyone should have expected Republicans like Gardner and Rubio to question State about that. State should have known by now that both men would be well-prepared and unsparing in their criticism. The intellects of both men, and good behind-the-scenes work by the staff — including arms control experts and one with extensive sanctions administration experience at the Treasury Department — ensured that they would quickly sift away talking points and cut directly to the issues. Gardner mentioned at one point that the senators were given a common set of briefing materials. It showed in both the insightfulness and focus of the questions, and in the bipartisan unity of their questions’ thrust. I’ve never worked in the Senate, so I wouldn’t know if that’s standard procedure there, but past hearings I’ve watched didn’t run this well. Gardner himself was in complete command of both the material and the room, and gave every appearance of being a man with limitless potential. Indeed, all of the senators were well-prepared. All, regardless of their party or tribal affiliations, asked good or excellent questions. 

In the end, however, no one can hurt you more than the people who love you. At 58:17, Senator Menendez began questioning Fried by arguing for secondary sanctions against Chinese banks. He then embarked on a well-prepared, determined, and lawyerly cross-examination of Fried about this. Pressured by Menendez’s questioning and clearly unsure of his material, Fried told Menendez that Dandong Hongxiang was a bank (not true). I don’t think Fried was lying, but he didn’t have command of the facts, and when he got out of his depth, he swam into a rip current. Menendez pinned Fried down on his answer. Then, when his time expired, he went back and pulled Treasury’s announcement, probably talked to his staff, and confirmed that this wasn’t true. At 1:35:30, Menendez returned, rearmed. This, ladies and gentlemen, is what it’s like to have a bad day in the United States Senate.

SEN. MENENDEZ: Mr. Fried, I pride myself on my preparation for these hearings, so I went back to your office after your answer, and I looked at OFAC’s statement of Monday. You said in response to my question we’d sanctioned a bank on Monday. Well, I read from OFAC’s statement that they imposed sanctions on Dan-ong Yonhwang (sic) Industrial Development Company and four individuals. Now, is that company a bank? 

A/S FRIED: Sir, it is a financial — it is not a bank — it is the financial company that worked with a sanctioned North Korean bank.

SEN. MENENDEZ: All right, that’s different than saying you’d sanctioned a bank.

A/S FRIED: Yes, sir.

SEN. MENENDEZ: You did not sanction a bank on Monday.

A/S FRIED: Uh, we sanctioned a fi — a Chinese, uh, financial corporation.

SEN. MENENDEZ: All right, well, that’s different than a bank. Let me ask you this. How many banks — banks — has the administration sanctioned as it relates to North Korea?

A/S FRIED: Uh, a nu — do you mean banks in general or Chinese banks?

SEN. MENENDEZ: Chinese — let’s talk about Chinese banks.

A/S FRIED: A number — no Chinese banks.

SEN. MENENDEZ: No Chinese banks.

A/S FRIED: Not in China. We have umm —

SEN. MENENDEZ: That’s my point. That’s the point I was trying to drive at earlier. You have sanctioned no Chinese banks at the end of the day, and they are probably the major financial institutions for North Korea. What this company, as I understand, did was make purchases of sugar and fertilizer on behalf of a designated Korean bank. It’s a trading company, not a financial company. So, when I take testimony as a member of this Committee, I need to make sure that testimony is accurate, because I make decisions based upon it. And I must say that the information you gave me is not accurate. It was not a bank. This was a trading company. And finally, I got the answer that I wanted to hear, which is what I knew, that you’ve sanctioned no Chinese banks that relates (sic) to North Korea. And it is our hesitancy to do so that that takes away one of the major instruments possible to change Chinese thinking. I’m all for persuasion if you can achieve it. But when you can’t, and North Korea continues to advance its nuclear program in a way that becomes more menacing — and its miniaturization and its missile technology — I don’t know at what point we are going to continue to think we can stop them when in fact they’re pretty well on their way. And we allow them to continue to do so. And we don’t use some of the most significant tools that we have. So I’m disappointed that you didn’t give me the right information.

I hold no ill will toward Mr. Fried, but I literally cheered as Menendez calmly bored right to the truth of the matter. Yet on another level, watching this was deeply depressing. Menendez, for all his troubles — and I hope he’ll soon put those behind him — clearly showed us how valuable he is to his state and his country. If the Democrats retake the Senate, I hope he’ll be Committee Chairman again. Markey — watch for him to emerge as a liberal advocate for human rights in North Korea — wisely counseled restraint on South Korea’s military threats. Rubio, who had personally read and commented intelligently on an earlier version of the NKSPEA, had also read and understood C4ADS’s report and its implications. Any one of these senators would have been a better choice as President than the choices before us now. What I can’t help asking myself today is how we elect such good senators, yet such awful presidents.

In the years after the passage of the North Korean Human Rights Act, those who had worked hard to pass that law watched the State Department slow-walk it to a full stop, with Congress seemingly powerless to make it follow the law. That may have been to State’s short-term advantage, but its long-term cost was to plant in many of us a deep distrust of the State Department. We learned that passing a law is only the first step — that laws need robust enforcement mechanisms and a permanent, bipartisan constituency to make sure the executive enforces them. Hence, section 103 briefings, the first installment of which came due just as Kim Jong-un tested his fifth nuke. This Subcommittee is taking full advantage of those oversight provisions. Pray that continues to be the case in the next congress. 

I’ll give The Wall Street Journal the final word, if only to make the point that this issue isn’t going away, and that the next POTUS will come under withering pressure to do what this one has not done — enforce our laws. 

An invaluable report published last week by South Korea’s Asan Institute and the U.S.-based Center for Advanced Defense Studies found that Hongxiang Industrial and its parent company conducted some $532 million in North Korea business from 2011 to 2015. To put that into perspective, South Korean officials have estimated that the North’s main nuclear facility at Yongbyon cost less than $700 million to construct. [….]

In addition to neutralizing Hongxiang, these sanctions are aimed at persuading other Chinese companies to cut off Pyongyang lest they suffer the same fate, as when the U.S. sanctioned Macau-based Banco Delta Asia for about a year starting in 2005. This is the best hope for squeezing Kim hard enough that he might halt his nuclear drive. But China opposes such measures because it fears that squeezing too hard might cause the collapse of its client state.

Chinese trading firms and especially banks are likelier to cut off Pyongyang if the U.S. follows up promptly with further sanctions. One good sign is that the State Department’s Daniel Fried suggested Wednesday to Congress that more penalties are coming for Chinese firms.

Less promising is that in unsealing its indictment Monday the Justice Department said “there are no allegations of wrongdoing” against the banks involved in Hongxiang’s sanctions-busting. So despite imposing billions of dollars in penalties on a range of European banks for violating sanctions on Iran and others in recent years, the Obama Administration is signaling that Chinese banks aiding North Korea are untouchable.

In an open letter this month to President Obama, 19 Senators led by Colorado’s Cory Gardner quoted our Aug. 19 editorial (“North Korea’s Sanctions Luck”) on the evidence, compiled by United Nations experts, that the Bank of China “allegedly helped a North Korea-linked client get $40 million in deceptive wire transfers through U.S. banks.” That’s one of many examples. [WSJ]

If the House and Senate staff believe the administration has held back on specific targets, such as the Bank of China or any of the 12 banks named in the DHID forfeiture complaint, their next step should be to send the President a section 102(a) letter, which triggers a mandatory investigation, and possible designation.

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Senate Foreign Relations Chair to President Obama: Enforce N. Korea sanctions law

Senator Bob Corker’s office issued this statement today:

CHATTANOOGA, Tenn. – U.S. Senator Bob Corker (R-Tenn.), chairman of the Senate Foreign Relations Committee, released the following statement today after reports that North Korea fired three medium-range missiles as the Group of 20 economic summit was underway in China.

“It is highly discouraging that China does little as North Korea continues to test and develop its missile and nuclear programs,” said Corker. “China wants the international respect due a country of its size, yet it refuses to responsibly address a growing threat to stability in its own region and has failed to fully implement United Nations Security Resolution sanctions. Meanwhile, the Obama administration continues to drag its feet, with lackluster implementation of the new sanctions authority Congress provided earlier this year under the North Korea Sanctions and Policy Enhancement Act.”

On February 10, the Senate unanimously passed the North Korea Sanctions and Policy Enhancement Act of 2016 following a day of legislative floor action led by Corker. To date, no Chinese entities or individuals have been sanctioned under the new authorities provided by Congress. Click here for more information on the bill, which was developed by the Senate Foreign Relations Committee. [Sen. Bob Corker]

Well, partially. Let’s not forget to give Ed Royce his due credit for writing and passing the first version on the House side, but it’s also true that without the SFRC staff and Senator Gardner in particular, this bill would still be stuck in the House. Brokering the February compromise in the Senate must have been very difficult work indeed, given the complex Senate rules.

Clearly, the Senate committee staff have also noted the concerns I noted here. Now, the failure to designate Chinese entities by itself might be excusable — temporarily — if the administration simply doesn’t know where Kim Jong-un’s money is. That has become a hard defense to accept at face value, for reasons I explained in the previous link, and here. It would also be excusable if quiet diplomacy could immobilize the funds without needless unpleasantness, but although there are some hints that North Korean diplomats and overseas workers are under some financial duress, pretty clearly, most of those funds are not yet immobilized.

I continue to predict that the section 103 briefing is going to be tense and difficult for the administration. The odds of some very contentious election-year hearings increase with each new provocation from Pyongyang, and particularly if President Obama returns from Beijing empty-handed.

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The Obama administration isn’t following Kim Jong-un’s money. Congress should ask why.

In February and March, respectively, the U.S. Congress and the U.N. Security Council responded to North Korea’s fourth nuclear test with sanctions that were, in theory, an order of magnitude stronger than any sanctions imposed on North Korea until then. Sanctions, of course, are only as good as their enforcement, and in enforcing sanctions against North Korea, the most important rule has always been “follow the money.” Money — along with the contradictions of its political system — has always been one of Pyongyang’s main vulnerabilities. Much of that money sits in banks in China, Europe, and Russia. A sudden cutoff of those funds could shake the increasingly fragile cohesion and discipline of the security forces. It could also shake the wavering confidence of North Korean elites in Kim Jong-un’s capacity to preserve their status, position, and survival. After an inevitable period of backlash, tension, and provocations, an insolvent dictatorship in Pyongyang would confront an existential choice to reform and disarm or perish.

Of course, confronting Kim Jong-un with that choice depends on getting Kim Jong-un’s bankers in China, Russia, and European states to comply with the new U.N. sanctions. Because China and Russia have voted for and subsequently violated U.N. sanctions resolutions for years, Congress concluded that a credible threat of secondary sanctions was necessary to make them enforce the resolutions. Section 104 of the North Korea Sanctions and Policy Enhancement Act requires the administration to block the slush funds that facilitate Kim Jong-un’s proliferation, arms trafficking, luxury goods imports, and human rights abuses, wherever those funds are found. The purpose of the law is to force the administration to cut off the funds that maintain Kim Jong-un’s regime, and to send a clear message to Chinese and Russian banks that the days of business as usual are over. Either they can do business with Pyongyang or New York, but not both.

Congress made those sanctions mandatory — barring the invocation of a presidential waiver in section 208(c), which must be reported to Congress — because had it lost patience with China, and because it had lost confidence in the Obama administration’s will to enforce U.S. law or U.N. sanctions against North Korea. The Obama administration has too a long history of letting Kim Jong-un off the hook for his most egregious conduct to be trusted. It did functionally nothing to sanction Pyongyang after its second and third nuclear tests, multiple missile tests, and two attacks against South Korea. It failed to list North Korea as a state sponsor of terrorism despite multiple attempts to assassinate dissidents and human rights activists, multiple arms shipments to Iranian-backed terrorists, and the Sony cyber terrorist attack against the U.S. homeland. It did nothing to the Chinese and China-based entities that hosted and enabled the North Korean hackers. Yet for years, despite the extensive evidence of China’s bad faith, the White House effectively outsourced its North Korea policy to China. 

More recently, the Obama administration has taken a back seat to South Korea, whose diplomats have conducted a skillful and effective campaign to terminate North Korea’s lucrative arms dealing and labor exports, and to shore up international support for sanctions enforcement. Meanwhile, the Obama administration failed to undertake a serious campaign of financial diplomacy against Pyongyang. 

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The administration has denied knowing where North Korea’s slush funds are, but those denials become harder to believe as the open-source evidence accumulates. For years, open sources have reported that U.S. and South Korean authorities had pursued and identified large amounts of those funds. A recent spate of high-level defections — yet another was revealed just today — has likely added to the U.S. government’s knowledge of those funding streams. Good journalism has done much to expose North Korea’s China-based money laundering. In the coming days, an extraordinary and little-known organization, the Center for Advanced Defense Studies, will release a meticulously researched report, based entirely on open-source information, that will provide a ground-breaking expose of the North Korean overseas procurement networks. Any guesses which country they operate from?

But perhaps “ground-breaking” is too optimistic. Six months after the latest report from the U.N. Panel of Experts, the administration still hasn’t sanctioned any of the dozens of third-country enablers of North Korean proliferation, smuggling, or money laundering named in that report. The Panel’s report added dozens of names to the long list of Chinese and China-based trading companies, middlemen, and assorted death-merchants to the list of those who’ve spent the last two decades helping Pyongyang buy, sell, and trade the instruments of proliferation and extortion. You won’t find any of them listed among this year’s designations by the Treasury Department.

The administration still hasn’t blocked Chinpo Shipping, which was convicted by a court in Singapore of facilitating North Korean weapons smuggling. It has taken no action against the Bank of China, whose local staff knowingly deceived their U.S. correspondents — and may have broken U.S. money laundering laws — by directing Chinpo to conceal any North Korean links to the shipment. It has not sanctioned Chinese ex-spy Sam Pa or his 88 Queensway Group for their dealings with Bureau 39 (sanctioned by both Treasury and the U.N.) although it did sanction Pa for violating Zimbabwe sanctions. The same goes for the North Korean mining companies and their foreign investors I found among the Panama Papers. Under Executive Order 13722, those companies and their enablers should be subject to sectoral sanctions. No action has been taken against any of them, either.

If the administration — despite the vast personnel, legal, and intelligence resources at its disposal — doesn’t have all of this information, that could only be because it isn’t trying to gather it. What seems much more likely is that the administration has decided not to act on it — on any of it. The fact that the Obama administration won’t act on the information it has makes it harder to believe its denials that it knows where Kim Jong-un’s money is. I have no way of knowing what Treasury knows on the classified or law enforcement sensitive level, of course, but Congress does. We’ll get to that at the end of this post.

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Is the administration simply afraid of the diplomatic consequences of secondary sanctions against Chinese and Russian interests? Clearly not. Just two weeks ago, the Treasury Department designated and blocked a network of traders and trading companies that were helping the Syrian government’s arms procurement and proliferation. One of those traders was a Chinese national and two were Russian; one of the companies is located in Shenyang and one in Moscow. And of course, the Obama administration has directly sanctioned some of Putin’s top officials and financiers over Russia’s invasion of the Ukraine.

The administration can’t credibly claim that China deserves a pass because of its good behavior, either. Recently, China has turned sharply toward authoritarianism, anti-Americanism, and imperial hegemony over neighboring states and waters. It just blocked a toothless U.N. censure of North Korea over missile launches that flagrantly violated a decade-long series of Security Council resolutions by inserting poison-pill language objecting to South Korea’s improvement of its missile defenses. 

Yet instead of accepting responsibility for selling North Korea missile technology and road-mobile missile carriers, among other items, China’s Global Times blames the U.S. for the North Korean threat. Instead of sanctioning Pyongyang, Beijing is threatening Seoul with trade sanctions for having the temerity to want to defend itself from North Korea missiles. It has made a show of cozying up to North Korea and expressing its “significant differences” with the United States.It has even taken to bullying South Korea’s beloved K-pop artists. Korean conservatives are making an issue of this, as they should. Even the far-left, anti-American Hankyoreh Sinmun calls China’s threats “petty.” Scott Snyder is probably right that in the end, this will hurt China’s own economic interests. That is to say nothing of the nationalist backlash it will inspire among Koreans. But the broader point is that China isn’t taking the gravity of this threat to U.S., South Korean, and Japanese security seriously. That’s all the more reason why China must share in the cost of the threat it has done so much to incubate. 

I disagree with John Park and James Walsh on the role of sanctions as often as not, but they are right that for sanctions to slow North Korea’s proliferation, the administration must be willing to pursue and sanction North Korea’s procurement networks in China. They are also correct that weakly enforced sanctions, like half-doses of antibiotics, only serve to strengthen the disease’s resistance to the cure. It should go without saying that in attacking North Korea’s procurement networks, it may be necessary to sanction their Chinese enablers, too. But to go beyond merely delaying Kim Jong-un’s progress toward an effective nuclear arsenal, we must do much more — we must instill the fear of God in Chinese banks that hold (at least) hundreds of millions of dollars in North Korean slush funds, and that allow Kim Jong-un and his cronies to use those funds to maintain his hold over his military and security forces.

In the weeks and months following the imposition of U.S. and U.N. sanctions, I’ve seen and seized on hopeful signs that Chinese banks were freezing North Korean accounts, and that North Korean operatives have been unable to pay their debts. No doubt the administration knows things that I don’t, but these isolated reports still do not suggest that Pyongyang is in the early stages of a liquidity crisis that will confront it with the choice to reform and disarm or perish. Rather, absent more evidence that Treasury is serious about finding and blocking North Korean slush funds, those initial hopeful signs will fade away. It will be business as usual all over again, just as it was not long after Chinese banks briefly froze North Korean funds in 2013.

The fact that Pyongyang continues to sell coal and iron ore to China — in volumes that are increasingnot decreasing — suggests that Pyongyang still has access to bank accounts where it can deposit its coal and iron ore revenues. North Korea’s unsanctioned mineral exports are also rising. Because the mineral trade is under regime control, the fact that it is not directly sanctioned does not absolve China from the duty to ensure that revenue from this trade isn’t used to support Pyongyang’s WMD programs. The rise in this trade reinforces the likelihood that China’s banking industry is open for North Korean business. One South Korean expert opines that it also reflects a rising consensus among Chinese trading companies that China has lost interest in enforcing sanctions against Pyongyang.

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Yes, the administration has taken the long-overdue step of blocking North Korean banks’ access to the financial system. Treasury’s regulation is still not final, and it still remains to be seen what effects U.S. and EU money-laundering blacklisting will have. On one level, the recent surge of defections suggests that the regime is under some financial duress, for some reason. Yes, the administration has designated Kim Jong-un by name for his human rights abuses, while signaling that this action is an entirely symbolic one. Those actions were commendable, so I commended them. But they were meant to be symbolic and much more. The administration must do more than name Kim Jong-un; it must find and freeze the billions of dollars he is not using to provide for his people. Whatever we are doing right, we can do it better.

Fortunately, Congress learned a lesson from the North Korean Human Rights Act: administrations don’t always want to enforce the law, so Congress must make them. When it passed the new sanctions law, Congress included numerous reporting requirements, including a requirement that the administration report to Congress 180 days after the enactment of the legislation on exactly what it has done to enforce the new sanctions. I wonder if the administration forgot about this. Congress hasn’t forgotten it. The time has come for Congress to ask for that briefing. I can think of some very detailed and specific questions the staff should ask about what the administration has done to follow the money. If the administration doesn’t have satisfactory answers, Congress should hold oversight hearings.

We are still in the early phases of implementing these new sanctions authorities. There is still time for sanctions to work, but we are also at the stage where China traditionally stops pretending to enforce sanctions and returns to business as usual. In Washington, the distractions of an election year present a high risk that the administration may prefer a quiet exit to stopping North Korea’s march to nuclear breakout. An administration that wasted eight years while the North Korean threat continued to build has not earned one last “era of procrastination, of half-measures, of soothing and baffling expedients, of delays.” We are entering an era of consequences. The President must enforce the law. Congress must use its oversight authority to ensure that he does.

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Update: Similar thoughts here, from the Heritage Foundation’s Bruce Klingner. And I should note that this Time report from Dandong offers some contradictory (and more encouraging) evidence:

Sipping fruit tea in a Dandong café, Wang, the alias of a Pyongyang-born Chinese trader who speaks to TIME on condition of anonymity, describes how his business importing North Korean coal and minerals and exporting building materials has been eviscerated by the sanctions. “North Korean traders don’t have cash anymore,” he says. “I have to limit the amount of goods I sell to them on credit as the risk of default is so high.”

The report also says that refugees in South Korea have had an easier time sending money to their relatives back in North Korea. There’s nothing wrong with that, as long as Chinese banks enforce sanctions against the regime’s agents.

 

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Why Treasury should require banks to keep records about N. Korean beneficial ownership

In my policy discussions about North Korea, two of the smartest sanctions skeptics I’ve debated are professors John Park and James Walsh. Not only are they both genuinely nice people, their skepticism points to flaws and gaps in the sanctions regime, and that skepticism ultimately serves to improve the quality of the sanctions and their enforcement. They’ve been particularly persuasive about the importance of pursuing “North Korea Inc.,” Pyongyang’s extensive and shadowy network of agents and trading companies in China, who facilitate not only its legal trade, but also act as money launderers and purchasing agents for its WMD programs and luxury goods demands. Such is the nature of money laundering; it uses legal trade to conceal illegal trade.

One answer to Park and Walsh’s criticisms is to add one additional special measure, found at 31 U.S.C. 5318A(b)(2), to the special measures Treasury previously announced on June 1st. This measure would require financial institutions to collect information on the beneficial ownership of property by North Korean persons, or of property in North Korea. That would mirror the European Union’s recent blacklisting of North Korea for money laundering, which triggers increased beneficial ownership reporting rules.

Happily, I’m joined in this view by the most accomplished North Korea sanctions expert I know, William J. Newcomb, who previously served with the CIA, Treasury, State Department, and the U.N. Panel of Experts (here’s a link to an address Bill gave to the Korea Society). Today, Bill and I posted a public comment on Treasury’s proposed special measures against North Korean money laundering. You can read the full text of the comment below the fold, annotated with hyperlinks. It should also be available on the federal regulations portal shortly.

To read the full comment, click the “continue reading” button below.

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What Pyongyang Must Do to Get Sanctions Lifted

If a problem cannot be solved, enlarge it. – Dwight D. Eisenhower

In yesterday’s post, I confronted two unwelcome facts: first, that Kim Jong-un almost certainly will not give up his nuclear arsenal voluntarily; and second, that we cannot learn to live with a nuclear North Korea (or more accurately, it will not learn to live with us). To these, I’ll add a third: things in Korea will certainly get much scarier over the next few years. Pyongyang is blaming sanctions for its own threats, but the inevitability of this crisis isn’t a function of our own policy choices; it’s a function of Kim Jong-un’s psychology, the mass psychology of a system addicted to threats of war, and the fact that as Pyongyang gains more confidence in its weapons, it will feel more freedom of action to provoke and extort without cost. 

Ex-diplomats’ temptation to dialogue, while understandable on certain levels, is an exercise in futility at this point. (Of course, we never really stopped talking to Pyongyang. Not that I necessarily object to talking. I object to paying.) Still, my question remains: if Pyongyang won’t disarm, what’s to talk about?

In yesterday’s post, I ruled out every diplomatic strategy for disarming Pyongyang except one — putting it under so much financial and political duress that its leaders realize that they must change or perish (and it’s much too soon to make effective use of that leverage now). Today’s post will start by answering Sahand Moaref’s question of why the U.S. government chose to sanction North Korea over human rights, thus diffusing what Moaref sees as a necessary focus on disarmament, and denying diplomats the flexibility to achieve a negotiated disarmament. There are two answers to this — a simple legal answer, and the policy reasons behind the legal answer.

The simple legal answer is that section 304 of the North Korea Sanctions and Policy Enhancement Act gave the President 120 days to make a public decision whether to designate Kim Jong-un for human rights abuses. Then, if the President found Kim Jong-un responsible, it was required to designate him and freeze his assets in the dollar-based financial system. State now says that its designation of North Korean human rights violators was years in the making. If that’s true, Congress was pushing against an open door, and the political consensus was already unanimous that there was no diplomatic breakthrough for such a designation to ruin. Still, that consensus went unrequited until three weeks after Congress forced State to say whether Kim Jong-un was responsible for crimes against humanity. Of course, there is only one correct answer to that question.

The reasoning behind the NKSPEA is that our diplomatic strategies — first, appeasing Pyongyang; then, ignoring it — were drifting over a waterfall. There was thus little risk in limiting the flexibility of diplomats to negotiate an agreement that wasn’t happening anyway, and that had little hope of success even if it did. Instead, Congress demanded a comprehensive policy for a comprehensive solution. The NKSPEA requires the President to apply all of our instruments of national power short of military force to coerce Pyongyang to end those behaviors that the U.S. and its allies cannot simply learn to live with. Congress also did something no diplomat has ever done — it told Pyongyang exactly what it must do to get sanctions lifted by writing suspension and termination conditions right into the law. (I’ll get to what those conditions are in a moment.)

To the drafters of the NKSPEA, of which I’m one, State’s negotiating strategy was hopelessly myopic. Its focus on the narrowest of disarmament objectives traded away nearly all of our leverage over Pyongyang to get transitory concessions on just one part of its nuclear program. Thus, that strategy made it more difficult to achieve a comprehensive solution to the greater Korean crisis. It bears repeating that the Korean crisis isn’t just about nukes — it’s about the chemical, biological, thermobaric, and conventional weapons Pyongyang regularly threatens to rain down on millions of South Korean civilians, and the missiles and artillery that would deliver those weapons. It’s about narcotics trafficking, insurance fraud, money laundering, international abductions and assassinations, the sale of weapons to terrorists, cyberterrorism against the U.S. homeland, and the counterfeiting of U.S. currency. It’s also about a system of repression and secrecy so extreme that it renders any disarmament agreement unverifiable.

Thus, by 1998, in pursuit of a freeze of North Korea’s plutonium program, the Clinton administration had lifted most trade sanctions against North Korea and continued to provide it aid, despite a growing body of evidence that it was cheating on the 1994 agreement by pursuing a uranium enrichment program. Both political parties are equally culpable here; by 2008, the Bush administration lifted most financial sanctions in exchange for one blown-up cooling tower and a few boxes of uranium-tainted papers.

Meanwhile, State never even began negotiations in earnest to disarm North Korea of its chemical weapons, biological weapons, ballistic missiles, or the conventional artillery it had aimed at Seoul and other South Korean cities.

By giving away so much so soon, Washington also damaged the cohesion of the most important diplomatic alliances we would need to achieve a lasting peace in the region. In 2007, for example, the U.S. turned its back on treaty ally Japan by removing North Korea from the list of state sponsors of terrorism without having secured a meaningful commitment by Pyongyang to return Japanese abductees. That betrayal caused great controversy in Japan at the time, and it was still harming the U.S.-Japan alliance years later, when Japan cut a separate deal with Pyongyang for the return of the abductees.

Similarly, the Bush administration’s decision in 2007 to let Pyongyang ship weapons to Ethiopia was a clear violation of UNSCR 1718, a resolution the U.S. had just expended substantial political capital to secure. Allowing Pyongyang to violate that resolution squandered a global diplomatic consensus to limit Pyongyang’s arms dealing, which funds its WMD programs. To this day, the U.S. and South Korea are still expending diplomatic capital to get African and Asian states to comply with UNSCR 1718, and with the resolutions that followed it.

North Korea’s human rights abuses have long been a grave concern for many members of Congress, but since the 2014 release of a U.N. Commission of Inquiry report finding North Korea’s government responsible for crimes against humanity, that concern has resonated globally. The world is no longer prepared to give Pyongyang license to commit murder, rape, extermination, and starvation on a mass scale, nor should it be. And if State and Treasury had designated the leaders of Zimbabwe and Belarus for human rights abuses, they could hardly justify their failure to designate Kim Jong-un for far worse.

There are also sound political reasons why any agreement with North Korea must go beyond nukes. Iran continues to support terrorism and test missiles despite the Joint Plan of Action, and Congress isn’t just going to live with that; it will impose new sanctions in response to new evils. Support for terrorism and missile tests are unacceptable to Congress and to U.S. allies, regardless of whether Iran complies with the JPOA or not. These political and diplomatic realities explain why diplomatic solutions with rogue states must be comprehensive, even if comprehensive agreements are harder to achieve in the short term.

More fundamentally, negotiations are doomed to fail as long as Pyongyang continues to lie its way through them. Pyongyang has repeatedly reneged on its agreements, and we’d be fools to trust it again without compelling evidence that it is prepared to become a fundamentally more transparent society, whose commitments, actions, and adherence to the standards of basic humanity can be verified. How can we verify North Korea’s disarmament, especially now that it has admitted to having a more easily concealed uranium enrichment program, if Pyongyang continues to cage foreign aid workers in Pyongyang, miles from where the hungriest people are? Can we really monitor North Korea’s nuclear program if the vast areas that contain its political prison camps — including Camp 16, directly adjacent to its nuclear test site — remain off-limits to us? How could inspectors expect to hear candid answers from North Korean scientists, engineers, or laborers who live in terror of having their loved ones sent to those camps? A closed, terrorized, and opaque society with a long history of determined mendacity is fundamentally impossible to disarm. To be disarmed, it must first be altered or abolished.

Pyongyang, not Washington or Seoul, made the decision to engage in such a wide range of conduct that is unacceptable and offensive to us, to North Korea’s neighbors, or to civilization as a whole. If that breadth of evil complicates diplomacy, Pyongyang alone is responsible for that. If Pyongyang will not live by the basic standards of civilized humanity, it must live without the benefits of commerce with civilized humanity.

To Moaref, the expansion of sanctions leaves Pyongyang confused as to what it must do to get sanctions lifted. But today, no one in Pyongyang need wonder what they must do to get sanctions relaxed or lifted, because clear and specific goals and benchmarks are written into the law. Under the NKSPEA, sanctions can be suspended for a renewable period of a year if the President certifies that North Korea has done the following:

(1) verifiably ceasing its counterfeiting of United States currency, including the surrender or destruction of specialized materials and equipment used or particularly suitable for counterfeiting;

(2) taking steps toward financial transparency to comply with generally accepted protocols to cease and prevent the laundering of monetary instruments;

(3) taking steps toward verification of its compliance with applicable United Nations Security Council resolutions;

(4) taking steps toward accounting for and repatriating the citizens of other countries—

   (A) abducted or unlawfully held captive by the Government of North Korea; or

   (B) detained in violation of the Agreement Concerning a Military Armistice in Korea, signed at Panmunjom July 27, 1953 (commonly referred to as the “Korean War Armistice Agreement”);

(5) accepting and beginning to abide by internationally recognized standards for the distribution and monitoring of humanitarian aid; and

(6) taking verified steps to improve living conditions in its political prison camps.

Eventually, sanctions can be lifted entirely if North Korea meets the following conditions:

(1) met the requirements set forth in section 401; and

(2) made significant progress toward—

   (A) completely, verifiably, and irreversibly dismantling all of its nuclear, chemical, biological, and radiological weapons programs, including all programs for the development of systems designed in whole or in part for the delivery of such weapons;

   (B) releasing all political prisoners, including the citizens of North Korea detained in North Korea’s political prison camps;

   (C) ceasing its censorship of peaceful political activity;

   (D) establishing an open, transparent, and representative society; and

   (E) fully accounting for and repatriating United States citizens (including deceased United States citizens)—

      (i) abducted or unlawfully held captive by the Government of North Korea; or

      (ii) detained in violation of the Agreement Concerning a Military Armistice in Korea, signed at Panmunjom July 27, 1953 (commonly referred to as the “Korean War Armistice Agreement”).

If Congress agrees that the President has reached an agreement on some other acceptable terms, it can always amend the law, but a future President would be understandably reluctant to ask Congress to do this without bringing a very strong case to a future Congress. The North Koreans have burned us too many times to get another pass.

Note that these benchmarks do not necessarily require North Korea to become a fully “open, transparent, and representative” society, but merely to make “significant progress” toward one. This is not an end-state; it’s an abbreviated dialectic. The President could sign such a certification today with respect to any number of authoritarian states. As long as North Korea progresses toward transparency and openness, the President can continue to grant one-year suspensions of sanctions while our leverage remains in place.

Would North Korea view these conditions as political suicide? It agreed to many of them in 1953, so it’s hardly in a position to object to them now. Its agreement to progress toward becoming “open, transparent, and representative” depends how interested its leaders really are in developing their society and improving the living standards of their people. Until recently, U.S. and South Korean diplomats assessed that interest as high. North Korean propaganda still extols economic development as the half of its byungjin policy that isn’t fundamentally objectionable to the rest of humanity.

Whether Pyongyang would agree to this condition also depends on whether its leaders believe their own propaganda. That propaganda ceaselessly emphasizes how much the people adore Kim Jong-un, their single-minded pride and nationalism, and their belief that only a Supreme Leader can protect them from the packs of ravenous capitalists and carpetbaggers beyond the walls of their safe space. Some of the top officials in Pyongyang probably really do believe this, to varying degrees. Because human beings are individuals, and because individuals vary, some demographics in even the poorest regions of North Korea probably share it, too. I’ve met North Korean refugees who admit to having believed it themselves at one time. You don’t have to go all the way to Pyongyang to find experts who believe we underestimate the popularity of the regime, either: both Brian Myers and Andrei Lankov, who disagree with each other more often than not, have both said this at different times. Whether they’re right or wrong is mostly speculative; it isn’t even the point of the discussion. The point is that the leaders in Pyongyang might just believe it, or that they might, in a moment of sufficient duress, take the risk of believing the things they pretend to believe. But the state’s increasingly repressive policies also suggest its general recognition that many North Koreans despise the state’s exercise of totalitarian authority.

If a diplomatic solution is as unlikely as most people think it is, these conditions are probably moot anyway, and sanctions are merely one part of a broader strategy to either collapse the regime in as controlled a manner as possible, or to limit its capacity to threaten the world by putting it in something akin to international financial receivership. I’ll discuss the latter concept in the next post in this series.

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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.

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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.

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

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U.S. will announce new North Korea sanctions as early as this week.

At this event at the Heritage Foundation yesterday, I emphasized that U.S. and U.N. sanctions are mutually complementary, and that for the U.N. sanctions to work, the U.S. must show its determination to back them with the new authorities in H.R. 757, and by harnessing the power of the dollar.

The signs I’m seeing this week all suggest that the Obama Administration finally gets this. On Monday, President Obama said “that effective enforcement of sanctions on North Korea is one of the key tasks facing the country.” Yesterday, Treasury Secretary Jack Lew briefed a congressional committee on his talks with Chinese officials about enforcing North Korea sanctions, which he described as only “theory until you implement them” through “sustained efforts.” Said Lew, “We know from these sanctions programs that it’s grueling day-to-day work. You’ve got to identify the entities, act against the entities.” Exactly right.

The administration has also begun the hard work of financial diplomacy:

Adam Szubin, acting undersecretary of Treasury of terrorism and financial intelligence, will be in Beijing and Hong Kong on Monday and Tuesday to meet with senior government officials and compliance officers to discuss “a range of issues of mutual interest,” according to an advisory notice from Treasury. It comes in light of recent United Nations and U.S. sanctions on North Korea imposed this month, Treasury said.

“This trip provides an important opportunity for discussions of ways to strengthen U.S.-China coordination in response to North Korea’s destabilizing behavior and to ensure sanctions targeting the North Korean regime are as effective as possible,” the advisory notice said. [WSJ, Risk & Compliance Blog]

According to Channel News Asia, Szubin was to meet “with both government officials and the private sector” with regard to the implementation of both U.N. and U.S. sanctions. Reading the reports together, Szubin appears to have met with officials of certain banks that may hold North Korean assets. It may be a complete coincidence that Szubin visited Hong Kong just as HSBC froze Sam Pa’s accounts, and that HSBC’s top legal officer is Stuart Levey, Szubin’s predecessor. Coincidences do happen.

What we often forget about Treasury’s anti-money laundering effort against North Korea in 2005 and 2006 is that it was more than an action against one dirty bank. It was a broader campaign of financial diplomacy, led by Levey and Daniel Glaser (who is still a senior Treasury Department official today). It looks like we’re starting to see a similar strategy re-emerge now. There’s no question that implementing it will be challenging, based on what the U.N. Panel of Experts told us last week about North Korea’s extensive use of deceptive financial practices.

179. The financial sanctions notwithstanding, the Democratic People’s Republic of Korea continues to gain access to and exploit the global international financial system (including banking and insurance) through reliance on aliases, agents, foreign individuals in multiple jurisdictions, and a long-standing network of front companies and embassy personnel, all of which support illicit activities through banking, bulk cash and trade.

180. The Panel has concerns about banks without adequate banking regulations and the intent to enforce them, especially in countries lacking effective laws and compliance institutions.91 Transactions originating in foreign banks have been processed through corresponding accounts in the United States and Europe. The enhanced due diligence required under the resolutions in the case of the Democratic People’s Republic of Korea is frustrated by the fact that companies linked to the country are often registered by non-nationals, who also use indirect payment methods and circuitous transactions dissociated from the movement of goods or services to conceal their activity.

Cooperation and information sharing among member states will be essential to the success of the strategy.

181. The implementation of financial sanctions becomes more complex as it moves from targeted financial sanctions based on designation lists to activity-based sanctions,92 an endeavour that requires first establishing whether an entity is being controlled or used by a designated entity. The situation is complicated because lists of aliases are never exhaustive, not least because of alternative ways to transliterate Korean names. In addition, the Panel is hampered in updating information on designated entities owing to time lapses in responses to its inquiries, allowing entities more room to continue their activities.

Yonhap also reports that “[t]he U.S. is putting together a package of unilateral sanctions against the North to carry out the Security Council sanctions and the recent congressional legislation tightening the screws on Pyongyang.” Special Envoy for Human Rights Robert King adds, “There is an Executive Order being drafted right now that will deal with these additional sanctions.”

This is welcome, if unexpected. After all, what could a new executive order do that Executive Order 13687, which the administration has barely used, doesn’t already do? (Search “DPRK2.”) I suppose it could further clarify that the President may impose secondary sanctions on persons who engage in arms trafficking with North Korea, insure or reflag its ships, or maintain correspondent accounts for its banks, but H.R. 757 already gives the President the authority to address those things. What would be more useful would be a round of designations under section 104.

Treasury also sorely needs a better set of sanctions regulations to replace the weak ones at 31 C.F.R. Part 510. Instead, it needs something broadly analogous to the more comprehensive regulations that apply to Syria (Part 542), or to Iran (parts 560, 561, and 562). One important part of the new regulation would be its general licenses for humanitarian transactions, subject to the limits of section 208. Another would expansive definitions of “arms or related materiel” (to include technical assistance) and “severe human rights abuses” (to include the use of North Korean forced labor). Let’s hope Treasury is working on that, too, but for now, the good news is that Treasury is working.

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The end of the beginning: President Obama will sign North Korea sanctions into law

Update, 2/18: The President signed the bill.

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This afternoon, the White House made it official — the President will sign the North Korea Sanctions and Policy Enhancement Act. The White House didn’t say when, but I’d expect it to happen within a week or so.

The question now turns to implementing the bill to maximize its impact on the regime, while minimizing the impact on the North Korean people. For well over a month, the legislation has had enough momentum in Congress that the Treasury Department should have been working on implementing guidance and humanitarian waivers under section 208, to reassure banks that they won’t be sanctioned over transactions to ship food and medicine to North Korea. Here’s hoping that Treasury hasn’t waited until now to write it.

Some favorable reactions to the legislation come from South Korea’s second-highest ranking diplomat, who said he hopes the bill “will help teach Pyongyang that its provocations come at a price,” and from two members of the House Armed Services Committee who are visiting Seoul.

Vice Foreign Minister Lim Sung-nam made the remarks in a meeting with two U.S. Congress members — Rep. Robert Wittman (R-Va) and Rep. Madeleine Bordallo (D-Guam) — saying their visit as members of the House Armed Services Committee is very timely given the regional security landscape following North Korea’s nuclear and missile tests, according to a press release by the ministry. [….]

“Vice Minister Lim said he expects that the bill, through implementation of specific measures, will make clear to North Korea that provocations are followed by punishments,” the ministry said.

Bodallo (sic) said she reaffirmed through her visit to South Korea that the two countries’ alliance and joint defense posture remain strong, noting that they should maintain close coordination in response to the North’s continued provocations and firmly respond to them together with the international community.

Wittman added that he hopes Congress’ approval of the bill will help draw a strong sanctions resolution on Pyongyang from the U.N. Security Council. [Yonhap]

One area where the bill could make an immediate impact is against North Korea’s slave labor exports, which could be sanctioned as severe human rights abuses under section 104(a)(5). Since it closed down Kaesong, South Korea has been calling for sanctions against Pyongyang’s slave labor exports, saying it intends to focus on Southeast Asia first. Here, both U.S. national sanctions and a new U.N. Security Council resolution could play complementary, mutually reinforcing roles. Both could also help President Obama and President Park put diplomatic pressure on Southeast Asian nations to send North Korean slave laborers home. President Obama just met with the leaders of ASEAN this week; let’s hope he took the opportunity.

Separately, the Congressional Budget Office estimates that the bill will cost $44 million to implement over the next five years, including $33 million for radio broadcasting and other humanitarian programs, and $11 million to hire cops and lawyers to enforce the new bill. Treasury has been overworked by sanctions on other targets, including Iran, Russia, ISIS, Al Qaeda, and various drug traffickers, so these new resources are essential, especially in a time of shrinking federal budgets. (HT)

What the CBO did not score, however, is how much the bill could put back in the Treasury because of its expanded civil and criminal forfeiture authorities (see section 105) against criminal activity covered by section 104(a).

Meanwhile, let’s raise a toast to Ed Royce, who led the bipartisan rebellion against the bipartisan failure called “strategic patience,” and Cory Gardner, the up-and-coming freshman Senator who moved this bill through the parliamentarian labyrinth that is the United States Senate. And to the thousands of ajummas and ajoshis, teens and twentysomethings, Southern Baptists, hard-liners, bleeding hearts, and other good-hearted people who joined the ragtag rebel alliance that moved Congress.

Now, all we have to do is make the President enforce it.

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N. Korea sanctions bill headed for President’s desk later today; Hillary makes a funny about Bernie.

By now, most of you know that the North Korea Sanctions and Policy Enhancement Act, the Senate’s version of H.R. 757, passed the Senate unanimously Wednesday night. The House is expected to pass the Senate’s version this morning and send it to the President’s desk.

In an election year, when floor time is especially precious, it was remarkable and humbling that the Senate spent an entire day debating this bill. Senator after senator came to the floor to give supportive speeches. If you read only one of them, read the moving speech of Senator Diane Feinstein (D, CA) about human rights, but be warned — this is the stuff of nightmares, and not for children’s eyes.

The speeches should be available on video here within the next few days.

Both Ted Cruz and Marco Rubio interrupted their presidential campaigns to fly back to Washington and cast “yea” votes. Both senators have been solid supporters of the bill. Two years ago, Senator Rubio personally read every line of an earlier version. I hope I’m not giving away a trade secret here, but it’s pretty damn rare for representatives and senators to personally read lengthy, legalistic bills themselves; most delegate that to their staffers. Rubio did so with obvious care and understanding, leaving no doubt that he’s extremely bright. I saw his tracked changes and comment bubbles in the draft, and suspect that the mineral export ban the Senate added to section 104 was (at least in part) his idea. That provision could be quite powerful, akin to previous legislation that banned Iran’s oil sales.

Cruz’s staff was also strongly supportive of the effort following North Korea’s nuclear test, and (working through the snowstorm) made a careful effort to understand the impact of its secondary sanctions. In the interest of bipartisanship, the same can be said of Senator Ed Markey, a liberal Massachusetts Democrat, from whom I expect great things on the human rights issue this year. And every senator — even Senator Paul, who had me concerned to the point of apoplexy at one point — resisted the temptation to inject the bill with parliamentary malware or veto bait.

The Senate’s key leaders on foreign policy, including Senators Bob Corker (R, TN), Ben Cardin (D, MD), and Bob Menendez (D, NJ) all gave strong speeches. Standing watch over it all was up-and-coming freshman and Asia Subcommittee Chair Cory Gardner (R, CO), who led the Senate’s efforts to move the bill forward.

You can see the full list of the Senators who voted here, but it would be easier to give a list of those who didn’t vote — Dan Sullivan (R, AK); Dick Durbin (D, IL); Lindsay Graham (R, SC), who was campaigning for Jeb! in his home state, but who had co-sponsored an earlier version of the bill; and Bernie Sanders (I, VT), who stuck to the campaign trail, but did issue a statement supporting the legislation.

For which, Hillary pounced on him.

“It is unfortunate that yet again, Senator Sanders has shown a lack of interest in vital national security issues, failing to vote on sanctions against the country he said poses the greatest threat to the United States,” Clinton campaign spokesman Jesse Ferguson said after Wednesday’s vote, according to news reports.

Sanders was quoted as saying that he had to be “necessarily absent,” but the increased sanctions were “absolutely essential” to ending North Korea’s nuclear program. [Yonhap]

Myself, I’m not a Bernie guy, because I like my regular supplies of meat and toilet paper, and 23 choices of deodorant obviously still aren’t enough for the people who sit next to me on the Metro. But … let’s just bear in mind that much of what this bill does is force the State Department to do things it could have done itself at any time over the last decade, but didn’t. That includes the period following North Korea’s second nuclear test, the sinking of the Cheonan, the shelling of Yeonpyong Island, the collapse of the Leap Day deal, a spate of assassination attempts against defectors and human rights activists in China and South Korea, and the disappearance of tens of thousands of political prisoners and their families at Camp 22 — all of which happened on Hillary Clinton’s watch as Secretary of State.

So there’s that. 

The South Korean government, which has immense influence in Washington, and which my paranoid side had at times suspected of a certain ambivalence about the bill, ultimately welcomed its passage.

The bill was lauded by the South Korean Ministry of Foreign Affairs Thursday as demonstrating the “need for strong and comprehensive sanctions on North Korea.” [….]

The South Korean Ministry of Foreign Affairs in a statement Thursday lauded the resolution for “reflecting a bipartisan understanding and will on the need for strong and comprehensive sanctions on North Korea.” [Joongang Ilbo]

After the Senate vote, the South Korean Ambassador came to visit Ed Royce (R, CA), the Chairman of the House Foreign Affairs Committee (full disclosure), where both men welcomed the Senate’s action.

With Park Geun-hye’s decision to pull out of Kaesong, Seoul has broken decisively with the Sunshine Policy, its main cause for ambivalence. Now, South Korea’s influence machine turns its weight toward a more effective enforcement of sanctions against North Korea. 

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On North Korea policy, the opinion pages suddenly read like posts from this blog

Since January’s nuclear test, I have noted with satisfaction the signs that Washington’s consensus on North Korea policy has taken a decisive turn toward views I’ve advocated at this site for years. This week, OFK readers have been sending me a great deal of better-placed commentary about North Korea, asking me, “Did you write this?” I swear I didn’t write, for example, this Washington Post editorial, published yesterday:

What is needed is a return to the only non-military strategy that brought results: sanctions that strike at the regime’s inner circle. Mr. Kim and his cronies are still managing to import luxury goods from China, in spite of a U.N. ban; they still use Chinese banks to do business with the rest of the world. Those links could be curtailed if North Korea, like Iran before it, were designated as a money launderer and U.S. sanctions were slapped on Chinese banks and other businesses that supply weapons and luxury goods.

Pending U.S. sanctions legislation, already passed by the House and scheduled for a Senate floor vote this week, would mandate these steps, while providing the administration with some flexibility. It should pass, and Mr. Obama should sign it. [….]

Both China and North Korea must see that they will pay a mounting price for what, to the United States, should be Mr. Kim’s intolerable steps toward a nuclear arsenal. “Strategic patience” is no longer a viable option. [Washington Post Editorial]

Or this, from a Wall Street Journal columnist:

Groundhog Day was last week, but North Korea’s ballistic-missile test on Sunday may have you feeling you’ve seen this one before. First the weeks of rumors, then the launch, next the emergency session at the United Nations—and then nothing. The pattern will continue until the U.S. stops running its North Korea policy through Beijing. [….]

Though President Obama calls North Korea “the most sanctioned” nation on Earth, he’s wrong. The U.S. lists Iran and Burma as countries of primary money-laundering concern, a designation it doesn’t apply to Pyongyang despite its counterfeit-currency racket. The U.S. has applied harsher human-rights sanctions against Congo and Zimbabwe, never mind the tens of thousands of political prisoners in Pyongyang’s labor camps.

Treasury Department officials have argued for stronger measures, on the model of the highly effective sanctions the U.S. imposed on Macau’s Banco Delta Asia in 2005 that forced banks to suspend business with Pyongyang. But National Security Adviser Susan Rice has opposed the move for fear of upsetting U.S. relations with Beijing.

The House last month overwhelmingly passed the North Korea Sanctions Enforcement Act, mandating action against entities and individuals tied to illicit weapons programs, luxury-goods imports, counterfeiting and drug trafficking. The White House has hinted that it doesn’t oppose the bill, and the President might sign it if it passes the Senate. But the bill’s effectiveness depends on the Administration’s willingness to squeeze North Korean financing by punishing the Chinese banks through which the Kim regime moves its money. [….]

China isn’t likely to squeeze its client unless it sees the U.S. and its allies doing more to isolate the North on their own. Such a policy would seek to end the regime through sweeping financial sanctions that prevent the Kim family from financing the tools of their tyranny, from weapons to whiskeys, and that impose stiff penalties on their enablers abroad. The strategy of begging China has been a failure. [WSJ, Review & Outlook]

Or this, from the Chairman of the Senate Foreign Relations Committee:

This week the U.S. Senate will join the U.S. House of Representatives in passing legislation that sends a strong bipartisan message: North Korea is a serious threat to U.S. national security and our current approach is a failure.

The North Korea Sanctions and Policy Enhancement Act of 2016, which we expect to become law in the coming weeks, will provide the executive branch with a more robust set of policy tools to confront the threat posed by the rogue regime in Pyongyang. And while there is no “silver bullet” solution to the North Korea policy challenge, the United States must undertake a more proactive approach toward North Korea to address its nuclear and ballistic missile programs and human rights abuses against its own people.

The Senate bill represents the best of our bipartisan foreign policy tradition and builds upon legislation passed in the House of Representatives to expand and tighten enforcement of sanctions for North Korea’s destructive activities.

he bill requires the Obama administration to investigate sanctionable conduct. This means working to expose those involved in supporting North Korea’s human rights abuses, proliferation of weapons of mass destruction, and activities undermining cybersecurity — marking the first statutory framework for sanctions in response to the growing North Korean cyberthreat.

Importantly, it also targets for investigation those who back these activities through other means, such as providing the regime with industrial inputs such as coal, or luxury goods that serve as a valuable source of hard currency to fund North Korea’s nefarious activities. The President then is mandated to sanction any person found to have materially contributed to, engaged in or helped to facilitate these actions. [….]

Some North Korea watchers assert that Beijing doesn’t have the leverage that many U.S. officials contend it has over Pyongyang’s behavior. But that’s simply not true. [Sen. Bob Corker, CNN.com]

I welcome all of this unreservedly, and if this means I’ve directly or indirectly influenced these views, then that’s all I’ve ever wanted from this jihad of mine. It is an unfamiliar feeling to an insurgent to be overtaken by the mainstream. Still, it would be an error for any American to take credit for it. This tipping point is really the work of the most effective lobbyist in this town, a morbidly obese high school dropout and NBA fan who has never been to Washington and barely speaks English.

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Senate Foreign Relations Committee agrees on, passes North Korea sanctions bill

Last week’s big news was that the Senate Foreign Relations Committee, the last real legislative obstacle to a North Korea sanctions law, reached a compromise and unanimously approved a tough new version. Both Republicans and Democrats gave supportive statements before and after the vote:

“We have a bill that, in many respects, is stronger than the House bill,” said the Senate committee’s top Democrat, Ben Cardin of Maryland. “What we do is put pressure on not just the government, but on those who want to do business with North Korea — if they do in these areas, there will be sanctions imposed.”

The House bill requires the president to investigate and sanction persons and entities contributing to North Korean weapons of mass destruction, money laundering, censorship or human rights abuses.

The Senate bill adds provisions targeting North Korea’s sale of minerals and precious metals, a major source of hard currency. Corker said the legislation also places a greater emphasis on Pyongyang’s human rights record.

“I think we’ve enhanced it [the House bill] significantly,” Corker said. “It takes into account other issues that we have with North Korea, not just the nuclear testing, but also some human rights issues.”

Cardin stressed that the sanctions legislation would not affect international aid to Pyongyang.

The bill “is not aimed at all at humanitarian needs,” he said. “The North Korean people are in desperate need. We regret that the country doesn’t spend its resources on its people.” [VOA]

You can read Corker and Cardin’s official joint statement on the legislation here.

I’ll agree that the Senate bill is not only stronger than the House version but also stronger than what I’d expected. Under the compromise bill, the sanctions in sections 104(a) (for conduct such as proliferation and human rights abuses) and 104(c) (blocking all North Korean government assets) are now mandatory. Under the Menendez bill, 104(a) was discretionary and 104(c) didn’t exist as such. Under the Gardner bill, 104(a) was mandatory and 104(c) was discretionary. 

Marcus Noland should be pleased that section 302 of the new bill requires the administration to implement a diplomatic strategy to combat North Korea’s use of overseas slave labor, and that section 304 may well trigger mandatory sanctions against its use.

The Foreign Relations Committee has posted its amendment-in-the-nature-of-a-substitute on its website, although you have to put it together with some helpful amendments, proposed by Democratic Senator Ed Markey of Massachusetts, to get the full text. According to Senator Cory Gardner, the Colorado Republican who led the charge for this legislation, the full Senate will probably vote on it in the next two weeks.

Because the House and Senate bills are not identical, the House will have to act next to put the legislation on the President’s desk. It will probably vote on the Senate bill, rather than taking it before a Conference Committee. I’ve been told by a source I trust that President Obama has signaled that he won’t veto the bill. 

Here ends the good news. I promise you that all the other news is dreary, but I’ll save that for tomorrow’s post.

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Senate sanctions bills pick up new co-sponsors

It may be of no more than symbolic value at this point, with intense behind-the-scenes discussions ongoing over a bipartisan compromise bill, but symbols do matter, and a few more senators have lined up behind different versions of the North Korea Sanctions Enforcement Act in the Senate.

One of the Senate bills, S. 2144, has picked up Republicans David Perdue and Johnny Isakson of Georgia, Tom Cotton of Arkansas, Steve Daines of Montana, Mark Kirk of Illinois, Kelly Ayotte of New Hampshire, John Cornyn of Texas, Orrin Hatch of Utah, Roy Blunt of Missouri, Shelly Moore Capito of West Virginia, Pat Roberts of Kansas, and Mike Rounds of my home state, South Dakota. Kirk’s co-sponsorship is interesting, in that he has a background in naval intelligence and is a recovering North Korea engager.

Senators Cory Gardner of Colorado, Marco Rubio of Florida, and James Risch of Idaho were original co-sponsors of S. 2144, which makes a total of 15.

Meanwhile, the Menendez-Graham bill, S. 1747, has picked up two more Democratic co-sponsors, Dick Durbin of Illinois and Michael Bennet of Colorado.

Absent some unanticipated delay, the Foreign Relations Committee is expected to mark up a bill on Thursday. Interestingly, the schedule shows that they’ll be considering a 2015 version of the House bill, “with an amendment.”

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In The Weekly Standard: Ed Royce’s Bipartisan Coup Against a Bipartisan Failure

If President Obama ends up signing a North Korea sanctions bill in the next 30 days — and at this point, I don’t know what interest he has in vetoing one — it will effect the biggest change in our North Korea policy since the 1994 Agreed Framework. That, in turn, will have been due to years of principled dissent and patient, bi-partisan coalition building by Ed Royce, the California Republican who chairs the House Foreign Affairs Committee.

A certain, too-prevalent type of Republican who sees all Democrats as enemies could learn a few things about winning policy arguments from a man who defied his own party for conservative principle, and yet had the strategic sense to see Democrats, including some very liberal ones, as allies to be won over.

Read the rest of the story here.

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WaPo: Senate Foreign Relations hopes to mark up N. Korea sanctions bill next Thursday.

Via the Washington Post this morning, we’re still pretty much where I said we were last week, but at least we have an expected date for a committee markup. The Senate is still trying to work out a bipartisan compromise between Senator Bob Menendez’s (D, NJ) weaker S. 1747 and Cory Gardner’s (R, CO) tougher S. 2144, rather than voting on the House bill that passed last week “with huge bipartisan support.”

While the House and Senate bills contain generally the same sanctions options, there are differences between them — key among them that a compromise Senate measure is likely to leave more decision-making authority in the president’s hands and carve out more humanitarian assistance protections than the House bill.

Senate Foreign Relations Committee Ranking Member Ben Cardin (D-Md.) said in an interview while there was “nothing fundamentally wrong with the House bill,” he would like to tackle human rights in North Korea more comprehensively.

The House bill would only serve as a backup if the Senate can’t work out one outstanding issue between the its two measures, Chairman Bob Corker (R-Tenn.) said Wednesday.

“I’m 99 percent sure it will be a Senate bill,” Corker said, adding his committee will likely consider the measures during a Jan. 28 markup. [WaPo, Karoun Demirjian]

There is more pressure for the Senate to get its act together this time. Demirjian notes that in contrast with the House, which also passed a similar antecedent to its recent sanctions bill in the 113th Congress by a voice vote, the Senate “dropped the ball” on moving its own bill in the last Congress. It notes that “working through a separate bill may slow down the pace with which Congress responds to the latest nuclear provocation from Pyongyang.”

But Senate leaders stressed they have every intention of moving North Korea legislation quickly this month.

If the negotiations process falls apart, Corker said, “we still have the House-based text we could take up and certainly pass with a strong bipartisan majority.” [WaPo]

From what little we know here, it sounds like the negotiations are headed in the right direction.

Menendez said last week the compromise bill should feature “a mix of mandatory and discretionary sanctions” and added on Wednesday that he expected the final list would be a combination of the two.

If I’m guessing this right, the Senate is thinking of retaining the mandatory sanctions in Section 104(a) and making the sanctions in Section 104(c) discretionary, and perhaps even conforming that subsection to the text of Executive Order 13687. That would be a reasonable compromise that would keep the bill tough while preserving a structure that would be easy to amend and toughen in response to future provocations.

The bills also differ in what kinds of cybersecurity threats would be sanctioned, and emphasis put on North Korea’s minerals industry — a unique feature of Gardner’s bill.

The measures also approach human rights and humanitarian activities differently, with Menendez’s bill going the furthest to ensure that humanitarian aid and assistance receives special protection from enhanced sanctions, which is a key concern for some Senate Democrats. [WaPo]

Judging by some of the off-line discussions I’m having, the Senate really is working actively on this, with some of the most conservative and some of the most liberal senators taking leading roles. One issue I can confirm Senate staff are giving careful consideration is the shape of the humanitarian waivers and exemptions, such as those you can see in Section 207 of the House bill. That’s an important issue, deserving all the careful draftsmanship the world’s greatest deliberative body can muster.

From my vantage, this continues to be a case of a hawkish and mostly united Congress — yes, I really said “united Congress” — pitted against an administration that can’t decide what to do, and has decided to do nothing. For example, while Senator Gardner is criticizing the President for not mentioning North Korea in his SOTU speech, Gardner’s own toughness finds a serious competitor in this letter from Senator Ed Markey, a liberal Massachusetts Democrat, to the Secretary of State.

Here’s hoping that the final shape of the Senate’s bill is worth the wait.

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