Every now and then, I read something so brilliant I’m angry at myself for not writing it first.
While I was there, I also found this guilty pleasure.
Every now and then, I read something so brilliant I’m angry at myself for not writing it first.
While I was there, I also found this guilty pleasure.
Marcus Noland has published two fascinating charts on recent changes in North Korea’s palace economy. According to one, North Korea has begun posting a current account surplus by squeezing its poor, and by taking in foreign exchange from mysterious (but probably Chinese) sources. That would certainly explain some of its recent, more aggressive behavior — a well-funded North Korea is menacing; an underfunded North Korea is relatively, if temporarily, conciliatory. Judging by North Korea’s aggressive WMD development and investment in white elephants (gray ones, too) and perks for its elite, the regime doesn’t appear to be starving, even if its people are. Noland also posts another fascinating chart showing his estimate of the share of North Korea’s income earned through illicit activities, which he estimates at between 5 and 20 percent of its export revenues.
Obvious questions arise about how we can really know such things, but it’s unlikely that anyone in America knows better than Marcus does. Assuming his charts are correct, enforcement efforts have had considerable success, yet a staggering share of North Korea’s revenues continues to come from illicit sources. It’s now incumbent on us to identify these new revenue sources for the sake of our own national security; indeed, it may also alter our estimates of the “illicit” share of North Korean exports. Both charts present challenges to the potential effectiveness of sanctions, but not insurmountable ones under anti-money laundering (AML) principles. It all depends on how widely you’re willing to target North Korea’s income, because our time for playing whack-a-mole has run out. A strategy that isn’t comprehensive and that doesn’t reach North Korea’s foreign enablers is, by default, a license to proliferate.
How an economist analyzes those challenges is apt to differ from how a lawyer addresses them. This is why I enjoy my side of this public conversation so much. Please don’t confuse what follows with criticism. What it is, is eagerness to devour and parse the research. So having said that, here’s a short list of what else I wish I knew.
First, how do we define “legitimate?” For example, are the Siberian logging revenues legitimate, given that some of the escaped loggers say they aren’t being paid? That would make any transaction to facilitate these arrangements “trafficking in persons,” which is a predicate offense for money laundering under 18 U.S.C. 1956(c)(7)(B)(vi), and therefore subject to criminal prosecution, along with the seizure and forfeiture of any proceeds or instrumentalities of the transaction. The same predicate offense may well describe North Korean gold, coal, iron ore, and copper, probably its largest “legitimate” exports, if they are mined with forced labor (for which North Korea’s mining industry is deservedly notorious). If the products of this newly announced Chinese-owned garment factory in North Korea (HT) are labeled “Made in China,” importing them into the United States could violate the country-of-origin labeling laws, this executive order, and consequently, the International Emergency Economic Powers Act, which would make the merchandise subject to seizure and forfeiture, and any movement of funds to facilitate that importation (you guessed it) money laundering, under 18 U.S.C. 1956(c)(7)(D). Drive it past me, and I can probably find a broken taillight that anyone else would be ticketed for. I have never accepted “North Korean exceptionalism,” the idea that we must judge North Korea by a lower standard.
Second, one of the reasons why estimates about illicit revenues are invariably imprecise is the problem of commingling of legitimate and illicit funds. If a North Korean attache’s diplomatic pouch contains $100,000 in supernotes, $100,000 in dope revenues, and $800,000 in proceeds of North Korean restaurants, how much should the authorities seize? The answer, under AML principles, is $1 million, because commingling is usually a sine qua non for money laundering, and lawmakers eventually decided to vastly improve enforcement, and save law enforcement officers much annoyance, by empowering them to seize the whole lot.
Third, it’s important to distinguish between proceeds of prohibited activity and instrumentalities of prohibited activity. Even if you accept the legitimacy of the labor and pay arrangements Kaesong, how do we know that its proceeds aren’t used for WMD development? (My view is that only Jang Song Thaek, Kim Jong Un, and a few people in Bureau 38 really know, and that as North Korea threatens South Korean civilians, and South Korea’s President prepares to visit the United States, for South Korea to revive the idea of importing Kaesong-made products into U.S. markets tariff-free is just crazy talk.) If those proceeds are misused for WMD programs, they become instrumentalities. Under AML principles, instrumentalities can be seized and forfeited, along with whatever other funds they’re commingled with.
What this means is that, even assuming the accuracy of Noland’s estimates, well-crafted sanctions could and should reach much more than 5 to 20 percent of the regime’s income, and thereby suffice to vaporize its surplus and shock it into instability. After all, the money isn’t being used to better the North Korean people.
If the administration is really serious about stopping North Korean proliferation, it needs a new sanctions law, similar to the Iran sanctions acts of 2010 and 2012, which targeted Iran’s main source of income, its oil industry, as an instrumentality for its proliferation and a means to put political pressure on its regime. As the Financial Action Task Force has been telling us for years, North Korea lacks the financial transparency needed to ensure that its income does not facilitate illicit activity. We also know that North Korea prioritizes weapons development over providing food, heath care, and education for its people, and even over feeding some less-favored units of its military. North Korea can’t continue to develop its WMD programs or maintain its system of domestic terror without foreign money, particularly from China, but also from South Korea, the Middle East, and a small amount of European trade.
When it comes to investments, aid, and loans to North Korea, we would be well justified, and arguably compelled by Paragraph 8(d) of UNSCR 1718 to shift the burden. As such, North Korea’s donors, lenders, investors, and insurers should be required to “ensure” that the end use of their funds is not some banned purpose. If not, those funds should also be subject to blocking, seizure, and forfeiture.
Correction: A previous version of this post contained an image of an incorrect location for Bureau 39. I will try to post an image of the correct location later.
So the news today is that North Korea–which President Bush removed from the list of state sponsors of terrorism on October 11, 2008 for agreeing to give up its nuclear weapons programs–has warned the civilian populations of Baengnyeong-do, Yeonpyeong-do, and other islands in the Yellow Sea to evacuate now. The instrument this time is the quasi-official Uriminzokkiri, which is hosted in China, a nation that embraces the sacred principle that all speech, no matter how threatening or objectionable, has a protected place in the marketplace of ideas.
Yes, children, there is a word for this sort of thing.
Some sources are also alleging that during a visit to some of the artillery units with their guns trained on the islands, Kim Jong Un threatened to “wipe out” Baengnyeong-do, population 5,000, although the curious thing about that is I can’t find a KCNA report quoting His Porcine Majesty as saying quite what Sky News and Al Jazeera say he said.
You can see more pictures of the budding Western-oriented reformer here, posing with one of North Korea’s 170 millimeter koksan guns, which, from forward placements, can range parts of Seoul. I can hardly wait to hear how he reacts to this statement, by Rep. Mike Rogers:
“You have a 28-year-old leader who is trying to prove himself to the military, and the military is eager to have a saber-rattling for their own self-interest,” said Rep. Mike Rogers, the chairman of the House Intelligence Committee. “And the combination of that is proving to be very, very deadly.” [....] “This is very, very concerning, as we just don’t know the stability of their leader — again, 28 years old,” Rogers said. “We’re just not confident that we know he wouldn’t take those steps.” [CNN]
Keep the good people of the Yellow Sea islands in your thoughts. These must be pretty scary times for them.
WERE THE 2010 ATTACKS North Korea’s way of making good on extortion? Stephan Haggard, not widely know for his hard-line views, cites an article in the Chosun Ilbo revealing that Kim Jong Il wanted a summit with Lee Myung Bak, but at a price.
The sticking point was money. How much? According to the Chosun Ilbo, $500-600 million in rice and fertilizer aid, which had effectively been cut from the first of the year, and perhaps some cash too; that was about the price that Kim Dae Jung paid for the first summit. Negotiations continued through November at Kaesong, when the North Korean delegation even presented a draft summit declaration including a resumption of aid. [Stephan Haggard, Witness to Transformation]
The Chosun Ilbo story adds this important piece of evidence:
In January 2010, after the secret contacts ended and North Korea realized that it was impossible to extract any aid from Seoul, it vowed to launch a “holy retaliatory war” against the South and fired multiple artillery rounds at the Northern Limit Line, a de facto maritime border on the West Sea. [Chosun Ilbo]
Haggard makes a compelling (if circumstantial) argument that the attacks were meant to demonstrate that North Korea’s extortion should be taken seriously. We now know that two months after Lee refused to pay up, North Korea sank the Cheonan.
Wondering if I could make this case a bit less circumstantial, I decided to consult my archives and see what else North Korea said and did in the months between Lee’s refusal to pay and the Cheonan attack. I didn’t find what I expected. Although there were certainly some menacing acts and words by North Korea, the threats were nowhere near as extravagant or as frequent as those issued in early 2009, after President Lee cut off aid, and as President Obama warmed up his chair. What’s interesting, however, is that in early 2010, North Korea was facing a severe popular backlash against The Great Confiscation.
In November, of course, North Korea followed up with the Yeonpyeong attack.
Let me take Haggard’s point a step further: if he’s correct in his inference, this course of conduct would be a good fit for the legal definition of “international terrorism.” Some commenters have suggested that the 2010 attacks — particularly the Cheonan attack — are not a basis (not that another is needed) to re-list North Korea as a state sponsor of terrorism, but fresh evidence of a motive to extort merits reconsideration. The key element is that the violent act must have been intended to influence South Korean government policy, and some of North Korea’s statements from 2009 provide additional evidence of North Korea’s intent. The evidence is circumstantial, but somewhere in North Korea are people with direct evidence, and one of them is probably thinking about defecting.
The U.N. Human Rights Council is set to approve an inquiry into human rights conditions in North Korea, conditions that a U.N. investigator says “may” be crimes against humanity:
Marzuki Darusman, an investigator for the United Nations, is expected to present a report to the council urging the creation of an international commission of inquiry to follow up on the abuses recorded in the eight years that a United Nations official has monitored human rights in the North. [N.Y. Times]
So, what exactly would that mean?
“An inquiry mechanism could produce a more complete picture, quantify and qualify the violations in terms of international law, attribute responsibility to particular actors or perpetrators of these violations and suggest effective courses of international action,” Mr. Darusman said in the report. [N.Y. Times]
It could also presage indictments in the International Criminal Court — indictments that China would have to expend cred and capital to block.
The U.N. Human Rights Council will likely consider and approve Darusman’s recommendation in March, in a resolution to be co-sponsored by the EU and Japan in March. South Korea’s co-sponsorship is notably absent, but at least South Korea will actively support the measure, which is a change for the better. Here’s another change for the better:
“We are in effect ramping up international political pressure on this unparalleled, systemwide failure in respect to human rights,” Eileen Chamberlain Donahoe, the American ambassador to the Human Rights Council, said by telephone. “We’re hoping that even if it doesn’t crack the whole system that on some of these issues we might see some opening and some change because of this pressure.” [N.Y. Times]
Robert Joseph puts this in context nicely:
“Exposing the North’s brutality toward its own citizens has not been a priority component of U.S. policy,” Robert Joseph, the top State Department disarmament diplomat in the George W. Bush administration, told a U.S. Senate hearing on Thursday.
“In fact, concerns about how such exposure might affect the prospects for engagement with the regime have worked to place human rights atrocities in a separate box which is mostly neglected if seen as complicating higher order diplomacy,” he said, in a view widely shared by the human rights community. [Reuters]
Reading further, it’s clear that this effort by human rights lawyer Jared Genser played an important role in getting the U.N. to finally focus on this issue. Another factor appears to be the emerging consensus that quiet diplomacy has failed to disarm North Korea or address the human rights issue. Policymakers no longer worry that emphasizing human rights will cause North Korea to walk away from disarmament talks. After all, they walked away from those talks five years ago. Since then, they’ve carried out two missile tests, two nuke tests, and two major attacks on South Korea.
I’ve been as skeptical as anyone about the capacity of the U.N. to do much of anything binding, and in fact, even the Times agrees that an inquiry would be a largely symbolic gesture. Where this will really matter is in how it shapes other, more tangible debates in committee meetings, floor votes, and in the boardrooms of companies making investment decisions.
Last week, I asked whether Dennis Rodman would have played Sun City. He wouldn’t have, because at least one responsible adult of average intelligence would have warned him that it would have been career suicide. Maybe playing Pyongyang will be prove to be career suicide for Rodman; his career is long over anyway. But the Rodman episode does illustrate that in most households, North Korea isn’t yet the pariah it deserves to be. When it is, that will have severe consequences for a regime that survives on foreign currency.
For a variety of reasons, the U.N. Human Rights Council doesn’t have the moral authority to pin that label on North Korea. Ironically, one good reason may be that it has it has ignored this issue for so long. Still, such things require a steady and determined drumbeat to work.
Update: North Korea calls the charges “faked material … invented by the hostile forces, defectors and other rabbles.” Am I a “hostile force” or an “other rabbles?”
Hope springs eternal. I said recently that it wouldn’t surprise me to see China temporarily restrict trade with / aid to North Korea to mislead us into thinking that it’s really pressuring North Korea to disarm, thereby slowing the momentum here to legislate what Glyn Davies calls “national” sanctions. This trick works so well because so many of us so desperately want to believe that China will give us an easy out. Witness this report, via Korea Real Time, that rice prices have risen in Pyongyang, linking it to a crackdown by Chinese customs. Does this mean that China is finally saving us from having to deal with North Korea? Can we get back to pretending this isn’t our problem? No? Here are some reasons why this story could mean a lot of other things, aside from the thing we wish it meant.
1. Grain prices always rice in North Korea at this time every year. In the spring, North Korea’s winter stocks of food start to run out, and nothing has sprouted from the ground yet.
2. North Korean traders who supply its jangmadang have become very sophisticated speculators who know enough to link missile and nuclear tests to temporary crackdowns on cross-border flows of merchandise. If the traders also noticed increased scrutiny by Chinese customs, the price rises would be more speculation than a function of supply and demand.
3. How do you measure prices at all in a place like North Korea? In terms of North Korean currency, or in terms of the Chinese yuan, which has increasingly become the de facto currency of North Korea’s people’s economy since the Great Confiscation of 2009? In a lengthy post, Chris Green makes the case that yuan-based rice prices have risen steadily since then, but that the rise may be more indicative of shifting exchange rates as North Korea’s “people’s economy” transitions to one based on the yuan.
4. Recently, Yonhap reported that North Korean grain imports from China plunged between December and January, after North Korea’s latest missile test but before its nuclear test. This wouldn’t be North Korea if we didn’t have some contradictory evidence to harmonize — in this case, a Daily NK report that North Korea recalled some of its purchasing agents from China in December, to commemorate the one-year anniversary of Kim Jong Il’s assumption of room temperature (even in death, he’s still starving them). But rice is an elite food in North Korea, and if (presumably state-employed) traders were called off the street in December, it makes sense that there would be fewer deliveries on transactions in January.
5. If China were really cooperating with sanctions against North Korea, I’d say food is about the last thing we should expect them to crack down on. Although there is some evidence that food shortages are a factor in falling morale and rising defections among front-line NKPA units, the regime almost certainly sees hunger as a highly effective tool of control. Hungry people are listless, passive, and easy to control.
Again, I don’t foreclose the possibility that China is temporarily pressuring, or will temporarily pressure, North Korea on aid and trade. That’s in China’s interests, even if (especially if!) you view them as cynically as I do. Still, there are several other explanations for the price rise that are functions of North Korea’s own political and economic policies, and the consequent tendency for North Korean markets to be vulnerable to supply disruption and speculation.
Last Thursday, two days after the hearing of the House Foreign Affairs Committee, the Senate Foreign Relations Committee also held a hearing (on video here). This time, consensus was much less evident than ambivalence, and the views of the State Department were much more in evidence. Most of the oxygen was consumed by the first witness, Special Envoy Glyn Davies.
Our Special Envoy’s testimony, by the way, was sponsored by Deer Park Bottled Water (written statement here).
Chairman Bob Menendez (opening statement here) and Ranking Member Bob Corker* seem to agree that past policies, whatever you may think of them, have failed. (* Yes, Corker, not McCain. Noted.). You may also be interested in what Menendez had to say in Foreign Policy. On the Senate side, it’s just as clear that the current policy direction is considered a failure; it’s less clear what the Senators think a better policy would be, and the State Department’s traditional influence was much more evident in the selection of witnesses.
Say what you will about Davies, but the man certainly knows how to follow a script. Listening to him talk about North Korea’s “deplorable” human rights conditions, or its starvation of its people while it pours money into WMD programs, you wouldn’t think that this was the same guy who once asked a State Department colleague to Trotsky the naughty bits out of a human rights report on North Korea, during the heyday of Agreed Framework II. His statement today reads like an indictment, and he didn’t counsel the senators to show patience or restraint while he works on Agreed Framework III, although later in the hearing, he let on that that’s still his objective. For now, however, the focus has clearly shifted to counter-proliferation and sanctions. Davies mostly talked about U.N. sanctions, but also talked about “national” sanctions, such as the weak ones Treasury recently imposed under E.O. 13382.
Behind the tough talk, however, Davies still sees sanctions as just another way to pressure North Korea back to the bargaining table. To Davies, sanctions are “not punitive, but a tool to impede,” “make clear the costs” of refusing to engage in “meaningful dialogue” and “authentic and credible negotiations” to “bring North Korea into compliance with its international obligations” toward irreversible disarmament. Davies says he (meaning he) “will not engage in talks for talks’ sake,” and that he will insist on “serious and meaningful change in North Korea’s priorities.” I wouldn’t disagree with a word of that last sentence, but then, I didn’t disagree with it when Chris Hill said it, either.
Davies didn’t express, and did not seem to harbor much optimism about diplomacy. He took a swipe (1:30) at the “Camelot” view of Kim Jong Un, a view that he now thinks has been discredited by events. He suggested (1:34) that the most effective sanctions are those directly focused against luxury good and proliferation (seriously?). In his highlighting of sanctions directed at particular categories of transactions, Davies reveals an approach that targets the proceeds of prohibited activities, rather than the instrumentalities of regime maintenance and WMD proliferation. He’s clearly more interested in pressuring North Korea at the margins than in rocking their world.
With respect to what diplomatic approaches stood the best chance of being effective, Davies said that North Korea “allowed” the famine to happen (1:42) in 1990s, so food aid isn’t worth much to the regime as an inducement. He noted that that the Chinese are paying close attention to debates like the one he’s participating in there, at the Senate. In what was clearly intended as a message to China, he references the U.S. “pivot” to Asia and told China (1:44) that if it doesn’t bring North Korea to heel, it will see “more of the same” and “you’re not gonna like it.”
Chairman Bob Menendez was hard to read, but clearly skeptical of past strategies and ready to be persuaded (if not yet persuaded) that the right kind of sanctions could work.
Corker wasn’t hard to read at all. He thinks we’re at a “crossroads,” where if we don’t get results now, we may never get them. Later, at 1:04: “Some people are saying we should call the entire North Korean government as a money laundering concerns, which we could then enforce against third party entities, some of which reside in China.” Gee, who might that be? Davies thinks we’ve already reaped a lot of the benefits to be gained from sanctioning illicit activities, but we should continue to focus on it. Corker also endorsed a greater emphasis on human rights issues in North Korea, and suggested we should increase broadcasting to the North Korean people.
Later, Corker suggested that Davies conceded that a diplomatic solution was years away at best, and that North Korea is well past the red line we drew for Iran. Do we need a red line in North Korea, like with Iran? Why is our policy in North Korea so different than it is from Iran (1:56). Davies thinks pressure will eventually get North Korea to change course. Corker called that “highly aspirational” and unrealistically optimistic.
Sen. Chris Murphy (D, Conn.) gets it. Listen to him distinguish the peoples’ economy from the palace economy at 1:38. Davies notes that “many people are fooled when they go to Pyongyang” based on more cars on the street, and more cell phones. Hmm. He really doesn’t sound like an AP fan, does he?
Sen Chris Coons (D, Conn.) also seemed interested in emphasizing the human rights issue, potentially via the inquiry proposed by the U.N. High Commission for Human Rights. He also expressed concern about our inability to monitor food aid distribution. Davies seems to think the answer is following the examples of groups like Mercy Corps, that have continued to work in North Korea (not the World Food Program, interestingly enough).
Sen. Mark Udall (D, N.M.) asked if negotiated denuclearization is still our goal. Davies thinks there’s still a hope for the six-party talks. Maybe “within a generation or so” we’ll see a very different situation in North Korea. He certainly is good at being cryptic.
Sen. Marco Rubio (R, Fla.) thinks North Korea wants to be accepted as a nuclear power and stay isolated notwithstanding its “atrocities.” He doesn’t think they can be negotiated out of that goal. Everything North Korea does until it achieves that goal is a scare tactic or a delay tactic. Japan and South Korea will want nukes, and Iran will see what North Korea can get away with. Rubio thinks we should (1) delay North Korean’s proliferation, (2) never let the world forget what the North Koreans’ atrocities, and (3) begin to create the conditions for reunification — a unified, democratic, peaceful Korea. Rubio doesn’t think Davies is likely to succeed, and Davies (1:19) agreed to a great extent.
Sen. Mark Warner (D, Va.), thinks the transition to a hereditary dictatorship is a dangerous and unstable time for North Korea. He’s clearly focused on the potential for “fracking” the “microfractures” inside North Korean society. Good analogy. I think I’ll use that.
After Davies’s testimony, there was a second panel, consisting of Amb. Stephen Bosworth, Amb. Joseph DiTrani, and Amb. Robert Joseph.
I had not realized what an extreme figure Bosworth really was until this hearing. You could have mistaken him for Christine Ahn with sensible glasses. Bosworth thinks we’ll eventually engage again, because there are no better ideas. But for what purpose? (Bosworth didn’t say it here, but he has acknowledged that North Korea will never verifiably disarm.) Bosworth wants broad engagement that would give North Korea aid, diplomatic recognition, and a peace treaty. He thinks we need to make North Korea feel secure. Bosworth blamed the BDA sanctions for the collapse of the 2005 agreement — because all negotiations with North Korea are tenuous, and they have to be “reassured” that they are not giving up their one piece of leverage for nothing.
DiTrani took a more careful view — yes, we have a lot of benefits to offer North Korea, but only after they denuclearize. In a way he didn’t when he testified at the House, he seemed to blame the BDA sanctions for the collapse of the 2005 agreement. Menendez picked up with this in a revealing question, asking why, if North Korea was serious about diplomacy, it still refused to allow verification in 2008, long after we dropped the BDA sanctions. DiTrani backed away from what Menendez and I heard, saying that we’d always told North Korea that law enforcement was a separate matter, unrelated to disarmament talks. Later, under questioning by Corker, DiTrani spoke up that economic sanctions against the regime could be an effective pressure point.
Robert Joseph, in my view, got it exactly right: North Korea will only abandon its nuclear and missile programs “if it is judged essential to regime survival.” Listen to his statement at 2:17; it’s a shame no one was listening anymore. Joseph doesn’t suggest we should shouldn’t abandon diplomacy, but we should do it right, and we should adjust our expectations to reality. We need to pressure China “the principle obstacle to effective pressure on North Korea,” which supports them unconditionally, no matter how deadly their behavior. and we always release pressure prematurely. ”Promotion of human rights, while part of official U.S. talking points for years, has not been a significant element of U.S. strategy. It should be ….” Listen to him again at 2:36. He’s on fire.
So over the weekend, I read U.N. Security Council Resolution 2094, and I didn’t see much that deviated from the low expectations I expressed based on the press reports. (Since then, Marcus Noland has expressed a similarly pessimistic view).
For those nations that are interested in strict enforcement, there is useful material in this; for example, the reference to the recommendations of the Financial Action Task Force, which you can find on Page 13 of this document, will cause some nations to be more circumspect about letting their banks host North Korean funds. But in the end, as with previous resolutions, the effectiveness of this one will depend on how different nations interpret vague terms like “credible evidence” and “reasonable grounds to believe,” and more specifically, how strictly China is willing to enforce it.
What’s that, you ask? A timely and relevant example that could answer the critical question in the previous paragraph, thereby providing useful guidance to policy-makers? OK, I think I’ll go with this one:
12. Calls upon States to take appropriate measures to prohibit in their territories the opening of new branches, subsidiaries, or representative offices of DPRK banks, and also calls upon States to prohibit DPRK banks from establishing new joint ventures and from taking an ownership interest in or establishing or maintaining correspondent relationships with banks in their jurisdiction to prevent the provision of financial services if they have information that provides reasonable grounds to believe that these activities could contribute to the DPRK’s nuclear or ballistic missile programmes, or other activities prohibited by resolutions 1718 (2006), 1874 (2009), 2087 (2013), and this resolution, or to the evasion of measures imposed by resolutions 1718 (2006), 1874 (2009), 2087 (2013), or this resolution;
Someone play Handel’s Messiah as we enter a new world of financial due diligence, in which the regime and its key figures can no longer keep massive slush funds in offshore banks and freely repurpose them for suspicious alloys, hollow-point ammo for the border guards, and a customized Maybach electric scooter for His Porcine Majesty to ride around the Kwangbok Area Supermarket. Right?
South Korean and U.S. authorities have found dozens of accounts presumed to belong to North Korean leader Kim Jong-un in several banks in Shanghai and other parts of China. They contain hundreds of millions of dollars.
Yet for some reason the accounts were excluded from financial sanctions under the new UN Security Council Resolution 2098, which was adopted last Thursday, posing questions over the effectiveness of the measures.
A government source here said an investigation that lasted for several years led South Korea and the U.S. to the accounts. “We have located the names of the account holders and account numbers, some of them set up in the days of former North Korean leader Kim Jong-il,” the source added.
South Korean and U.S. officials urged China to include the accounts in the latest sanctions against North Korea, but Beijing apparently refused. “Following North Korea’s third nuclear test, China has demonstrated willingness to take part in sanctions against the North,” the government source said. “But Beijing is reluctant to touch North Korea’s real Achilles heel.” [Chosun Ilbo]
Hat tip to the South Korean government Strategic Leak Wire Service.
So we can already see where this is all headed, if the past isn’t sufficient to tell you. And in case you missed the point, China is making it clear publicly that it won’t “abandon” North Korea. We can see what China means. China will need “help” from the U.S. Congress and Treasury Department to enforce this resolution in a minimally effective way.