Is Orascom facilitating crimes against humanity in North Korea?

New Focus International is reporting that North Korea has distributed cell phones to its secret police, and that the secret police are using them to hunt down potential refugees:

The distributions of cell-phones are being made as part of efforts to aid agents of the Ministry of State Security and Ministry of People’s Security in preventing people escaping the country.

As part of the process of organising an escape, North Koreans intending to flee the country often make contact through cell-phones with those who have already made it.

The surveillance authorities are acutely aware of this, and the distribution of cell-phones is seen as a direct response to counter such attempts at reaching the outside world.

In June, our sources described, ‘This kind of cell-phone use and distribution is supposed to be illegal. The authorities are very much on edge about preventing escapes and seeking out channels of communication to the outside that they are handing out cell-phones to security agents.’

When a North Korean individual is discovered to have attempted phone calls with someone over the border in China, surveillance agents in the local area communicate via cell-phone in order to move quickly to cut that channel. [New Focus International]

That North Korea’s secret police would have the best comms Pyongyang can obtain for them isn’t surprising. Nor is it surprising that the secret police would use those comms to hunt down those who would flee their Fatherland for food and freedom.

It is still legally significant that these specific facts are being reported by New Focus, because in most U.S. sanctions regulations, such as those against Iran and Cuba, facilitating censorship or human rights abuses is a basis to block the assets of any entity that knowingly involves itself in such contemptible conduct. Because our North Korea sanctions regulations are among the weakest on the books today, there is no similar provision in effect with respect to North Korea. Section 104(a) of H.R. 1771 would weld this loophole shut by imposing mandatory blocking sanctions on any company that knowingly facilitates censorship or severe human rights abuses.

[This is what North Korea does to people who help others to escape.]

It’s frustrating that New Focus doesn’t say more about what sort of cell phones the security forces are using to help us sort the cats from the mice, but it is possible to make some educated guesses.

Potential escapees, traders, smugglers, and defection brokers illegally use cell phones that operate on Chinese networks — networks that reach a few miles into North Korea. Koryolink, a subsidiary of the Egyptian conglomerate Orascom, is widely believed to be the only authorized provider of cellular communications services in North Korea. It is possible, but unlikely, that North Korea’s secret police would use any other cellular network but Koryolink to communicate. If my assumption and New Focus’s reporting are both correct, Koryolink is on notice that the Inmin Poan Bu and the Kuk-Ga Anjeon Bowibu are using its service for purposes that could one day be punishable by the blocking of assets, and by criminal and civil penalties. Even the risk of blocking sanctions would likely be a deal-breaker for Orascom’s Board of Directors. After all, Orascom is already having trouble repatriating its alleged profits from North Korea.

That means that if H.R. 1771 passes, some hard decisions will be necessary for Koryolink to have a future, just as it will be true of other investors who have overlooked ethical concerns about their investments in North Korea. First, Koryolink (or Orascom’s directors) could very quickly and publicly decide that supplying the regime’s security forces is a legal and financial risk they aren’t prepared to accept. Then, Kim Jong Un would have to decide whether he’s willing to allow his security forces to be denied Koryolink’s services so that his other minions can keep it.

The other implication of New Focus’s report would be the use of Koryolink to isolate North Koreans, roll back the gradual marketization of its economy, and restore its fractured information blockade. Many supporters of engagement with Pyongyang take a see-no-evil approach to investment, justifying their actions with arguments that those investments contribute to the greater good by reforming the bigger system. If Koryolink is an instrumental tool in Kim Jong Un’s border crackdown, it would do much to undercut that argument.

Unlike most “engagement” deals with the regime in Pyongyang, I harbor a degree of ambivalence about Koryolink. I think it’s unlikely that they have anywhere near the number of subscribers they’ve claimed, and I suspect their phones are both closely monitored and (as with all resources in North Korea) distributed to loyalists, and those who can afford to bribe their way through the usual restrictions. Still, I recognize the potential benefit in allowing North Koreans, including elite North Koreans, to have the capacity to communicate from city to city about news, prices, and ideas, or to spread the word should there be a popular disturbance or a military mutiny in one of the provinces. The likelihood that the system is heavily monitored and equipped with a kill switch greatly mitigates these potential benefits.

Ultimately, however, what I don’t know about Orascom outweighs what I do know, and the things we know the least about are its financial arrangements in North Korea and the extent of its partnership with the state’s machinery of oppression. Those, too, could be deal-breakers. Perhaps they should be.

Suzanne Scholte takes her case to Northern Virginia’s Korean-Americans

Last Saturday, Suzanne Scholte and I appeared at a panel sponsored by the Korean-American Association of the Washington Metropolitan Area and the Korean Freedom Alliance. Scholte, who is now running to represent Virginia’s 11th District in Congress, addressed the group and made an impassioned case for why Korean-Americans should lead their fellow Americans and the world in opposing North Korea’s crimes against humanity.

WKTV, northern Virginia’s Korean-language TV channel, was also there. Video of Suzanne starts at about 4 minutes in.

I’m a proud supporter of Suzanne’s candidacy. Conservative voters will not need any persuasion from me to support Suzanne, so I’ll address this brief argument to those who see themselves as liberals or moderates, and who are interested enough in human rights in North Korea to read this site. I have nothing against her opponent, Gerry Connolly, whom I’ve met and liked. I see this as a race between good and best, and all I ask is that just one of our 535 legislators care about this issue as much as Suzanne does.

Voters with an interest in women’s issues should respect Suzanne’s work on behalf of North Korean victims of sex trafficking. I don’t doubt that her advocacy has saved hundreds of them over the years she has devoted to this cause.

Suzanne’s campaign is also on Facebook and Twitter. If you feel the same way about this issue as I do, I hope you’ll friend and follow her.

Cracked on growing up in, and escaping from, North Korea

When I was a kid, I considered Cracked to be the Phantom Menace of humor magazines, a lame knockoff of Mad that could never be as good as the original. In the online age, Cracked matured into something funny and intelligent, and often seems to be better researched than many news sites.

The other day, commenter “kcr” pointed me to this piece about North Korea in Cracked, co-authored by Michael Malice, and I was favorably impressed. In my recent interview on the CBC, I talked about the sloppy, superficial, and trivial portrayal of North Korea on in our public conversations about it, and I conceded that I’ve also struggled with the boundaries of taste when parodying a regime that’s also perpetrating a horrific humanitarian tragedy. Cracked manages to find that line stay within it, writing a piece that’s funny, sympathetic, and informative.

Thanks to commenter “kcr” for pointing it out.

You’d be surprised how much tougher our Zimbabwe and Belarus sanctions are than our North Korea sanctions.

The Treasury Department has just tightened its sanctions regulations on … Zimbabwe, more than doubling the number of Zimbabwean entities on Treasury’s List of Specially Designated Nationals (called the SDN List) from 77 to 161, including “President” Robert Mugabe, his wife, and his son. The sanctions are largely directed at the Mugabe regime’s human rights violations, corruption, and subversion of the democratic process. Here, from Treasury’s Federal Register notice, is a summary of what those sanctions do:

Section 1(a) of E.O. 13469 blocks, with certain exceptions, all property and interests in property that are in the United States, that come within the United States, or that are or come within the possession or control of United States persons, including their overseas branches, of any person determined by the Secretary of the Treasury, after consultation with the Secretary of State: 

(i) To be a senior official of the Government of Zimbabwe;

(ii) to be owned or controlled by, directly or indirectly, the Government of Zimbabwe or an official or officials of the Government of Zimbabwe;

(iii) to have engaged in actions or policies to undermine Zimbabwe’s democratic processes or institutions;

(iv) to be responsible for, or to have participated in, human rights abuses related to political repression in Zimbabwe;

(v) to be engaged in, or to have engaged in, activities facilitating public corruption by senior officials of the Government of Zimbabwe;

(vi) to be a spouse or dependent child of any person whose property and interests in property are blocked pursuant to E.O. 13288, E.O. 13391, or E.O. 13469;

(vii) to have materially assisted, sponsored, or provided financial, material, logistical or technical support for, or goods or services in support of, the Government of Zimbabwe, any senior official thereof, or any person whose property and interests in property are blocked pursuant to E.O. 13288, E.O. 13391, or E.O. 13469; or

(viii) to be owned or controlled by, or to have acted or purported to act for or on behalf of, directly or indirectly, any person whose property and interests in property are blocked pursuant to E.O. 13288, E.O. 13391, or E.O. 13469.

The property and interests in property of the persons described above may not be transferred, paid, exported, withdrawn, or otherwise dealt in. [79 Fed. Reg. at 39313]

Read together, the old and new rules effectively block all of Robert Mugabe’s closest relatives and key minions out of the global financial system, and specifically penalize (and therefore, deter) activities in furtherance of stealing public funds or votes, censoring free expression, or abusing the human rights of Zimbabweans.

Treasury’s new amendments to the Zimbabwe sanctions regulations tighten existing rules against facilitating or evading the existing sanctions, including a new requirement to obtain an OFAC license before donating food, clothing, or medicine to an entity on the SDN list. They even take the extraordinary step of blocking the assets of family members of those designated. Implicitly, they allow for the designation of entities that use non-dollar currencies to evade these sanctions, allowing for those enablers to be barred from the dollar system as well.

Our North Korea sanctions authorities consist of Executive Order 13466, in which President Bush lifted most of our previous sanctions but preserved some restrictions and the blocking of certain property; Executive Order 13551, which blocks the property of named entities involved in proliferation, weapons trafficking, and money laundering in a non-comprehensive way; Executive Order 13570, which imposes import sanctions; and regulations at 31 C.F.R. Part. 510. Now, how many of the above sanctions from the Zimbabwe regulations appear in North Korea-specific sanctions authorities? If you answered “none,” go get yourself a cookie.

This comparison chart, now slightly outdated, should give you the general idea — our North Korea sanctions are some of the weakest that we bother to maintain against any country. Note the empty squares indicating the lack of “comprehensive” or “financial” sanctions against North Korea, despite everything we’ve learned about how well they worked.

At the top of this post, I told you that 161 Zimbabwean entities are sanctioned. Wanna know how many are designated under North Korea-specific sanctions authorities? Seven. An additional 11 individuals and 25 entities are designated under Executive Order 13382, a Bush-era executive order that isn’t specific to North Korea, but authorizes sanctions against entities trafficking in WMD components and technology. I didn’t count, but it’s likely that most of those entities were designated during Bush’s first term. (I’ve pasted the full list of 43 designated North Korean entities below the fold.)

In case you’re wondering, no, Kim Jong Un, his royal family, and his senior government officials are not listed. The only sanctioned entities of any national consequence are Bureau 39 and the Foreign Trade Bank. The others are largely front companies, minor government ministries, and officials that are as easily replaced as whacked moles.

We can extend this comparison further. Slobodan Milosevic – a dead guy – still appears on the SDN List years after his death (presumably, to prevent the misuse of his estate’s assets). He is one of 231 “persons”* still designated under the Balkans sanctions program, two decades after the end of the Balkans wars. Treasury was so thorough in its targeting that it named many individual alleged war criminals by their nomes-de-guerre.

Alexander Lukashenko, the President of the neo-Soviet fossil state called Belarus, is one of about 50 “persons” designated under the Belarus sanctions program, along with his Justice Minister, KGB head, and the officials in charge of Belarus’s media and “elections.” Let no one say that the targeting of a head of state or a state’s top officials is unprecedented because sensitivities to the state’s powerful sponsor are too great.

The SDN List designates 164 “persons” as part of the Burma sanctions program, including Beijing-based China Focus Development Company. Let no one say that China’s economic links to its oppressive satellites are inviolable.

A whopping 397* “persons” are designated under the Cuba sanctions program, including what must be every website domain name registered in Cuba, and curiously, former Panamanian dictator Manuel Antonio Noriega. (Oddly enough, Fidel and Raul Castro are not designated.)

[*It's likely that I counted a few aliases in these numbers.]

So many Iranian entities are listed — the number clearly runs into the hundreds — that I didn’t have the courage to count them all. Iran sanctions are clearly a small industry, but you can’t deny that Treasury’s focus has gotten results.

Hundreds of other targets are designated under Executive Order 13224, authorizing sanctions against terrorists, their sponsors, and their organizations.

Now, I’m no fan of Robert Mugabe, or any of these other regimes. I spent a few nervous days there in 1990 — and those were much better days for Zimbabweans — and the place certainly felt like a dictatorship. I don’t doubt that Mugabe deserves everything President Obama has dropped on him, but would anyone argue that Zimbabwe represents a strategic threat to the United States or to global peace? Or that its human rights abuses, however tragic, compare to the scale of those going on in North Korea?

When your list of sanctioned entities runs into the triple digits and you publish frequent updates to the list of Specially Designated Nationals, it means you’re serious about sanctioning your target. If, as in the case of North Korea, you’ve sanctioned a paltry three-and-a-half dozen over an entire damn decade, it means you aren’t. This, along with the Obama Administration’s utter inaction five months after the release of the U.N. Commission of Inquiry’s report, can only mean that President Obama is either disinterested in or unserious about addressing North Korea’s proliferation, money laundering, threats to peace, or crimes against humanity — even as he sanctions serious but less severe violations in Zimbabwe, Belarus, and other places.

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Kim Jong Un’s limp

OK, I’m convinced. The rheumy-eyed, snaggletoothed old Trotskyites at The Guardian didn’t enable the embed feature — hypocrites! — but you can watch Reuters’s video here. No official word yet on whether Kim acquired the limp by stumbling over a starving orphan on the doorstep of one of his palaces. Hat tip to a valued reader.

You could also characterize this slight limp as a waddle, the kind that would be cute if a penguin walked with it; less so when a mass-murdering psychopath of a man-child with nuclear weapons does it.

As I said yesterday: suspensors.

Open Sources, July 14, 2014

~   1   ~

NORTH KOREA FIRED A MASSIVE BARRAGE OF ROCKETS over the weekend, this time in the Sea of Japan,* near the disputed inter-Korean maritime border.

“North Korea fired off about 100 artillery shells in a northeast direction into the East Sea for about 30 minutes from 11:43 a.m. from a place hundreds of meters away from the demilitarized zone (DMZ) in Goseong, Gangwon Province,” JCS spokesman Um Hyo-sik said.

“They landed in the sea, some 1 to 8 kilometers north of the Northern Limit Line (NLL),” he said, citing the de facto inter-Korean maritime border.

While it is unknown exactly which launchers the North used to fire the shells, the South Korean military said most of them were likely fired from the North’s 122-meter or 200-meter launchers.

“Some of them flew some 3 kilometers, and others at the maximum of 50 kilometers,” a JCS officer said, requesting anonymity.

“It is not unusual for Pyongyang to carry out such a shelling on its east coast, but it is rare that the North has done that near the military demarcation line,” he noted.

[Update: And also, two SCUDs into the Sea of Japan.] North Korea was removed from the list of state sponsors of terrorism on October 11, 2008. Discuss among yourselves.

~   2   ~

I GUESS I’M PLEASED AT HOW FEW media outlets fell for that rather obvious parody story that North Korea had claimed to have won the World Cup. A long-time reader (thank you) alerted me to the story over the weekend, asking me if it could be true. It took about five minutes of investigation for me to note that neither the Rodong Sinmun nor KCNA made a similar claim.

It took less time than that to spot some obvious red flags in the video itself. Anyone even vaguely familiar with North Korean dialects (or the distinctive manner of speech of its news announcers) would have seen a few things amiss with the supposed video of the broadcast, which appears to be an overdub of North Korean news clips by an unconvincing South Korean voice actress.

Also, the reference to South Korean player Jong Tae-Se (the In-min Rooney, because his past connection to North Korea) would have been a dead giveaway to any South Korean soccer fan.*

~   3   ~


[L]et’s hope U.S. authorities are keeping a close eye on a North Korean cargo ship called the Mu Du Bong, which late last month called at Cuba, then vanished from the commercial shipping grid for more than a week. This past Thursday, July 10, the Mu Du Bong reappeared at Havana, then began steaming north of Cuba, and as of this writing is cruising the Gulf of Mexico, not all that far from the Mexican port of Tampico — or for that matter, the coast of Texas.

If you were to ask me what North Korea’s most likely nuclear delivery system was, I’d say it’s commercial shipping.

~   4   ~

THOSE REPORTS THAT KIM JONG UN was seen walking with a limp weren’t completely persuasive to me because I couldn’t find any video, but if you’re interested in knowing as much as I know, read this and this. I suppose it’s worth keeping an eye on, but if Baron Harkonnen could rule Geides Prime from the comfort of his suspensors, I suppose the same is true of Kim Jong Un ruling North Korea.

~   5   ~

MAAZEL TOT: Lorin Maazel has died. Maazel, as you recall, attracted the wrath of this site for comparing North Korea’s crimes against humanity to Gitmo, which was an extraordinarily stupid thing for any person to say, regardless of your views about Gitmo. Which is still open for some reason, more than five years after Barack Obama’s inauguration.

~   6   ~

AUSTRALIA IS SAID TO BE CONSIDERING “a bill that may penalize North Korea for its human rights abuses,” but the Korea Herald doesn’t quote any Australian government sources for the report, and politicians are very accomplished at leading people to the conclusions they want those people to draw, without actually articulating those conclusions themselves.

~   7   ~

A MIG-17 CRASH TEMPORARILY GROUNDED North Korea’s entire fleet of 100 aircraft for several weeks, according to the Joongang Ilbo. The article notes the growing maintenance problems this aging fleet is creating for the NKPAF.

~   8   ~

Our Defense Secretary, who concedes that ISIS itself poses an imminent security threat to the United States, must deny that uranium seized by ISIS is a threat, at least for now. I don’t which of these things confounds me more — (a) that Iraq had weapons of mass destruction after all, (b) that a six-year war failed to eliminate them as a threat, or (c) that we stabilized this country only to walk away and let it collapse into anarchy.

~   9   ~

THE AMERICAN INTEREST LOOKS at the money laundering risks associated with the large-scale holding of “big bills” — that is, large-denomination notes for Swiss francs, Canadian dollars, and other secondary “reserve” currencies.

~   10   ~

EUROPE SEEMS TO HAVE FALLEN OUT OF LOVE with President Obama, but in the New York Times, Clemens Wergin, foreign editor of Die Welt, argues that Obama’s foreign policy is too European.

While Mr. Obama’s new style of diplomacy — soft power and nonintervention — was at first seen as a welcome break with the Bush years, five years later a dismal realization has set in. It turns out that soft power cannot replace hard power. On the contrary, soft power is merely a complementary foreign policy tool that can yield results only when it is backed up by real might and the political will to employ it if necessary. [....]

Barack Obama wanted America to learn from Europe’s soft-power approach. But while Europeans are loath to admit it, they know that European soft power often doesn’t work either — and that it is a luxury that they could afford only because America’s hard power always loomed in the background. And when they dropped the ball, America would pick it up.

And therein lies the lesson to our American friends who seemingly want to become less involved and more European: There is no second America to back you up when you drop the ball.

Read the whole thing. I also thought this piece in MacLean’s was well-written and well-reasoned.

* Earlier versions of this post misspelled Jong’s name, and incorrectly stated that North Korea’s shells fell into the Yellow Sea. They actually fell in the Sea of Japan. Thanks to Yang for the correction. 

Open Sources, July 11, 2014

~   1   ~

I SUSPECT THAT SOMEONE LIKE KURT CAMPBELL would have been a better man for the job, but I wish John Kerry the best of luck in his discussions with the Chinese:

“China shares the same strategic goal, and we discussed the importance of enforcing U.N. Security Council resolutions that impose sanctions on North Korea’s weapons of mass destruction and ballistic missile program,” Kerry said.

However, Kerry said China needs to do more in reining in its unruly ally North Korea. Kerry said China must play its “unique role” in persuading North Korea to give up its nuclear weapons program. 

Unfortunately, the very fact that John Kerry is delivering the message subtracts from its effectiveness. But the good news is that Kerry is (for now) showing no obvious signs of acceding to Chinese demands that we engage in pointless, non-disarmament talks for talks’ sake.

~   2   ~

SOUTH KOREA HAS DENIED a rescue NGO permission to go to North Korea to assist with the apartment collapse in Pyongyang. Given how the North Koreans did the “rescue,” and the fact that the collapse was two months ago, there can’t be much more to rescue than dried-out chunks of what were once wives, children, and grandparents.

~   3   ~

HYUNDAI ASAN, which was the sole provider of tours to Mt. Kumgang before a North Korean soldier shot and killed tourist and housewife Park Wang-Ja there, has since laid off a stunning 70% of its employees and lost $858 million. As absolutely no one in South Korea ever said during the Sunshine fad, “caveat investor.”

I did not realize the extent to which this large South Korean corporation had put all of its eggs in Kim Jong Il’s basket, or the extent to which the Sunshine Policy’s select cronies relied on South Korean government subsidies. But given suspicions that Kim Jong Il diverted the subsidized proceeds of Kumgang toward “regime maintenance,” I’m always pleased to make Sunshine’s punch bowl my chamber pot.

~   4   ~

TO SAY THAT JULY IS EXTORTION SEASON in North Korea would be like saying that August is campaign season in Washington. According to the Daily NK, however, extortion is especially prevalent in North Korea in July:

The term “8.3 money” is related to a program of limited enterprise autonomy put in place by Kim Jong Il in 1984. As part of the plan, workers are encouraged to earn money outside their state-mandated workplaces and present de facto tax payments back to their employers. Such contributions are not necessarily defined in monetary terms: wild edible greens and valuable medical herbs (some of which fetch a high price in China) can also be contributions, for instance. 

The source went on, “These measures have brought an ambivalent response from workers. In the past people might have prioritized this type of fund as an expression of fidelity to the Party, but you’d struggle to find that kind of loyalty now.” [Daily NK]

~   5   ~

NEW FOCUS THINKS IT KNOWS what triggered Jang Song Thaek’s purge. Citing “sources in North Korea,” it claims that the regime intercepted a letter from Jang to China’s leaders that would have shifted Nort Korea’s power structure in his favor:

It has been revealed that in early 2013, Jang Song-thaek dispatched a letter to the Chinese leadership, explaining that he desired to instigate changes to the North Korean system such that its pivot of power would move away from the Korean Workers’ Party (KWP) and towards the DPRK government, as overseen by the Prime Minister and the Cabinet.

This letter and its contents is said to have served as the decisive evidence that led to the removal of Jang Song-thaek from his post in the enlarged Politburo meeting, called by the KWP Organisation and Guidance Department (OGD) in early December of last year. [New Focus International]

~   6   ~

MEANWHILE, KIM KYONG HUI, JANG’S WIDOW, is recuperating at Samjiyeon from a breakdown after fighting with Kim Jong Un about her husband’s execution — or so says the Daily NK. I remind you of my low confidence in any reports from inside the royal court.

~   7   ~

REMEMBER ALL THE HYPE about that new bridge between Dandong and Sinuiju? Construction is behind schedule because of slow progress and pilferage on the North Korean side.

“China provided a lot of materials and machinery to the North, but there is a story that this machinery was sent for use on other projects rather than for the bridge construction. The Chinese traders who did harbor high hopes for [economic] opening brought on by the bridge are showing their disappointment more and more,” the source explained. [Daily NK]

~   8   ~

SOUTH KOREAN HISTORICAL DRAMAS are still a hit in North Korea, despite Kim Jong Un’s border crackdown.

~   9   ~

DAILY NK GUEST COLUMNIST LEE JONG CHEOL writes that South Korea has textbook revisionism problems of its own:

Generally speaking, middle and high school history textbooks hold that both the Soviet-supported Kim Il Sung and U.S.-backed Syngman Rhee were equally accountable for the war. They agree that North Korea prepared for the war with help from the Soviets, and that Kim Il Sung ordered the invasion of the South. However, they also describe the Cold War environment, the “Acheson Line” (the nominal American defense perimeter), and battles around the Military Demarcation Line (MDL), giving them similar weight in the narrative and effectively downplaying the responsibility of the Soviets and Kim Il Sung. Furthermore, textbooks portray the Korean War as a battle for unification, with military force the only option available to achieve it.

That’s not so surprising when you consider who’s in charge of South Korean teachers’ unions.

Obama administration sanctions everyone except Kim Jong Un

The boys at Treasury have been busy sanctioning nasty people lately … just not nasty North Korean people. In the last 30 days, they’ve imposed sanctions on new targets in Syria, the Central African Republic, South Sudan, and the Ukraine, and put a shiny new Executive Order on the President’s desk blocking the assets of human rights violators in Democratic Republic of Congo. Really? We do that sort of thing? Yes, we do that sort of thing — just not to Kim Jong Un.

(They’ve also substantially weakened U.S. sanctions on Burma, just as it’s becoming increasingly obvious that the Burmese government is going back on many of its promises of democratic reform, and that its generals are still engaging in arms trafficking with North Korea.)

Yet this still isn’t our greatest lost opportunity. Recently, Treasury and French parastatal bank BNP Paribas concluded a settlement under which BNP Paribas will pay an absolutely colossal amount — $8.9 billion, which is a record for sanctions violations. BNP Paribas’s M.O. was to strip data from transactions that had to be reported to Treasury, thus avoiding the burden of obtaining licenses to trade with sanctioned countries, or perhaps to evade a requirement to obtain a license that OFAC wouldn’t grant.

Today’s settlement resolves OFAC’s investigation into BNPP’s systemic practice of concealing, removing, omitting, or obscuring references to information about U.S.-sanctioned parties in 3,897 financial and trade transactions routed to or through banks in the United States between 2005 and 2012 in apparent violation of the Sudanese Sanctions Regulations, 31 C.F.R. part 538; the Iranian Transactions and Sanctions Regulations, 31 C.F.R. part 560; the Cuban Assets Control Regulations, 31 C.F.R. part 515; and the Burmese Sanctions Regulations, 31 C.F.R. part 537. [Treasury Dep’t Press Release]

Notice anyone missing from that list? In case you wonder why, it’s because of the lack of comprehensive financial sanctions against North Korea — the kind of sanctions that are in place and self-evidently effective against these other targets. (No, sanctioning the Foreign Trade Bank is not comprehensive. It in no way compares to our sanctions against Cuba, Syria, or Iran.)

North Korea alone is free to receive foreign investments and all sorts of cash payments, no questions asked, through the dollar-based financial system that uses U.S. banks, and without an OFAC license. This, despite the fact that U.N. Security Council resolutions clearly demand that investors ask questions, and that governments implement and enforce financial transparency.

BNP Paribas wasn’t fined for breaking North Korea sanctions regulations because absent proof that the transactions furthered illicit activity or proliferation, there’s nothing to break. But that’s the catch — there are special licensing requirements on Iran and Syria because that’s how we’re most likely to detect proliferation and money laundering. Instead, our North Korea sanctions are weaker than any of these other national programs. And that makes no sense at all from a strategic, humanitarian, or enforcement perspective.

“Today’s settlement is OFAC’s largest-ever and reaffirms OFAC’s determination to aggressively enforce U.S. sanctions rules and regulations,” said OFAC Director Adam J. Szubin.  [....]

The specific payment practices the bank utilized in order to process sanctions-related payments to or through the United States included omitting references to sanctioned parties; replacing the names of sanctioned parties with BNPP’s name or a code word; and structuring payments in a manner that did not identify the involvement of sanctioned parties in payments sent to U.S. financial institutions.  While these payment practices occurred throughout multiple branches and subsidiaries of the bank, BNPP’s subsidiary in Geneva and branch in Paris facilitated or conducted the overwhelming majority of the apparent violations.  

I don’t dispute the awfulness of the civil war in the DRC, but do its human rights violations equal this in terms of their scale and their drearily methodical state sponsorship? And even if so, why the DRC and not North Korea? The DRC isn’t a strategic threat to U.S. interests. Syria and Iran are, of course, but North Korea is suspected of nuclear cooperation with Iran, has a proven history of chemical weapons and nuclear cooperation with Syria, has attacked on U.S. treaty allies, and has sold arms to Hamasbollah.

On the other hand, none of these nations is suspected of state-sponsored drug trafficking, counterfeiting of U.S. currency and intellectual property, illegal gambling, or money laundering on a comparable scale. Those things represent a direct threat to the financial system on which the global economy depends. So what reason exists to sanction any of those regimes that isn’t just as good a reason to sanction North Korea, too?

Open Sources, July 9, 2014

~   1   ~

NORTH KOREA LAUNCHES MORE SCUDS into the Sea of Japan. I reckon that somewhere in Washington, someone who worked at the State Department in the 1990s is thinking that by launching missiles on July 2nd and July 9th (but not the 4th), North Korea was really being conciliatory.

~   2   ~

PARK GEUN HYE CALLS for the “international community,” which is an oxymoron, to pay more attention to the rights of North Korean refugees. But given the shortcomings of the International Criminal Court, I’d settle for more attention to the subject by Park Geun Hye, starting with (1) calling for Xi Jinping to release those eleven refugees, (2) publishing an official Korean translation of the COI report, (3) allowing North Korean exiles to broadcast to their homeland on medium wave, (4) insisting that North Korean workers at Kaesong actually receive their salaries, (5) pushing the National Assembly to pass a human rights law, and (6) establishing a human rights tribunal in South Korea, similar to the Cambodia tribunal.

~   3   ~

THE MANAGEMENT EXTENDS ITS WARMEST OFK WELCOME to its readers in Mongolia, Nicaragua, Laos, Venezuela, and Barbados. You’re next, Tajikistan, Svalbard, and the Democratic Republic of Congo.

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EFFORTS TO CREATE A NEW LIU XIAOBO PLAZA in front of China’s Embassy are proceeding, with a favorable vote in the House Appropriations Committee. I like so much, I think “Edward Snowden Boulevard”  in Beijing will be well worth it.

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A SOUTH KOREAN COURT HAS SENTENCED what Yonhap calls “the head of a left-leaning dance troupe” to four years in prison for contacting a North Korean intelligence agent and swearing an oath of loyalty to the Pyongyang regime.

It does not surprise me that the prisoner is a member of Unified Progressive Party, the party of convicted traitor Lee Seok-Ki. It does surprise me that there is a “traditional Korean dance company” that specializes in dancing in such an awkward position. Just think of the chiropractic expenses.

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I HAVE SOMETIMES REFERRED TO Kim Il Sung as North Korea’s largest stockpile of preserved meat, but it seems I have taken “preserved” too much for granted, and the old tyrant is said to be “losing water like a drying Pollack.” (For those of you from Wisconsin, this refers to a certain species of fish.)

Keeping China’s Cold War cold: The case for PATO

As our alliance diplomacy fails in Asia, “Pentagon officials,” no doubt with some prodding from the White House, say that if the Senate confirms Mark Lippert as Ambassador to South Korea, he would redouble U.S. efforts to rebuild a trilateral alliance with Japan and South Korea.

“Trilateral” would be a very good start toward “multilateral,” and I wish the administration success. I don’t know much about Mr. Lippert, but a diplomatic vacuum now could mean war and chaos for us all, while good diplomacy could still restore peace and order in the world’s most economically dynamic region. While you’re thinking about how alarmist that was of me to write, give this Washington Post article a read. Then, try to think about soft, cuddly pandas.

Lippert’s job didn’t get any easier when Xi Jinping presumably strong-armed Park Geun-Hye into saying this:

“The basic stance of the (South Korean) government is that Japan in principle is not allowed to exercise its collective self-defense right within the Korean Theater of Operation, or KTO,” a government source said, requesting anonymity.

Apparently, Park rejects the possibility that Japan might exercise that right while protecting South Korea (among others) from China’s self-declared air defense identification zones or unilateral maritime claims, or to help it stabilize a post-collapse North Korea. Take another look at the map in the Post’s article:


[Washington Post]

It’s clear that China, in deference to the tested principle of “divide-and-rule,” has carefully avoided expanding that zone into the Yellow Sea. For now, China is content with buying the fishing rights (or simply stealing the fish).

China has been in a Cold War with us since before our Cold War with the U.S.S.R. ended. All that’s missing is our acknowledgement of that. Chinese domination of all of East Asia would cause a series of dramatic shocks to our economy, as China used its military supremacy to monopolize and tax the region’s resources, manufacturing, and trade routes. Chinese theft of U.S. intellectual property would skyrocket, and China would impose its own terms on trade, and the costs of raw materials and finished goods. China would control the Strait of Molucca, and with it, our oil imports from the Middle East. The result would be our impoverishment as a nation. You think China is already doing many of those things now? Wait until it controls the entire Western Pacific.

In a few years, we may find ourselves facing a choice of defending (or not) our treaty allies in the region. (A second-worst case scenario would be finding ourselves bearing the entire cost of their defense.) Some of those allies have made the decision to appease China for now, in the hope that they can buy time. We all earnestly hope that our conflicts with China don’t become military conflicts. The best way to prevent that would be through good diplomacy that concentrates minds across the Pacific on their common interests and their collective strength, if allied to each other, and to us. That is, good diplomacy and strong alliances can deter China, prevent war, and avoid the common impoverishment of the U.S. and its Pacific allies.

I worry that John Kerry, who may be the worst Secretary of State in U.S. history, isn’t the man for that job.

None of this will work, of course, as long as Japan continues to shift the region’s focus to debates over settled history, and as long as other Asian nations continue to take Japan’s bait and elevate those debates over their own interests. Koreans can’t seem to confront the fact that Chinese men are turning North Korean women into sexual slaves today, because of the Chinese government’s own crimes against humanity.

Meanwhile, Japan needs to be told in clear terms to stop hedging on its apology for the Comfort Women and other historical issues. In exchange, we’ll support its claims to Senkaku, and use forceful financial sanctions to force North Korea to return its abductees.

Just as NATO preserved the peace in Europe, we need a Pacific-Asia Treaty Organization* to preserve the peace in Asia. Of course, China would say that this alliance is meant to “contain” it, which is exactly what John Kerry is telling the Chinese we aren’t doing. But a time when China is grabbing territory and resources across East Asia is past the time for reassurances. In fact, it’s probably past time for China to reassure us.

* If it bothers you that “pato” means “duck” in Spanish, we could always use “APTO” instead.