Must read: Iranian bank handled arms transactions for Tehran, Pyongyang through Seoul branch

Investigative journalist Claudia Rosett, who covered the Tienanmen Massacre and exposed the U.N. Oil-for-Food scandal, has written an extensive report about the operations of Iran’s Bank Mellat in Seoul during the administrations of Roh Moo-Hyun and Lee Myung-Bak:

In a cable dated March 20, State asked its embassy in Seoul to tell the South Korean government that “Bank Mellat has facilitated the movement of millions of dollars for Iran’s nuclear program since at least 2003.”

Four days later, State followed up with a cable asking its embassy to “Inform Seoul that the U.S. views Bank Mellat’s Seoul branch as a key node for facilitation of proliferation-related activities.” That same cable included a list of U.S. allegations regarding specific transactions of Bank Mellat in Seoul. For example, State alleged that in 2007 Bank Mellat in Seoul had served as an intermediary for a Hong Kong company that was “almost certainly a front company for Tanchon Bank (North Korea’s primary weapons trade bank)” and that Bank Mellat in Seoul had played a role in financial transactions related to Iran’s ballistic missile program, purchase of a surface-to-air missile system, and illicit nuclear procurement networks in China.

Tanchon is a front for KOMID, the Korea Mining Development Trading Corporation, a notorious proliferator for North Korea. Treasury designated  KOMID under Executive Order 13,382 in 2005, and the U.N. designated it in 2009. Treasury designated Tanchon Bank under the same Executive Order in 2009.

E.O. 13,382 is an authority that allows the blocking of the dollar-denominated assets of entities involved in the proliferation of weapons of mass destruction.

South Korean officials thanked the U.S. for this demarche, and reaffirmed their commitment to investigating Bank Mellat’s branch in Seoul.

A few months later, in June, 2008, U.S. authorities, in turn, thanked Seoul, and urged them, consistent with U.N. sanctions on Iran, to “establish reporting and/or licensing requirements for all transactions executed by Bank Mellat Seoul.” The U.S. also suggested that South Korea, “once its investigation is complete, explore options for closing Bank Mellat Seoul.”

So while 28,500 Americans were in South Korea, defending it from North Korea’s growing WMD threat, South Korea let an Iranian bank front for a North Korean proliferator … admittedly one that Treasury itself has not yet designated.

Still, you’d think that Seoul would be especially sensitive to violations of U.N. Security Council Resolutions 1695 and 1718, which prohibited North Korea’s missile programs, and sales or purchases of major weapons systems. Those resolutions were largely U.S. initiatives to protect South Korea’s security, meaning that South Korea ate our sugar from one end and shat it right out the other. I’ll just let that be your kachi kapshida image for that day. (Update: No, I won’t. Not this day. See the next post.)

Two more years went by, during which the U.S. continued to prod South Korea to take action. In June, 2010 the U.N. Security Council passed its fourth sanctions resolution on Iran. This resolution included, in an annex, the statement that “Over the last seven years, Bank Mellat has facilitated hundreds of millions of dollars in transactions for Iranian nuclear, missile and defense entities.”

… and by this time, the U.N. Security Council had also passed UNSCR 1874, further tightening the restrictions on North Korea’s arms trade.

Even then, it took three more months, and a visit from the State Department’s then-serving special advisor for nonproliferation and arms control, Robert Einhorn, before South Korea in Sept. 2010 worked around to blacklisting Bank Mellat’s branch in Seoul. [Claudia Rosett, Forbes]

Although Rosett makes a strong case that South Korean regulators turned a blind eye to Treasury’s pleas for years, Treasury itself was slow to act against Bank Mellat. Bank Mellat is not listed as a Primary Money Laundering Concern by Treasury, and Treasury did not designate Bank Mellat under Executive Order 13,382 until 2011. To an extent, I can understand the South Koreans’ slow reaction: why should they take action against Bank Mellat when not even Treasury itself had done so? You would think that South Korea’s own security interest in the success of the global nonproliferation system would answer that question, but that sort of logic does not match the prevailing point of view in South Korea then or now.

In any event, the chronology you see illustrated here is a combination of financial diplomacy and enforcement that this administration would take against a target in which it shows genuine interest. That’s exactly what you won’t see with respect to North Korea.

How Barack Obama let Kim Jong Un get away with censoring and terrorizing America (updated)

Last December, after the FBI and the National Security Agency  concluded that North Korea’s Unit 121 had hacked Sony Pictures and threatened the Americans who wanted to see “The Interview,” President Obama publicly accused North Korea of the cyberattack and threat, and promised a “proportional response” to it. On January 2nd, the President signed a new executive order whose potential was sweeping, but whose actual effect was “symbolic at best.” In practice, the designations under the new executive order amounted to whack-a-mole sanctions against ten small-time arms dealers, who were probably replaced by ten other small-time arms dealers within weeks.

Is that all? Maybe not. If you believe Rep. Michael McCaul, the President also directed the intelligence community to take down North Korea’s internet for a few days. The Director of the CIA, who seems rather desperately to want to deny the story, nevertheless stuck to the CIA’s customary neither-confirm-nor-deny line — sometimes called a “Glomar” response — which will be read in most places, including Pyongyang, as, “So they did it.”

Had this been the act of a band of angry nerds in Guy Fawkes masks (and by the way, about those masks), most people would have applauded it. I still hope that it was. As the act of a great power that once treasured and defended the free expression of its people with all of its might, no word would describe this better than “chickenshit.” It suggests that angry nerds in Guy Fawkes masks have been put in charge of defending the lives, liberty, and security of the world’s greatest power with a mighty arsenal of college pranks. What’s next, flaming dog poop on the doorstep of North Korea’s U.N. mission? It’s hard to see how this will deter future North Korean attacks; after all, the internet is about as vital to North Korea as a subway system is to North Dakota.

In the United States, freedom of expression is not only the foundation of our system of government — of what makes us America — it is also the foundation of what those who shrink from the use of hard power call “soft power.” It is difficult to measure the damage our freedom of expression has suffered in just the last three months alone, but the cyberattack caused Sony Pictures to cancel the release of a major film just before the holidays, and a second studio, New Regency, also announced that it would scrap a second film about North Korea.

In a very real way, the world’s most oppressive system of government has extended the reach of its censorship to our society, and our government acts as if it is impotent to react to this. When one considers the very real legal and safety risks attendant to engaging in what the most extreme adherents of Islam call “blasphemy” today, one strains to argue that the United States is as free today as it was five years ago. If only there were a man whose duties and authorities consisted of preserving, protecting, and defending the Constitution of the United States.

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Knowing, as history has taught us, that finance is the only North Korean vulnerability the United States has ever exploited successfully, smarter people are following the money. No one should be following North Korea’s money more closely than Adam Szubin, the head of the Treasury Department’s Office of Foreign Assets Control (Szubin is also the Acting Treasury Undersecretary for Terrorism and Financial Intelligence because his predecessor, David Cohen, has been picked to be the new CIA Director. That should tell you everything about the importance of financial intelligence in U.S. foreign policy today.) This week, Szubin delivered a speech to a trade group in Florida, where he talked about the Obama Administration’s sanctions enforcement priorities:

We are imposing costs on Russia for its brazen violation of core international principles.  We are working to deprive ISIL of the financial means to terrorize the people of Iraq and Syria and spread its warped ideology.  We are keeping up the pressure on Iran while we seek a diplomatic means of ensuring that it will not acquire a nuclear weapon. [Treasury Dep’t Press Release]

By now, you’ve noticed a glaring omission from the list — the only state counterfeiter of the U.S. dollar. One of two nations (Iran being the other) singled out for countermeasures by the Financial Action Task Force. The only nation to have successfully suppressed freedom of expression in the United States by directing its clandestine agents to make a terrorist threat against the American people, in their own country. And as of this week, the only nation to have sponsored a cyberattack against multiple nuclear power plants, an attack that the South Korean government claims was intended to cause a reactor malfunction.

Where it matters — on the financial front — North Korea is a blind spot for the Obama Administration. You can see this manifested in a variety of ways. In this paper, I explained the general weakness of the sanctions authorities in place against North Korea, the relatively small number of North Korean entities designated for the blocking of their dollar-denominated assets, and the relatively low level of the entities designated. This matters, because as the U.N. Panel of Experts recently confirmed, North Korea still relies heavily on the dollar system to violate U.N. Security Council sanctions. Yet you’ll have to search far and wide for any evidence that Treasury has enforced even those sanctions against the banks that help North Korea finance itself, violate U.N. Security Council resolutions, break our laws, and suppress our fundamental freedoms, all by using our own financial institutions.

Last year, for example, the Treasury Department entered into the largest settlement of a potential sanctions penalty in its history, when the French parastatal bank BNP Paribas agreed to pay nearly $1 billion for stripping data out of records of transactions to evade sanctions. Sanctions against whom, you ask?

For instance, a Sudanese bank seeking to move U.S. dollars out of Sudan transferred funds internally within a BNP satellite bank, which then transferred the money to the Sudanese bank’s “intended beneficiary” without reference to the Sudanese bank.

BNP Paribas agreed with sanctioned entities “not to mention their names in U.S. dollar transactions,” and included explicit instructions to bank personnel, such as “! Payment in $ to [French Bank 1] without mentioning Sudan to N.Y.!!!” [….]

According to New York regulators, the scope of the violations was much larger. DFS said from 2002 to 2012, BNP Paribas provided more than $190 billion of dollar-clearing services for Sudanese, Iranian and Cuban parties.

Under orders from “high levels of the Bank’s group management,” BNP Paribas engaged in a “systematic practice…of removing or omitting Sudanese, Iranian or Cuban information” from U.S. dollar-denominated transactions with the purpose of avoiding disclosure “to any potential investigatory authorities,” according to the DFS document. [Wall Street Journal]

Once again, North Korea is absent from the list. Even after the BNP Paribas settlement, Treasury continued to investigate “at least six banks in Germany, France, Italy or Japan” for violating sanctions against “Iran, Sudan, Cuba or other nations hit with U.S. sanctions.” Although North Korea wasn’t one of the principal targets of that investigation, the article gave reason to hope that there would be at least one enforcement action against a bank this year. It linked to this 2014 report by Germany’s Commerzbank, revealing that the bank was under investigation for possible sanctions violations involving North Korea. That probably means that Commerzbank was suspected of dealing with the Foreign Trade Bank or Daedong Credit Bank, the only two North Korean banks of significance that have been designated by Treasury’s Office of Foreign Assets Control.

Months passed with no word of any enforcement action against Commerzbank. Then, last week, Treasury issued a press statement confirming the outcome of its investigation: Commerzbank signed a settlement with OFAC, agreeing to pay $258,660,796 for “apparent” violations of sanctions on Iran, Sudan, Burma, Cuba. What about North Korea? To be fair, OFAC also suspected Commerzbank of violating Executive Order 13,382, “Blocking Property of Weapons of Mass Destruction Proliferators and Their Supporters,” which is the authority for approximately half of the North Korean designations. Yet no North Korean entities are mentioned in the settlement agreement, which explains Commerzbank’s alleged violations in detail. Here’s Treasury’s summary of how Commerzbank did it:

Those practices included deleting or omitting references to Iranian financial institutions and replacing the originating bank information with Commerzbank’s name from payment messages sent to U.S. financial institutions.  Commerzbank also created a process to route payments involving Iranian counterparties to a payment queue requiring manual processing by bank employees rather than routine, automated processing.  Commerzbank utilized these practices in 1,596 financial transactions routed to or through banks in the United States between 2005 and 2010….

As is customary, Commerzbank denied any wrongdoing in the settlement agreement. The report does have one bright spot — It also notes that “Deutsche Bank, Germany’s largest bank, has said it stopped doing new business with Iran, Syria, Sudan and North Korea in 2007.”

It’s worth clarifying that the Treasury Department isn’t the problem here. Szubin is regarded by congressional staffers of both parties as a highly competent bureaucrat and technocrat. The problem is that his remarks reflect the priorities of the president he serves. For the same reasons, the OFAC staff aren’t the problem, either; when sufficiently resourced, they do their jobs very well. The problem is at the top — the President hasn’t made it a priority or dedicated sufficient resources to the problem, most likely because the State Department has persuaded the President to slow-walk sanctions enforcement. The result is that the President keeps the sweep of the sanctions narrow, barely enforces the sanctions that are in effect, and pays token attention to violations and offenses he absolutely can’t ignore.

That abstention from responsibility is now threatening the most fundamental freedoms of the American people, the safety of the South Korean people, the integrity of the U.N. Security Council’s sanctions, and the entire global nonproliferation system. North Korea has made it clear that its system of government and ours cannot coexist. The very least we should do is less of what we’re doing now to help North Korean fascism to continue to exist.

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If you believe the anonymous U.S. government sources who talked to the Daily Beast, we didn’t knock KCNA down, but we did something else. The sources won’t say what, and more importantly, it’s hard to tell if these sources are high enough in their own organizations to understand the full picture of what various other agencies were up to.

On Tuesday, the online news outlet Daily Beast cited unidentified sources with knowledge of the U.S. government cyber-operations against North as saying that the operations were “designed to send a message that North Korean officials weren’t beyond the reach of the American government.”

The U.S. operations took place before the blackout, but the takedown itself was not the result of those operations, the sources were quoted as saying. The report also said independent hackers have claimed they are the ones that took the North offline.

Former U.S. intelligence officials were also quoted as saying that the American government would hesitate to take down the North’s entire network because it would cut intelligence agencies off from the cyber-spying they were doing inside North Korea. [Yonhap]

You can read the Daily Beast report here.

Investigators: N. Korean hackers tried to cause reactor malfunction

Earlier this week, I posted on South Korean investigators’ conclusion that North Korea was behind the hacking of several South Korean nuclear power plants, but that the attacks caused no operational impact. Evidently, that wasn’t for lack of effort:

The team of South Koreans investigating the incident says the hackers tried to cause a malfunction at the reactors, which supply around 30% of the country’s electricity, but failed to break through the control systems. [Sky News]

See also this report from AFP.

The Unification Ministry called the attack “cyber-terror” and accused Pyongyang of “taking the life and safety of our people as a hostage.” And if what the investigators say is true, this would be the first serious attempt at nuclear terrorism that I’m aware of.

Honestly, I can’t believe this isn’t a much, much bigger story than it is. It should be as big a story as any of the attacks in 2010. Either someone at the Unification Ministry is hyping this (and I really don’t see the incentive for that) or someone else in the Korean government is downplaying the scope of the attack to avoid political responsibility for lax nuclear security (and if you still remember the Sewol Ferry, you can certainly see the incentive for that).

Breaking news! FINCEN rehashes same old North Korea advisory.

To hear Yonhap tell it, the Treasury Department’s Financial Crimes Enforcement Network just stuffed Kim Jong Un into a size XXXXL iron maiden, financially speaking:

The United States has issued another advisory on financial transactions with North Korea, designating the communist country as a jurisdiction with high money laundering and terrorist financing risks, a U.S. report said Wednesday.

The guidance to U.S. financial institutions, issued Monday by the Treasury Department’s Financial Crimes Enforcement Network (FinCEN), is based on the international money laundering watchdog Financial Action Task Force’s updated list of countries with anti-money laundering and counter-terrorist financing deficiencies, according to the Radio Free Asia (RFA) report. [Yonhap]

The truth is much less dramatic. In reality, FINCEN didn’t “designate” North Korea as anything. It’s just echoing the latest iteration of the same call for “countermeasures” against North Korean money laundering that the Financial Action Task Force (FATF) has been issuing since 2011. If you actually read FINCEN’s advisory, there’s a section called “Summary of Changes to this List,” which shows that the advisory language applicable to North Korea didn’t change at all.

Jurisdictions in this section (Iran and DPRK) are subject to the FATF’s call on its members and other countries to apply countermeasures to protect the international financial system from AML/CFT risks. U.S. financial institutions should continue to consult existing FinCEN and U.S. Department of the Treasury (Treasury) guidance on engaging in financial transactions with Iran and DPRK. Previous FinCEN advisories and guidance on Iran and DPRK remain in effect. [….]

Existing U.S. sanctions – in particular, those under the North Korea Sanctions Regulations and Executive Orders 13570 and 13551 – create a legal framework that limits U.S. financial institutions’ direct exposure to the types of North Korean financial or commercial transactions contributing to DPRK’s proliferation activities that are the focus of UNSCRs 2087 and 2094, as well as UNSCR 1718. [FINCEN]

Warnings like these may well dissuade the more reputation-conscious banks from handling transactions with North Korea or encourage them to report the suspicious ones, but this advisory doesn’t block anything, and strictly speaking, isn’t even a sanction. It’s the banking equivalent of, “Hey, kid, be careful, broken glass.”

In fairness, I vaguely recall that I made the same mistake myself several years ago, when I knew much less about this subject. There isn’t really much of a story here at all.

For those interested in what our North Korea sanctions actually do — and don’t do — the only primer I’m aware of is the one I wrote for the Fletcher Security Review.

South Korea blames North Korea for hacking nuke plants

Let the conspiracy theories commence at Naver, Minjok Tongshin, and MissyUSA, in 3, 2, 1 ….

South Korean prosecutors on Tuesday blamed North Korea for cyber attacks against the country’s nuclear reactor operator last December, based upon its investigation into Internet addresses used in the hacking.

The conclusion comes less than a week after a hacker believed to be behind the cyber attacks on Korea Hydro and Nuclear Power Co Ltd released more files on Twitter that are believed to have been taken in December. The investigation included last week’s leak of a blueprint and test data.

“The malicious codes used for the nuclear operator hacking were the same in composition and working methods as the so-called ‘kimsuky’ that North Korean hackers use,” a statement from Seoul central prosecutors’ office said. [Reuters]

President Bush removed North Korea from the list of state sponsors of terrorism on October 11, 2008. The Obama Administration’s official view is that North Korea is “not known to have sponsored any terrorist acts since the bombing of a Korean Airlines flight in 1987.” Discuss among yourselves.

Ironically, this story has received little attention thus far because when it came out last December, the Sony hacks crowded it off page one. According to the initial reports at that time, the hackers used malware, possibly introduced through social engineering attacks, to gain access to the systems of South Korea’s Korea Hydro and Nuclear Power Corporation.

According to the The Joongang Ilbo, “The hackers’ group threatened that the three nuclear reactors in Gori and Wolseong must be shut down by Christmas or they would reveal more files and carry out a second attack,” and threatened that “[i]t will be a Fukushima.”

The hackers, posing as anti-nuclear hacktivists, then released blueprints for multiple South Korean nuclear power plants online. Korea Hydro has said that the attacks did not affect the plants’ operating systems.

South Korean government investigators traced the attack to Shenyang, a wretched hive of scum and villainy favored by North Korean hackers, but which is not otherwise renowned for its feisty tradition of pushing the boundaries of free expression.

At the time, Justice Minister Hwang Kyo-Ahn told the South Korean National Assembly that authorities were investigating suspicions that North Korea may have been behind the attack, but an official from the investigation team said, “We cannot confirm nor deny the North’s involvement in the case.”

After this, the story went cold again for months. Then, on March 12th, the hackers had made a fresh demand for extortion money:

Using an account under the name of the president of an anti-nuclear group in Hawaii, the hacker posted additional files on Twitter, which reportedly included documents concerning the country’s indigenous advanced power reactor 1400.

“Need money. Only need to meet some demands… Many countries from Northern Europe, Southeast Asia and South America are saying they will buy nuclear reactor information. Fear selling the entire information will undermine President Park (Geun-hye)’s efforts to export nuclear reactors,” the posting said.

The hacker did not say how much money he wanted but warned that South Korea will end up losing much more if it tries to save a few hundreds of millions of dollars. [Yonhap]

The circumstances would suggest that this latest communication provided new evidence of the North’s involvement, although the reports do not say so.

Now, armed with evidence of North Korea’s culpability, let’s parse the definition of terrorism in the Foreign Relations Authorization Act (you can parse other definitions here and here). That statute defines “terrorism” as “premeditated, politically motivated violence perpetrated against noncombatant targets by subnational groups or clandestine agents.” Premeditated? Obviously. Politically motivated? Although the ostensible purposes of the attacks were to disrupt infrastructure, get ransom money, and generally scare the soondae out of South Korea’s civilian population, the very fact of North Korea’s culpability suggests a political motivation. The link to President Park and export revenue is also evidence of one, as is the group’s release of “the transcript of a telephone conversation between President Park and the U.N. chief, Ban Ki-moon, on Jan. 1.” Korea Hydro is a noncombatant target, and the attack was perpetrated by Unit 121, which reports to the Reconnaissance General Bureau, a clandestine agency.

The main problem with calling this terrorism is the absence of an act of violence. Still, there is ample precedent for the State Department considering threats of violence (“It will be a Fukushima”) to be acts of terrorism in its annual Country Reports on Terrorism. For example, State’s 2013 “Country Reports” cites a threat by an anarchist group to poison soft drinks, the conviction by a Norwegian court of an Ansar-al-Islam leader for “issuing threats and intimidating witnesses,” a bomb threat by Aum Shinrikyo, a death threat by Harakat-al-Mujaheddin, a threat by Jaish-e-Mohammed against an Indian politician, and threats by the Jewish extremist organization Kahane Chai.

The State Department has also cited threats by state actors, including a threat by Iran against Saudi Arabia (1989), Iraqi threats against Saudi interests (1990), Iranian threats that participants in the Middle East peace process would “suffer the wrath of nation” (1991), Libyan threats to support extremists in neighboring countries (1993), Libyan threats against dissidents abroad (1994, 1997, and 1998), and alleged attempts by the former Iraqi regime to intimidate dissidents abroad (2000 and 2002).

The Immigration and Nationality Act’s definition of “terrorist activity” includes threats, and the Criminal Code’s chapter on terrorism also makes threats punishable. Thus, the omission of threats from the FRAA definition appears to be a drafting oversight, and State treats it accordingly. Although the cyberattacks against Korea Hydro, by themselves, probably do not qualify as terrorism, the threat to make the plants “like Fukushima” would meet the standard, to the same extent as the threats against audiences for “The Interview” would.

For more information on what re-listing North Korea as a state sponsor of terrorism would actually do, see this post.

It’s concerning to see North Korea’s threats escalate to this level. Much like the attacks of 2010, hacking nuclear power plants goes a step beyond what I’d have thought even North Korea to be capable of. It’s more evidence of Kim Jong Un’s impulsive and violent nature. It’s more evidence that ignoring North Korea isn’t working. Just as clearly, appeasing them didn’t work, either. Four months after President Obama promised a “proportional” response to North Korea’s terrorist threats against American moviegoers, he has still failed to deliver on that promise. North Korea has drawn the obvious conclusion.

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Update: Yonhap’s take, and North Korea’s predictable reaction.

Three Pinocchios for Glenn Kessler’s “fact-check” on North Korea

If only for prudential reasons, 47 Republican Senators should not have written to Iran’s Supreme Leader. We only have one President at a time, and only the President should negotiate with foreign leaders. Parallel, shadow-government negotiations with foreign adversaries are wrong when Republican Senators do it; they were just as wrong when Jim Wright met with Daniel Ortega, when Nancy Pelosi met with with Bashar Assad over a Republican President’s objections, and when a young John Kerry met with Madam Nguyen Thi Binh, the Viet Cong representative to the Paris Peace talks. A country that cannot speak with one voice cannot speak coherently.

I do not exhibit this fossil record to question the Democrats’ objections, but because both parties need reminding to adhere to this principle, regardless of which party occupies the White House or controls Congress, and no matter how ardently the opposition may disagree with the President. Congress, of course, has the right and duty to legislate against bad deals, and to communicate its objections to the President and the people. Had the same objections come from Majority Leader McConnell or Chairman Corker to Secretary Kerry or President Obama, they would have been appropriate.

Substantively, the Republicans have good reason to worry about the President’s deal with Iran. Its main weakness is Iran’s mendacity. Iran has been caught with undeclared nuclear facilities and repeatedly lied (see page 14) to the IAEA, yet the deal would rely on NPT safeguards agreements that will only work if Iran is forthcoming. The alternative to a bad deal is not war. It would be some difficult diplomacy with our allies, and more sanctions, until Iran is ready for a deal that secures our interests, and those of our many allies within range of an Iranian bomb.

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Not surprisingly, the 1994 Agreed Framework with North Korea arises as an analogy to the negotiations with Iran. Also not surprisingly, The Washington Post‘s Glenn Kessler speaks up to defend the Agreed Framework and “fact-check” Senator Cotton’s criticism of it.

Obviously, Kessler has strong opinions about this subject. He covered North Korea during most of the Bush Administration, and his coverage leaned strongly toward the 1994 agreement’s most outspoken defenders, and against the Bush Administration for allegedly abandoning it. This 2006 story, for example, was a thinly veiled opinion piece defending the 1994 deal. Worse, Kessler treated North Korea itself like a sideshow to Foggy Bottom, mostly ignoring Pyongyang’s crimes against humanity, and thereby missing one of the decade’s most important human rights stories. Even when viewed through Kessler’s narrow aperture, North Korea’s lying and cheating about food aid and prison camps mirrored its approach to nuclear negotiations.

Kessler characterizes North Korea’s nuclear program as “nascent” in 1994, but by then, that program included a functioning reactor and reprocessing plant. You can see archived satellite imagery here. They don’t look “nascent” to me.

yongbyon6

5-mwe-nuclear-reactor-yongbyon-n-pyongan-dprk-photo-2

nuclear-reprocessing-plant-yongbyon-n-pyongan-dprk-photo-2

yongbyona3

What these images show is a large investment in the acquisition of nuclear weapons — a point Kessler concedes — even as between 600,000 and 1 million North Koreans starved to death.

As subsequent events would show with increasing clarity, North Korea was also pursuing a second, parallel path to a bomb by enriching uranium, in clear violation of the 1994 agreement. The gravity of this threat lies in the relative ease of concealing a uranium enrichment program, compared to a plutonium program like that shown above. A nuclear agreement that gave Kim Jong Il regime-sustaining aid and diplomatic cover, but that failed to curtail his uranium program, would have been a short-term benefit and a long-term liability for the security of the United States and its allies.

The extent of the uranium program became a matter of intense controversy by the late 1990s. By then, not even the Clinton Administration could certify Pyongyang’s compliance with the 1994 agreement. In a 1999 policy review, Clinton’s Defense Secretary, William Perry (assisted by current Defense Secretary Ashton Carter) also conceded the evidence of North Korea’s “possible continuing nuclear weapons-related work.” Meanwhile, Pyongyang’s development of ballistic missiles continued, almost without interruption.

The uranium controversy intensified during Bush’s presidency. The 1994 deal finally collapsed in 2002, when North Korean diplomats admitted the program’s existence to visiting U.S. diplomats. In response, the Bush Administration stopped shipments of fuel oil to North Korea, and the North Koreans kicked out IAEA inspectors and restarted the Yongbyon reactor. Because of Washington tribalism and North Korean exceptionalism — the tendency of some observers to excuse North Korea from the rules by which the rest of humanity lives by, or pretends to — many left-of-center scholars, diplomats, and reporters blamed the breakdown on Bush. Yet even as the evidence of North Korea’s uranium program mounted, Kessler questioned its existence.

The uranium controversy mostly ended in 2010, when North Korea dressed a visiting American nuclear scientist in a red velvet smoking jacket, handed him a Cohiba and a glass of Hennessy, and showed him through what former diplomat Christopher Hill once mocked as “a secret door they can open and find a group of scantily clad women enriching uranium.” Inside that room was a cascade of perhaps thousands of centrifuges, most likely based on designs from the A.Q. Khan network that Pyongyang worked on both before and after the 1994 agreement. The room did not exist in 2008, but its contents were years in the making.

uranium girl

Even now, Kessler questions the veracity of North Korea’s 2002 admission, saying, “Questions have since been raised about whether the Bush administration misinterpreted North Korea’s supposed confirmation.” Pyongyang’s admission was a particularly damning one for the Agreed Framework’s defenders, but if the facts leave little room for doubt about it, Kessler should not have left it unresolved:

One of the specialists who visited North Korea last week, former State Department official Charles L. Pritchard, was part of the U.S. delegation that reported hearing the North Korean admission. U.S. officials said they had three translators at the 2002 session and have no doubt the North Koreans confirmed the program.

One official present at the 2002 meeting said Pritchard and Assistant Secretary of State James A. Kelly began passing notes as Kang Suk Ju, North Korea’s first vice foreign minister, “looking flushed and defiant,” began a 50-minute monologue reacting to the U.S. declaration that it knew North Korea had an enrichment program. As the translation progressed, Pritchard and Kelly each passed notes, asking, “Is he saying what we think he’s saying?” A half minute later, they passed notes again, in effect saying, “Never mind — it’s clear.” [Washington Post, Jan. 12, 2004, archived here]

Tong Kim, one of the translators who was present for the discussion, later published his own confirmation of what Kang Suk Ju said (archived here). The Washington Post‘s story interests me the most, however. Given its date, it’s likely that Kessler himself wrote it. Unfortunately, it has fallen so far down the memory hole that not even The Internet Archive can retrieve it. For Kessler to question this admission is particularly disingenuous in light of what his own paper reported.

In 2007, Kessler wrote a book, “The Confidante,” which painted a flattering portrait of George W. Bush’s own sequel to the 1994 Agreed Framework (review here, first chapter here). Bush’s diplomats repeatedly deceived Congress to forestall opposition to their eleventh-hour deal with Pyongyang, but their agreed framework would turn out as badly as Clinton’s, and for the same reason. Shortly after the 2007 deal was signed, North Korea was caught red-handed building a nuclear reactor in Syria. (Kessler did not see this as a vindication for skeptics of North Korea’s trustworthiness, but as “an awkward moment for the Bush administration.”) Throughout 2008, North Korea lied about its uranium program, balked at inspections, and eventually withdrew from the deal shortly before Bush left office. Even in 2007, the outcome seemed predictable, and was.

Kessler writes that by 2009, talks with North Korea were “considered such a loser that the Obama administration has barely bothered to restart” them. He omits that Pyongyang greeted President Obama with a missile test and a nuclear test within six months of his inauguration. He also omits that the Obama Administration has engaged in years of on-and-off back-channel talks with Pyongyang, talks that may continue right up to this year. Those talks reached their pinnacle with the 2012 “Leap Day Agreement,” a deal to freeze North Korea’s nuclear and missile programs, and which Pyongyang reneged on within weeks of signing it. If President Obama kept the profile of his talks with Pyongyang low, it may be because Pyongyang was so justly infamous for its mendacity that he felt some understandable insecurity about “buying the same horse twice,” as his Secretary of Defense, Robert Gates, described it.

Who can name a single agreement with the United States, starting with and including the 1953 Armistice, that North Korea has kept? Kessler indulges much counterfactual speculation about how a Gore Administration would have handled the HEU question, but there’s little reason to believe that anything short of much tougher sanctions or regime collapse would have prevented Pyongyang’s first nuclear test, or the two subsequent tests it carried out during the Obama Administration. At a convenient moment, Pyongyang can always find an excuse to violate its agreements. Several such excuses arise each year.

Between 1994 and 2002, Kim Jong Il may well have concluded that the Agreed Framework was a small price to pay for the aid it raked in. After all, it would be years until Pyongyang could miniaturize and deliver a nuclear weapon to South Korea or Japan. By some accounts, it finally developed that capability during Barack Obama’s second term.

Where Presidents Clinton, Bush, and Obama all deserve blame is their shared failure to draft and implement a Plan B for Pyongyang’s inevitable cheating. That oversight deprived our diplomats of the leverage they needed to succeed, and may have encouraged Kim Jong Il to renege.

~   ~   ~

Interestingly, Kessler does not assign any Pinocchios to Cotton’s statement. Had Kessler only omitted the whole truth about Kang Suk Ju’s admission, I’d have afforded him some deference on an issue that has long been controversial, and where the whole truth still has not come to light.

The most important sentence in Kessler’s article, however, is this one: “North Korea got the bomb because the agreement collapsed.” It’s a conclusion that ignores years of evidence that North Korea’s pursuit of nuclear weapons — through both uranium and plutonium — was calculated, deliberate, and only partially delayed by the diplomacy Kessler now defends with a selective recitation of the facts.

Make no mistake: North Korea got the bomb because Kim Il Sung and Kim Jong Il wanted the bomb. They were willing to expend any amount of money, lives, and lies necessary to achieve that goal. Although the 1994 Agreed Framework may have delayed North Korea’s progress toward a plutonium bomb for a few years, ignoring its uranium program would have irresponsibly ignored the greater long-term threat. North Korea did not get the bomb because George W. Bush finally acknowledged that the 1994 deal had been falling apart for years. North Korea got the bomb because it wanted the bomb, and no American President was willing to do what it would take to interrupt that pursuit.

I don’t believe that Kessler wrote his article with intent to deceive, but it contains significant factual errors, selective omissions, and contradictions. More than anything, it’s a tendentious presentation of dubious and debatable opinion as fact. By my reading of Kessler’s own standards, that qualifies for three Pinocchios.

Off-topic: The remarkable Anna Ella Carroll

My belated contribution to International Women’s Day is to direct you to the remarkable, nearly untold story of Anna Ella Carroll, a legal scholar, spy, strategist, and Lincoln confidant who made an inestimable contribution to the Anaconda Plan, and to the union victory in the Civil War.

N. Korea calls for S. Koreans to join “patriotic struggle to check and foil the U.S. imperialists.”

Following North Korea’s post-hoc support for the slashing of U.S. Ambassador Mark Lippert, my two main questions where (1) whether the North had a role in inciting the attack (for which I’ve seen no direct evidence thus far); and (2) whether the North is calling for more violent anti-American attacks.

KCNA’s latest helps us answer the latter question in the affirmative. It isn’t specific about its favored methods of “patriotic struggle,” although its recent approval of the slashing of diplomats should give you a fairly good idea.

Full text below the fold.

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Good engagement: BBC, in a reversal, decides to broadcast to North Korea (Update: Did the Telegraph get it wrong?)

Congratulations to EAHRNK, Lord Alton, and Youngchan Justin Choi, another of the young Korean-American over-achievers who may already have had an impact beyond his years on the history of his ancestral homeland. Here’s another link to Choi’s pages on Twitter and Facebook, if you wish to add your congratulations to mine. (I’m sure I’ve omitted many names of those who pushed for this, so feel free to add others in the comments.)

It now looks like the Beeb is going to launch a North Korea service after all. So what took the BBC so long?

[I]t is likely to spark fury from Pyongyang’s volatile leadership, and could lead to the British embassy in Pyongyang being targeted for protests or being shut down altogether.

It could also put Britain in the firing line for North Korean-led cyberattacks, such as the one that targeted Sony Pictures last year over its film “The Interview”, which lampooned Kim Jong-un. [The Telegraph]

The Sony attack wasn’t attributed until last December, and the BBC had been considering this issue for far longer. This reason seems more plausible to me:

A number of senior figures within the Foreign Office were understood to have objected to the proposal, fearing that Britain’s ambassador to Pyongyang could be constantly hauled in for dressing downs by his North Korean hosts.

Gee, this bad? The horror! They sound an awful lot like our State Department.

But pressure in Parliament and the Lords, combined with growing international concern at the extent of Pyongyang’s human rights abuses, is understood to have led to a recent change of heart at the BBC.

Having said that, there are also some sound practical reasons, too, although not one of them seems insurmountable to me. For example, if there are short-wave broadcasts available the jangmadang (markets) won’t take long to provide short-wave radios. An even easier change would be for South Korea to allow medium-wave broadcasts to North Korea. That would certainly lessen the need to argue about leaflet balloons.

I look forward to the reaction of everyone who supports engagement with North Korea, right up to the point that the engagement reaches ordinary North Koreans. For some reason.

Now, if we can just get them to bring back Top Gear ….

~   ~   ~

Update: A well-informed source, who asked not to be named, writes in to tell me he had recent communications with the BBC, and that the BBC is still saying no. The BBC needs to clarify its position, and the rest of us — especially those who sincerely believe in engaging the North Korean people — need to keep the pressure on.

Russia’s nuclear cooperation with N. Korea violates at least three UNSC resolutions

My final excerpt from the draft U.N. Panel of Experts report is a lengthy graf (below the fold) describing long-standing and continuing Russian assistance to, and cooperation with, some of the same scientists involved in North Korea’s nuclear weapons program.

It’s hard for me to understand how this is not a violation of the UNSC sanctions. Despite the fact that key scientists in designated North Korean agencies (for example, its General Bureau of Atomic Energy) were invited to do research in Russia, Russia argues that technically, it didn’t invite any designated individuals, that its own facility’s purposes are peaceful, and that North Korea “should not be excluded from fundamental science activities.”

The POE responds that “all … nuclear programmes” means what it says. I’ll helpfully insert the relevant provisions, starting with this one from UNSCR 1718 (2006):

6. Decides that the DPRK shall abandon all nuclear weapons and existing nuclear programmes in a complete, verifiable and irreversible manner, shall act strictly in accordance with the obligations applicable to parties under the Treaty on the Non-Proliferation of Nuclear Weapons and the terms and conditions of its International Atomic Energy Agency (IAEA) Safeguards Agreement (IAEA INFCIRC/403) and shall provide the IAEA transparency measures extending beyond these requirements, including such access to individuals, documentation, equipments and facilities as may be required and deemed necessary by the IAEA;

And there is this, from UNSCR 1874 (2009):

“8.   Decides that the DPRK shall abandon all nuclear weapons and existing nuclear programmes in a complete, verifiable and irreversible manner and immediately cease all related activities, shall act strictly in accordance with the obligations applicable to parties under the NPT and the terms and conditions of the IAEA Safeguards Agreement (IAEA INFCIRC/403) and shall provide the IAEA transparency measures extending beyond these requirements, including such access to individuals, documentation, equipment and facilities as may be required and deemed necessary by the IAEA;

And this, from UNSCR 2094 (2013):

“5.   Condemns all the DPRK’s ongoing nuclear activities, including its uranium enrichment, notes that all such activities are in violation of resolutions 1718 (2006), 1874 (2009) and 2087 (2013), reaffirms its decision that the DPRK shall abandon all nuclear weapons and existing nuclear programmes, in a complete, verifiable and irreversible manner and immediately cease all related activities and shall act strictly in accordance with the obligations applicable to parties under the NPT and the terms and conditions of the IAEA Safeguards Agreement (IAEA INFCIRC/403);

Under Section 104(a) of the NKSEA, the Russian institute concerned would be subject to mandatory asset blocking, and possibly to criminal prosecution leading to the forfeiture of its U.S.-based assets. Unless, of course, the institute was unwise enough to have kept its funds in Euros or (may God help them) Rubles. In which case, the question would shift to which bank the Institute uses.

The POE stops short of concluding that Russia is in violation, but says it will continue to investigate. The POE is also investigating that recent report that Russia invited North Korean representatives to attend a weapons trade fair. All in all, it’s a promising candidacy for the Axis of Evil. Excerpts follow.

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Roh Moo Hyun’s ex-campaign manager just hates it when politicians exploit tragic isolated incidents

The good news is that Ambassador Mark Lippert has been released from the hospital, and is recovering well.

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[Joongang Ilbo]

Give the South Koreans credit for making lemonade from lemons — the news coverage here has been filled with images of well-wishers greeting Lippert, or expressing regret for the attack on him. The greetings look both staged and sincere,* but because of that reaction, most Americans will see Kim Ki-Jong as one small turd in a vast, sweet, fizzy bowl of gachi gapshida.

lippert 2

I’m not sure I quite agree with that image now, and I certainly wouldn’t have agreed with it nine years ago. In today’s environment, however, I’d guess that Kim’s actions, Lippert’s obvious gift for public diplomacy, and the imagery of the pro-American reaction will shift public opinion in a more anti-anti-American direction, at least until something shifts it back. But as we’ll also see in a moment, the reactions of other Koreans seem oddly conflicted.

Lippert’s assailant, Kim Ki-Jong, has been charged with attempted murder. The Men in Blue have established that Kim visited North Korea not six, not eight, but seven times between 1999 and 2007. Which does raise a rather obvious question:

“We are investigating whether there is any connection between the suspect’s visits to North Korea and the crime committed against the U.S. ambassador,” Yoon Myeong-seong, chief of police in Seoul’s central Jongno district, told reporters. [Reuters]

It’s hard for me to believe that North Korea ordered a hit on the U.S. Ambassador, but then, I never thought they’d order a hit on a South Korean warship or build a nuclear reactor in Syria, either (or get away with both of those things, but I digress). It’s still the sort of thing you expect the police to investigate when someone slashes a foreign ambassador, especially when the assailant’s preferred country-of-destination publicly approves of the attack.

The police are doing a forensic analysis of Kim’s hard drive, and looking at what his phone and financial records say about any accomplices or foreign sponsorship. They’re also going through his library, and have concluded — to the astonishment of no one with any sense at all — that it has some pro-North Korean content.

Ordinarily, I wouldn’t want the police to investigate a man’s political views. I don’t believe it should be illegal to hold any political belief, but as we’ve established, Kim Ki-Jong fits the American legal definition of a terrorist, and the motives of a terrorist have to be probative of something in a criminal investigation. Not that there should be much question, based on Kim’s words, actions, target, and timing, that Kim was a North Korean sympathizer. Right?

Opposition leader Moon said that he expressed his appreciation to Lippert as his calmness and online messages helped the alliance remain on a firm footing.

“I believe Lippert’s attitude helps enhance the alliance, but if this incident is politically used (by the ruling party), which claims pro-North Korean followers are behind it, such a move will rather hurt the Seoul-Washington ties,” Moon said. [….]

The liberal NPAD says the attack was an “isolated incident” committed by an extremist nationalist, urging the Saenuri Party not to use the case politically. [Yonhap]

That’s right. Roh Moo Hyun’s former campaign manager and successor party earnestly hope that conniving politicians won’t exploit emotions arising from a tragic-yet-isolated incident for political gain.

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koreans_ripping_apart_american_flags_2002_protests

Because that could hurt the alliance. Nice of him to warn us about that.

angry-koreans-protests-demonstrations-08

Also, does anyone else see anything off about Moon passing judgment on the attitude of the guy who just had 80 stitches? Couldn’t he have at least waited for Lippert to come home from the hospital before deconstructing the sensitivity of his tweets? In what sense is “the alliance” responsible for Korean politicians doing what politicians do? And why, by contrast, is Moon so rigidly non-judgmental about Kim Ki-Jong’s motives? He isn’t even waiting for the police to finish their investigation to rule out the McCarthyist smear that Kim Ki-Jong, who slashed the face of the American Ambassador while shouting, “The two Koreas must be reunified!” and protesting joint military exercises, might just maybe have been a North Korean sympathizer.

With this risible statement, Moon not only opened the door to rebuttal about Kim’s views, he opened the door to questions about his own grasp of reality.

Before you get too worried that Moon’s election to the presidency would be the second coming of Roh Moo-Hyun, at least take comfort in the fact that it would be a terrific opportunity to withdraw two brigades from South Korea and put the OPCON handover on a six-month timetable. And if you think hard enough about the insecurity and dependency from which Moon’s attitudes grow, you’ll start to see why that would be a healthy thing for South Korea’s sense of nationhood, self-reliance, and sense of responsibility for its own policies. I’d prefer to see our alliance with Korea become more like our alliance with Israel.

Oh, and since Kim Ki-Jong lawyered up, he now denies having ever been to North Korea, that (in Reuters’s phrasing) his actions were “connected in any way with North Korea,” or that he intended to kill Lippert. Not that I have any great interest in the success of Kim Ki-Jong’s legal defense, but it’s a hard thing to stand by and watch legal malpractice. So, as a man with some experience defending criminal suspects, I’ll offer this gratis consultation to Mr. Kim’s lawyer: get your client under control and shut him the f**k up.

Below the fold, for your enjoyment, I’ve posted excerpts from the delectable inter-Korean dialogue that has broken out over the question of whether slashing Ambassador Lippert’s face was the moral equivalent of Korean patriots resisting the Japanese occupation. (Yes, Pyongyang is doubling down on that one.) I can’t imagine that in the 1930s, a popularly elected Korean government (had one existed) would have lobbied Tokyo to stall the transfer of OPCON back to Seoul. I see that Marcus Noland also found that analogy objectionableWhat I did not see is where Moon Jae-in did. Anyone?

~   ~   ~

* A regular reader, based in Seoul, and with strong connections to conservative groups there, writes in to say that the pro-Lippert demonstration shown in this photo was not staged by the Korean government, and describes the organizer as “a grass-roots, pro-US conservative” woman.

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Why legal investments in North Korea are a money laundering risk

You’ve often seen me write about the importance of “financial transparency” in transactions with North Korea. For a decade, economic engagement has mostly been done by one of two models: (1) controlled interactions with members of the elite, the actual effects of which are negligible at best; and (2) barbed-wire capitalism, where a few North Korean officials relay orders from foreign managers to hand-picked workers, and where the regime seals the whole enterprise off to prevent it from influencing the local community.

The former are, for the most part, of little financial significance. The latter may represent a significant source of income for illegitimate uses, and may also help the regime hide its flows of dirty money.

It wasn’t supposed to be this way by now. The idea behind economic engagement was to gradually draw North Korea into compliance with the rules that the civilized world lives by. Yet ten years later, the South Korean Unification Ministry can’t tell us how much (if anything) Kaesong’s workers receive after the regime takes its cut from their wages, and the Undersecretary of the Treasury recently expressed his concern about just how North Korea is spending that money.

The U.N. Panel of Experts now expresses a related worry — that North Korea could be using its ostensibly legal businesses to conceal and launder the proceeds of illicit activity:Screen Shot 2015-03-03 at 7.32.53 AMScreen Shot 2015-03-03 at 7.33.11 AMA few days ago, we saw that North Korean diplomats have been smuggling gold to earn hard currency for Pyongyang. That’s not just of concern because of how North Korea spends the earnings, but also because of concerns about conditions in which the gold is mined. As noted here, however, North Korea continues to run most of this business through the dollar system.

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Hence, the renewal of FATF’s warning about “countermeasures.”

Recently, a scholar friend emailed me that his opponent in a debate had criticized the effrontery of blocking North Korean assets that are the co-mingled proceeds of legal and illicit activity. In fact, that is standard law enforcement practice, because co-mingling is the essence of how criminal organizations conceal the illicit origin of their earnings.

Defendants often commingle SUA proceeds with legitimate funds. The government need not prove that all proceeds in a transaction were unlawfully derived, but must be able to trace some of the proceeds to a SUA. Criminally derived proceeds deposited with legal funds are considered to be withdrawn last unless the account/business is deemed to be permeated with fraud. This implies that the business operations are so intertwined with fraud that to segregate the legitimate operation and profits is impossible. Special agents should work closely with the attorney for the government when investigations involve commingled funds to ensure the elements of the crime are met. [IRS]

That’s why Congress, and many third-country parliaments, have long given their law enforcement agencies the authority to seize co-mingled funds.

The Treasury Department could do a great deal to regulate transactions with North Korea — and perhaps, put more food into empty bellies and drive the development of a true market economy — simply by requiring OFAC to license them. As a condition of each license, the Treasury Department could ask the applicant for assurances that the ultimate end-use of the funds would be for items that would benefit the people: food, clothing, medicine, consumer goods, materials for civilian construction projects, or electronic items like desktop computers that help to open up information flows.

To make this requirement truly effective, the EU Central Bank could impose similar requirements for Euro-clearing transactions. If Canada, Britain, Australia, and Switzerland joined, they would collectively cover just about all of the world’s convertible currencies, leaving only trades in Chinese Yuan unregulated. Of the latter, the Treasury Department could still target the most egregious with secondary sanctions.

In his paper about labor conditions in Kaesong, Marcus Noland called for investors in North Korea to adhere to a single set of minimal standards, akin to the Sullivan Principles. What I’m calling for here is a financial analogue to the Sullivan Principles — a requirement that investors ensure that their money will be used to better the lives of the North Korean people, rather than being wasted on weapons and luxury goods.

The real flaw in the engagement argument today, ten years after it began, is that it can’t show any significant, enduring, positive impact on North Korea, its treatment of its people, or its relations with the wider world.

It’s unfortunate that so many advocates of engagement are too focused on making nice with their minders to insist that the regime make any of the changes they once promised. Two good places to begin would be transparency in their labor and financial arrangements. If they did, they might strengthen their argument by showing that they’ve made legitimate, positive change in how North Korea does business.

N. Korea’s support for slashing of U.S. Amb’r might be state sponsorship of terrorism

Yonhap and The Washington Post are reporting that North Korea’s official “news” agency, the Korean Central News Agency or KCNA, has expressed its support for an extremist’s slashing of U.S. Ambassador Mark Lippert yesterday, calling it “a just punishment.” You won’t find those words in the English version of KCNA’s report, whose headline is a dry, “U.S. Ambassador Attacked by S. Korean,” although you will see that KCNA spelled the Ambassador’s name “Report.” The Korean-language headline of the same article, however, translates to something like, “Act of just punishment for war-crazy America.” Here’s a screenshot of the original Korean.

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KCNA has as bad a reputation for malware infections as Tijuana has for infections of other kinds, but if you’re willing to risk it, here’s a link. You’ve been warned.

The linguistic disparity looks like another case of KCNA code-switching for Korean- and English-speaking readers, in the same way it chose not to translate its most racist attack on President Obama. KCNA must assume that English speakers won’t notice, and that Korean speakers won’t care (which says a lot about what kind of Korea KCNA believes in). I’ve pasted the full English-version KCNA article below the fold. Here are some excerpts:

Kim Ki Jong, representative of the Uri Madang, a civic organization demanding peace against war, suddenly stormed with a knife Mark, shouting the south and the north must be reunified and he is opposed to a war. [….]

He didn’t stop shouting slogans opposing war and the U.S.-south Korea joint military exercises, being walked away by police.

Because you can’t really say you love peace unless you’ve slashed a diplomat’s face for it.

KBS, CBS, MBC and other broadcasting services of south Korea reported the news, screening Mark shedding blood from his face and wrist. The AP and other foreign news agencies promptly aired the breaking news.

This is my cue to remind you that the AP is a business partner of KCNA, through two memoranda of agreement that the AP refuses to disclose. According to leaked drafts, however, the AP agreed to “serve the purpose of the coverage and worldwide distribution of policies of the Worker’s Party of Korea and the DPRK government.”

CNN, quoting south Korean media as reporting Kim was opposed to the joint military exercises, said that his remarks were prompted by his anti-American feelings.

The puppet police are strictly guarding U.S.-related facilities allegedly to cope with emergency.

The recent case amid mounting anti-Americanism reflects the mindset of south Korean people censuring the U.S. for bringing the danger of a war to the Korean peninsula through the madcap saber-rattling. -0-

President Bush removed North Korea from the list of state sponsors of terrorism on October 11, 2008. The Obama Administration’s official view is that North Korea is “not known to have sponsored any terrorist acts since the bombing of a Korean Airlines flight in 1987.” Discuss among yourselves.

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Ambassador Lippert’s wounds were ghastly:

Surgeon Jung Nam-sik of Yonsei University Hospital, speaking at a televised briefing, said 80 stitches were needed to repair Lippert’s facial wound, which was more than four inches long and one inch deep. The cut did not affect his nerves or salivary gland, the surgeon said. Lippert also suffered significant knife wounds to his left wrist while apparently struggling to push off his assailant.

The ambassador is expected to be able to use his hand after four weeks of treatment, but due to tendon damage, a more complete recovery will take longer because of the loss of sensation in his little finger, his doctors said. [N.Y. Times]

According to the doctors, “it will take several months for Mr. Lippert to recover full use of his injured fingers.” If there’s anything fortunate about this ugly incident, it’s the fact that it happened in the world’s plastic surgery capital. It’s never a good thing to have your face slashed by a knife-wielding extremist, but if it happens, there’s no better place to get reconstructive surgery than Seoul. The attack must have been horrifying for Lippert and his wife. That Pyongyang would support this openly tells you plenty about its easy, casual embrace of crimes that cause human suffering.

The attack will mean the end of Lippert’s brave walks through Seoul without bodyguards, but if anyone in the State Department reads this, I hope they’ll encourage the Ambassador to go right back onto the streets, scars and all — with bodyguards — as a vivid reminder of what Kim Ki-Jong’s ideology stands for. As soon as he feels well enough, of course.

Kim sounds like the sort of left-nationalist whose ideology was at its apex when I was in Korea, as I described it in my congressional testimony years ago. That sentiment has since ebbed, although latent extremism is a hard thing to poll. South Korea wants us to see this as an isolated incident, which, strictly speaking, it is today.

Kim Ki Jong

[Kim Ki-Jong at a protest at the U.S. Embassy in Seoul, one year ago]

That wasn’t always the case. In 1989, left-nationalist thugs occupied U.S. Ambassador Donald Gregg’s residence, occupied the U.S. Information Service building in Seoul, and tried to burn down the U.S. Cultural Center in Gwangju. In 2006, others blocked former Ambassador Sandy Vershbow from going to an interview.

There is a small-but-significant constituency in South Korea that agrees with Kim Ki-Jong’s sentiment, if not necessarily his methods. Some commenters at the far-left, U.S.-based Minjok Tongshin are expressing their support for the attack. (Yes, I’m assuming that some of them are South Koreans.) One even compares Kim Ki-Jong to Yun Bong-Gil, who orchestrated an anti-Japanese bombing in 1932, and who is considered a national hero in South Korea. The intersection of nationalism and socialism is an especially ugly place.

Other commenters disagree with Kim’s violent methods. Overall, the vast majority of Koreans will be repelled by the attack.

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Having established that the reports of North Korea’s support for the attack are accurate, let’s examine the legal significance of that support. Under Section 6(j) of the Export Administration Act, the Secretary of State may designate a state as a sponsor of terrorism if he finds that the state has “repeatedly provide[d] support for acts of international terrorism.” There are no authoritative definitions of “support” or “international terrorism” for purposes of a SSOT listing, but we can get a good idea of what those words mean from the various definitions of “terrorism” scattered around the U.S. Code, and in the case of “support,” from other, less authoritative sources.

We’ll take the simpler question first. Was the attack international terrorism? Based on the facts reported so far, pretty clearly so. It was a premeditated, violent, politically motivated attack by the head of a violent, extremist subnational group (it calls itself Uri Madang) against a noncombatant target. The attacker knew where and when Lippert would be speaking and may have had a hand in inviting him to breakfast. His political motive was to protest annual U.S.-Korean military exercises. Targeting an ambassador makes the attack international terrorism. As such, it would meet the definitions at 22 U.S.C. 2656f and in the Criminal Code, at 18 U.S.C. 2331(1). It would also meet the definition of “terrorist activity” in the Immigration and Nationality Act, which is the definition the State Department uses to designate Foreign Terrorist Organizations.

Also, Kim reportedly told the police, “Today I committed a terrorist act.” So there’s that.

The question of “support” is the harder one. Although KCNA’s statement certainly fits one plain-usage meaning of “support,” as far as we know, the support was only post-hoc, verbal support. There’s no evidence that KCNA has ever referred to Kim Ki-Jong or “Uri Madang,” the group he led before today. On the other hand, Kim had visited North Korea six times, which is pretty rare for South Koreans who aren’t involved in some kind of cross-border business venture. Kim even tried to build a Kim Jong-Il* monument in Seoul. It seems unlikely that the North Koreans could have failed to take an interest in him by his third visit, but that’s just my speculation.

By itself, KCNA’s statement of support doesn’t prove that North Korea encouraged, facilitated, or planned the attack. But what does “support” mean, legally? The answer isn’t clear. There are only two places where anyone wrote anything in official sources approximating a definition. One of them is a (non-binding) 1989 congressional report, quoted here. That report lists some categories of conduct that would qualify, including providing materials, money, training, sanctuary, or planning or directing attacks. KCNA’s post-hoc verbal support isn’t any of those things, but that list isn’t exclusive.

A more authoritative source is this section of the Foreign Relations Authorization Act for Fiscal Years 1988 and 1989 (the same section that defines “international terrorism,” as codified in Title 22). It doesn’t, strictly speaking, define “support” — no statute does that — but it does describe conduct that the State Department is required to report in its in annual Country Reports on Terrorism. That conduct includes political support. That suggests Congress wanted State to consider conduct that falls short of material support, but which nonetheless encourages terrorism. And a fair reading of KCNA’s reaction to the attack on Ambassador Lippert would be, “More like this, please.”

Did the North Koreans say anything before the attack that could be viewed as inciting it? Well, read this and this from Pyongyang’s Rodong Sinmun from a few days ago and ask yourself how Kim Ki-Jong would have interpreted it. For example:

The whole Korean nation and the peace-loving people all over the world are required to resolutely check and frustrate the anti-DPRK nuclear war drills by the U.S. and south Korean puppet group that harass the peace and stability on the Korean peninsula and in its vicinity.

Rhetoric like this is common in North Korean propaganda. We have no way of knowing whether Kim Ki-Jong even read this, of course. It’s technically illegal to read the Rodong Sinmun in South Korea. Regardless of whether you believe Pyongyang incited this attack, however, it pretty clearly means to incite the next one.

Is there any precedent for the State Department considering the mere incitement of attacks to be the state sponsorship of terrorism? There is. State’s 1991 Country Reports on Terrorism cited Saddam Hussein’s call for “all of his terrorist allies to attack coalition targets, frequently through announcements on Iraq’s Mother of Battles radio.” The 1997 report (among others) cited the Ayatollah Khomeini’s offer and broadcast of a bounty for the first guy to kill Salman Rushdie for writing “The Satanic Verses.” The 2009, 2010, and 2012 reports cited Syria’s hosting of al-Rai radio, a pro-Baathist radio station that “transmitted violent messages in support of terrorism in Iraq.” So there’s ample precedent for State to consider incitement of violence as the state sponsorship of terrorism. And it’s certainly not above Pyongyang to directly incite the very sort of act that Kim Ki-Jong committed:

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Could State re-list North Korea as an SSOT because of its approval of an attack on a U.S. Ambassador? The legal standards are vaporous, but yes, it could. There isn’t much evidence that Pyongyang actually caused this incident or intended for it to happen, although its statement today encouraged more like it. The incitement of terrorism was enough to justify the SSOT listings of Iran, Iraq, and Syria. It could justify a re-listing of North Korea.

Should State re-list North Korea as a SSOT for expressing its support for this attack? No. State should re-list North Korea as a state sponsor of terrorism because of its multiple attempted or completed assassinations of activists and defectors in China and South Korea. It should re-list North Korea because of its long relationship with Hezbollah, in which North Korea helped Hezb dig a tunnel system, and was caught shipping it two boatloads and one plane-load of weapons, including MANPADS. It should re-list North Korea because of its threat against audiences for “The Interview,” right here in the United States. It should re-list North Korea for the kidnapping and murder of the Reverend Kim Dong Shik, for which Barack Obama personally promised, in writing, to oppose removing North Korea from the list to begin with.

All of those things meet any reasonable interpretation of what “support for international terrorism” means. Of course, if none of those things was enough for our State Department, I don’t suppose this will be, either.

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* A previous version of this post said Kim Il-Sung. Since corrected.

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Breaking: U.S. Ambassador to S. Korea slashed by guy who really hates bloodshed

Here’s a link to the story, and here’s a picture:

Hat tip to Sung Yoon Lee. More to follow, but initial word I’m hearing suggests a political motive.

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Update 1: AFP’s report has more details.

Seoul (AFP) – The US ambassador to South Korea, Mark Lippert, was injured in an attack by a razor-wielding assailant Thursday in Seoul, police and television reports said. The YTN news channel, citing police sources, said a man with a razor blade concealed in his right hand had attacked Lippert as he was attending a breakfast function in central Seoul. The channel carried a picture showing the bleeding ambassador holding his right hand to his right cheek, with his left hand smeared with blood. Lippert, 42, was taken to hospital, but his injuries were reportedly not life-threatening. The assailant, who was immediately taken into custody, reportedly shouted an anti-war slogan as he lashed out at the envoy, who only took up his post in Seoul last October. The United States and South Korea launched annual joint military exercises this week, triggering a surge in tensions with North korea.

It will be interesting to see if North Korea praises this, although it’s hard to see even them being stupid enough to order it.

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Update 2: Some of you will recall that in 2006, Park Geun-Hye was also the victim of a similar slashing attack. I never saw it reported that the North was behind that attack, although one of the few things Park ever did to impress me was to react coolly afterward. As for the assailant’s motives, well, let’s just say I’m adding a “Fifth Column” tag to this post. The Chosun Ilbo is reporting that the assailant shouted, “The two Koreas must be reunified.” Yonhap adds:

The suspect shouted his opposition to the annual Key Resolve and Foal Eagle military exercises that started Monday, police said. The exercises are part of Seoul and Washington’s efforts to better deter threats from North Korea.

I loved the next sentence.

Police said they were questioning the suspect to determine the motive for the attack.

In July 2010, Kim received a suspended two-year prison term for throwing two pieces of concrete at a Japanese ambassador to Seoul. He published a book last year in which he details his assault on the Japanese envoy, Tosinori Shigeie. 

Kim is the head of a liberal organization that protests Japan’s territorial claims over South Korea’s easternmost islets of Dokdo. He changed the address of his family register to Dokdo in 2006 after the Japanese prefecture of Shimane designated a day named after Takeshima, which is what the islets are called in Japan.

I wish we’d stop calling people like this “liberal.” That’s an insult to conscientious liberalism. Shall we set up a little pool for the first reporter to call the slasher a “peace activist?”

So a serial assailant of foreign diplomats was allowed to run loose on the streets, lead his own organization, and attack again? Look — you can believe that Shinzo Abe is a repulsive human being and a war crimes denier, and still see that this is the sort of conduct you should expect in a society where any political leader can earn cheap applause by vilifying a former enemy. Or so it has been said.

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Update 3: This is what’s known as “premeditation.”

North Korea evades U.N. sanctions with shell games, spell games, and whack-a-mole

On any given day, the U.S. Treasury Department’s Office of Foreign Assets Control may publish several pages of new designations for the list of Specially Designated Nationals. Inevitably, most of the designations will be designations of aliases. That’s because one of the oldest sanctions-evasion tricks is renaming an entity, so that when banks type its name into their software, they don’t get a hit that might warn them to decline the transaction, block the account, or file a Suspicious Activity Report.

In the case of North Korea, there’s an additional and related problem. North Korea can also play spell games with the English transliteration of Korean names. The U.N. Panel of Experts has specifically raised that issue as a problem that requires closer attention from national governments.

So when Treasury designates a list of North Korean smuggling ships, as it did last July, it’s not enough to publish their names and IMO numbers and call it done.

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Like any sanctions program, the enforcement of sanctions against North Korea requires constant attention and follow-up.

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It’s a long game of what Marcus Noland calls Whack-a-Mole. And judging by the POE’s latest report, we aren’t winning that game.

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This isn’t a grand new revelation. NK News’s Leo Byrne, one of the very best reporters to cover North Korea for any publication, noticed this last October. Four months later, Treasury hasn’t followed up with new alias designations. You can even extend that M.O. back to this 2006 New York Times report, on North Korea’s use of deceptive shipping practices, like re-naming and re-flagging. Whether Treasury’s inaction reflects a lack of political will or a simple lack of resources, I’ll decline to speculate.

A key point the POE makes is that member states are required to seize these vessels as soon as they identify them.

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Instead, several nations are allowing Ocean Maritime Management to continue operating on their soil, or from their ports.

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OMM doesn’t just rename its ships; it also renames itself. Lately, for example, it has gone by the names “Haejin Ship Management Co Ltd.” and “Yongjin Ship Management Co Ltd.” Sometimes, it puts each ship under the ownership of its own shell company. The POE also suspects that OMM is working through Singapore-based entities known as ”Senat Shipping & Trading Private Limited,” “Senat Shipping Limited,” and “Senat Shipping Agency Pte. Ltd.,” particularly for the handling of its financial transactions. The POE put some questions to Senat. Senat hasn’t responded.

OMM’s deceptive practices don’t only appear to be designed to evade sanctions. They also appear to be intended to evade creditors. Switching the ownership of each ship to a single shell company is helpful for that.

As a result, OMM is still in business. And in some cases, its agents are actually North Korean diplomats.

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The POE even made this interesting diagram.

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North Korea isn’t only playing whack-a-mole with shipping. Notorious (and U.N.-designated) proliferator Ryonha Machinery sometimes goes by “Millim Technology Company.” It operates openly in Dandong and Beijing, China under that name. The General Department of Atomic Energy of the DPRK now calls itself the “Ministry of Atomic Energy Industry of DPRK.” The Korean Committee for Space Technology recently renamed itself the “National Aerospace Development Administration,” or NADA (couldn’t you have checked that one with your Cuban friends?). The Second Academy of Natural Sciences has taken to calling itself the “National Defence Science of the Democratic People’s Republic of Korea.”

The moles, in other words, are popping up faster than we can whack them. Thanks to Chinese stalling, the U.N. bureaucracy is too hopelessly slow to keep up, and the member state governments (including ours) that are supposed to be enforcing these sanctions aren’t paying attention.

The report tells us some other interesting things about North Korea’s merchant fleet. As North Korea’s fleet ages out, it is switching to smaller vessels. In a rare bit of good news, its port calls in non-Chinese foreign ports have declined dramatically in recent years, “to just 6 percent of 2008 figures,” according to the POE. Today, nearly all of its direct shipping trade is with China. It would make sense for North Korea to migrate to smaller ships in that case. In the past, for example, in the 2009 ANL Australia incident, North Korea shipped its cargo to Chinese ports in containers, and then played a shell game with port authorities all the way to Dubai, and very nearly to Bandar Abbas.

North Korea is also relying more on reflagging — the use of so-called “flags of convenience,” to dodge inspections.

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The obvious answer is for governments to call on these states to stop reflagging North Korean ships, unless they physically cross-check their IMOs. If these states continue reflagging vessels that are subject to immediate seizure, vessels flying these flags should be targeted for inspection by the United States and other countries. This is a national security issue. God only knows what the North Koreans might want to slip into this country in a shipping container. For more on that option, see Section 205 of the NKSEA.

One potential exploit in North Korea’s shipping system is insurance. North Korea has found it difficult enough to insure its vessels that it self-insures.

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We saw, in the case of the Mu Du Bong, that North Korean self-insurance isn’t particularly useful. One solution to that problem is for ports to refuse to accept KSPIA as a valid insurer. When port directors and customs inspectors see that a vessel is insured by KSPIA, that should also be a signal for them to check the vessel’s IMO number, or any links to Ocean Maritime Management or its aliases. If they can, they should be seizing any of its vessels on the spot.

Finally, North Korean ships are switching off their transponders.

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Screen Shot 2015-02-27 at 6.56.41 PMThat’s often the first sign of a vessel that’s engaged in smuggling or piracy. Those vessels should be followed to port, boarded, and inspected.

The POE also seems close to calling for the designation of Air Koryo, although I’d personally counsel against that, absent some established link between them and North Korea’s post-UNSCR 1874 smuggling:

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I’ll close with this graphic of POE’s various methods of deception.

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Clearly, many member states aren’t taking the enforcement of these sanctions seriously. What’s most obviously lacking is any coordination of enforcement among governments. If only there were some inter-governmental organization whose mission were to control proliferation through international air and maritime cargo. Even better, if only that organization were unencumbered by a requirement for unanimous consent, or the threat of a veto from Russia or China. Oh, wait. There is exactly such an organization. So what’s stopping us?

An open letter to Mike Bassett

Dear Michael, Thank you for your letter. As anyone who has read One Free Korea knows, I enjoy a good debate, but I respectfully decline to “debate” ideas like these:

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That’s not a debate, those are delusions. Incidentally, I’ve noticed how at some moments, you try to seem calm and rational. At the next moment, your moods swing wildly to some fit of rage. You seem unstable (as in, “Warning: contents under pressure”). You’re not an adversary; you’re a stalker and a conspiracy theorist. I feel great sympathy for your personal circumstances, and I think you need help. That’s why, up to this point, I’ve mostly ignored you. More fundamentally, I really don’t think you have anything interesting to say.

Although I find your tone obsessive and creepy, I’ll choose not to interpret your “ultimatum” as a physical threat. Say what you like on your blog. I really don’t care one way or another, with two caveats: (1) if you libel me, I’ll sue, and (2) if you ever approach me in person, I’ll contact the police and file for a restraining order.

Have a wonderful day.

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Update: It now occurs to me that that first screenshot entitles me to invoke Godwin’s Law. Also, to be clear, I’m a lawyer, not a doctor. My inferences about Bassett’s emotional stability are just that — my own inferences. I base them on what he writes, how he writes it, and what he has said publicly about his personal history. A healthy mind does not veer Hitler-and-yon the way Mr. Bassett’s does. I wish him a speedy recovery. I also wish he’ll do it at least 500 feet away from me.

Yes, North Korea is still using the dollar system to launder its money.

The Financial Action Task Force has re-issued its call for “countermeasures” against the risks of money laundering and terrorist financing emanating from North Korea. The FATF’s call is not significantly different from advisories the FATF has issued since 2011, but it is significant in one way.

More sensible Korea-watchers are accustomed to the pavlovian response of the South Korean press, and of certain American academics, whenever North Korea hints at being willing to talk. We saw this again after Kim Jong Un’s New Year speech, which was (as is traditional) so selectively overanalyzed that Kim Jong Un’s intent could not be identified from dental records. We saw it when the editors of The New York Times seized on a risible North Korean offer and called on President Obama to “test North Korea’s intentions” — it would be equally enlightening to test Dennis Rodman’s urine — as if the last 20 years have tested nothing. By my count, North Korea has conducted three underground tests of its intentions. But I digress.

We saw the same Pavlovian response in some reporters after North Korea agreed to hold talks with the FATF, and after its Central Bank issued a statement committing “to implementing the action plan of ‘international standard’ for anti-money laundering and combating the financing of terrorism.” (As if.) Yonhap even took it seriously when Pyongyang announced that it had established its own anti-money laundering body. And here’s how the FATF dispensed with that:

Since October 2014, the DPRK sent a letter to the FATF indicating its commitment to implementing the action plan developed with the FATF.

However, the FATF remains concerned by the DPRK’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. The FATF urges the DPRK to immediately and meaningfully address its AML/CFT deficiencies.

The FATF reaffirms its 25 February 2011 call on its members, and urges all jurisdictions, to advise their financial institutions to give special attention to business relationships and transactions with the DPRK, including DPRK companies and financial institutions. In addition to enhanced scrutiny, the FATF further calls on its members, and urges all jurisdictions, to apply effective counter-measures to protect their financial sectors from ML/FT risks emanating from the DPRK. Jurisdictions should also protect against correspondent relationships being used to bypass or evade counter-measures and risk mitigation practices, and take into account ML/FT risks when considering requests by DPRK financial institutions to open branches and subsidiaries in their jurisdiction. [FATF]

The force may have a strong influence on the weak-minded, but Pyongyang’s mind tricks haven’t influenced the FATF’s bankers. Maybe all those years of foreclosing on tearful widows and orphans have built an immunity that can, in a different context, serve mankind’s greater good. It never ceases to fascinate me how much better bankers are at diplomacy than diplomats are. A certain discipline may come with the expectation that the words in contracts are meaningful and enforceable as written. The FATF expects more than words from North Korea, and the latest draft U.N. Panel of Experts report goes far to explain why.

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That is, North Korea habitually uses deceptive financial practices similar to those used by criminal organizations. Moving money this way has a higher risk premium, higher cost, slower speed, and less flexibility. North Korea wouldn’t use these cryptic, bronze-age methods unless it was hiding something. Similarly, if Pyongyang’s finances are legit, why is it using Reconnaissance General Bureau agents as bulk cash smugglers?

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The U.N. report also tells us that North Korea continues to use the dollar system for those deceptive practices.

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That isn’t the only report this week that King Dollar rules in Pyongyang, partially as a consequence of Pyongyang’s catastrophically self-destructive currency “reform.” An interesting report in The Daily NK tells us that North Korea’s Ministry of Railways expects payment for shipping from both its state-controlled “foreign-currency earning enterprises” and “individual vendors” in U.S. dollars. This Yonhap report quotes an anonymous source, who says that “Pyongyang has become a de-facto dollar-using economy,” although the Yuan is more popular near the Chinese border.

And here’s an example of how this works in practice:

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The FATF’s warnings, of course, are merely persuasive authority; they don’t have the force of law. They are persuasive to responsible governments and banks, but North Korea finds its enablers among the world’s less responsible actors. That will not change until the U.S. Treasury Department and other regulators credibly threaten those actors with secondary sanctions. You can almost hear the Panel of Experts calling on the Treasury Department to do exactly that here, with respect to North Korean weapons smuggler/shipper Ocean Maritime Management, and others:

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And what has President Obama done about any of this lately? On January 2, 2015, he signed Executive Order 13687, the actual legal effect of which was to block the assets of ten low-level arms dealers. If there is a single theme that emerges from the latest POE report, however, it is Pyongyang’s speed and deftness at whack-a-mole. I can just about guarantee you that those low-level arms dealers have been replaced by ten other low-level arms dealers. Whatever the effect of EO 13687’s original designations, they were minimal and brief.

There are several conclusions this evidence points to. First, Pyongyang is worried about sanctions. Second, its growing dependency on King Dollar gives it good reason to be. Third, it continues to use the dollar system to engage in money laundering and to violate U.N. Security Council sanctions. Fourth, the Obama Administration has yet to show that it is serious about protecting the U.S. financial system from North Korea’s money laundering, or about making U.N. sanctions work. It tells you everything you need to know that even the U.N. is (in its own subtle way) pleading for the President to enforce the law.

North Korea’s arms trade flourishes as U.S. diplomacy falters

The latest U.N. Panel of Experts report is a bleak one for the U.N., and for an Obama Administration that seems content to outsource its policy to it. North Korea shows no sign of complying with the resolutions, and every sign of pursuing its WMD programs at full speed. Yongbyon was active for a while last year, and as recently as last September, there were signs of new excavation at North Korea’s nuclear test site at Punggye-ri. North Korea has improved its Seohae missile test site, tested a KN-08 engine, and fired off large numbers of rockets and missiles from its east coast.

By design, the U.N. can’t enforce its own resolutions, and governments’ enforcement of the U.N. sanctions is flagging. This chart from the latest U.N. Panel of Experts report should tell you most of what you need to know:

Screen Shot 2015-03-02 at 8.23.14 AMIn other words, most member states are less likely to have reported back to the U.N. on their enforcement of North Korea sanctions than they were to have reported on their enforcement of other U.N. sanctions. We’ll turn to why later in this post, but a number of anecdotes reported by the POE should give you a good idea:

– Iran (of course) has been shipping North Korean weapons to Yemen (most likely to Houthi militias). That would be consistent with Iran’s long-standing practice of buying North Korean weapons for Hamas and Hezbollah.

– Ethiopia, a long-standing arms client of North Korea, is suspected of violating the arms embargo to buy ammunition from the Korea Mineral Trading General Corporation, or KOMID, which has been designated by Treasury for its proliferation-related activities.

– Next door, Ethiopia’s arch-enemy, Eritrea is suspected of “arms-related cooperation” with Green Pine Associated Corporation, another North Korean proliferator.

I’ve previously accused Uganda of violating the arms embargo by hiring North Koreans to train its police, and apparently, the POE agrees:

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– North Korean-made 107- and 122-millimeter rockets have been found in the possession of rebels in the eastern D.R. Congo. The POE is still investigating, but Uganda and Rwanda are both known to have armed rebel groups there.

– The POE also updates us on the abortive sale by corrupt Mongolian military officers of MiG-21s to North Korea. The story has a happy ending: the sale was blocked, and the North Koreans never got their money back.

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The POE also reports that an unknown European state provided information leading to the discovery of “an air shipment” of “spare parts for Yugo class submarines that were procured in the United States market, for a military-related company based in South-East Asia.” Really? There are people in the United States who deal in that sort of gear? So where are the indictments? Maybe they’re filed in the same receptacle as Dennis Rodman’s civil penalty.

While we’re on the subject of luxury goods, the U.S. is in good company in its lackluster enforcement:

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There are certainly plenty of knowing suppliers, although the only guilty party these particular facts implicate is the one that the luxury goods almost necessarily traversed to get to North Korea.

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So while one part of the U.N. goes begging for aid for malnourished North Korean kids, another part of the U.N. can only point out that Kim Jong Un is spending freely on limousines, ski equipment, and yachts:

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Not even rule-bound Britain would (or could) make Princess Yachts answer the POE’s questions about selling yachts to North Korea. That’s typical: of 262 requests the POE sent out last year, asking for information, it only received 116 responses.

Numerous states also hosted offices of U.N.- and U.S.- sanctioned Ocean Maritime Management “including Brazil (São Paulo, Brasilia), China (Dalian, Hong Kong, Shenzhen), Egypt (Port Said), Greece (Athens), Japan, Malaysia (Kuala Lumpur), Peru (Lima), the Russian Federation (Vladivostok), Singapore and Thailand (Bangkok).” But more on shipping in a future post.

Then, there is the example of Cuba. It violated the North Korea sanctions flagrantly, yet neither the U.N. nor the Treasury Department sanctioned a single Cuban person or entity for it. You may agree with the U.S. policy shift toward Cuba, and you may not, but the U.S. was able to improve its relationship with Burma and still sanction Burmese generals for their arms deals with North Korea.

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The picture this paints is of a sanctions regime that few governments — including ours — believe they have to take seriously. It isn’t the job of the POE, after all, to enforce the law. That’s something member states have to do through their national laws.

The Ugandas, Ethiopias, and Chinas of the world have their own reasons for violating sanctions. They aren’t going to be persuaded to change their behavior the easy way. We can raise the cost of their non-compliance, but that would require political will. States that receive U.S. aid may find themselves denied aid one day under Section 203 of the NKSEA, and the bureaucrats responsible for arms deals with North Korea could have their assets blocked. In the case of China, forcing change will require a combination of credible threats and face-saving diplomacy.

Other governments are probably more passive and persuadable, but they might reasonably ask why they should be the only ones enforcing the resolutions. They aren’t necessarily looking to the U.S. for leadership, but because of America’s economic power, U.S. leadership would certainly sway many of them toward a global consensus of serious enforcement of North Korea sanctions. If forced to choose whether to have an economic relationship with the United States or an economic relationship with North Korea, the choice would be an easy one for most banks and governments. Right now, that’s not a choice anyone has to make. But if the U.S. doesn’t lead, who will? And if it doesn’t, who will follow?

Most people remember that the Treasury Department sanctioned Banco Delta Asia. Few people remember that top Treasury Department officials did much more than sanction one bank in 2005 — they launched a campaign of financial diplomacy to persuade bankers and finance ministers from Moscow to Ulaanbaatar to Hanoi to distance themselves from North Korea. It was multilateral diplomacy at its best, and it worked, until the State Department swallowed Kim Jong Il’s bait and undid all of it. What’s needed today is neither war nor appeasement, but some good diplomacy. Of course, all good diplomacy requires leverage, in the form of veiled consequences.