Report: North Korea is selling rockets to Hamas

“Western security sources” have told The Telegraph that Hamas has struck a deal with North Korea to purchase communications equipment, and to replenish its stock of rockets to fire at civilian targets in Israel.

Security officials say the deal between Hamas and North Korea is worth hundreds of thousands of dollars and is being handled by a Lebanese-based trading company with close ties to the militant Palestinian organisation based in east Beirut.

Hamas officials are believed to have already made an initial cash down payment to secure the deal, and are now hoping that North Korea will soon begin shipping extra supplies of weapons to Gaza.

If “Western security sources” know this much, then they must also know the name of the bank that processed the transaction. If the bank did so knowingly, and if the United States has personal and subject matter jurisdiction over its officers, they may have violated Executive Order 13551. Even if the bank simply overlooked its “know-your-customer” due diligence, it could get Alderaaned.

“Hamas is looking for ways to replenish its stocks of missiles because of the large numbers it has fired at Israel in recent weeks,” explained a security official. “North Korea is an obvious place to seek supplies because Pyongyang already has close ties with a number of militant Islamist groups in the Middle East.”

Using intermediaries based in Lebanon, Hamas officials are said to be intensifying their efforts to sign a new agreement with Pyongyang to provide hundreds of missiles together with communications equipment that will improve the ability of Hamas fighters to coordinate operations against Israeli forces.

North Korea has long been suspected of helping Hezbollah dig a network of tunnels throughout its territory in southern Lebanon (Page 22). Apparently, it has done the same for Hamas.

Israeli military commanders supervising operations against Gaza believe North Korean experts have given Hamas advice on building the extensive network of tunnels in Gaza that has enabled fighters to move weapons without detection by Israeli drones, which maintain a constant monitoring operation over Gaza.

The North Koreans have one of the world’s most sophisticated network of tunnels running beneath the demilitarised zone with South Korea, and Israeli commanders believe Hamas has used this expertise to improve their own tunnel network.

The Telegraph report also bolsters suspicions, raised in this recent U.N. Panel of Experts report, that Hamas’s 333-millimeter rockets might have North Korean fuzes.

More on North Korea’s support for terrorism at this post, where I noted earlier this week that federal District Court Judge Royce Lamberth had found North Korea liable for supporting Hezbollah rocket attacks against Israel.

All in all, it’s been a rough week for the State Department’s official position that North Korea “not known to have sponsored any terrorist acts since the bombing of a Korean Airlines flight in 1987.”

President Bush removed North Korea from the list of state sponsors of terrorism on October 11, 2008, to reward it for promising to completely, verifiably, and irreversibly dismantle its nuclear weapons programs.

During the Obama Administration, North Korea has carried out two nuclear tests, multiple missile tests, two attacks on South Korea, and a spate of attempted and effected assassinations against critics of its regime, yet President Obama has seen no cause to reverse President Bush’s decision.

Discuss among yourselves.

 

Update: Benjamin Young has more on North Korea’s arms sales to Palestinian terrorists, here.

I’ll be doing a Reddit AMA Sunday night, 7-9 p.m. Eastern time

Here’s the url; meanwhile, I’m reading all about what an AMA is and how not to make mine like Woody Harrelson’s.

Update: Try this link if the other one doesn’t work.

H.R. 1771 scheduled for a House floor vote on Monday

It’s on the calendar. And while I doubt there will be serious opposition in the House, we’ll need Kim Jong Un’s help to pass the Senate this year. But if not this year, next. Eventually, he’ll do something stupid, and when he does, we’ll be ready.

By itself, passage in the House would be a major symbolic victory. No one will ever be able to say there’s no alternative to standing by and watching a nation be slaughtered, strangled, and starved to death.

You hear a lot about how polarized this Congress is politically, but the Foreign Affairs Committee is a haven from that. The (relative) partisan and ideological balance in this bill’s support reflects that even in the Congress, there’s still a place where the two parties can work together. Royce himself has called our North Korea policy “a bipartisan failure.” H.R. 1771 represents a bipartisan recognition that we need a better strategy.

I can’t overstate my appreciation for so much hard work by Korean-American and other groups that mobilized to pass this bill: the Federation of Korean Associations, the North Korean Freedom Coalition, the Korean Church Coalition (which ran an outstanding event to support this bill two weeks ago), and of course, the Committee for Human Rights in North Korea.

[The Korean Church Coalition, 2014 Leadership Conference, Washington]

Finally, I can’t overstate my appreciation to Chairman Royce for delivering, and to the Foreign Affairs Committee’s talented, overworked, underpaid, and often unrecognized staff members — of both parties, and in the Asia Subcommittee — who did the hard work that made this bill possible.

Open Sources, July 25, 2014

~   1   ~

NK NEWS has an extensive report about H.R. 1771, the North Korea Sanctions Enforcement Act. Your correspondent is interviewed at length, as is Christine Hong, to provide an opposing view. I have to say, I’m rather pleased with that choice myself, because it gives me an opening to present a short list of the neocons who’ve co-sponsored H.R. 1771: Elliot Engel, Loretta Sanchez, Karen Bass, Linda Sanchez, Chaka Fattah, Gerry Connolly, Jim McDermott, Jim Moran, Tulsi Gabbard, Carol Shea-Porter, Marcy Kaptur, Colleen Hanabusa, Alcee Hastings, and Joseph P. Kennedy III. Seriously — does this woman ever do any research before opining?

The more legitimate criticism is that Congress will simply fail to move it, but then, there are rumors about town that the next Congress could be a more favorable environment for it, particularly as the President’s credibility on foreign policy continues to weaken among members of both parties..

~   2   ~

DEAR YONHAP REPORTERS: Please stop calling North Korea “an impoverished nation.” North Korea is undoubtedly a nation with many impoverished people, but the government of an impoverished nation wouldn’t be able afford an underwater hotel, a new ski resort, a new water park, a $1.3 billion-a-year ballistic missile program, nuclear weapons, and other things that cost far more than the cost of satisfying all of those international aid appeals.

~   3   ~

THE ASAN INSTITUTE HAS PUBLISHED a must-read comparison of human rights violations and sanctions against Syria and North Korea:

This paper compares the human rights violations and crimes against humanity in North Korea and Syria as described in the COI reports. It finds that the consistency, purpose, and scope of human rights violations in North Korea are worse than those during the early stages of the Syrian uprising before the situation deteriorated into a civil war. However, unlike the case of Syria, not a single US Presidential Executive Order, EU Council Regulation, or UN Security Council Resolution has dealt with human rights violations in North Korea. [Asan Institute]

And of course, both of these crimes dwarf Gaza, yet get a fraction of the attention … for some reason. Asan’s analysis is extensive, methodical, carefully documented, and even presented with graphs and charts. Read the whole thing, and don’t read me to conclude that sanctions against Syria are unwarranted – they’re warranted – read it to conclude that the absence of human rights sanctions against North Korea is inconsistent and indefensible.

~   4   ~

AT FOREIGN POLICY, an examination of North Korean-Iranian WMD cooperation:

One particular area of concern for the global powers negotiating with Iran is that North Korean technicians will provide Iran with advanced centrifuge technology. Pyongyang has apparently mastered production of the P-2 centrifuge. These are much more efficient than the P-1 centrifuges that Iran currently uses, and they are more proven than the IR-2m that Iran is trying to develop, apparently due to technical difficulties with making the P-2 type and shortages of key raw materials.

If North Korea was willing to build Syria a nuclear reactor, why wouldn’t it share centrifuge designs with Iran? Note that at least someone in the current administration shares the suspicion that these regimes are cooperating in their nuclear weapons development.

~   5   ~

A FEW OF YOU E-MAILED me this “exclusive” AP report by Eric Talmadge on agriculture in North Korea, and while I don’t see anything particularly novel or exclusive about the information it reports, I do credit Talmadge with skeptical and balanced reporting, questioning what he’s told, and introducing extrinsic facts to give his readers a clearer idea of the truth of the story. That’s probably the best we could ask for, with one important exception — readers should not be left to guess whether Talmadge drove himself to Changpyong-ri, or whether he was escorted there by government minders.

~   6   ~

SO NOW THAT 30% OF MY TRAFFIC is coming from Europe, does that mean I have to stop posting things like this? (h/t)

I’ve never had a visit from Tajikistan or Kyrgyzstan. Does that mean I can start making fun of those places instead? Do you suppose people in Tajiks and Kyrgyz are good sports?

No, I suppose not.

~   7   ~

THE FAA HAS BANNED U.S. commercial flights over North Korea, although based on this regulation, it’s not clear to me why that alters the status quo. It may be that FAA issued an advisory, reminding operators of the existing rule.

Federal judge finds N. Korea liable for terror sponsorship

Judge Royce Lamberth of the U.S. District Court for the District of Columbia has found North Korea liable in the case of Kaplan v. Central Bank of Iran for supporting Hezbollah rocket attacks that injured Israeli civilians like Michael Fuchs. According to the Complaint:

34. On July 13, 2006, at approximately 14:30, plaintiff Michael Fuchs was driving his car in Safed when a rocket filed by Hezbollah at Safed struck nearby. Massive amounts of shrapnel penetrated Fuchs’ car and caused him severe injuries. Fuchs lost large quantities of blood, lost consciousness and was rushed to the intensive care unit of Rebecca Ziv Hospital. Fuchs’ throat was slashed as a result of the explosion and his right hand remains completely paralyzed. Fuchs has been permanently disabled. He is unable to work and relies on intensive and expensive medical treatments on an on-going basis. 

The court’s decision finds North Korea responsible for supporting Hezbollah’s attacks:

The Court finds by clear and convincing evidence that Hezbollah carried out the rocket attacks that caused plaintiffs’ injuries and that North Korea provided material support. Prior to July 12, 2006, North Korea provided Hezbollah with a wide variety of material support and resources, within the meaning of 28 U.S.C. § 1605A. This material support included professional military and intelligence training and assistance in building a massive network of underground military installations, tunnels, bunkers, depots and storage facilities in southern Lebanon. Moreover, North Korea worked in concert with Iran and the Syria to provide rocket and missile components to Hezbollah. North Korea sent these rocket and missile components to Iran where they were assembled and shipped to Hezbollah in Lebanon via Syria. These rocket and missile components were intended by North Korea and Hezbollah to be used and were in fact used by Hezbollah to carry out rocket and missile attacks against Israeli civilian targets. Between July 12, 2006 and August 14, 2006, Hezbollah fired thousands of rockets and missiles at civilians in northern Israel. As a result of North Korea’s provision of material support and resources, Hezbollah was able to implement and further goals shared by Hezbollah and North Korea. [Memorandum Opinion, July 23, 2014]

More on this story at The Miami Herald, and Yonhap, which makes the silly observation that, “Even if damages are awarded, however, there is no chance that North Korea will agree to pay.” Hey, I’m no lawyer — oh, wait, I am a lawyer; I’ve been handling criminal or civil litigation in the federal courts for almost 20 years — but isn’t “judgment” that thing where someone gets to take your money away from you even if you don’t want them to? Assuming they can find your money, anyway? It is, as I sometimes tell my children, mandatory, not optional.

As in other civil litigation against North Korea in U.S. courts, North Korea did not appear to defend itself.

The decision’s detailed findings of fact about North Korea’s recent and extensive sponsorship of terrorism will be another humiliation for the State Department, which takes the obtuse and factually risible position that North Korea is not known to have sponsored any acts of terrorism since 1987.

President Bush removed North Korea from the list of state sponsors of terrorism on October 11, 2008. Discuss among yourselves.

The fact that Royce Lamberth made these findings will make them harder to ignore. Lamberth is one of the most experienced, respected, and feared judges on the federal bench. I’ve seen some of the Justice Department’s best litigators stricken with panic upon hearing of the assignment of a weak (for us) case to Judge Lamberth. And for good reason.

The Kaplan Complaint contains detailed allegations about North Korea’s long history of material support for Hezbollah (start at para. 22). The Congressional Research Service has documented North Korea’s support for Hezbollah both before and after the 2006 attacks (page 17, page 22). The degree of that support accelerated substantially after that. On December 15, 2009 – three days after the Kaplan Complaint was filed – a chartered Il-76 transport aircraft was intercepted at Bangkok and found to be filled with weapons on their way from North Korea to Iran, including man-portable surface-to-air missiles (see figure XVIII). It was the year’s third seizure of North Korean weapons believed to be on their way to Middle Eastern terrorists, including Hamas and Hezbollah. Previous incidents included the seizure of a container from the ANL Australia, and the Israeli Navy’s interception of the M/V Francop, which was carrying weapons (including 122-millimeter rockets) to Syria (see para. 108).

Obviously, none of the weapons in those latter shipments were used in any of the 2006 attacks that injured the Kaplan plaintiffs, but they are part of a long-standing pattern of North Korean support for terrorism. Given Hezbollah’s deep involvement in the Syrian Civil War, North Korea’s weapons are probably killing Syrian civilians now, rather than their intended Israeli targets.

The decision is the second decision by a federal judge finding North Korea liable for the sponsorship of terrorism. In 2010, the U.S. District Court for the District of Puerto Rico found North Korea liable for sponsoring the Japanese Red Army’s 1970 attack against Puerto Rican religious pilgrims at Lod Airport, Israel. Since then, the plaintiffs have been in litigation, trying to collect their $370 million judgment from U.S.-based accounts that may contain North Korean assets.

Ordinarily, foreign governments are immune from suit, but after the September 11, 2001 attacks, Congress created an exception to the Foreign Sovereign Immunities Act for states that were, at the time of the acts complained of, listed as sponsors of terrorism (or that were later listed for the same acts complained of in the suit). Prior to October 11, 2008, both Iran and North Korea were listed.

The next step in this case will be the appointment of a special master to apportion damages to the various plaintiffs.

 

Update: This post was edited after publication, for extra sarcasm.

Update 2: Some background on Judge Lamberth, explaining his reputation for having a “low tolerance for incompetence.”

29 N. Koreans arrested in China at risk of repatriation and execution

Via the Chosun Ilbo:

Twenty-nine North Korean defectors and five of their South Korean helpers were arrested in China on July 15-17. They were nabbed in Qingdao, Shandong Province, and Kunming, Yunnan Province, on an established escape route to Southeast Asia, and face deportation, possible torture and execution in North Korea. 

Kwon Na-hyun of an activist group for defectors on Tuesday said 20 defectors were arrested in Qingdao and nine others in Kunming. One of the helpers who were arrested is Na Su-hyun (39), himself a defector who now has a South Korean passport.

They have been transferred to a detention center in the border town of Tumen and face deportation to the North, Kwon added.

All defectors had stayed in a safe house in Qingdao, but some of them left for Kunming first. “Nine of them left for Kunming on July 14, because it would have been dangerous if all 29 defectors traveled together,” Kwon said. 

This is the largest-scale arrest of North Korean defectors and their helpers in China so far.

Here’s some background information explaining why it would be unlawful for China to repatriate these people, and here’s a link where you can spam your local Chinese Embassy to pressure its government to refrain from murdering these people.

The arrest of these South Korean heroes means the ROK government will have to be notified, pursuant to that new consular agreement with Xi Jinping. We’ll soon see whether South Korea has the backbone and principle to demand the safe passage to Seoul of those Koreans unfortunate enough to be born north of the DMZ.

APG needs N. Korea like the Vienna Boys’ Choir needs Jerry Sandusky

The Asia/Pacific Group on Money Laundering describes itself as “an autonomous and collaborative international organisation … consisting of 41 members and a number of international and regional observers [who] are committed to the effective implementation and enforcement of internationally accepted standards against money laundering and the financing of terrorism, in particular the Forty Recommendations of the Financial Action Task Force on Money Laundering (FATF).”

APG has an Associate Membership in FATF, the world’s primary international organization dedicated to fighting money laundering and terrorist financing, and one of the few international organizations in this world that actually works. Although membership in APG does not confer membership in FATF, it does allow the member (or observer) a degree of secondary influence over FATF’s decision-making. And since 2010, FATF has issued statement after statement cautioning banks and finance ministries about North Korea’s “failure to address the significant deficiencies in its anti-money laundering and combating the financing of terrorism (AML/CFT) regime and the serious threat this poses to the integrity of the international financial system.”

No doubt, Kim Jong Un’s financiers in Pyongyang understand the potential consequence of being severed from the global financial system, which is why, since February, Pyongyang has “engaged” with FATF to “discuss” its deficiencies. Presumably, those discussions are nothing more than discussions; otherwise, FATF wouldn’t still be urging Pyongyang to “immediately and meaningfully address” the deficiencies. It also explains why North Korea wants into APG.

As always, the flaw in this engagement is the absence of evidence that Pyongyang has made a decision to abide by the rules and common values of the association engaged with. As U.N. Security Council Resolution 2094 points out, FATF also supports “targeted financial sanctions related to proliferation.” North Korea not only remains constitutionally dedicated to developing nuclear weapons in violation of that resolution (and others), it is also dedicated to financing its WMD programs by any means necessary. We saw this most recently when North Korea lost a World Cup match of sorts — no, not that internet hoax, but the one it played against the Cambodian police.

~   ~   ~

Earlier this month, Yonhap reported that Cambodian authorities had arrested 15 North Koreans in Phnom Penh for running illegal gambling websites that were booking bets on the World Cup, which North Korea did not win, and for conducting cyber warfare against South Korea. The report was sourced to “a South Korean government source,” who also said the Cambodians “seized computers and other related equipment.”

It’s a far better thing to seize computers, which talk, than to seize North Koreans, who don’t. The computers could provide valuable information about North Korean bank accounts, financial relationships, co-conspirators, and the currencies and media of exchange used. It might even provide proof to support longstanding suspicions that North Korea’s overseas restaurants, including those in Cambodia, are fronts to launder money from the proceeds of activities like illegal gambling.

If the Treasury Department were at all serious about targeting North Korea’s financial enablers — a purely theoretical discussion, because it isn’t — an effective computer forensic analysis could give Treasury the basis to sanction North Korea’s third-country enablers.

North Korea has a long history of using illegal online gambling to finance itself. In 2011, the rheumy-eyed, snaggle-toothed old Trotskyists at The Guardian reported that “an elaborate hacking network” run by 30 North Koreas based in China “broke into online sites hosted in South Korea and stole prize points worth almost £3.7m ($6m)” using malicious code. Authorities also arrested five South Koreans for distributing the malware. Just four months before that report, the Russian Foreign Ministry “reprimanded the North Korean and Belarusian ambassadors for running illegal gambling on their premises in Moscow;” specifically, “a large network of underground casinos.” Even Dennis Rodman’s recent visit to Pyongyang was sponsored by Paddy Power, a (legal) Irish online gambling site. More here, here, here, and here.

~   ~   ~

Given North Korea’s long, promiscuous history of counterfeiting, proliferation, arms sales to terrorists, and money laundering – and the fact that this history leads right up to the present day – I can’t help wondering whose bright idea it was to offer North Korea “observer” status in APG, whose “members and … observers” are supposed to be “committed to the effective implementation and enforcement of internationally accepted standards against money laundering and the financing of terrorism.”

The arguments against this are as obvious as the reasons why those Craigslist ads say “disease-free.” North Korea will use its usual Jedi mind tricks to make contacts, schmooze, and persuade APG members (and indirectly, FATF) that it’s this close to some endlessly receding horizon that may or may not be a real step toward financial transparency. If, like me, you spent the last ten years watching how well those tricks worked on South Korea and our State Department, you can imagine how they’ll work against APG. The consequence will be the relaxation, rather than the strengthening, of anti-money laundering enforcement standards.

It’s clear enough how accepting this invitation serves North Korea’s interest in perpetuating its money laundering and proliferation.

The APG will decide later whether to elevate North Korea from observer status to a member country once it evaluates Pyongyang based on its annual reports to the organization and visits by the representatives of the group over the next three years.

South Korea and many other members are trying to figure out the motive behind the unexpected move by Pyongyang, because North Korea was previously opposed to joining the APG.

“[North Korea’s motive] is a mystery to us,” said a high ranking government official, who requested anonymity. “We suspect that North Korea, while looking for ways to ease the international financial restrictions imposed on them, decided to show their efforts in improving their global image [by joining the APG].

“But since the lists that they need to follow are long, we will probably have wait and see how sincere and determined they are with their decision.”

In other words, it could be a facade as a way for North Korea to ease the sanctions imposed on it, since the possibility that Pyongyang will give up its nuclear ambitions is low.

The action is particularly suspicious because up until last year’s APG meeting held in Shanghai, North Korea refused to join the organization because of the rule requiring members and observers to follow global standards. North Korea at the time argued that it would join the APG only after the agreement to follow UN resolutions was taken out. [Joongang Ilbo]

It’s hard to see what good this invitation does for APG, FATF, or the financial system. North Korea clearly hasn’t made the fundamental decision to abide by the shared values of any of those associations. And that fundamental decision is what gives “engagement” the potential for those associations to change North Korea, as opposed to the very opposite outcome.

It’s easier to see the dangers this move creates — again, absent evidence that North Korea has seen the evil of its ways and decided to change them. The most obvious is that it gives North Korea undeserved legitimacy in area where it has been the world’s most flagrant recidivist.

Then, there is the example of the U.N. Human Rights Commission to draw from. I suppose that once, long ago, some addlebrained diplomat hypothesized that if only the leaders of China, Cuba, and Libya could be exposed to the principles by which the rest of civilized humanity lives, their leaders would feel compelled to conform themselves to those principles. What happened instead was that China, Cuba, and Libya took over the Human Rights Council, eviscerated its founding values, and destroyed it. So it goes whenever international institutions welcome members who don’t share the common principles of the institutions.

Test something louder, Dear Leader. John Kerry still can’t hear you.

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.”

As South Koreans are keenly aware, North Korea has not been quiet. Under the direct supervision of His Porcine Majesty, it has been testing SCUDs in violation of multiple U.N. Security Council resolutions, along with massive barrages of artillery rockets. The U.S. and U.N. responses to this have been negligible.

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.

Most unforgivably, it has offered no policy response whatsoever to a U.N. Commission of Inquiry’s finding that Kim Jong Un’s regime is committing crimes against humanity. Kerry is as deaf to the cries of the North Korean people as he is to roar of Kim Jong Un’s rockets. That is why North Korea continues to defy the Commission of Inquiry and all those who support its recommendations.

It’s as if this administration has no North Korea policy at all.

Meanwhile, as gravity of the threat from North Korea builds, President Park is so convinced that a North Korean provocation is imminent that she has directed her military commanders to return fire immediately if fired on by North Korea. This puts us one ill-advised temptation away from the miscalculation that could start Korean War II.

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]

To claim success for Kim Jong Un’s failure to nuke off is to confuse coincidence with causation. There is no evidence that Kerry’s diplomacy has resulted in serious movement toward disarming North Korea. There is more evidence that the Obama Administration itself is moving away from denuclearization as an objective.

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.

FBME Bank denies money laundering allegations

FBME Bank, whose correspondent accounts were ordered closed by a Treasury Department action under Section 311 of the USA PATRIOT Act last week, has responded to Treasury’s allegations of money laundering:

FBME said it was “shocked” by the content of the US Department of the Treasury notice “that sets out unexplained allegations of weak AML controls,” which, the bank said, it had not been given any opportunity to comment on or refute.

The bank denied the allegations, saying it had commissioned the German division of an international accountancy firm to carry out a detailed assessment into its operations and practices over the past two years.

FBME, it said, was found in compliance with applicable rules on AML regulations of both Cyprus and the European Union.

“FBME Bank welcomes the involvement of its regulator, is cooperating fully with it and reiterates its absolute continued commitment to full compliance with applicable laws and regulations,” the bank said in an announcement posted on its website. [Cyprus Mail]

That welcome may be a bit superfluous, because according to the Cyprus Mail and the Lebanese news site Ya Libnan, the Central Bank of Cyprus has taken over FBME’s operations for “as long as the central bank deems it necessary.” The move is similar to the Macanese government’s takeover of Banco Delta Asia in 2005, after Treasury published a similar set of notices against it for laundering money for North Korea. With Cyprus trying to stave off a broader banking crisis now, the last thing it needs is for a bank operating on the island to collapse, even if that bank is chartered in Tanzania and serving a largely non-Cypriot clientele.

I’ll offer a few points in response to FBME’s statement, which largely misapprehends how Section 311 (codified at 31 U.S.C. sec. 5318A) operates.

First, it is both technically true and legally irrelevant that FBME had no notice of this specific action. A Notice of Finding and a Notice of Proposed Rulemaking under Section 311 are intended to be no-notice actions to block correspondents accounts that may contain illegally derived funds. FBME’s opportunity to respond began with the publication of the notice and will end 60 days after that. After considering any comments on the proposed action, Treasury will make its final findings and conclusions and publish its Final Rule. Presumably, this process will give FBME an opportunity to hire lawyers to argue Treasury hasn’t met the criteria of 31 U.S.C. sec. 5318A(b).

Second, until that point, it would be fair to say the allegations are “unproven,” but it would not be fair to call them unexplained. Treasury’s notices explain them in great detail.

Third, Treasury has no obligation to warn the target of a law enforcement investigation that it is investigating the target for suspected illicit activity; rather, it is the duty of the financial institution to know its customers and make reasonable inquiries about suspicious transactions – that is, to perform due diligence. If true, FBME’s alleged provision of financial services to an unnamed front for a Syrian entity involved in WMD co-development with North Korea suggests that it fell short of these “know your customer” obligations. Presumably, FBME’s response and Treasury’s evidence will be given due consideration before Treasury publishes its Final Rule. If FBME can make the case that it didn’t fall short of these obligations, or that the shortfalls were inadvertent, Treasury should mitigate or rescind the special measure.

Finally, if half the allegations in Treasury’s Notice of Finding are true, FBME can’t honestly claim that it wasn’t on notice of deficiencies in its “know your customer” and anti-money laundering obligations. Of course, FBME has another 55 days to make its case to the contrary. After that, FBME can appeal Treasury’s decision to the federal courts, in which case Treasury’s decision would get a high degree of judicial deference, but its evidence would still be subject to judicial scrutiny. Even classified evidence Treasury relies on would be subject to the court’s in camera review.

You can read the full statement at FBME’s web site, which is loading rather slowly. For some reason.

U.S. should ask Mexico to search the M/V Mu Du Bong

Last week, I linked to a piece by investigative journalist Claudia Rosett (third item), noting the travels of the North Korean freighter Mu Du Bong from Cuba into points unknown in the Gulf of Mexico. Now, thanks to intrepid Miami Herald reporter Juan Tamayo, we learn that the Mu Du Bong has run aground in the Mexican Gulf Coast port of Tuxpan, not far from Veracruz. The ship is said to be empty, but there are a number of suspicious aspects of its behavior.

The 430-foot Mu Du Bong grounded Monday on a reef about seven miles from the Mexican port of Tuxpan, according to shipping industry officials. The job of pulling it off the reef will be complicated and take several days, they said.

The ship was empty and planning to pick up cargo in Tuxpan when it ran aground because its captain “lost his bearings,” according to a report by the Agence France Presse. Tuxpan is known as one of Mexico’s main sugar exporting ports.

Port administrators told El Nuevo Herald aid they did not know whether the Mu Du Bong was entering or leaving the port. An official at the Captain of the Port’s office said no one there was authorized to give information on the case. [Miami Herald]

Like the Chong Chon Gang, the North Korean ship that was caught carrying weapons from Cuba through the Panama Canal last year, the Mu Du Bong had its automatic location beacon switched off for several days, creating a potentially unsafe condition for other ships.

The Mu Du Bong crossed the Panama Canal into the Caribbean June 15. Its transponder signaled June 25 that it was near the port of Mariel, and on June 29-30 that it was in Havana, according to a Forbes magazine article Sunday that first reported its voyage.

For the next nine days its transponder fell silent, Forbes reported. It started working again on July 10, showing the ship was in Havana and then sailed north into the Gulf of Mexico, according to the magazine article.

One shipping industry official called the freighter built in 1983 “an ugly old rust bucket” and said photos of the ship’s deck show an odd mast surrounded by wires that could be some sort of jerry-rigged crane or an antenna. [....]

The Forbes report said shipping records show the two vessels share the same commercial agent, Ocean Maritime Management Company Ltd. U.N. experts who investigated the Chong Chon Gang incident said that company “played a key role in arranging the shipment of the concealed cargo of (Cuban) arms and related materiel.” [Miami Herald]

The Mu Du Bong’s shipping agent was Ocean Maritime Management, the same company that arranged for the voyage of the Chong Chon Gang.

Mu Du Bong

[Image source]

In other words, four months after a U.N. Panel of Experts report laid out conclusive evidence of OMM’s deliberate and premeditated violation of U.N. Security Council sanctions, the U.S. Treasury Department has not sanctioned OMM or any other entity under Executive Order 13551 over the Chong Chon Gang incident, or added it to the list of Specially Designated Nationals. Meanwhile, OMM is still acting as an agent for suspicious North Korean shipping traffic to Cuba.

Under a recent U.N. Security Council resolution, Mexican authorities have the legal authority to inspect the Mu Du Bong.

Moreover, in the effort to prevent the direct or indirect supply, sale or transfer to or from the Democratic People’s Republic or Korea or its nationals of any banned items, States are authorized to inspect all cargo within or transiting through their territory that has originated in the Democratic People’s Republic of Korea or that is destined for that country.  They are to deny permission to any aircraft to take off from, land in or overfly their territory, if they have reasonable grounds to believe the aircraft contains prohibited items. [UNSCR 2094]

I don’t know whether the U.S. government is currently pressing the Mexican government to assert that right, but a U.S. government with a genuine interest in enforcing U.N. Security Council sanctions would be pressing for an inspection of the Mu Du Bong.

A number of analysts quoted in various press reports doubted that the Mu Du Bong could be carrying weapons because its bills of lading list only civilian goods. But by the same faulty argumentum ad ignorantiam logic, North Korea has no concentration camps because it denies having them, and O.J. is still looking for the real killer. At page 92 of this U.N. Panel of Experts report, you can see the bills of lading for the Chong Chon Gang. They mention 210,000 bags of sugar, and nothing about MiGs or missile parts. The real answer is that we won’t know what the Mu Du Bong is carrying until the ship is inspected.

Update: I changed “press” to “ask” in the title of this post. Better to ask nicely the first time, and “press” only if asking nicely doesn’t work, right?

Update 2: More on this story via Reuters.