North Korea has offered to stop testing nuclear weapons — something that several U.N. Security Council resolutions already prohibit — if President Obama cancels annual military exercises (full KNCA article below the fold.) Which sounds something like a bank robber promising to stop robbing you if you disable your alarm system and leave the safe unlocked.
Which is almost exactly what the Korean Defense Ministry thought. To his credit, President Obama saw this for what it was:
“The DPRK (North Korea) statement that inappropriately links routine U.S.-ROK (South Korea) exercises to the possibility of a nuclear test by North Korea is an implicit threat,” a State Department spokesperson said on condition of anonymity.
“Our annual joint military exercises with the Republic of Korea are transparent, defense-oriented and have been carried out regularly and openly for roughly 40 years,” the spokesperson said.
North Korea should “immediately cease all threats, reduce tensions and take the steps toward denuclearization needed to resume credible negotiations,” the spokesperson said. [Yonhap]
Sounds kind of like they want to test a nuke, huh?
Evidently, I refreshed your memory of the 2007 Al-Kibar reactor raid just in time for this cheery piece of news: Der Spiegel, citing anonymous intelligence sources, reports that Syria “has apparently built a new nuclear facility at a secret location” in the mountains near the Lebanese border. The conclusion is based, in part, on signals intelligence:
[T]he clearest proof that it is a nuclear facility comes from radio traffic recently intercepted by a network of spies. A voice identified as belonging to a high-ranking Hezbollah functionary can be heard referring to the “atomic factory” and mentions Qusayr. The Hezbollah man is clearly familiar with the site. And he frequently provides telephone updates to a particularly important man: Ibrahim Othman, the head of the Syrian Atomic Energy Commission.
It’s a real Axis of Evil reunion, starring Hezbollah, the Iranian Revolutionary Guards, and some special guests from Yongbyon:
Experts are also convinced that North Korea is involved in Zamzam as well. Already during the construction of the Kibar facility, Ibrahim Othman worked closely together with Chou Ji Bu, an engineer who built the nuclear reactor Yongbyon in North Korea.
Chou was long thought to have disappeared. Some thought that he had fallen victim to a purge back home. Now, though, Western intelligence experts believe that he went underground in Damascus. According to the theory, Othman never lost contact with his shady acquaintance. And experts believe that the new nuclear facility could never have been built without North Korean know-how. The workmanship exhibited by the fuel rods likewise hints at North Korean involvement.
The report is interesting and worth watching more closely, although Der Spiegel‘s report isn’t exactly an airtight case.
Jeffrey Lewis, whose observations about nuclear and weapons technology are as consistently interesting and informative as his policy recommendations are conformist and outdated, has done more investigation on Google Earth. Lewis tweets that the facility dates back to between 2008 and 2009, and is more likely to be an enrichment facility than a reactor, due to its distance from a supply of cooling water.
The “good” news is that, thanks to Hezbollah, nearby rebels haven’t quite managed to overrun the site and seize its estimated 8,000 fuel rods.
In other words, our choices are (a) North Korea sharing nukes Syria, Iran, and Hezbollah; (b) Al Qaeda; and (c) ISIS? Gee, thanks, President Obama!
The only thing we do have going for us is that we’re already bombing targets all over Syria. Although I’d suspect that this site would be far trickier from an air defense perspective, it might not push the diplomatic envelope so far to bomb one more site in Syria.
The deployment of ballistic missile defense systems around North Korea by the United States and its allies could be an effective way to change China’s strategic thinking about Pyongyang, a U.S. congressional report said.
The Congressional Research Service made the point in a recent report, “North Korea: U.S. Relations, Nuclear Diplomacy, and Internal Situation,” saying Beijing would find it not in its national interest if provocative actions by the North lead to increased military deployments in the region. [Yonhap]
Here’s the full report, which touches on a series of topics of interest to OFK readers, including refugees, human rights, proliferation, and North Korea’s support for terrorists. The money quote is more subtle than Yonhap’s characterization:
As part of the efforts by the United States and its allies to change China’s strategic thinking about North Korea, the BMD deployments may have an impact. Chinese media made the Patriot deployments a major part of their coverage of the April 2012 launch. A subtext to those reports was that North Korea’s actions are feeding military developments in Asia that are not in China’s interests. Many observers, particularly in the United States and Japan, argue that continued North Korean ballistic missile development increases the need to bolster regional BMD capabilities and cooperation.
A nuked-up South Korea would be a far better deterrent to Pyongyang than the so-called “U.S. nuclear umbrella.” I can see why an impulsive young leader in Pyongyang might calculate that the Pentagon wouldn’t pull the trigger if it called our bluff. I wouldn’t.
China must be concerned about the possibility that South Korea, Japan, and Taiwan would be insecure enough about U.S. power to acquire their own nuclear weapons. They have every reason to be insecure. If the choice is between nuking up and getting rolled by China, we’ll soon see how much they value their freedom and their independence.
When you’re done with that, Bechtol has written a paper arguing that North Korea’s proliferation activity (contrary to some views) is increasing, and discusses ways to disrupt it. One of the many tragic consequences of the Syrian Civil War is that it has increased an old customer’s demand for North Korea’s wares.
Before the committee voted Tuesday, North Korea warned that it might retaliate with further nuclear tests. Trying to punish it over human rights “is compelling us not to refrain any further from conducting nuclear tests,” said Choe Myong Nam, a North Korean foreign-ministry adviser for U.N. and human rights issues, according to the Associated Press. [Washington Post, Anna Fifield]
My post on North Korea’s alarming progression toward a nuclear missile capability inspires a knowledgeable reader and friend to send me an extended comment. Because he has asked me to withhold his name and where he works, we’ll call him “Basho, an observer of Things, and international affairs raconteur.” Without saying more, I’m confident that Basho has a basis to know what he’s talking about. I print his comments in their entirety, unedited except that I embedded his hyperlinks.
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There are tested and fielded road mobile missiles in the DPRK inventory. The biggest threat to us is the question of whether they have a tested, capable, and fielded, road mobile ICBM. The surmised vehicle that may have an intercontinental capability (defined as a missile capable of 5,500 Km or more range) is the KN-08. (link)
Western ‘experts’ have said until relatively recently the ICBM threat from nK is negligible because the north Koreans are not capable of making a small enough nuclear warhead to fit on an airframe like the KN-08. In Spring ‘14 the north Koreans put the launch vehicles on display with mock up missiles. (The transporter vehicles were sold by PRC to north Korea as ‘lumber trucks’).
The United States Forces Korea (USFK) commander’s comments a few days ago indicated that the north Koreans are able to miniaturize a nuclear warhead, which would be essential to fitting a nuke to one of their missiles. Just a year or two ago, our experts and analysts were testifying to Congress that the north Koreans couldn’t field anything like that for years. Oops.
The South Korean MOD’s comments supporting this supposition may not be that credible – I get the sense they’re just jumping on Gen. Scapparotti’s comments to garner more support (i.e. funding) for missile defense.
The public comments also come at a curious time considering the tensions related to the potential fielding of THAAD to ROK. Airing these conversations publically has more to do with influencing that discussion than any real technological satori.
Other road-mobiles that *could* be nuclear-capable:
– Musudan IRBM, possibly just shy of being considered an ICBM (link)
- Nodong MRBM (this is potentially the missile that will be tested as an SLBM)
Public analysts frequently reduce their reporting to the trees rather than the forest,whether ‘they’ might have something or not, reporters seem to totally gloss over any analysis related to what the real risks are if the north Koreans do have something. That’s a bit frustrating. While we shouldn’t overreact, prudent man theory indicates we should acknowledge the risks of the worst case.
The newest threat is whether the north Koreans will have a nuclear-capable submarine fleet capable of launching missiles. Granted, their submarines are largely Cold War diesel-electrics but they present a threat to the region and, possibly, the United States.
Diplomacy. As for the diplomatic strains between the three-party group (Japan,ROK, US), I would offer that Japan and, to a lesser extent, South Korea are both pursuing diplomatic options with China and nK because of the lack of leadership by our executive and diplomatic efforts. The DOD is heavily engaged with South Korea on the potential employment of THAAD accompanied by the implications of missile defense for Seoul, and the handover of military authority from the U.S. Forces Korea to the South Korean military – two huge topics.
As for Japan, I don’t think our mil-to-mil relationships have ever been stronger. The Japanese have agreed to host a second missile defense radar in their country that will not just protect Japan, but also bolster missile defense for the US and our allies in the Pacific region.The governments of Japan and the United States just signed agreements on space surveillance tracking that will advance scientific research. Also, Japan has committed to buying several more Aegis missile defense destroyers over the next few years.
Because of their recognition of the regional threats, and interest in respecting common global interests, I’m not terribly worried about them holding bilateral talks with north Korea on other issues (e.g. kidnap victims, etc.). They’re only doing bilateral talks as a result of the vacuum of US leadership.
So last week, when I was busy writing about the U.N. and human rights, the Commanding General of U.S. Forces Korea went to a press conference at the Pentagon and said, “I believe [the North Koreans] have the capability to miniaturize a device at this point and they have the technology to potentially deliver what they say they have.”
The general added that even if we haven’t seen a test, we’re at the point where we have to operate under the working assumption that Pyongyang is nuked up—specifically, that it has the capacity to miniaturize a warhead enough to put it on a missile.
The Pentagon’s Press Secretary later clarified that miniaturization is “not the same thing as … the capability to mount, test and deliver a nuclear weapon in an ICBM.” Duly noted.
The ROK’s new Defense Minister, Han Min-Koo, also agrees that Pyongyang has made significant advances in miniaturization. Not surprisingly, Deutsche Welle found some experts in Europe who say they aren’t sure. Oh, and the Chinese have joined the South Koreans in expressing their “deep concern.” Also duly noted.
Whether the North also has road-mobile missiles is a matter of furious debate, but if they do, that would be even more worrying. During the Gulf War, U.S. forces had a particularly difficult time finding and tracking Iraq’s SCUDs.
I’ve been hearing this discussed openly by people I respect and trust since at least July—that the U.S., Japanese, and South Korean governments have all shifted to the working assumption that North Korea has an effective nuclear arsenal. That has caused a diplomatic earthquake behind the scenes, sapping our influence in Tokyo and Seoul, and tempting both states to cut separate deals with the North.
Can anyone remember a time when discussion about human rights in North Korea eclipsed a discussion about its nuclear weapons program? That’s just what’s happening today, but it ought to inform our conversation about why North Korea shouldn’t have nuclear weapons to begin with.
South Korea and the United States are drawing up a joint contingency plan to employ Washington’s missile defense (MD) system against growing threats from North Korea’s ballistic missiles, a government source here said Tuesday.
The joint contingency plan would employ not only missiles and surveillance equipment the U.S. Forces Korea and South Korea have been developing under their Korean Air and Missile Defense (KAMD) project, but also key assets of the U.S. MD system, according to the source.
The U.S. air defense includes the X-band radar system, the Terminal High-Altitude Area Defense (THAAD) missile system and the high-altitude, unmanned aerial vehicle, Global Hawk. [Yonhap]
Better late than never. Despite the objections of China, North Korea’s number one supplier of missile technology and a major exporter of chutzpah, the arrangement under discussion would have the U.S. sharing intelligence, technology, and backup, and the South supplying its flat refusal to join in an integrated air defense system with the U.S. and Japan. Seoul also seems to be leaning toward the deployment of THAAD.
”A missile launch tube on a North Korean submarine was observed recently by U.S. intelligence agencies and is raising new concerns about the missile and nuclear threat from the communist regime in Pyongyang, according to two defense officials familiar with reports of the development.” [Free Beacon]
That would complicate the interception of North Korean missiles immensely.
“Since late August 2013, the Agency has observed, through analysis of satellite imagery, steam discharges and the outflow of cooling water at the 5 MW(e) reactor, signatures which are consistent with the reactor’s operation.” [via Reuters]
The United States has wrapped up its survey of candidate sites for its advanced missile defense (MD) system to be deployed in South Korea, with a final decision likely to be made before their annual defense ministers’ meeting in October, sources said Monday.
Washington has made no secret that it is considering deploying a Terminal High-Altitude Area Defense (THAAD) battery, an integral part of its MD system, to South Korea, citing evolving threats from North Korea. [Yonhap]
But take some comfort in this — if you’re not South Korean, that is: South Korea, under pressure from the ChiComs and the neo-Soviets not to deploy THAAD, is saying that the system is only for the protection of U.S. Forces Korea. Tough luck, people of South Korea.
For the last year, the South Korean government has been saying that it considers a North Korean attack a very real risk, and it has also said that if attacked, its retaliation will be swift and severe. Its President, Park Geun-Hye, recently expressed concern about a North Korean “misjudgment,” and touted the U.S.-ROK military alliance as the best deterrent against that. As recently as this week, she has been warning her army of the dangers of “complacency.”
I don’t have access to the intelligence that President Park has, so I have no basis to either affirm or question her premise. Part of this is probably deterrent bluster, but I doubt Park would bluster without some basis. I’ve always thought President Park was a smart and shrewd politician. In South Korea, appeasement is popular enough that its name in the political lexicon predates even the Sunshine Policy — it’s known as the “Northern Wind.” Appeasement is not as popular as it was a decade ago, but it’s popular enough that I doubt that a politician as shrewd as Park would fabricate a threat that wouldn’t serve her political interests. (I’m sure others will disagree; so be it).
“There are also large concerns in the international community about (the North’s) preparations for a fourth nuclear test,” she said during the luncheon at the presidential office. “The gravity of the situation does not allow for the least bit of carelessness in maintaining our defense posture.” [….]
“I have complete faith in the judgment of our military,” Park said. “If there is any provocation, I expect all of you to respond strongly in the initial stages and punish (the North).” [Yonhap]
The simplest electro-magnetic pulse or EMP weapons are, put simply, nuclear weapons detonated at high altitude. A high-altitude nuclear blast would overload and destroy electrical circuits and infrastructure, and create blackouts over wide areas for extended periods of time. Imagine your life without the internet, telephone, electricity, or cars — in short, being part of a 21st Century population trying to sustain itself with Colonial Williamsburg technology — and you get the idea. Without the means to recover from that sort of attack quickly, a modern society can’t survive for long.
The Heritage Foundation has published this background paper on the EMP threat, which itself links to this study commissioned by Congress, which examines the threat in more detail. Although I’ve read some of the predictions about the potential consequences of an EMP strike that sound exaggerated, I do think EMP is a danger we should take seriously with respect to our defenses, and also, our capacity to recover our infrastructure after an EMP attack.
For South Korea, the EMP threat could be particularly dire. The ROK has one of the world’s highest population densities, and its defense is as dependent on technology as the rest of its society. I’m not surprised, then, that the South Korean military is denying that North Korea has EMP weapons … at least for now.
Meanwhile, another writer suggests that our own EMP weapons could help restore our failing military deterrence of North Korea.
One way to threaten preemption even without missiles is to further develop a non-nuclear electromagnetic pulse (EMP) weapon that could neutralize missiles on the launcher. Because North Korea will soon develop road-mobile missiles capable of firing nuclear weapons, the further development of non-nuclear EMP systems capable of taking out, say, a 50-square-kilometer joint fire area, would also shift the cost-benefit calculus against North Korea. [Patrick Cronin, The Diplomat]
The use of non-nuclear EMP doesn’t raise the same concerns about nuclear escalation and clouds of radionuclides drifting over, say, China. On the other hand, South Korea is almost certainly far more dependent on technology, and thus far more vulnerable to EMP warfare, than the North. The area south of the DMZ is heavily populated, whereas the area to the North is thinly populated and technologically backward. Whether a first use of EMP is really a good idea depends on unknowable facts, such as the imminence and scale of the threat we’d be preempting, the capability of the weapons, and the likelihood that North Korea could respond in kind.
For a more scaleable form of deterrence, I’m much more comfortable with this idea, myself.
While North and South Korea agreed some years ago to forego psychological warfare against each other, the North is a flagrant purveyor of vitriol and falsehood. Surely the alliance can better saturate the North with uncomfortable facts—from pictures of Kim Jong-Un’s luxury houses side by side with North Korean gulags, to video lectures by North Korean refugees who have managed to escape the world’s most oppressive regime.
In fact, I don’t see any good arguments against doing these things in response to North Korea’s tests of SCUD, 300-millimeter rockets, or ICBM engines. If one of our goals is to slow the rate of North Korea’s progress toward acquiring an effective nuclear arsenal, wouldn’t it make sense to convince Kim Jong Un that that progress also carries risks, and that time isn’t on his side?
He accused the United States of using its military power to deliberately subvert any dialogue between North and South Korea — which is also a standard North Korean assertion. But in a variant of that theme, he said the American behavior “is reminding us of the historical lasting symptom of a mentally retarded patient.” Asked later to explain the analogy, Mr. Ri said, “The U.S. has been doing it for over six decades on our doorstep.” [N.Y. Times]
I don’t think I’ll ever get over my amazement that North Korea, a flagrant violator of U.N. Security Council resolutions that keeps 100,000 men, women, and children in political prison camps, is a member of the United Nations in good standing.
“Ambassador” Ri also threatened that Pyongyang would continue its nuclear weapons development if the U.S. continues its “threats” against North Korea, and demanded that the Security Council conduct an emergency session to review joint U.S.-South Korean training exercises.
Consider the absurdity of this. It’s the equivalent of Dennis Rodman telling his agent that unless he quits nagging him about going back to rehab, he’ll have no choice but to keep drinking and sue for breach of the peace … in Judge Joe Brown’s court.
Adm. Samuel Locklear, commander of U.S. forces in the Pacific, told reporters Tuesday he believes North Korea has continued to make “steady progress” in both its missile technology and nuclear capability.
So we find ourselves in a place where the sanctions we’ve imposed are woefullyinsufficient to slow or stop North Korea’s nuclear weapons development, or to force it to negotiate away its nukes. Our State Department still says it isn’t interested in talks with a North Korea that rejects the premise of nuclear disarmament, and North Korea insists that it isn’t disarming. Intelligence estimates vary on North Korea’s capacity to miniaturize and deliver a nuclear weapon, but time clearly isn’t on our side. We also know that North Korea will sell any weapon it possesses to any willing customer, including helping listed state sponsors of terrorism with their nuclear and chemical weapons programs.
In his inauguration speech, President Obama promised to reach out his hand to rogue states if they would unclench their fists. In the years since then, the President has given North Korea the closest thing there is to immunity from sanctions for its attacks on South Korea, its missile tests, its nuclear tests, its arrests of harmless tourists and tour guides, and its proliferation and weapons smuggling.
I suppose I shouldn’t overstate my point here, because I’ve never seen that much significance in North Korea’s displays of good will or temperamental moderation for external audiences. In fact, my point is that in the North Korean context, gestures and atmospherics mean next to nothing. By now, it should be clear that those who counseled the President that he could move us closer to the realization of our nation’s interests by avoiding confrontation with Pyongyang, and by building a reserve of good toward it have sent him on a fool’s errand. North Korea is never meaner than when, fairly or unfairly, it perceives us to be soft.
“QUIET” NORTH KOREA has tested another missile to celebrate the anniversary of its survival of its invasion of South Korea. Based on the range, it was probably a SCUD, which makes the test a violation of UNSCR 1695, 1718, 1874, 2087, and 2094, in case you’re keeping track. According to Yonhap:
Saturday’s firing is the 15th rocket launch, and the sixth ballistic missile launch, by the North this year, which the international community condemned as a violation of the United Nations Security Council resolutions.
I think Yonhap meant to say that this is the 15th missile launch; after all, North Korea has probably fired at least 100 artillery rockets.* His Porcine Majesty was present to oversee the festivities in person. Knowing that our current Secretary of State can be a bit hard of hearing, he spoke in our direction:
“He examined a firing plan mapped out in consideration of the present location of the U.S. imperialist aggressor forces’ bases in South Korea and under the simulated conditions of the battle to strike and destroy them before guiding the drill,” the KCNA said in an English dispatch.
North Korea routinely test-fires missiles, artillery and rockets, but the number of weapons tests it has conducted this year is much higher than previous years. Outside analysts say this indicates that North Korea’s young leader, Kim Jong Un, is handling things differently than his late father, Kim Jong Il, who sparingly used longer-range missile and nuclear tests as negotiating cards with the outside world to win concessions.
I suspect John Kerry already regrets his characterization of North Korea as “quiet.”
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* Correction, July 28: An earlier version of this post stated that “North Korea has fired well over 100 of its 300-millimeter rockets.” While crunching the numbers on this, I realized that not all of these rockets were necessarily of the new 300-millimeter type, and that some of the artillery fired in the big barrage of July 14th was old-fashioned tube artillery. I suppose now you’re going to want to see the numbers crunched. The dates are hyperlinked to my sources.
** According to this N.Y. Times report, “North Korea has conducted 13 rocket and missile tests this year, launching a total of 90 projectiles, most of them fired from sites on the country’s east coast. Ten of those missiles were ballistic, including two Rodong missiles that were fired from Sukchon, north of Pyongyang, the North Korean capital, on March 26 and flew 403 miles across the country before landing in waters off the east coast.”
With the world erupting in the greatest cascade of escalating conflicts since 1975 and President Obama’s approval rating on foreign policy at negative 21.2% — 11% lower than his overall (dis)approval rating — John Kerry eked out some time over the weekend to tempt fate with a dubious boast:
I just came back from China, where we are engaged with the Chinese in dealing with North Korea. And you will notice, since the visit last year, North Korea has been quieter. We haven’t done what we want to do yet with respect to the de-nuclearization. But we are working on that and moving forward. [John Kerry, Meet the Press, July 20, 2014]
If you’re in Seoul or certain parts of Washington, that clapping sound isn’t applause; it’s the smack of palms against foreheads. Kerry’s observation rubs a lamp that wiser men do not touch for fear of the genies they would rather not summon. One may as well compliment a politician’s moderate views during primary season, or announce one’s arrival in the cellblock by telling the gang leader that he seems a decent enough fellow. As if on cue, yesterday, North Korea threatened South Korea and the United States with “practical retaliatory actions of justice.”
At best, Kerry’s comment suggests poor coordination with one of our most important allies that still hasn’t been attacked this year. At worst, it suggests dangerously wishful and complacent thinking. It clearly means that Kerry neither knows nor cares much about North Korea. Such revelations cause unease among our allies, which is why the State Department had to “clarify” Kerry’s remarks yesterday:
U.S. Secretary of State John Kerry is clearly concerned about North Korea’s provocative actions and did not mean to downplay the seriousness of the issue when he said Pyongyang is “quieter” than before, a government official said Monday.
“The secretary and we all have been very clear in condemning North Korea’s aggressive actions when they occur. We’ve talked recently about the ballistic missiles and how those were in violation of U.N. Security Council resolutions,” State Department deputy spokeswoman Marie Harf said at a regular press briefing.
“So I think the secretary has been very clear about our concern with North Korea’s activity,” she said in response to a question whether Kerry’s statement is a correct assessment of the situation. “He wasn’t trying to convey something different than we’ve conveyed in the past.” [Yonhap]
Concern, however, is no substitute for a coherence in matters of policy. Under Kerry’s tenure, the Obama Administration has shown a lack of seriousness about enforcing existing U.N. Security Council sanctions, even after North Korea was caught in flagrante delicto. It has imposed targeted financial sanctions on Zimbabwe, Russia, and Belarus — and grudgingly enforced tough financial sanctions against Iran — while its tepid trade sanctions against North Korea are stuck in the 1970s. Treasury has sanctioned and blocked the assets of the top leaders of these nations, but none of the top leaders of North Korea.
Our government has designated Burma and Iran to be primary money laundering concerns, a potentially devastating measure that is the financial industry’s equivalent of a sex offender registration, isolating them from a community where reputation means everything. It has made no such designation with respect to North Korea, the world’s most prolific state sponsor of money laundering, counterfeiting, drug dealing, and illegal proliferation.
But perhaps, Koreans wonder, this isn’t what Kerry meant:
[C]ritics said [Kerry’s] assessment is far from reality.
While characterizing the North as “quieter,” Kerry might have referred to the fact that the provocative nation has not carried out a nuclear test or a long-range rocket launch — the two main types of provocations Pyongyang has used to rattle the world.
Even without such major provocations, however, the North has continued to rattle its saber in recent months, firing a number of rockets, missiles and artillery rounds off its coast with some launches in violation of multiple U.N. Security Council resolutions.
Last week, the council issued a statement condemning the North’s ballistic missile launches. [Yonhap]
One could just as well claim that the House’s introduction last April of tough financial sanctions targeted at Kim Jong Un’s financial jugular may be deterring him from a nuclear test. Or, it could simply be that North Korea’s nuclear tests will conform to their previous interval of three to four years. A test of something louder would at least get the attention of everyone else in Washington who would otherwise forget that North Korea exists. One can hope that this time, Congress might just respond with more credible policy options than John Kerry has to offer.
The Treasury Department has gone full Banco Delta on Cyprus-based, Tanzanian-chartered FBME Bank for money laundering, terrorist financing, and possibly even Syrian WMD proliferation — proliferation that is closely linked to North Korea.
According to Treasury’s press release, FBME promoted itself as a provider of no-questions-asked banking services with loose anti-money laundering controls, although I saw no evidence of this at FBME’s Web site. But according to Treasury’s more detailed Notice of Finding, FBME was laundering money for Hezbollah, illegal online gamblers, phishing hucksters, drug lords, African kleptocrats, and various swindlers who ripped off victims in California, Ohio, and Michigan.
Treasury invoked Section 311 of the USA PATRIOT Act against FBME, applying the dreaded Fifth Special Measure, which closes the target’s correspondent accounts and effectively cuts it off from the global financial system. You can read Treasury’s Notice of Proposed Rule-Making here. Or, for those of you who aren’t banking lawyers, I’ll simplify:
Well, almost. A bank can survive that sort of thing and continue to do business, but only on a small, local scale. Banco Delta Asia itself continues to do business for a local customers in Chinese Yuan and Macanese Petacas. In the case of FBME, however, its business model depends on international transactions. It isn’t offering commercial banking services in Cyprus, and it only has four branches in Tanzania.
So far, Treasury has invoked Section 311 against four jurisdictions — the Ukraine and Nauru (since rescinded), Burma, and Iran. It has also listed 13 financial institutions, including Banco Delta Asia, which remains listed to this day.
North Korea, the only existing state known to sponsor currency counterfeiting and drug trafficking, and to encourage illicit activity by its diplomats abroad, has never been listed. Discuss among yourselves.
Treasury’s case against FBME makes no direct reference to North Korea, but according to the Notice of Finding, one of FBME’s customers was a front for a sanctioned Syrian entity, the Scientific Studies and Research Center (SSRC), and used FBME to process transactions through the U.S. financial system. (This is the part that people never get — the bad guys love them some dollars. They just don’t think they’ll get caught, probably because they usually aren’t.)
Treasury did not name the front company.
According to the Nuclear Threat institute, SSRC “collaborates heavily with Iranian and North Korean entities” on missile technology. In February 2013, the Israeli Air Force bombed a convoy loaded with anti-aircraft missiles at SSRC’s complex north of Damascus, damaging what The New York Timesdescribed as “the country’s main research center for work on biological and chemical weapons.” Further on, the Times article says, “Intelligence officials also believe that the center has links to North Korea, a source of much of Syria’s missile technology.”
Oh, and those anti-aircraft missiles were SA-17s, the same kind suspected of shooting down that Malaysian airliner today. [Update: Subsequent press reports have said that the missile used to shoot down the airliner was an SA-11.]
The SSRC is also working on a project with North Korea to help improve its Scud D missile capabilities. North Korean officials at the Tangun corporation have already begun researching and producing components for Scud D missiles which would make it difficult for enemy targets to calculate the missiles’ flight trajectory upon atmospheric entry, Jane’s reported, thus preventing or delaying interception by anti-missile systems, including those in Israel’s possession.
Korea Tangun Trading Corporation appears on the SDN List. For more about the links between SSRC and North Korea, NK News has done some superb investigativereporting on this topic.
According to the Notice of Finding, the SSRC front company shared the same address in Tortola, British Virgin Islands with 111 other shell companies that are also subject to international sanctions. There are only 74 targets on the SDN list with Tortola addresses. Most are fronts for Cuba; a few are sanctioned for links to Hezbollah, Iran, or Zimbabwe. One, DCB Finance, is North Korean, and is a front for Daedong Credit Bank. DCB Finance and Daedong Credit Bank were sanctioned last June for proliferation-related activities.
By itself, the coincidence of address adds little to Treasury’s case, which presumably relies on financial evidence of the SSRC front company’s transactions. It does suggest that in financial terms, you will never find a more wretched hive of scum and villainy than Road Town, Tortola.
FBME had did not immediately respond to a Wall Street Journal reporter who contacted it for comment. Perhaps when he called, the reporter heard a Board of Directors cry out in terror before it was suddenly silenced.
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[Update: Greetings to my visitors arriving from FBME Bank and FBME Card Services on the lovely island of Cyprus. If you want to get your side of the story out there, do feel free to send an email or drop a comment. I have to say this for FBME — after a lot of searching, I never did find the evidence that it marketed its lax AML compliance, although the pre-paid card services it offered did not have a particularly good compliance reputation.]