Yay, it happened! Jim Rogers got burned by hyping North Korea!

And just like that, crackpot investment advisor Jim Rogers joins the distinguished company of Hyundai Asan, Volvo, Yang Bin, David Chang and Robert Torricelli, Chung Mong-Hun, Roh Jeong-ho, and Orascom’s Naguib Sawaris, all of whom won Darwin Awards in North Korea. I’ve previously written about Rogers and his enthusiasm for North Korea and its worthless currency. That OFK post caught the eye of a New York Times reporter, who has just published a story on the relationship between Rogers and his self-described business partner, a Chinese entity called Unaforte:

“It’s very exciting. The kid has been opening up North Korea,” Mr. Rogers said in an interview, referring to Kim Jong-un, the country’s ruler.

But North Korea can be a murky place to tread — as Mr. Rogers’s experience shows.

A Hong Kong company called Unaforte that is involved in several North Korean businesses named Mr. Rogers as a shareholder a year ago, according to a corporate filing. Investing in a North Korean business like that would probably violate American sanctions if it happened now, though experts say it was legal at the time. [NYT, Patrick Boehler & Ryan McMorrow]

In this case, “experts” means me. Rogers’s investment came just a month before President Obama signed Executive Order 13722, which imposed sectoral sanctions on North Korea’s transportation, mining, energy, and financial services industries. That E.O. was enough to drive investor and fund manager James Passin out of North Korea. Before that, however, our threadbare North Korea sanctions probably didn’t prohibit what Rogers did. Still, staying one step ahead of the law doesn’t mean one isn’t stepping in something.

Mr. Rogers said he gave Unaforte $100 as a token of good will but never expected that it would name him as a shareholder. Asked about his stake in the company in October, he interrupted an interview with The New York Times to call Unaforte and told the English-speaking sister of its founder that the company had agreed he could not be a shareholder.

Speaking into his phone, Mr. Rogers said, “I know I have told you, ‘Never, never, never.’”

Unaforte no longer lists Mr. Rogers as a shareholder in its filings but will not release shareholder records that might show more details about the shares given to Mr. Rogers. Officials at Hong Kong’s corporate registry said they were investigating whether Unaforte is complying with the city’s disclosure laws. Unaforte did not respond to emailed questions for comment. [NYT]

The Times chronicles how Rogers quickly distanced himself from Unaforte once its reporters started asking questions (“I make speeches for hundreds of people.”). At one time, Unaforte featured Rogers prominently in its promotional materials. Its founder, Zhao Chunhui, calls himself “Jim Rogers’s business partner in China.” Then, a Unaforte website marketing its North Korea investments — a bank, an office park, and a stake in a gold mine — “went offline after The Times began to ask about its businesses.” On March 17, 2016, two days after President Obama signed EO 13722, Rogers wrote to Unaforte, asking “that it return his $100 and take back an unspecified number of shares.”

To make matters worse, Unaforte also drew a mention in the latest report of the U.N. Panel of Experts, for setting up a bank in the Rason Special Economic Zone. Sorry, my WordPress installation doesn’t read hanja:

221. A Hong Kong, China, company, Unaforte (?????????), with a Yanbian branch (?????) established the First Eastern Bank (????) in Rason in 2014 as a subordinate enterprise to provide financial support and loans to Chinese investors in mining and real estate projects in Rason (see annex 15-11). The bank is licensed by the Central Bank of the Democratic People’s Republic of Korea (see annex 15-12) and provides loans to Chinese individuals and companies in the Rason area. In its promotional materials, Unaforte claims: “The [First Eastern] Bank is fully independent and does not require proof of identity. It is not subject to the jurisdiction of China or [the] Democratic People’s Republic of Korea and is not required to report to the Chinese government or the Democratic People’s Republic of Korea government!” (see annex 15-13). The Panel notes that foreign nationals holding accounts in banks of the Democratic People’s Republic of Korea would be a violation under resolution 2321 (2016).

Under sanctions adopted by the U.N. Security Council last year, the Far Eastern Bank must now be closed. Specifically, Paragraph 31 of UNSCR 2321, adopted on 30 November 2016, requires Member States to close all existing representative offices, subsidiaries or banking accounts in the DPRK within 90 days. UNSCR 2270, paragraph 33, requires Member States to “prohibit in their territories the opening and operation of new branches, subsidiaries, and representative offices of DPRK banks,” to “prohibit financial institutions within their territories or subject to their jurisdiction from establishing new joint ventures,” except with a U.N. Committee’s advance approval, and requires member states “to close such existing branches, subsidiaries and representative offices, and also to terminate such joint ventures [and] ownership interests.”

Previously, Leo Byrne of NK News also reported on Unaforte’s exports of gold jewelry to Hawaii. The gold was allegedly mined in North Korea; thus, exports to the U.S. could have violated a 2011 executive order prohibiting imports from North Korea, except pursuant to a Treasury Department license. Rogers comes across looking like a fool, a charlatan, and a generally amoral person, but from a strictly legal perspective, not even he can be faulted for ex-post facto sanctions violations. There’s no evidence that Rogers knew of the gold jewelry exports to the U.S., but if he did, that might be his greatest legal risk.

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U.N. report: SWIFT banking network violated North Korea asset freeze

Since last year, this blog has covered SWIFT’s continued provision of financial messaging services to North Korean banks, despite suspicions that North Korea was involved in stealing almost $100 million from the Bangladesh Bank by hacking into SWIFT’s messaging software. Later, I wrote about an effort in the last Congress to ban North Korean banks from SWIFT, mirroring a sanction that was one of our most effective measures against Iran. SWIFT is effectively the postal service of the financial system, sending instructions between banks to credit and debit accounts to facilitate payments. Losing SWIFT access makes it slow, costly, and inefficient for a bank to operate.

The U.N. Panel of Experts’ latest report, released over the weekend, now confirms that SWIFT continued to provide services to three North Korean banks — Bank of East Land, Korea Daesong Bank, and Korea Kwangson Banking Corporation, the object of this recent Justice Department indictment — long after those banks were designated by the U.N. and the U.S. Treasury Department. Worse, the Belgian government authorized that. Generally speaking, both sets of designations require the freezing of any of the target’s assets, and prohibit any action that facilitates the target’s transfer of property or interests in property.

248. In response to inquiries by the Panel, SWIFT confirmed to the Belgian authorities that it provided financial messaging services to designated banks of the Democratic People’s Republic of Korea. As part of its procedure for doing so, SWIFT requests authorization from the Government to receive the moneys owed for the services. Upon receipt of such authorization, SWIFT receives payment for its services from the designated banks.  The payments are then entered in its books and recorded as revenue. The Belgian authorities have authorized SWIFT to receive the amounts set out in tables 13 and 14 from designated banks in exchange for the provision of financial messaging services, the provision of the SWIFT handbook, training in the use of the SWIFT network and maintenance costs.

SWIFT stopped providing services to four other North Korean banks — Amroggang Development Banking Corporation, Daedong Credit Bank, Tanchon Commercial Bank, and Korea United Development Bank — not because SWIFT was even minimally principled, but because “those banks themselves requested SWIFT to do so.”

Paragraph 8(d) of UNSCR 1718 requires all Member States, and all persons subject to their jurisdiction, to “ensure that any funds, financial assets or economic resources are prevented from being made available by their nationals or by any persons or entities within their territories, to or for the benefit of” designated entities. The whole point of financial messaging services is to make economic resources available. I can’t for the life of me see how financial messaging on behalf of designated North Korean banks is anything but a clear violation of 1718.

The unavoidable fact of SWIFT messaging is that it enables banks to effect financial transfers. Thus, messaging services that facilitate designated banks’ financial transactions violate a Member State’s duty (in this case, Belgium’s) to “prevent” the funds “from being made available” to designated entities, per paragraph 8(d) of UNSCR 1718 (2006), paragraph 11 of UNSCR 2094 (2013), and paragraph 10 of UNSCR 2270 (2016). To authorize the acceptance of payment from designated DPRK entities would permit those entities to purchase goods and services and access the global economy, which would contravene the plain meaning of an asset freeze. That’s exactly what Belgium and SWIFT did here. Bear in mind that last summer, the Justice Department indicted Dandong Hongxiang for using an off-the-books ledger system to move funds for one of the very same banks.

Then, there is the question of whether SWIFT provided “financial services” to North Korean banks. In relevant part, Paragraph 11 of UNSCR 2094 requires Member States to “prevent the provision of financial services . . . by their nationals or entities organized under their laws . . . of any financial or other assets or resources . . . that could contribute to” activities prohibited by the Security Council’s resolutions. By citing Paragraph 8 (d) of UNSCR 1718 (2006), this provision specifically applies to entities that have been designated by the Security Council.

Now, I take it that SWIFT’s highly-paid lawyers and lobbyists (at least, more highly paid than me) have gone to great lengths to persuade people that financial messaging services aren’t “financial services.” In paragraph 249 of the Panel’s report, Belgium cites domestic and EU law to that effect. At best, that’s a valiant effort to make chicken salad from chicken shit. To its credit, the Panel didn’t buy that, although it focused on a different angle — the receipt of fees by SWIFT from North Korean banks.

The Panel notes that, in the absence of a determination by the Committee that these payments fall under the exemptions in paragraphs 9 (a) and/or (b) of resolution 1718 (2006), the receipt of funds from a designated entity is a violation of the asset freeze pursuant to paragraph 8 (d) of resolution 1718 (2006) and paragraphs 8 and 11 of resolution 2094 (2013).

Myself, I’m much less concerned about the minuscule fees SWIFT received — a few thousand dollars — than the (undoubtedly, much larger) sums SWIFT’s messaging services helped those designated banks to move.

With U.N. resolutions, we’re lucky if many states’ officials read them at all. For the resolutions to have any chance to work as intended, thousands of officials in hundreds of member states have to interpret and apply them consistently. Not all of those officials are banking lawyers. Pedantic interpretations of resolutions that fly in the face of their plain meaning are a recipe for exceptionalism. That’s what happens when a Member State’s interpretation of its domestic law is allowed to contravene the plain meaning and purpose of the resolutions.

Belgium, of all places, now finds itself cast as a unilateralist rogue state defying U.N. resolutions and flirting with money laundering. Given SWIFT’s influence on both sides of the Atlantic, it probably saw itself as above the law. There is nothing on SWIFT’s website reacting to that revelation at the time of posting. But with the truth of SWIFT’s enabling of dirty North Korean banks now revealed, it’s hard for me to believe that it will be business as usual. At a bare minimum, I’d expect SWIFT to disconnect the three designated banks. The next move may well be up to Congress. For SWIFT, that’s a lot of risk to take to feed the hand that bites them.

~   ~   ~

Update:

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Class struggle in North Korea

“The history of all hitherto existing society is the history of class struggles. Freeman and slave, patrician and plebeian, lord and serf, guildmaster and journeyman, in a word, oppressor and oppressed, stood in constant opposition to one another, carried on an uninterrupted, now hidden, now open fight, that each time ended, either in the revolutionary reconstitution of society at large, or in the common ruin of the contending classes.” 

– Karl Marx, The Communist Manifesto

And yet, no place is quite so perfect a laboratory for Marx’s ideas of class struggle and alienation as the state that some neo-Marxists claim as a paradise of socialism, even as others wishfully declare that capitalism is breaking out there. Both views are wrong, of course. North Korea hasn’t been socialist for a long time. Its officials are accomplished profiteers and money launderers. It practices economic totalitarianism because that serves its greater goal of political totalitarianism. One form of economic totalitarianism is as good as the next:

Recent reports suggest that the consumption gap is widening in Pyongyang, increasing tension between North Korean residents and the regime. According to sources inside the country, the newly affluent middle class, known as the donju, are fueling the trend by providing premium high quality products to wealthy customers while offering sub-standard items to ordinary citizens.

“Pyongyang, the heart of the revolution, is becoming a place of severe income disparity – even more so than in a capitalist state. This is because the privileged classes are in control of the Pyongyang Department Store [No.1], the General Markets, and the trading infrastructure,” a source in South Pyongan Province told Daily NK on February 27. [Daily NK]

What the report really describes is state capitalism, or crony capitalism, in which most Pyongyang residents rely for their needs on markets that are rigged by a predatory oligarchy that profits from its political connections, not its merits or talents. Party officials, their wives, and their relatives have used those connections to seize control of state stores, markets, and the trade in the goods that fill them. They have a de facto monopoly that excludes all but the highest rungs of North Korea’s political caste system:
What this has resulted in is a situation in which all the prosperous individuals are either direct relatives of officials or those who donate significant loyalty funds to government departments. Having absolute power over trading infrastructure, the donju have taken control of the market in Pyongyang with the authority to import foreign goods freely, and price them however they wish.
Any poli-sci professor at Berkeley could have told you the inevitable outcome of that:
As a result, many residents are feeling alienated from the benefits of marketization, and complaints against the regime are rising. In addition, criticisms are increasingly targeting the wealthy class who are openly squandering their money while maintaining their wealth through the political control of enterprise assets.
Consequently, the report says, “the majority of” Pyongyang residents have come to detest the donju and their conspicuous consumption.
Some of the more opinionated residents are saying that, ‘They (the cadres and donju) should be bumped off first if a war breaks out,'” a source in Pyongyang added.
Marx may or may not have said that (though Douglas Adams said something very much like it). Incidentally, North Korean defectors have told me that “when the war comes” is code talk for revolution. This is the natural result of Kim Jong-un’s policy of enriching the party elites while keeping everyone else just hungry enough to control them efficiently and enslave them profitably. Is there some law against the CIA sowing Marxist agitprop? It is malpractice that our own government’s broadcasts and information operations fail to exploit the timeless and universal appeal of class struggle, given the legitimacy of its basis in the capital of such a dangerous enemy.

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N. Korea, dissent & desertions: as internal control tightens, border control degrades

I haven’t yet had time to read Nat Kretchun’s new report on the circulation of samizdat inside North Korea, but ReutersThe Washington Post, and Sokeel Park helpfully summarize its bleak findings: Kim Jong-un is not a Swiss-educated reformer, is not bringing Glasnost to North Korea, has turned Koryolink into a tool for hunting down dissent and dissenters, and is slowly winning the war to restore thought control. (Still unanswered is whether Syracuse University’s “engagement” program that taught Pyongyang how to do digital watermarking also helped it perfect its digital censorship.) North Koreans believe it has become more dangerous to watch foreign dramas under His Porcine Majesty’s rule. The only small bright spot is that DVDs and USBs with forbidden content continue to circulate. It will be difficult (if not impossible) to re-indoctrinate generations of disillusioned North Koreans, but highly possible for the state to isolate and repress them.

Still, it’s a profound testament to the power of hope that people would risk a slow death in a prison camp for a rare glimpse at a life worth living, and unfortunate that our own efforts to leverage that power are still in their infancy. South Korea, which knows the power of hallyu, is mulling ways to help spread information into North Korea, but again finds its efforts hobbled by the left-wing, anti-anti-North Korean politicians. One simple and powerful first step would be to extend the range of existing South Korean cell networks. A seemingly unrelated report suggests a second strategy, by highlighting the greatest vulnerability in Kim Jong-un’s control over his own population — low morale and indiscipline among the border guard force. Yes, it happened again:

The North Korean soldiers deserted their posts along the border area with China and illegally entered Changbai County in the country’s northeastern province of Jilin on Tuesday, according to the source.

“Chinese authorities notified residents to be on alert and immediately report their location if they are observed,” the source added. [Yonhap]

Although the Yonhap report doesn’t specifically say that the soldiers deserted, the fact that Chinese police are still looking for them strongly suggests that. Incidents like his have risen sharply since 2014. I’ve compiled reports about other defections, fraggings, desertions, and cross-border crimes by border guards here, and reports of similar disciplinary breakdowns within the North Korean military as a whole here (there’s plenty to read at those links if you’re interested in researching that topic further). This isn’t even the first such incident this year. In January, a border guard shot and killed seven of his comrades. Yonhap mentions just a few of those incidents in its report.

In July 2016, five runaway North Korean soldiers broke into residents’ houses in the county and committed robbery. Chinese police arrested two although two policemen suffered gunshot wounds in the process.

In December 2014, a North Korean army deserter killed four Chinese citizens in a robbery attempt in the Chinese border city of Helong, while an year earlier, a North Korean defector in his 20s killed an elderly Chinese couple in the Chinese border city of Yanji and stole 20,000 yuan (US$2,900). The North Korean defector was caught by Chinese authorities after fleeing to Beijing.

“Since the 2000s, worsening food shortages seems to be pushing North Korean soldiers into deserting their posts,” another source said. “North Korea seems to be suffering from more food shortages since massive flooding hit the country’s northeastern region in late August.” [Yonhap]

The immediate cause of all of these incidents is the fact that the soldiers aren’t being fed or paid properly. Look further behind that, and you find that the soldiers and non-commissioned officers had come to rely on bribes from smugglers to supplement their pay. Kim Jong-un’s crackdown on refugee flows, cell phones, and smuggling has forced the soldiers to rely on a commissary system that’s corrupt, inefficient, and incapable of providing for them.

So how, exactly, does this suggest a strategy? Because North Korea’s domestic economy is so barren, the Ministry of State Security and Reconnaissance General Bureau fund themselves with foreign trading companies and businesses. The same is almost certainly true of other internal security forces, including the border guard force. Targeting those funding sources with sanctions, money laundering prosecutions, forfeitures, and asset freezes would further strain the commissary system, morale, and discipline, and deny those forces the funds to buy materials, parts, and equipment like cell phone trackers. That, in turn, would widen the cracks in Pyongyang’s control over the borders and help smugglers get more DVDs, USBs, radios, cell phones, and human beings across the border.

As I’ve often argued, samizdat will not seriously threaten Kim Jong-un’s control over North Korea until North Koreans have some means of organizing with each other digitally. As I’ve also argued, those means are probably no more than a few years away if we leverage the experiments of Google, Facebook, or other innovative technologies. These strategies aren’t mutually exclusive; indeed, they can be mutually complementary. It isn’t a question of sanctions or information operations or diplomacy. It takes more than a tuba to perform a symphony. It’s all of those instruments playing at once, as long as they play the same music.

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Weirdly, corroboration emerges that Kim Won-hong was ousted for “human rights abuses”

Charging a man with murder in this place was like handing out speeding tickets at the Indy 500.

– Apocalypse Now

Earlier this month, when the purge or demotion of State Security Minister Kim Won-hong was first reported, I seized on one rather bizarre part of the justification for his ouster from that key post for “corruption, abuse of power and human rights abuses.” North Korea has always angrily denied the existence of human rights abuses and called itself a paradise for its citizens. Such a concession would be extraordinary for a regime that prioritizes its own stability above everything and the rights of individuals beneath everything. It would imply that individuals have rights in a real way, as opposed to the theoretical rights guaranteed to them under North Korea’s farcical constitution. It would imply that the regime saw the perception that it denied individuals their rights as a threat to the stability it prizes over everything else, and perhaps, to its access to the global economy.

At the time, I said it would be important to watch for corroboration — first, that Kim Won-hong really had been ousted, and second, that human rights abuses really were part of the regime’s justification for that. As to the first, I’ll refer you to Michael Madden, who reviews the evidence to support the claim. As to the second, we now have a report from inside the MSS (formerly known as the SSD):

In the aftermath of the purge of Kim Won Hong, the former head of North Korea’s State Security Department, Kim Jong Un has reportedly ordered the State Security Department to cease human rights abuses.

A source in Ryanggang Province told Daily NK on February 8 that an emergency meeting was held at the Ryanggang Province branch of the State Security Department (SSD) for three days from January 25 to 27. During the meeting, the decision to dismiss Kim Wong Hong (sic) and execute five SSD cadres was announced, as well as orders to eliminate human rights abuses such as beatings and the torture of residents.

“Statements such as ‘You should not abuse your power to make money,’ and ‘These corrupt actions are turning the residents away from the Republic (North Korea)’ were also made during the meeting,” the source said. [Daily NK]

Of course, we are speaking here of North Korea’s Gestapo and SS — the agency that controls the borders, runs the prison camps, carries out the purges, and maintains the regime’s state of terror over the people. That’s why it’s appropriate to treat this report with as much skepticism as the North Korean people themselves are treating it.

However, residents have been responding coldly. The SSD has already established itself as “nothing but evil in the minds of residents,” she said, and no one expects that there will be any improvement in human rights.

“Residents are mostly pessimistic, saying, ‘I am not interested in whether Kim Won Hong was purged or SSD cadres were executed,’ or ‘The vampires sucking our blood and sweat remain,'” she noted.

“Some residents are also saying, ‘The [state-run publication] Rodong Sinmun has been claiming that there are no human rights violations, but now the regime admits that it has been abusing human rights after all.'” [Daily NK]

One interpretation is that this is really an anti-corruption drive to maintain the MSS’s discipline. The report also notes that some MSS agents are leaking news of the MSS’s abuses, which are damaging the regime’s standing. Another possibility is that because the regime knows these reports will leak out, the lectures are meant to disinform us. The North Korean official responsible may be seeking to mitigate his image, or to avoid sanctions or prosecution. And given Kim Won-hong’s seniority, there’s really only one official we could be talking about here. That, in turn, would infer that Kim Jong-un is hedging his own bets about his own future.

Finally, consider the possibility that North Korean officials, including Kim Jong-un himself, really believe their own propaganda, and really do believe (in their own strange way) that they’ve created a paradise for the North Korean people. Kim Jong-un has undoubtedly led a sheltered existence. He does not travel alone or visit any site that has not been carefully prepared and polished. For obvious reasons, he cannot be inconspicuous among his rail-thin subjects. Of course, many of the purges, killings, and other atrocities the regime has carried out could not have happened without his personal approval. Psychopaths always find ways of justifying such crimes. It is almost as certain that most of the rapes, killings, and myriad violations of rights of low-ranking North Koreans were arbitrary acts by lower-ranking guards, soldiers, and officials acting with a sense of omnipotence and impunity. Kim Jong-un could easily believe that all of those crimes are a droit du seigneur.

It’s almost as if Kim Jong-un had some unique insight into the arguments that prosecutors could make against him.

More likely, however, is that Kim Jong-un sees negative foreign and domestic sentiments about his rule as a growing threat to his own survival. I’ll be the first to admit my astonishment at the regime’s apparent vulnerability to the power of words alone, but of course, those words also have important diplomatic, security, and financial consequences. There is ample evidence to suggest that North Koreans are frequently expressing (and occasionally, acting on) their discontent. There is also evidence that this discontent is affecting the regime’s hold over its elite, including the most trusted of the elites, whom it sends overseas to maintain friendly relations with foreign governments, maintain access to foreign markets, and earn hard currency. There is some evidence that Pyongyang may be feeling some of the financial effects, too.

Calls by South Korean Foreign Minister Yun Byung-se for Kim Jong-un to be summoned to a tribunal, and for North Korea’s U.N. privileges to be suspended, will be further reason for Kim Jong-un to worry. By persuading him that the world is closing in on him, and that his regime is fraying from within, we will gain more leverage to force him to negotiate for verifiable reforms. When Kim Jong-un is more afraid of not reforming than he is of reforming, those negotiations will have some prospect of eventual success.

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North Korea should negotiate with the U.S.: No Rodong Sinmun op-ed, ever

This was supposed to be a big week for talk-to-North-Korea crowd, a constituency that’s well-represented in certain academic circles and op-ed pages … and pretty much nowhere else. Track 1.5 talks between current North Korean diplomats and former U.S. diplomats were supposed to begin tomorrow — in Washington, no less. This aroused certain Nobel Peace Prize aspirants and their megaphones in the New York Times and the AP about the prospect that Donald Trump want to might cut a deal with North Korea.

Personally, I’m not privy to the discussions inside the White House. I don’t know if the President wants to cut a deal or not, what kind of deal he’d cut, or who he’d cut it with. I don’t know if the administration asked anyone to convey any messages or what those messages might have been. Officially, Track 1.5 and Track 2 talks aren’t official, but Yun Byung-se, Seoul’s indispensable man, saw that possibility as significant enough to ask Secretary of State Rex Tillerson not to cut a freeze deal and stick to C.V.I.D.

By now, it has occurred to the wisest ones among you that our own arguments and negotiations about talks are an exercise in masturbatory diplomacy if the North Koreans aren’t even showing us any leg. After all, they’ve said over and over and over and over again that they aren’t going to denuclearize, period. Two weeks ago, the Rodong Sinmun specifically rejected Jeffrey Lewis’s bizarre proposal to offer North Korea help with its “satellite” program (which would violate U.N. Security Council resolutions currently in force) in exchange for a freeze on its missile programs. And in the week leading up to the scheduled talks, Pyongyang said this:

There is a heated argument among the political circles in the U.S. about whether the goal of denuclearizing north Korea” is possible or not. Minju Joson Tuesday observes in a commentary in this regard: It is nonsensical to argue about this matter and an attempt to realize the above-said scenario is as foolish as trying to turn back the clock of history.  [KCNA, Feb. 21, 2017]

And, lest anyone suspect that these were the words of a rogue North Korean editor, this:

The DPRK is a nuclear power possessed of even H-bomb which the world calls “absolute weaponry”. The increased nuclear threat to the DPRK will put the security of the U.S. mainland in a greater peril.

The Trump administration has to bear in mind that it may lead the U.S. to its final ruin should it follows in the footsteps of the Obama group which faced only denunciation and derision by the world people, being branded as a defeater for its pipe dream of leading the DPRK to “change” and “collapse” during its tenure of office.

Neither high-intensity nuclear threat and blackmail nor economic sanctions will work on the DPRK.

The U.S. has to face up to the reality and get awakened from pipe dream. The present U.S. administration has to make a bold decision of policy switchover, not trying to repeat its totally bankrupt anti-DPRK policy. [Rodong Sinmun, Feb. 21, 2017]

In the end, the White House decided that it might have sent the wrong message to grant the North Koreans visas and welcome them to Washington just two weeks after eight of their countrymen — including one of their diplomats! — committed an act of international terrorism with a weapon of mass destruction in a crowded airport terminal, in a peaceful and friendly country. After all, unless I’m overlooking something, this was the world’s first state-sponsored terrorist attack with a weapon of mass destruction.

Invariably, the usual suspects will use the denial of the visas to blame Trump for the fact that the talks didn’t happen. But given the inflexible position the North Koreans took going in, the better question is why we should have bothered at all. If North Korea’s nukes aren’t on the table, what conceivable benefit can we derive from negotiations? I suppose there’s value in sending certain messages to the North Koreans — putting them on notice that tougher sanctions are coming, and warning them of the consequences of attacking civilian targets. But there are other times and places to send those messages without committing the grave symbolic and diplomatic error of welcoming Pyongyang’s diplomats to Washington at such an inappropriate time.

But those are conversations, not negotiations, which is what the North Korea doves want, and which is also what the U.S. has tried to start again, and again, and again, even after North Korea reneged on the agreements it did make, again and again and again. Maybe, then, the North Korea doves should stop submitting all of those op-eds to The New York Times and The Washington Post and The Atlantic. Maybe they should start sending them to the editors of The Rodong Sinmun and KCNA and The Minju Choson instead. Let me know if you ever see one published.

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Malaysia’s lax enforcement of North Korea sanctions has finally come home

Over the weekend, Malaysian authorities painstakingly decontaminated a terminal of the Kuala Lumpur International Airport where North Korean agents — including a diplomatcarried out a lethal attack with the nerve agent VX, a substance so deadly that a tiny droplet can kill an adult. The authorities are clearly concerned that the use of a persistent chemical weapon of mass destruction in a crowded airport terminal will cause panic among Malaysian citizens and members of the traveling public, as well they should be. Pyongyang’s reckless act endangered thousands of innocent lives. It endangered every child who sat on the floor while her mother used the check-in machines. It endangered every baby who touched a contaminated surface and put her finger in her mouth, and every mother who used one of the sinks the attackers used to wash their hands. It endangered every worker who cleaned the restrooms or vacuumed the floors, every traveler who touched the handrails on the escalators going down to the taxi rank, every passenger who rode in one of those taxis after the attackers did, and every person who walked through that terminal and took her shoes off at her front doorstep.

The first object of Malaysians’ outrage is, and should be, the North Korean government. As of this hour, the North Korean embassy is still harboring two suspects, refusing to cooperate with Malaysian authorities, and spewing flagrant lies to deflect blame. Obviously, I can’t speak for the Malaysian government, but if I could, I’d be making plans to close the embassy, to expel everyone with diplomatic immunity, and arrest any suspect without it.

But if Pyongyang deserves the brunt of our outrage, a second object of outrage should be the Malaysian government itself, which had long been warned in U.N. reports that Pyongyang’s agents on its soil were violating U.N. sanctions and the laws of other nations, yet did little to curtail them. Report after report identified Malaysia as the home base of North Korean spies, smugglers, arms dealers, slave traders, money launderers, and procurers of tools to make missiles. In allowing this activity to go on for years, the Malaysian government not only allowed North Korea to endanger Malaysians, but to endanger the citizens of other countries — and indeed, the security of the entire world.

Just last week, for example, Reuters reported on the contents of a leaked excerpt of the 2017 report by the U.N. Panel of Experts overseeing compliance with U.N. sanctions against North Korea, including an embargo on the sale or purchase by North Korea or arms and related materiel. The report described the interdiction last year of a shipment of North Korean weapons in transit to Eritrea, including 45 boxes of battlefield radios manufactured by the Malaysia-based company Glocom. According to the report, Glocom is a front for the Reconnaissance General Bureau of the Korean Workers’ Party, an entity designated by the U.N. Security Council, and the agency suspected of carrying out the Kuala Lumpur airport attack. Glocom still operates through this website marketing its wares. It does not list Glocom’s corporate officers, so I’ll let the Malaysian authorities investigate whether there are any financial, logistical, material, or personnel links between Glocom and the attackers. Overall, that seems likely to be the case.

[Update]

Reuters has a must-read story on Glocom filled with details about how it masked its ownership and control behind layers of front companies and shell companies, and tied itself to Malaysian man with influence in the country’s ruling party. They even made this org chart:

It notes that on one occasion in 2014, a female RGB agent named Ryang Su-nyo was caught at the Kuala Lumpur airport terminal while attempting to smuggle $450,000 in cash through customs (note again the North Korean preference for U.S. dollars). Ryang said she was transporting the money for the North Korean embassy, so the authorities decided not to press charges and gave the cash back. Here’s a newer website for Glocom. This wasn’t like any of the ham-handed, rinky-dink North Korean front companies I’ve seen before. This was a slick, sophisticated, and well-capitalized operation that raised funds for an agency with a long history of terrorism. If any of the money ran through the U.S. financial system, which seems likely, it would be worth exploring a material support charge.

[End update]

Then, there is the case of a 2007 shipment of missile parts seized en route from North Korea to Syria. That shipment, which transited through Dalian, China and Port Kelang, Malaysia contained, among other items, “solid double-base propellant … usable for gas generators to power Scud missile turbopumps.” When the shipment was seized, the blocks of explosive propellant that had passed through those busy ports were removed “for safety reasons.” (2012 report, Para. 57.)

Malaysia has long been a hub and meeting venue for North Korean arms smuggling. A shipment of tank parts bound for the Republic of Congo, and which was seized in South Africa in 2010, was routed through Dalian, China and Port Kelang. (2010 report, Para. 63.) In June 2009, Japanese authorities arrested three individuals for attempting to illegally export a magnetometer to Myanmar through Malaysia, “allegedly under the direction of a company known to be associated with illicit procurement for Democratic People’s Republic of Korea nuclear and military programmes.” (2010 report, Para. 51.) In 2012, Japan notified the panel of 2008 and 2009 shipments through Malaysia of machinery useful for producing missile gyroscopes. (2012 report, Para. 91.)

Malaysians have seen the tragic results of anti-aircraft missiles falling into the wrong hands. In 2012, a British court convicted arms smuggler Michael Ranger of attempting to sell Azerbaijan “between 70 and 100 man-portable air defence systems”* from Hesong Trading Company, a subsidiary of the notorious Korea Mining Development Trading Corporation, or KOMID, Pyongyang’s principal arms-dealing front company. Ranger “was in regular e-mail correspondence with” O Hak-Chol, a North Korean diplomat and Hesong representative whom Mr. Ranger met in a number of third countries, including Malaysia. (2013 report, Paras. 90-95 & FN.61.) As recently as 2015, KOMID representatives continued to transit through Malaysia. (2016 report, Para. 177.)

As of 2015, long after the Security Council designated North Korean shipper Ocean Maritime Management (OMM) for arms smuggling and required member states to close its offices and expel its representatives, OMM still maintained an office in Kuala Lumpur. (2015 report, Para. 128.) Until early 2015, a Malaysia-based North Korean agent named Pak In-su acted as an agent for the Mirae Shipping Company, a front for OMM.

Pak In-su’s primary employer was Malaysian Coal and Minerals Corporation (2015 report, Para. 143), a company that is almost certainly linked to Malaysia’s use of North Korean labor in its coal mines. What little we know of working conditions for North Korean expatriate laborers in Malaysia, and what we know of the conditions elsewhere, suggests that those conditions are tantamount to slavery. At least one North Korean miner in Malaysia was killed in an explosion in 2014. In the end, the regime in Pyongyang probably keeps most of the workers’ wages.

The Committee for Human Rights in North Korea estimates that 300 North Korean laborers are working in Malaysia. Partially as a result of such labor practices, Malaysia was recently downgraded to Tier 3 under the Trafficking Victims Protection Act, which imposes penalties on legitimate Malaysian businesses that export to the United States. It also subjects Malaysia to sanctions risks, and the entire world to security risks. In a press release announcing its designation of the Mansudae Overseas Project group, for exportation of workers in violation of Executive Order 13722, the Treasury Department listed Malaysia as a market for Mansudae’s services, and said, “Some of the revenue generated by overseas laborers is used by the Munitions Industry Department, which was designated by the Department of State in August 2010 pursuant to E.O. 13382 for its support to North Korea’s WMD program.”

The procurement network that obtained parts and materials for North Korea’s missile programs has long had a strong presence in Malaysia. This presence has included entities that were designated by the U.N., including OMM, Mirae Shipping, and KOMID, and a U.N.-designated North Korean arms exporter known as Green Pine. In 2006 and 2010, the Korea Chonbok Trading Corporation, a front for Green Pine, purchased pressure transmitters from an unnamed European country for its long-range Unha-3 rockets. A payment invoice for the transactions lists one Ryong Jong-chol, a North Korean based in Malaysia, as the purchaser. (2015 report, Para. 195.) The payments, denominated in Euro, were routed through a Malaysian bank. According to the Panel, “Ryom was acting as the representative of Bank of East Land.” East Land was later designated by the U.S. Treasury Department (in 2011), the U.N. (in 2013), and the European Union (in 2013). (2016 report, Para. 186.) As of February 2016, the Malaysian government had still not responded to the Panel’s request for information about the transactions.

Malaysia’s tolerance of North Korea’s deceptive financial practices endangers Malaysian banks’ access to the global financial system. Malaysia is one of the few nations that still deals with North Korean banks, despite U.N. resolutions requiring “enhanced monitoring” of its financial activities (Para. 11), and warnings by the Financial Action Task Force to take “countermeasures” against North Korean money laundering and proliferation financing. In 2009, U.S. sanctions coordinator Philip Goldberg and Treasury official Daniel Glaser traveled to Malaysia and met with senior officials of the Malaysian government and central bank, regarding the implementation of U.N. financial sanctions under then-new UNSCR 1874. That visit followed reports that Malaysian banks were involved in transferring funds between North Korea and Burma for weapons-related transactions, in violation of a U.N. arms embargo. In 2013, Treasury Undersecretary David Cohen visited Malaysia to discuss its compliance with U.N. financial sanctions.

At least one major Malaysian Bank, Malayan Banking Berhad, was reported by the Panel in 2010 to maintain a correspondent relationship with, or to issue letters of credit for, North Korean banks. (2010 report, page 68.) It’s important to note, however, that the U.N. Security Council did not prohibit correspondent relationships with North Korean banks until 90 days after the adoption of U.N. Security Council Resolution 2270, on March 3, 2016. The Panel’s 2013 report listed the International Consortium Bank, a/k/a Hi-Fund International Bank as having been partially capitalized by and founded by the Malaysia Korea Partners Group of Companies (2013 report, page 132.)

ICB is a subsidiary of a North Korean front company called the MKP Group, which has the world’s most hilariously awful website, appears to have some ties to the Mansudae Overseas Project Group, also operates in Zambia, and really merits a post of its own one day. The existence of these banking relationships shows the importance of Malaysia as a secondary hub in Pyongyang’s financial network, which is often used for illicit purposes.

A recent investigation by Bangladeshi authorities into the smuggling of undeclared luxury goods, including LED televisions, tobacco, Rolls-Royces, and BMWs, has reportedly implicated the North Korean embassy in Malaysia. Under UNSCR 1718, North Korea is prohibited from importing luxury goods. In this case, the end destination for the goods isn’t clear, but whoever is behind the shipments conspired to evade Bangladesh import duties.

For the most part, the substantial network of North Korean arms smugglers, spies, and money launderers who operate in Malaysia merely endanger the citizens of other nations — most obviously in South Korea, but also in Syria and the Republic of Congo. In most cases, however, it’s impossible to predict who and where the next victims of North Korea’s activities will be. North Korea sells the world’s most dangerous weapons and technology to any buyer without regard to end users, victims, or consequences. As the VX attack at Kuala Lumpur illustrates, allowing North Korean agents to operate on one’s soil eventually endangers the host country’s citizens and interests, too. The question that the Malaysian people and government should be asking is whether the benefits of their financial and commercial ties to North Korea are really worth those risks.

~   ~   ~

* North Korea has been caught selling MANPADS before. One shipment of them was seized in Bangkok in 2010, on its way to Iran’s terrorist clients. In 2010, Yi Qing Chen was convicted of attempting to smuggle Chinese-made QM-2 man-portable surface-to-air missiles into the United States in 2005.  In 2011, he was sentenced to 25 years in prison. The QM-2 is a Chinese copy of the Russian Igla-1, or SAM-18.

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N. Korea just killed a guy with one of the WMDs that caused us to invade Iraq … in a crowded airport terminal, in a friendly nation.

Last night, Malaysian police revealed that Kim Jong-nam’s killers murdered him with VX, the deadliest of the nerve agents. I had hypothesized before that the killers almost certainly acted on orders from His Porcine Majesty. Saddam Hussein’s suspected possession of stockpiles of VX was at the core of our justification for invading Iraq. This time, the case doesn’t rely on grainy satellite photos or shadowy, unnamed sources. (And this time, an invasion is also the wrong answer to the problem; the right answer is a combination of financial constriction, the use of diplomacy to isolate Pyongyang, and political subversion, but let’s not get ahead of ourselves.) Here, in no particular sequence, are some assorted thoughts on what we’ve learned since yesterday, and what could happen next.

~   ~   ~

The next time someone tells you that human rights are a side issue or a distraction from more important issues, please punch that person in the nose.

~   ~   ~

The revelation that North Korea used VX has caused justifiable outrage in Malaysia and around the world. There were many Malaysians studying accounting, finance, and agriculture where I attended law school. All of them impressed me deeply with their maturity, wisdom, and strict moral values. I was most recently reminded of this when Kenneth Sng, a student from Singapore (which is culturally similar to Malaysia and separated from it at the end of British colonial rule) gave the introduction at a Republican debate last October.

As a student, I formed close friendships with some of the Malaysians. This is a conservative society that takes law, public order, public safety, and integrity very seriously. That attitude isn’t just a function of the state’s authoritarianism or a remnant of the British legal tradition, the common ancestor of our own legal system. It is a necessity for keeping the peace in a society with a history of ethnic and religious conflict. As Sumisha Naidu documents on her Twitter feed (keep scrolling), this has caused public outrage and protests in Malaysia. Members of a youth group delivered a protest letter to the North Korean embassy. There’s now a safety scare about the use of the terminal. It’s hard to believe that this incident will pass without serious damage to the relationship between North Korea and Malaysia. It could end with the deportation of a large number of slave laborers and money launderers.

~   ~   ~

How did the North Koreans get the VX into Malaysia? Judging by reports that the police (1) arrested a North Korean chemist and (2) later found a stockpile of chemicals in a condo, I’d guess they produced it locally. The other possibility being discussed is that they smuggled it in a diplomatic pouch, though this seems less likely to me.

~   ~   ~

Not surprisingly, I’ve gotten a lot of questions recently about the legal standard for putting North Korea back on the list of state sponsors of terrorism. By the time you read this, I’ll be at work, so I’d refer any questions to my long-form report, or this post, which predicted that North Korea would go back on the list sometime between Groundhog Day and Memorial Day. At this point, it wouldn’t surprise me if that happened before 5 p.m. today. In the latter post, I noted that the criteria in Section 6(j) of the Export Administration Act are so loose that Donald Trump could re-designate North Korea with a retweet. So, hold my beer and watch this!

[Retweet at your own risk, and mine.]

Both Congress and the South Koreans are becoming increasingly vocal in calling for a redesignation of North Korea. So would a redesignation do anything? Yes, it would, as I explained here, mainly by invoking the financial transaction licensing requirements in 31 C.F.R. Part 596, which are far stricter than those in the North Korea Sanctions Regulations at 31 C.F.R. Part 510. It would also lift North Korea’s sovereign immunity from civil liability for terrorist acts. Granted, the passage of the NKSPEA preempted some of the consequences of a re-listing, but we couldn’t get all of them done at once. Any policymakers looking for tougher options should start with Ted Cruz’s letter to Steve Mnuchin. If that’s still not enough for you, e-mail me.

~   ~   ~

For days, theories swirled that the poison was anthrax, which made no sense to me, given that anthrax has an incubation period of at least a day. You will note (because I can’t help reminding you) that in Wednesday’s post, I correctly predicted that the poison would probably turn out to be some kind of nerve agent. I derived this from the fact that the poison was applied to, and absorbed through, the victim’s skin, and the symptoms that followed: blurred vision, eye pain, headache, seizures, and death within minutes. (My long-term memory being better than my short-term memory, I recalled most of these symptoms from my Army years as the soldier’s cue to administer atropine.) All of the nerve agents have similar symptoms, so I didn’t venture a guess as to which one was used.

~   ~   ~

The CDC classifies VX as a persistent chemical agent. It takes several days to break down, and even one droplet can kill. To use such a deadly chemical in an airport terminal crowded with civilians — with babies and little children who crawl on floors and put their mouths on armrests, with young mothers who rolled their suitcases into the restrooms the assassins used — is breathtakingly contemptuous of human life and public safety in a friendly nation. It would not surprise me at all if reports began to emerge that other people who traveled through that terminal and touched contaminated sinks, handrails, or furniture also experienced symptoms of exposure.

There are reports that the two attackers slimed Kim Jong-nam with their bare hands. Why didn’t that kill them, too? According to the CDC, “any visible VX liquid contact on the skin, unless washed off immediately, would be lethal.” (Emphasis mine.) At least one of the women did wash her hands immediately after the attack.

Malaysian police said one of the women also “suffered [the] effects” of VX exposure and was vomiting after the attack. Initial reports said that one of the women wore a glove, but the Washington Post’s Anna Fifield says that isn’t so. Because VX can be a binary compound formed by mixing two separately inert chemicals, it’s also possible that each of the two women applied one of those chemicals.


Another possibility is that the North Koreans who plotted and coolly observed all of this from a nearby restaurant may well have assumed (and preferred) that the poison would kill them. The North Koreans made careful preparations for the escape of their own men, and no apparent plans for the escape of the two women.

~   ~   ~

Maybe the North Koreans were sure they wouldn’t get caught. For whatever reason, they seemingly gave no attention to concocting a plausible cover story. The attack itself went off without a hitch, but because it was needlessly and hopelessly elaborate, the getaway fell apart. By using a persistent chemical agent, they also raised the risk that that police would identify the agent, the composition of which suggests more sophistication than a non-state actor would ordinarily possess. The North Koreans aren’t very good at judging foreign reaction to their outrages. Perhaps history has taught them that the reaction will always be a lot of words amounting to nothing. Perhaps His Porcine Majesty’s advisors are afraid to caution him or tell him no. Still, I can’t imagine they expected their plot to be exposed as quickly and publicly as it was.

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Must read: Brian Myers on what North Korea really wants (hint: it’s South Korea)

Over the years, the soft-liners’ explanations for why Pyongyang sacrificed billions of dollars and millions of lives to build a nuclear program have shifted. First, they said it just wanted the electricity. Then, they said it wanted a bargaining chip to trade away for better relations with us. Now, they say it just wants to protect itself from us. Unlike them, Brian Myers has listened to what Pyongyang has been telling its own subjects — it wants reunification, on its own terms.

North Korea needs the capability to strike the U.S. with nuclear weapons in order to pressure both adversaries into signing peace treaties. This is the only grand bargain it has ever wanted. It has already made clear that a treaty with the South would require ending its ban on pro-North political agitation. The treaty with Washington would require the withdrawal of U.S. troops from the peninsula. The next step, as Pyongyang has often explained, would be some form of the North–South confederation it has advocated since 1960. One would have to be very naïve not to know what would happen next. As Kim Il-Sung told his Bulgarian counterpart Todor Zhivkov in 1973, “If they listen to us, and a confederation is established, South Korea will be done with.”

Western soft-liners keep saying the U.S. must finally negotiate a peace treaty with Pyongyang. That’s where their op-eds conveniently end. These people show no awareness of what such a treaty would have to entail. Are they in favor of withdrawing U.S. troops? If so they should come right out and say so, instead of pretending North Korea will content itself with the security guarantees it has rejected for decades. Many observers believe that the stronger the North Koreans get, the more reasonable they will become. Whenever I think I’ve seen the height of American wishful thinking, I find out it can get even sillier. [Slate]

The conventional wisdom is that North Korea, with half of the South’s population and a fraction of its economy, cannot hope to defeat the South. Myers thinks they’re much closer to winning the Korean War than most of us are willing to believe, and I think he’s right about that:

The stars are aligning very nicely for the strategy [Kim Jong-un] inherited from his father. Just as North Korea is perfecting its nuclear weaponry, China has acquired the economic power to punish South Korea for improving its missile defenses. Opinion polls in the South now strongly favor the left-wing presidential candidate Mun Jae-in, who in 2011 expressed hope for the speedy realization of a North–South confederation. If he or anyone else from the nationalist left takes over, years of South Korean accommodation of the North will ensue, complete with massive unconditional aid.

This went on under George W. Bush, and the alliance survived. Donald Trump, however, is much less likely to allow an ostensible ally to subvert UN sanctions while paying tributary visits to Pyongyang. And Kim Jong-un knows this. He knows that whatever security guarantees Trump gave to Seoul were made to the current conservative administration only. So Kim Jong-un has a better chance than his father did of pressuring the alliance to a breaking point. With China’s support he can pull a left-wing South Korean administration in one way while pushing the Americans in another.

Having lived in South Korea for the past 15 years, I don’t share most Americans’ confidence that it will always choose America over a North-supporting China. My own impression—bolstered by the ongoing controversy surrounding the stationing of the THAAD missile defense system—is that a growing number of South Koreans would rather see their state’s security compromised than risk their own prosperity. [Slate]

Read the whole thing.

Lately, I’ve often thought that the two Koreas are racing toward political collapse, and it’s anyone’s guess which one will lose first. In the North, Kim Jong-un’s brutality and incompetence are alienating the elites and pushing more of them to defect. Gradually — but too gradually — its financial lifelines and trade relationships are being cut one by one. Its people, though unorganized for now, are deeply alienated against the state, resentful of its corruption, and envious of the oligarchy’s ill-gotten wealth. Its system has never been more vulnerable to a well-orchestrated political and economic attack. Unfortunately, the only well-orchestrated attack underway today is being waged against the wrong Korea.

In the South, anarchy and mob rule will end as they always do. To an even greater extent than in the United States, the mobs are gullible, naive, and easily manipulated by spurious reporting and conspiracy theories. The people are so disunited and polarized into warring tribes that Diogenes would search in vain for a moderate voter. The political culture views mass protests, which should be the last resort of a free people, as a higher form of democratic expression than an independent judiciary or orderly self-government through the franchise. In the end, the minority will get what the majority deserves. It isn’t hard to see how a Korean “peace process” would proceed between a unilaterally disarmed South Korea and a nuclear-armed North Korea. Seoul, cut adrift by its allies, would make an overt agreement to end “slander” of the North’s system and a tacit agreement to say nothing as the North’s agents and proxies terrorize the last few noisy editors, defectors, and dissidents into silence or flight. Within five years, the incremental surrender of one of the world’s most prosperous nations to one of the world’s most wretched, repressive, and murderous regimes mankind has ever conceived could be irreversible. But at the time, they will call it peace.

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Does Kim Jong-un consciously imitate Dr. Evil?

As I contemplate both the competence and the incompetence with which North Korea (probably) executed the murder of Kim Jong-nam, I can’t help reflecting on how it often seems to combine the guile and ruthlessness of SPECTRE with the executive competence of Dr. Evil. On one hand, the plot worked with ruthless efficiency. The target is dead. A potential Pu Yi is removed from the scene, and its terrorist objectives have been successful, at least in part. The South Korean government will have to step up its measures to protect high-profile North Korean defectors, and Thae Yong-ho has canceled his public appearances indefinitely. (Admittedly, things don’t always go so smoothly for the RGB.)

Now, weigh those benefits against the costs. Ten people, including eight North Koreans and two local patsies (or agents) have been exposed. One suspect is a staffer for Air Koryo, North Korea’s flag carrier, which was recently designated by the Treasury Department and has had to cut back its routes under U.S. and South Korean diplomatic pressure. The loss of each route complicates Pyongyang’s arms smuggling, slave trade, money laundering, and bulk cash smuggling. If Air Koryo loses its landing rights in Malaysia, it will be harder to transport North Korean traders and coal miners there, and to bring their earnings and wages back to Chinese banks. At least eight people (and by the time it’s all said and done, probably more) who might have earned or laundered tens (if not hundreds) of millions of dollars will be uprooted and sent home.

Another suspect was a highly trained chemist and trader. After having studied overseas, including in the United States, he was a fan of American and South Korean culture — in many ways, a poster boy for engagement — and yet, when the order was given, he was probably the one who mixed up the poison used for the assassination. (Put me down as guessing that if it wasn’t neostigmine bromide, it was probably some other kind of nerve agent. The symptoms match: eye pain, blurred vision, headache, seizures, and fainting.)

Worst of all, one of the suspects is a North Korean embassy official. Malaysian police are now asking to question North Korean embassy staff. Someone tried to break into the morgue where Kim Jong-nam’s body was stored (any guesses)? The North Koreans are in a public spat with the Malaysian government up to the Prime Minister level after questioning the fairness of the police investigation in a country that’s obsessed with law and order. Relations with China were also strained. By involving a diplomat in the plot, Pyongyang has further raised the odds that it will go back on the U.S. list of state sponsors of terrorism.

Does it really take ten people, involving as many North Korean interests as possible, to kill one dude? Surely there must have been an easier way?

There may soon be a significant downgrade in relations between Pyongyang and one of its major trading partners. Kim Jong-un will suffer global embarrassment. Word of the assassination is spreading through North Korean markets like a new drama DVD. Fence-sitting South Korean voters and North Korean officials alike will ask, “If he’d kill his own brother, why not us?” As if on cue, Kim Jong-nam’s relatives are reportedly starting to defect. As with Kim Jong-un’s execution of his uncle, Jang Song-thaek, his act of fratricide will shift the global narrative about who he is and how to deal with him (or not).

Why does Pyongyang do these things? Are these the acts of a man who is irrational, impulsive, or merely stupid? Certainly we can perceive the uneven distribution of competence in North Korea, with its very top leaders having the least of it. But another perfectly rational explanation is that in the end, they know they’re almost never held accountable for the things they do.

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Video of N. Korea’s child slaves shows us (again) the value of Pyongyang’s signature

The video was clear and stark. Its authenticity was beyond serious question. It would have shocked us if North Korea had not already dulled our capacity for outrage. Indeed, there are times when I think it has dulled even mine. Then, last December, came the videos of North Korean children set to work in coal mines, and carrying sacks of heavy stones to build railroads.

[Original reports here and here.]

The Daily Mirror called it a “chain gang,” but the only chains were psychological, and the truth was bad enough: this government conscripts little children to do hard and dangerous work that only adults should do, and even then, only with heavy construction machinery.

Then, in January, a reporter photographed civilians, including children, clearing snow from a road so that foreign tourists and members of North Korea’s political elite could ski at Masikryeong, the resort Kim Jong-un built — it should not be forgotten — while the World Food Program pled for foreign governments to donate enough money to feed North Korea’s poor. This is the life of North Korean children that the Associated Press never showed you, or even tried to.

Most recently, the Daily NK described how the regime conscripts little girls to polish gemstones it exports for hard currency.

Trading companies affiliated with the Daesung General Bureau are reportedly seeking teenage girls with soft hands for employment as manual polishers at gemstone-processing plants. The report is one of the more unusual examples of the North Korean regime’s desperate bid to earn foreign currency.

“Young female students with smooth palms are being selected to work in gemstone-processing factories in cities across South Pyongan Province, South Hamgyong Province, and North Pyongan Province. These kids are being selected because it is believed that the best polish can be achieved by rubbing the jewels in the palms of their hands,” a source from South Pyongan Province told Daily NK on February 3.

“For this reason, teenage girls can be seen sitting in groups at the gemstone factories, diligently rubbing the jewels. The tiny jewels are so small that they are hard to pick up. The students sometimes grimace as they place the jewels between their two palms and rub away.” [….]

“After rubbing the gemstones with their hands all day, the young workers develop blisters and their skin begins to peel off. They are forbidden from complaining about the pain. Instead, they keep their heads down and work hard for eight hours every day,” the source said.

He added, “Those who complain about blisters receive no sympathy. They get kicked out of the factory and lose their jobs. So they have no choice but to endure. Instead of caring for the workers, the cadres at the helm of the operations are completely focused on fulfilling the quotas set by the Ministry of Foreign Trade.”

“Most of the laborers work so hard that they get calluses. When this becomes an issue, they’re told to leave the factory,” he said.

The meager wages earned by the workers reportedly amounts to 5,000 KPW per month, an amount that is insufficient to purchase a kilogram of rice. [Daily NK]

North Korea’s forced child labor has now drawn condemnation from Human Rights Watch, which is teaming up with other NGOs to bring evidence of those abuses before the U.N. Committee on the Rights of the Child.

Jeon Hyo-Vin, 16, experienced forced labor in school almost daily, until she had to leave secondary school because of her family’s inability to pay the required cash payments. Kim Eun-Sol, 18, endured forced labor in school while she was a teenager. By age 13, she became an unpaid worker in a private home in order to survive since her grandmother could not support her. Her mother, who had left to earn a living in China, could not maintain contact with her daughter. [HRW]

See also this op-ed. Even as it enslaves more children at home, Pyongyang is enslaving more adults abroad to alleviate a “chronic shortage of funds,” even at the risk that more of them will defect. In its desperation to monetize the slavery of its people, including little children, Pyongyang will make itself all the more toxic to investors who could transform its economy — if that was what Pyongyang really wanted. Instead, it pursues a business model that relies on a smaller number of the gullible and unethical partners to meet the cost enforcing the enslavement and isolation of most of its people.

~   ~   ~

Does Kim Jong-un care what some U.N. committee says? Almost certainly not, but his propagandists care very much. Their obsession with the regime’s image abroad has caused them to lash out at criticisms of the regime, even to the point of forcing North Korean diplomats to make arguments so implausible that they’re more demoralized than their audiences are persuaded.

But sometimes, the regime’s strategy of implausible deniability does work, at least up to a point. For example, a recent report by the U.N. High Commission for Human Rights credited Pyongyang for signing a convention on the rights of the disabled, while noting that it has refused to allow a U.N. Special Rapporteur or any U.N. representatives into the country to assess or verify its compliance with human rights standards.

So when Tomás Ojea Quintana, the new U.N. Special Rapporteur who replaced Marzuki Darusman in monitoring North Korean human rights issues, proposes to use Pyongyang’s accession to the Disability Convention as a keyhole to achieving broader improvements in human rights in North Korea, I can only shake my head in dismay.

“This initiative is a very useful step forward in the promotion and protection of all human rights in the DPRK and the implementation of recommendations from the latest Universal Periodic Review*,” said the UN Special Rapporteur on the situation of human rights in the DPRK.

“Ratification of the Convention will help the country address prejudice against people with physical, mental, sensory or other impairments. It should also serve to address other forms of discrimination to which certain groups may be subjected based on any other attribute,” he added.

Mr. OJEA QUINTANA stressed that it was now important for the government in Pyongyang to implement the treaty in full consultation with people with disabilities, and to allow technical experts to visit the country. “The ratification should also be used as an opportunity for the country to move forward in the implementation of the other human rights treaties it has ratified, and for it to engage more with human rights mechanisms,” he added. [U.N. Human Rights Council]

Mr. Ojea really ought to review the U.N.’s list of human rights conventions North Korea has already signed — almost as many as the number of arms control agreements it has signed and broken. Among those treaties is the U.N. Convention on the Rights of the Child, in 1990, and an optional protocol, in 2014.

By now, anyone remotely familiar with North Korea must know that its signature on a piece of paper is meaningless. It is all well and good to offer Pyongyang some incentives for meaningful cooperation, but any engagement strategy for North Korea must begin with the understanding that a signature alone is not meaningful. It must end with a threat of accountability and consequences, something to which the regime has proven surprisingly sensitive.

Thus far, Mr. Ojea hasn’t shown much understanding of those principles. At best, he’s in for a long breaking-in period while the North Korean people will go on suffering without his support. At worst, his office, which had become one of the few U.N. bodies that told the truth, will soon revert to the irrelevance and parody that have been more typical of U.N. bodies. We should all hope that he adopts a more realistic strategy soon.

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GOP heavyweights push for secondary boycott of North Korea

Six Republican senators — Ted Cruz (TX), Cory Gardner (CO), Thom Tillis (NC), Marco Rubio (FL), Pat Toomey (PA) and David Perdue (GA) — have signed a letter to newly confirmed Secretary of the Treasury Steve Mnuchin* calling for improved implementation and enforcement of the North Korea Sanctions and Policy Enhnancement Act (NKSPEA).

As Kim Jung-un has exposed his willingness to increase ballistic missile testing with the ultimate goal of achieving nuclear breakout, the potential for this regime to attain a developed and capable intercontinental ballistic missile (ICBM) poses an imminent threat that cannot be ignored,” the senators wrote. “North Korea’s test of an intermediate-range ballistic missile this past weekend demonstrates advancement in fuel and launch technology, underscoring the necessity of faithfully executing the law to meet this growing threat. [Sen. Ted Cruz]

The letter (the full text is here, and it’s an absolute must-read) proposes ten actions that President Obama never got around to, that would substantially improve the effectiveness of sanctions: (1) designate North Korea’s remaining banks; (2) hire enough cops and lawyers to enforce the sanctions; (3) invoke more Patriot Act special measures to require record-keeping and reporting on North Korean beneficial owners; (4) talk to Rex Tillerson about re-designating North Korea as a state sponsor of terrorism; (5) replace our weak and outdated North Korea sanctions regulations; (6) strictly enforce Know-Your-Customer and reporting rules on North Korean banking transactions; (7) investigate the banks involved in the Dandong Hongxiang and Chinpo Shipping cases; (8) enforce the law against any bank caught providing North Korean banks with direct or indirect correspondent account services; (9) work to cut North Korea out of SWIFT; and (10) show some willingness to impose secondary sanctions on Chinese sanctions violators.

That’s a good list — a very good list. I couldn’t have written it better myself (OK, maybe slightly, but only slightly).

The instigator and drafter of this letter is the man some now refer to as The New Ted Cruz. Although I’m not nearly as conservative as Cruz is on some issues, Cruz deserves commendation for stepping forward to lead on this issue, despite not even being a member of the Foreign Relations Committee or previously showing particular interest in foreign policy. (Tillis and Toomey aren’t Committee members, either; kudos** to them for signing on.) And while we’ve come to know Gardner and Rubio as leaders on North Korea policy, this episode also teaches us the importance of being willing to follow when someone else proposes good ideas. Rubio and Gardner in particular are highly respected in the Senate for their intellect and understanding of foreign affairs. It’s to their credit that they added their heft and gravitas to the letter by signing on. In doing so, they’re shaping the new administration’s policy at an early and malleable stage, when Trump probably needs all the good advice he can get.

Also deserving similar credit is Edwin Feulner, a (the?) founder of the Heritage Foundation and (so I’ve read in various press accounts) a man Donald Trump listens to. Yonhap also calls Feulner a leading candidate to be our next Ambassador to South Korea. Feulner sat down for an interview with Yonhap’s Chang Jae-soon and Shim In-sung, where he expressed similar views to those of the Gang of Six:

“I think anything that happens post January 20, 2017 is a test and is a challenge to President Trump and that President Trump takes anything that happens while he is the President of the U.S. he is going to take it very seriously,” Feulner said of the missile launch.

Increasing pressure on North Korea, including making China, through secondary sanctions, use more of its leverage over Pyongyang as the main provider of food and energy assistance, would be a key part of Trump’s policy on the North, Feulner said.

“Mr. Trump … will be expecting China to do a lot more. The notion of economic pressure on North Korea is one that Mr. Trump understands. Mr. Trump is not going to be reluctant to use his willingness to invoke secondary boycotts, for example, of organizations in North Korea or in China that are pass-through entities for exports from North Korea to cut off even more economic help,” Feulner said.

“Mr. Trump … will not hesitate to employ more significant measures,” he said. [Yonhap]

Also encouraging was Feulner’s call to bring more attention to North Korea’s crimes against humanity, and to appoint a “widely recognized, respected ambassador” for human rights issues, as mandated by the North Korean Human Rights Act (which is up for reauthorization this year, and will be reauthorized).

The rumor of Feulner’s potential nomination as ambassador may be the most encouraging news I’ve heard about the Trump administration so far. Historically, Korea only got the attention it deserved in Washington when ambassadors have had strong political pull and close relationships with the President. And while it’s hard to think of someone with better judgment or public diplomacy talents than Mark Lippert, Feuler’s combination of close ties to Korea, political strength in Washington, good policy instincts, and understanding of the subject matter would make him an outstanding candidate for the job as the North Korea crisis reaches a critical phase.

Most of what the six senators and Feulner said also sounds consistent with what Rex Tillerson, Yun-Byung-se, and Fumio Kishida said after their first trilateral meeting this week, in Germany.

“The ministers condemned in the strongest terms North Korea’s February 12, 2017 ballistic missile test, noting North Korea’s flagrant disregard for multiple United Nations Security Council resolutions that expressly prohibit its ballistic missile and nuclear programs,” the three countries said in a joint statement.

“Secretary Tillerson reiterated that the United States remains steadfast in its defense commitments to its allies, the Republic of Korea and Japan, including the commitment to provide extended deterrence, backed by the full range of its nuclear and conventional defense capabilities,” it said.

The sides pledged to collaborate to ensure that all countries fully carry out U.N. Security Council sanctions on Pyongyang and that violations of Security Council resolutions will be met with an “even stronger international response,” according to the statement.

The top diplomats urged Pyongyang to refrain from provocative actions and “abandon its proscribed nuclear and ballistic missile programs in a complete, verifiable, and irreversible manner” and comply with all U.N. resolutions, the statement said.

“Only in this way can North Korea be accepted as a responsible member of the international community,” it said.

The sides also agreed to continue to draw international attention to the North’s “systemic, widespread, and gross violations” of human rights. [Yonhap]

That latter point is an important one, not only from an ethical or a legal perspective, but from a utilitarian one. Since the release of the Commission of Inquiry’s report, Pyongyang has shown surprising vulnerability to criticism on human rights, to the point where that criticism may be affecting the cohesion of the elites and the stability of the regime itself. It will not be any single vulnerability that convinces the generals there that they have no future on the path set by Kim Jong-un, but a combination of vulnerabilities — financial, diplomatic, and political, both foreign and domestic — converging at once. It’s gratifying to see that the Americans (Update: well, some of them, anyway) who will have the most influence over the future of Korea understand what those vulnerabilities are.

~   ~   ~

* Mnuchin’s confirmation hearing is here. It’s about 5 hours long, in case you have a long weekend coming up and no life.

** Previously said “kudus.” Since corrected, although I wouldn’t mind “kudus” myself. As I can testify from personal experience, kudu is delicious.

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Dear New York Times: This is why your North Korea reporting stinks

I often say that the New York Times consistently has the worst North Korea coverage of any major U.S. newspaper. Next time someone asks me why that is, I suppose I’ll point them to this story by Jane Perlez, Choe Sang-hun and Motoko Rich, which could be the exemplar of everything that’s wrong with it in a single hyperlink. It was forwarded to me by an experienced journalist who writes for another major newspaper, and who probably wouldn’t want me to mention his name here. Here’s the headline:

Trump’s Muted Tone on North Korea Gives Hope for Nuclear Talks

I can’t get through the first sentence without finding a misleading claim.

For 16 years, the United States has publicly refused to engage in direct talks with North Korea, arguing that doing so would reward it for bad behavior. [NYT]

Does the Times have access to Google and a calculator? How can three members of its crack reporting team not know about George W. Bush’s ill-fated 2007 agreed framework or Barack Obama’s even more ill-fated 2012 Leap Day deal? Are ten and five still less than sixteen? (Update: A reader reminds me that I forgot Bush’s 2005 Joint Statement. Also ill-fated.)

These certainly weren’t the first examples of North Korea making agreements and reneging on them, so the Obama administration decided, sensibly enough, that it wasn’t going to negotiate with Pyongyang and offer it valuable concessions as long as North Korea continued to insist it would never denuclearize, and even wrote that into its constitution. To offer concessions under those circumstances would have risked a bipartisan congressional overthrow of its North Korea policy (something that eventually happened anyway).

But to “negotiate” is one thing; to “talk” is another, and for eight years, Obama sent a long stream of envoys to Pyongyang, New York, and everywhere in between to talk to North Korea, to see if a negotiation was even possible. As I wrote recently:

In the last eight years alone, President Obama sent former President Clinton and Stephen Bosworth to Pyongyang in 2009, sent Joseph DeTrani twice in 2012, and sent James Clapper in 2014. In 2011, Bosworth met North Korean diplomat Kim Gye-gwan in New York. Next came the Leap Day 2012 freeze agreement, similar to what engagement advocates call for today, and which Pyongyang reneged on shortly after signing it. Obama tried to send Ambassador Robert King to Pyongyang in 2013, but North Korea canceled the visit at the last moment. There were various Track 2 meetings between former U.S. officials and North Korean diplomats as recently as last year. In the weeks leading up to the first 2016 nuclear test, U.S. and North Korean diplomats discussed the parameters of a peace treaty negotiation, but Pyongyang insisted that its nuclear program would not be on the agenda. As recently as last June, U.S. diplomat Sung Kim met North Korean diplomat Choe Son Hui in Beijing. Mind you, this is just what’s available in the open sources.

All of these talks were “public” enough that the Times reported most of them. That’s a good set-up to debunk another demonstrably false statement in the story:

Such talks seemed politically impossible under President Barack Obama, who favored sanctions as the prime safeguard against the North’s nuclear ambitions. There is a growing sense in the region that Mr. Obama’s approach to the North failed.

As regular readers know, and unlike these New York Times reporters, I’ve actually read most of (and written some of) our North Korea sanctions. I’ve published legal analyses of what the sanctions were and weren’t. As a matter of law, the U.S. had stronger sanctions against Belarus and Zimbabwe until at least 2015, or 2016 at the latest. As a matter of fact, Obama never implemented strong or effective sanctions against North Korea, because he wasn’t willing to use secondary sanctions against China, which has consistently violated U.N. sanctions (a fact the Times selectively omits, despite the fact that U.N. reports and Justice Department filings prove it). (Update: Just about the entire U.S. Congress agreed that Obama’s sanctions against North Korea were weak, and voted to impose legislative sanctions.)

What follows is an unsupported, thinly veiled, unlabeled opinion piece that infers from — from a relative absence of inflammatory tweets, I guess? — that Donald Trump might be ready to seek talks with Kim Jong-un. The laundered opinions that Trump should negotiate with Kim Jong-un (about what?) come by way of a Chinese Foreign Ministry mouthpiece, assorted South Korean leftist ideologues, and “Chinese analysts” whose jobs depend on their adherence to the party line.

China has urged the United States to enter talks with North Korea to end its weapons program, apparently sensing that President Trump’s desire to make deals could break the yearslong deadlock on negotiations.

Beijing did so even after North Korea made another stride in its weapons program on Sunday, testing an intermediate-range missile that went into the Sea of Japan.

“The root of the North Korean nuclear and missile issue lies in the difference between North Korea and the United States and between North Korea and South Korea,” Geng Shuang, a spokesman for the Foreign Ministry in Beijing, said on Monday. “We believe that dialogue and consultation offers the way out.”

[….]

Chinese analysts said the White House should seize the chance for a new chapter in dealing with North Korea and abandon Mr. Obama’s policy of applying sanctions.

“We all think that the Trump administration should talk directly with North Korea,” said Lu Chao, director of the Border Study Institute at the Liaoning Academy of Social Sciences in Shenyang. “That would be the best approach to crack this problem.” [

Just imagine the reaction if Fox News reprinted this much Russian propaganda about Ukraine this uncritically. Along with this, we’re spoon-fed the opinions of South Korea’s left — whose experiment in sanctions-busting subsidies to Pyongyang ended just a year ago — that “sanctions have failed.” This, they declare less than one year after real sanctions replaced fake ones. But then, these are the same people who think reopening Kaesong is totally fine under U.N. sanctions resolutions (it isn’t).

In sum, we have a story (really, an opinion piece) that was neither researched nor fact-checked, is consequently riddled with factual falsehoods, bases its major premise on speculation unsupported by a single source (even an anonymous one), and quotes a selection of opinions so skewed it would make Pauline Kael blush. It isn’t just that three New York Times journalists know or care so little about what they’re writing; I’ve followed Choe’s work for years, so I expect that much. It’s the fact that the Times‘s editors neither knew nor cared enough to stop them from printing it. If the Times wants to be a P.C. Breitbart with better typography and a style section, that’s fine; just don’t expect me to pay for it.

Mind you, I could speculate that Trump would send someone to make Kim Jong-un one last offer, if only to say he’d checked that block. I could speculate about a lot of things, but speculation is neither news nor fit to print. Rather than resort to the “fake news” cliche, let’s just call this what it is: terrible journalism, in a time when the public is losing confidence in journalism, and when influential people question the very idea that there are objective truths and untruths. I’ve read a lot of self-important opinion pieces by journalists lately about their importance in speaking the truth in an age of “alternative” facts. I agree — emphatically — that objective and truthful journalism plays an essential role in a democratic society. And when journalists use their positions to write biased, baseless, and factually untrue stories like this one, they do nothing to regain our confidence.

If you agree, here’s how you can contact the New York Times’s Public Editor.

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The man who wouldn’t be king: the short, happy life of Kim Jong-nam

Kim Jong Nam, the estranged older half-brother of Kim Jong Un, North Korea’s leader, was killed in an attack at Kuala Lumpur airport, Malaysian police confirmed on Tuesday, in an apparent assassination.

The 46-year-old was assaulted by a woman who covered his face with a cloth laced with liquid as he was waiting for a flight to Macau, said Fadzil Ahmat, a Malaysian police official. He was confirmed dead after being taken to hospital. [Financial Times]

The kindest way to remember Kim Jong-nam may be as a man who was never cut out to be a tyrant. This must have been obvious from the circumstances of his fall from primogeniture — he was caught entering Japan on a fake passport on his way to Tokyo Disneyland. Maybe he never wanted the job, and maybe it was his downfall that caused him to reflect on the circumstances of his countrymen. He was neither a hero nor a martyr, although he later wrote a book criticizing the rule of his half-brother (whom he claimed he never met). Although there were rumors of a previous attempt to assassinate him by staging a car accident, Kim Jong-nam never really seemed interested enough in politics to call a dissident, either. He seemed interested in being happy. And any man who abstains from the opportunity to enslave others ought to be remembered fondly for that alone.

Friends who said they’d met Jong-nam and found him to be, against all odds, nice — which is to say he was affable, approachable, and spoke good English. His son, Kim Han-sol certainly seems like a nice kid. After doing an interview in which he criticized the regime’s human rights abuses, he went into hiding. My heart goes out to him, not just for the sadness he must feel at the loss of his father, but for the terror that he must feel for his own safety now. (Kim Jong-nam also had a daughter, who lives in Macau.)

~   ~   ~

The propagation of terror is surely one of the reasons why Kim Jong-un committed this act of fratricide. I don’t know that for a fact, of course, but as Mark Tokola asks, “Cui bono?” Someone in the U.S. government who probably knows things I don’t “strongly believes” Kim Jong-un did it. I can’t think of another logical explanation.

(Update: Malaysian police have arrested a North Korean man, Ri Jong-chol, a chemistry specialist, in connection with the murder. Incredibly, Ri kept a Facebook page that says he graduated from Kim Il-sung University in 2000, a school in Massachusetts in 2010, and had been studying in Kolkata, India. He liked Dave Mraz, Ha Ji-won, and was “interested in men,” unusual things for a North Korean who surely knew he was being monitored closely to admit openly. In other words, an engagement success story! Dagyum Ji of NK News reports that Malaysian police are also seeking four more North Korean suspects: Ri Ji Hyon, 33; Hong Sang Hac, 34; O Jong Gil, 55; Ri Jae Nam, 57, all of whom entered Malaysia in late January or early February, and who appear to have made a clean getaway to Pyongyang. Police are also seeking another North Korean, Ri Ji U, and two other unidentified men “believed to be North Koreans” for questioning.)

I don’t think there’s any question that it was murder, either, although the reports still can’t agree on exactly how Kim Jong-nam was done in. Surveillance video shows two women doing the deed and then fleeing in a taxi. (Update: Watch the video at this link.) In contrast to the Financial Times’s account, other reports say they sprayed poison on his face or that they jabbed him with one or more poison needles. Even the police weren’t sure yesterday afternoon. Both versions would be half-true if one chloroformed him and one jabbed him. (Update: from the grainy CCTV video, it looks like “LOL girl” reached around Kim Jong-nam from behind and put a cloth over his face.)

The news of the investigation is developing quickly, and there are many conflicting or unverified accounts of suspects being pursued, arrested, or dead. Malaysian authorities say they have arrested this woman, who was carrying a (possibly fake) Vietnamese name and passport.

The Sydney Morning Herald reports that police have also arrested another woman from Burma (Update: One woman with a Vietnamese passport, one Indonesian woman, her boyfriend, and this North Korean man, a chemist who attended high school in Massachusetts, Kim Il-Sung University, and a grad school in Kolkata, India). NK News says they may be pursuing up to five other suspects. The Joongang Ilbo suggests Kim Jong-nam may have been lured to Malaysia by a romantic relationship with one of the women. This may be one of the killers.

This report, which quotes an unnamed Japanese official, says she and her accomplice are both already dead. (Update: wrong; they’re both alive and under arrest. The best compilation of solid evidence of how the attack unfolded and who the attackers are is actually at this Facebook post. Although the women are apparently claiming that they thought they were only playing a prank on Kim Jong-nam, the video shows “LOL girl” striking quickly and Kim Jong-nam struggling. I don’t buy it.) In the past, RGB agents have been under orders to kill themselves before being taken alive, although not all of them have followed through with those orders in recent years.

Whatever the precise facts turn out to be, this was obviously an elaborate plot that unfolded over the space of months, if not years. Bloomberg quotes Lee Cheol-woo, chairman of the intelligence committee in South Korea’s National Assembly, as saying the murder didn’t have its impetus in recent events, but was simply the successful conclusion of a longstanding fatwa. Still, it’s difficult to believe that the plotters would have gone through with it without a final go-ahead from Pyongyang, from the very top.

~   ~   ~

In recent years, poison — specifically, needles spring-loaded with neostigmine bromide — have been the standard M.O. for the Reconnaissance General Bureau of the Workers’ Party of Korea, or RGB. Starting on page 59 of my report on North Korea’s state sponsorship of terrorism, I describe five such assassinations and foiled attempts since 2008. If you accept that the evidence will likely show that the North Korean government did the hit on Kim Jong-nam, this was a clear-cut case of international terrorism.

There are at least three statutory definitions of terrorism, all of them inconsistent and imperfect for reasons I discussed in my report, starting on page 5. If one makes a lowest common denominator of these definitions and sifts through a few decades of State Department reports for interpretive precedent, it’s possible to write a legal definition of international terrorism that consists of five elements:

  1. It must be unlawful under the laws of the place where it is committed;
  2. It must involve a violent act; an act dangerous to human life, property, or infrastructure; or a threat of such an act;
  3. It must involve the citizens or the territory of more than one country;
  4. It must be perpetrated by a subnational group or clandestine agent against a noncombatant target; and
  5. It must appear to be intended to intimidate or coerce a civilian population; to influence the policy of a government by intimidation or coercion; or to affect the conduct of a government.

Of the first three elements there’s no doubt, and Kim Jong-nam was a noncombatant. If the killers are caught, they were probably agents of the RGB, which employs women as clandestine agents to hunt down refugees in China, and as assassins. The terrorist acts of state actors through their clandestine agents can be a basis for a SSOT listing; in fact, it was two bombings by the RGB that caused the U.S. to put North Korea on the list in 1988. The Secretary of State has the discretion to find that North Korea has repeatedly provided support for acts of international terrorism. He doesn’t need a federal appeals court to tell him that (although one has, and my report also cites several other district court decisions).

As to the regime’s apparent intent, its motives must have been political. Kim Jong-nam had criticized his brother’s regime and predicted that it wouldn’t last. As Dennis Halpin explained, he was the best alternative successor to the family bloodline if China needed a North Korean Pu Yi, a possibility Kim Jong-un couldn’t allow. The most important reason to kill Kim Jong-nam was to warn Thae Yong-ho and others like him, who have been defecting in greater numbers. Pyongyang sees that surge of defections as a threat to its survival. It must want to send a message to Thae Yong-ho and others that they aren’t safe anywhere, even if they’re under government protection (in Kim Jong-nam’s case, China’s).

In one sense, those theories explain the assassination of Kim Jong-nam logically, but in another sense, it all seems illogical. Kim Jong-un must have known that this act of fratricide would shock South Korean voters in an election year, at a time when opinions are still unstable. He must have known that the odds were already high that the Trump administration would put his government back on the list of state sponsors of terrorism, triggering additional sanctions. He must have known that the evidence would lead back to him, further discrediting a naive and sympathetic commentariat that tried to sell us the image of Kim Jong-un as a Swiss-educated reformer, while encouraging more subsidies and investments to finance and sustain his rule. He certainly knew that assassinating someone under Chinese protection would irritate (but not alienate) his most important ally. But then, Pyongyang’s business model has long involved a curious combination of obsession with, and disregard for, world opinion.

Thus, if the reports are mostly accurate and the investigation validates a few reasonable inferences, this would be a clear-cut case of international terrorism, not that more evidence is needed to support a re-listing. Returning North Korea to the list of state sponsors of terrorism is both legally justified and good policy. It’s not just out of regard for Kim Jong-nam’s defiantly passive life that we should do it, but to protect more heroic men and women like Park Sang-hak, Thae Yong-ho, Hyeonseo Lee, and potentially dozens more would-be defectors who must be wondering if America will stand by them if they take the risk of crossing the line.

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Trump struggles on North Korea, but it’s still the first quarter (updated)

By this time tomorrow, we’ll know whether initial reports that Kim Jong-nam was assassinated by two North Korean women with a poison needle at the Kuala Lumpur Airport were wrong or only half-wrong. For now, I’ll dwell on grading the Trump administration’s answers to its first North Korean test — the test of a missile system whose moderate range belies its potential dangerousness, given its potential to be launched from a mobile carrier or a submarine. So far, that grade is a C-minus, but it’s still only the first quarter.

No doubt, the North Koreans knew that Trump would get the news during dinner with Shinzo Abe at Mar-a-Largo. That Trump devoted two days to meeting with Abe and restoring the confidence of an important ally is praiseworthy. Trump’s immediate reaction to the test, however, attracted criticism that he, Abe, and their aides held a sensitive (and perhaps, classified) discussion in an open, non-secure area. That was followed by a short, overly cautious, obviously scripted (good!) statement from a glowering Trump, who said nothing except that he would stand by Japan. The next day, Trump called North Korea “a big, big problem” and promised, without elaborating, to “deal with that very strongly.” So?

So, the administration is hinting at another Air Force flyover in Korea. That’s fine for reassuring the South Koreans, but I strongly doubt that Kim Jong-un cares.

The U.S., South Korea, and Japan also agreed to take the matter straight to the U.N., but they walked away with no better than a pro-formastatement, which has no legal effect. I didn’t expect a resolution, but I would have at least expected Trump to direct Ambassador Haley to push for some additional U.N. designations — of Air Koryo, the Korean National Insurance Corporation, various slave-labor exporters, or at the very least, some additional ships (such as those the Obama administration recently undesignated). It’s possible that behind the scenes, the U.S. and its allies are still pushing for this; we’ll know within a few days. The U.S. and its allies could also carry their frustrations with North Korea and China into the bargaining over the text of the U.N. Panel of Experts’ next report, which is due to be released in a month or so, and which is sure to contain at least one (literally) explosive revelation.

To back up its negotiating position with a threat of consequences, the Treasury Department could do another round of designations of North Korean targets, or (better yet) Chinese targets that are helpingNorth Korea break sanctions. The latter option is (a) what’s needed, (b) what Congresswants, and (c) what Rex Tillerson promised in his confirmation hearing.

Republican Senator Cory Gardner of Colorado on Sunday issued a statement on Pyongyang’s latest missile test, urging the Trump administration “to immediately pursue a series of tough measures, to include additional sanctions designations and show-of-force military exercises with our allies in the region, to send a message to Kim Jong-un that we remain committed to deterring the North Korean threat.”

Gardner, the chairman of the Senate’s Foreign Relations Subcommittee on East Asia, the Pacific, and International Cybersecurity Policy, authored the North Korea Sanctions Policy and Enhancement Act enacted last year through which Washington imposed landmark unilateral sanctions on Pyongyang.

He said that the latest missile test is an example of why “U.S. policy toward North Korea should never be ‘strategic patience,’ as it was during the Obama administration.”

On Friday, Gardner sent a letter to Trump to urge his administration to take a “determined and resolute U.S. policy toward North Korea.”

In the letter, Gardner urged the Trump administration to fully enforce existing U.S. and multilateral sanctions regarding North Korea and impose additional sanctions as necessary, highlight the regime’s illicit nuclear and ballistic weapons programs, human rights abuses and malicious cyber activities.

He also urged Trump to “employ all diplomatic tools to pressure” Beijing to fully enforce its North Korea sanctions commitments and encouraged secondary sanctions on any China-based entities that are found to be in violation of U.S. and UN measures.

Gardner called upon Trump to enhance Washington’s “defense and deterrence posture in East Asia,” especially urging the placement of the U.S.-led Terminal High Altitude Area Defense, or Thaad, system in South Korea.

“We must not allow China’s unprecedented pressure campaign against the ROK (Republic of Korea) to cancel the Thaad deployment succeed,” he wrote. [Joongang Ilbo]

Recent events give us a strong basis for optimism in this regard. On February 3, following an Iranian missile test, Treasury’s Office of Foreign Assets Control (OFAC) designated 13 individuals and 12 entities. Of these, three of the individuals had Chinese names or nationalities, and one of the entities was Chinese. This drew the usual howls of protest from the Forbidden City, which is firmly opposed to unilateral sanctions, exceptwhenit isn’t. The designations of Chinese entities working with Iran could mean that China’s days of immunity to U.S. sanctions are over.

Finally, the missile test could influence the new administration’s review of its North Korea policy and help it decide how to improve on “strategic patience.” Michael Flynn’s resignation last night could impact the contours of the new policy, depending on who succeeds him. Whatever Flynn’s other faults — and this is a blog about North Korea, so I’ll leave that discussion to others — he said nothing about North Korea that I disagreed with. Critical to that policy review will be the question of whether the U.S. will be willing to take diplomatic, overt, covert, or clandestine action to subvert Kim Jong-un’s political control inside North Korea itself. Such a strategy, in tandem with strong sanctions enforcement, will probably be a necessary element in convincing the generals in Pyongyang that they can only survive by coming to an accord with the U.S. and South Korea.

~   ~   ~

Updates: Have you heard that thing where they say “take him seriously, but not literally?”

I guess “on” is better than “with,” so take from that what you will, if anything at all. Ambassador Haley sent a clearer signal:

Haley may be a novice in foreign policy, but she pretty obviously gets it. Experience is no substitute for good judgment.

It wasn’t the council condemnation that was significant and notable, but rather the print statement issued by new US Ambassador to the UN Nikki Haley as she entered the consultations room.

Just weeks into her position, the tough-talking diplomat said Monday, “It’s time to hold North Korea accountable, not with our words, but with our actions.” Also in contrast to other recent US ambassadors, there was criticism aimed at China over its support of Pyongyang.

Haley wrote, “We call on all members of the Security Council to use every available resource to make it clear to the North Korean regime, and its enablers, that these launches are unacceptable.”

Enablers? No doubt a Trump administration shot across the bow aimed at Beijing. China went along with the council statement issued Monday night calling the launch a grave violation of its obligations under Security Council resolutions.

[….]

Haley’s veiled shot at China is not the diplomatic norm at the United Nations. Usually, harsh words among the big powers are expressed behind closed doors, though former US Ambassador Samantha Power and Russian Ambassador Vitaly Churkin went at it during public council meetings on Syria, the anger spilling over after years of war.

President Trump said last week he had agreed that Beijing is the one China in the US relationship, not Taiwan, but the Haley comment means relations among the big permanent five countries on the Security Council are likely to be in potential roller-coaster mode for the next four years. [CNN]

Relations with China may have to get worse before they can get better.

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Some on-point congressional testimony on sanctions as part of a broader N. Korea policy

Reuters reports that, following North Korea’s weekend missile test, the Trump administration “will consider a full range of options in a response to Pyongyang’s missile test” that are “calibrated to show U.S. resolve while avoiding escalation.”

Those options will include increasing “pressure on China to rein in North Korea,” “new U.S. sanctions to tighten financial controls, an increase in U.S. naval and air assets in and around the Korean peninsula and accelerated installation of new missile defense systems in South Korea.” The U.S., South Korea, and Japan are also bringing the launch up at the U.N. Security Council, although it’s not yet clear if they will ask for a new resolution, a toothless presidential statement, or a new round of designations (which is likely the best we can get).

What we’re about to confront is the question of whether we can coexist with a nuclear North Korea — or, more precisely, whether a nuclear North Korea will coexist with us.

This is where its nuclear weapons program fits into North Korea’s designs. In Pyongyang’s thinking, the indispensable instrument for achieving the DPRK’s grand historical ambitions must be a supremely powerful military: more specifically, one possessed of a nuclear arsenal that can imperil and break the foreign enemies who protect and prop up what Pyongyang regards as the vile puppet state in the South, so that the DPRK may consummate its unconditional unification and give birth to its envisioned earthly Korean-race utopia. [Nicholas Eberstadt, Testimony before the Senate Foreign Relations Committee, January 31, 2017]

I might add: Pyongyang will soon pose a direct nuclear threat to the United States. It launched cyberterrorist attacks against us to censor our own freedom of speech. It built a nuclear reactor in a part of Syria now controlled by ISIS. It sells surface-to-air missiles to terrorists. It’s cooperating with Iran on missiles. It will sell any weapon to any bidder with the asking price. It has long demonstrated its utter disregard for human life. The answer, emphatically, is “no.”

~   ~   ~

There are still plenty of items left on this list of options I posted last year, although I take some satisfaction from that fact that many of them have since been done, and we’re now waiting to see their impact. China’s latest sanctions violations on coal imports and cargo inspections are also openings for the new administration to offer strong responses.

Recent congressional hearings have also offered valuable guidance about what that policy should be. Once again, I’ll point to the testimony of former State and Treasury Department official Anthony Ruggiero, which should be required reading for anyone looking to make sanctions work. Ruggiero argues that we have to step up our investigation and enforcement efforts, target Kim Jong-un’s finances more strategically, and be willing to break some china along the way. Begging Beijing to help us is a fool’s errand (it won’t, at least not voluntarily). Our targets should instead be the Chinese banks and businesses that prop up Pyongyang, and that also need access to our financial system.

Also on the topic of sanctions, Victor Cha made this important argument:

The combination of the Treasury Department’s designation of the DPRK as a jurisdiction of “primary money laundering concern” under Section 311 of the PATRIOT ACT, the North Korean Sanctions and Policy Enhancement Act, and the sectoral measures sanctions under UNSCRs 2270 and 2321 comprise a new level of sanctioning. There will be many who criticize sanctions as being ineffective. Sanctions are the most maligned instrument in the diplomatic toolbox. The reality is that we don’t know whether sanctions work until they do. That is, only after the North returns to the negotiating table, or falters under pressure, or gives up its weapons, the policy community will point to sanctions and say they work. Until then, folks will say sanctions don’t work.

So we need to keep the pressure on and expand the scope. Sanctioning of North Korea’s slave labor exports and third-party entities that have willful involvement in DPRK insurance fraud schemes should be considered. Secondary sanctioning (discussed below) should also be considered. We also need to work harder on full enforcement of unilateral and multilateral sanctions. Sanctions enforcement should be pursued in conjunction with our allies and regional stakeholders as well as through international mechanisms. [Victor Cha]

Ironically, those who supported the economic subsidies (Kaesong, foreign tourism) that have undermined sanctions are the loudest voices claiming that sanctions have failed, or repeating the factually and legally false claim that years of strong sanctions haven’t worked. If you want to know why sanctions haven’t worked yet, it’s because (1) they were weak, and (2) until at least a year ago, economic subsidies from South Korea and China canceled out whatever limited effects they’ve had.

Then, what strategy do sanctions serve? Our goal can’t just be to force Pyongyang to come back to talks or promise us another unverifiable freeze.

If there is any chance at all that the North would ever entertain the idea of giving up its nuclear program, it would be only because the new administration has made it very clear that the Kim regime is facing a stark choice between keeping the nuclear arsenal and regime survival. [Sue Mi Terry, testimony before the House Foreign Affairs Committee, February 7, 2017]

As I explained here, sanctions can force Kim Jong-un to make difficult choices about allocating limited resources, catalyze corruption and indiscipline within the security forces, instigate inter-factional knife fights as resources dwindle, and convince him that he’s losing control. Anyone who wants to understand how sanctions fit into a broader policy, and what that policy should be, will not see it explained better anywhere than Terry did in her written testimony last week. She explains how sanctions further our medium- and long-term political objectives by weakening the regime’s domestic political support in tandem with information operations that pave the way for change and, ultimately, reunification without war. And as Terry explains, sanctions aren’t the only element of presenting that stark choice (she also argues for subversive information operations, strong alliances, and diplomacy).

Terry is probably right when she argues that while we can’t close off Pyongyang’s option to resolve the crisis diplomatically, “[i]n the final analysis, there is only one way that the threat from North Korean will truly come to an end: the current regime itself must come to an end.”

Another challenge for the United States is how to induce an internal debate among North Korean elites about the costs of a nuclear North Korea. Sanctions alone are likely to convince North Korean elites that their only options are to unite in support of Kim Jong Un and his nuclear policy or to risk regime failure and international retribution-that is to “hang together or hang separately.” [Scott Snyder, Testimony Before the Senate Foreign Relations Committee, January 31, 2017]

Unless, of course, we offer clemency to those who come forward and defect with valuable intelligence, or who refuse orders to fire on civilians, whether in North or South Korea.

For this reason, it is all the more important for senior officials around Kim Jong Un to know that there is an alternative pathway that can safeguard their survival. Given the absence of overt internal dissent within North Korea today, this strategy may also fail. But media reports of accounts by Thae Yong-ho, a high-ranking North Korean official who recently defected, suggest that dissenting opinions and discontent do exist among high-level North Korean elites. The United States and its allies should seek to communicate a clear message and guarantee to those around Kim Jong-un that there is a viable alternative path forward for North Korea if it abandons nuclear weapons and conforms to international norms, including on human rights.

Above all, however, any strategy that includes (or even tolerates) sanctioning and subsidizing the same target at the same time will fail under the weight of its own incoherence. Twenty years of engagement have made zero measurable progress toward the reform and peace that its backers promised us. On the contrary, those subsidies helped Pyongyang to nuke up, break sanctions, seal its borders, and consolidate a third generation of tyranny. No coherent policy has room for both sanctions and subsidies. It must be one or the other.

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Eight reasons why reopening Kaesong could be a deal-breaker for the U.S.-Korea alliance

More and more, I am hearing that Moon Jae-in, the left-wing front-runner in the South Korean presidential election, is talking about reopening and expanding the Kaesong Industrial Complex. It’s apparent that Mr. Moon and his supporters haven’t thought through the potential legal and diplomatic consequences of that. Perhaps this post will help concentrate some minds by telling Koreans, in frank terms, what most people in Washington really think about that idea.

1. Kaesong violates U.N. sanctions.

I heard somewhere that Moon Jae-in calls himself a lawyer (a human rights lawyer, no less). Perhaps Mr. Moon should devote a moment of his legal acumen to reading the U.N. Security Council’s sanctions resolutions on North Korea. Earlier this year, the South Korean government acknowledged that North Korea probably used Kaesong funds to pay for nukes. How is that anything but a flagrant violation of U.N. Security Council Resolution 1718, paragraph (d), which requires states to ensure that money they pay Pyongyang isn’t used for nukes? Resolution 2321, paragraph 32, bans public and private support for trade with North Korea, “including the granting of export credits, guarantees or insurance to their nationals or entities involved in such trade.” Does Moon really think anyone will invest in Kaesong without those subsidies, which the U.N. has since prohibited? Yes, there is a provision for a U.N. committee to approve that support. Expect the U.S. to block that approval, for the reasons that follow.

2. Kaesong paves the road to war.

How can South Korea ask other countries to follow the U.N. sanctions it would be violating if it reopens Kaesong? Reopening Kaesong would also deprive the U.S. of credibility to demand that China, or African or Middle Eastern states, follow the resolutions when our own ally is also violating them. Abandon sanctions and you’ve abandoned our last hope of disarming Kim Jong-un without war. The choice the U.S. would then face comes down to a preemptive strike, or abandoning Korea to its fate. If North Korea poses a direct threat to the United States, don’t assume President Trump would consider those to be mutually exclusive options.

3. Does Kim Jong-un take payment in ChocoPies?

North Korea is now designated as a Primary Money Laundering Concern, and North Korean banks can’t access the international financial system. Many of its banks are also directly blocked from the financial system, and more will be before this year is over. What is Moon Jae-in planning to pay the North Koreans with — ChocoPies? Because paying in dollars — Kim Jong-un wants dollars — is going to be very difficult. For Moon Jae-in to subsidize the same target we’re sanctioning will put the U.S. and South Korea at cross purposes.

4. Kaesong could lead to a catastrophic breakdown in the U.S.-Korea alliance.

Worse yet, reopening Kaesong would mean that while U.S. taxpayers would be subsidizing South Korea’s defense, South Korea would be subsidizing North Korea and its nukes. How long before that shows up in Donald Trump’s Twitter feed? American taxpayers won’t stand for that, nor should they. Why should we effectively subsidize both sides of this conflict, all while bearing a rising risk that U.S. involvement on South Korea’s behalf is feeding a direct North Korean threat to the U.S. homeland? Americans are willing to bear a certain amount of cost to defend allies, but not neutrals, frenemies, or enemies. If Kaesong reopens, expect to see more calls for U.S. disengagement from Korea. Koreans shouldn’t count on President Trump to be the cooler head who prevails over that sentiment.

Worse, reopening Kaesong would effectively mean that U.S. troops and their families would be hostages to the interests of both Koreas, limiting U.S. options for neutralizing a North Korean threat to the United States. In Washington today, one increasingly hears talk of preemptive strikes to prevent Pyongyang from gaining the ability to nuke Seattle. If President Trump decides to pursue that option (see my previous comment on “cooler heads”) the U.S. would have every incentive to disengage from South Korea first, to limit U.S. casualties in the event of retaliation. That could take the form of a breakdown in cost-sharing talks, unilateral “restructuring” of the alliance, or an unscheduled NEO exercise.

5. Kaesong incentivizes proliferation.

The other day, I tweeted a story about how Israel is asking President Trump to prioritize North Korea’s disarmament, because of the message it would send around the world if North Korea becomes a de facto recognized nuclear state. What Moon Jae-in and his supporters must understand is that North Korea’s nukes are not just a Korean problem or a regional problem — they’re a global problem. North Korea’s suspicious links to Iran, its construction of the Al-Kibar reactor in Syria, and its willingness to sell any weapon to any buyer are far greater threats than its missiles will ever be. Kaesong’s backers promised us, of course, that Kaesong would soothe North Korea and encourage it to disarm. How’d that work out?

Given the belligerence of Pyongyang’s recent behavior, in what sense has Kim Jong-un earned a reward that would help him win back the fraying loyalty of his elites? In what sense can we say that Kaesong would be more successful in improving North Korea’s behavior that it was between 2006 and 2016? What kind of message would it send to Pyongyang (or Tehran) that Kim Jong-un reaps a huge financial windfall by testing nukes and missiles? Pouring cash into Pyongyang through Kaesong doesn’t just undermine the financial pressure of sanctions, and consequently, a central part of our North Korea policy, it undermines the sanctions-based diplomatic strategy that’s been essential to preventing proliferation in Iran and everywhere else. That’s why Koreans shouldn’t expect the U.S. to be the only state to raise concerns about Kaesong.

6. Kaesong is slavery.

Has Seoul ever given us a credible answer to the question of how much of their so-called wages the workers actually receive? Or what rights they have to strike, quit, or demand safer working conditions? In other words, why should we see Kaesong as anything other than the mildest form of slavery North Korea has to offer? Has South Korea even demanded labor reforms or financial transparency in its dealing with the North Koreans? Doesn’t that really tell you everything you need to know about the discredited idea that engagement would lead to reform, disarmament, and peace? Kaesong has been Pyongyang’s tool to influence Seoul, not the other way around. As with all engagement with North Korea, it really raises the same old question: “Who changed who?”

7. Kaesong could kill the Free Trade Agreement.

People in both the U.S. and South Korea have already forgotten how hard it was to get congressional approval for the free trade agreement (FTA) between the two countries, or the fact that Kaesong was one of its most controversial points of contention. Annex 22-C, which covers “outward processing zones,” is widely understood as a reference to Kaesong, and a desire by South Korea to export Kaesong products to the U.S. Not only is that a non-starter, it’s a poison pill that could kill the entire FTA. If Kaesong reopens, expect to hear more questions about Kaesong-made components and parts in products exported to the U.S. through the FTA. Directly or indirectly importing goods or services from North Korea is already a felony under this executive order. On top of that, there’s a section in the Tariff Act that prohibits the import of slave-made goods into the United States.

Donald Trump’s criticism of the FTA last year reminded us that it remains controversial here, and exposed that the FTA has ferocious critics in both parties. When I worked with the Foreign Affairs Committee in 2013, I met with several hundred of the staffers from both parties who tell their bosses how to vote on legislation. That experience gave me a very good idea of how Congress feels about Kaesong, and there’s no other way to say this — Congress absolutely hates Kaesong. That sentiment includes staffers for individual members and powerful committees. I can count several occasions when staffers harangued me about their hatred of Kaesong with as much intensity as . . . as I’m haranguing you right now. As you can probably guess, not one of them ever got an argument back from me. (Update: The staffer I remember best immediately asked me whether H.R. 1771 flat-out banned Kaesong products. When I said it didn’t, her immediate reaction was to tell her boss to withhold his co-sponsorship.)

That sentiment will only rise now that blue-collar, rust-belt voters have emerged as the decisive constituency in elections. Orange Republicans and Green Democrats will both have protectionist incentives to renegotiate or cancel the FTA. Red Republicans will hate the idea of indirectly subsidizing North Korea. Blue Democrats will cave to FTA opponents like Hillary Clinton caved to Trans-Pacific Partnership opponents (because they want to win Michigan, silly). Liberals will be inflamed by the idea that Americans are buying products made (in part) by slaves. I’m generally pro-free trade, and am for the TPP, yet I have some sympathy with all of those arguments. If Kaesong reopens, I’d want to see the FTA renegotiated or canceled entirely. Is reopening Kaesong worth risking the whole FTA?

8. Kaesong didn’t work.

Now, weigh the benefits of Kaesong against those costs. The idea behind Kaesong, of course, was that it was supposed to integrate the two states’ economies and interests, which would lead to reforms, the easing of tensions, the opening of North Korea’s society, and eventually, disarmament. None of those things happenednone. I would argue that Kaesong was actually a source of tension, because of North Korea’s constant arbitrary demands, leading to the 2013 and 2016 closures, costing investors millions in uninsured losses, and guaranteeing that no sane investor would ever go in. In fact, I think I may have found the perfect metaphor for Kaesong:


If you can cite any evidence to the contrary, my comments are open. From where I sit, Kaesong was such an unmitigated failure that I find the support for it inexplicable, and — here is my main point — so do most other Americans. This isn’t to say the U.S. can’t find room for compromise with a Moon administration. I can see an accord emerge in which South Korea pursues harmless forms of engagement, such as visits by athletes and artists, or well-monitored humanitarian aid. But the U.S. position ought to be that no money must change hands, because financial pressure must necessarily play a central role in our efforts to disarm Kim Jong-un, and for years, South Korean subsidies to Pyongyang undermined that strategy. Kaesong could be a deal-breaker in the U.S.-South Korean relationship. Indeed, it may well deserve to be.

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Leaked U.N. report reveals record seizure of North Korean arms last August (updated)

The 2017 report of the U.N. Panel of Experts isn’t due to be published for another month, but a Kyodo News reporter has already obtained and published leaked excerpts. The focus of Kyodo’s story is the now-familiar (and unquestionably accurate) castigation of member state governments for not putting enough will or resources into the enforcement of North Korea sanctions, but I’d like to start with this revelation:

“An interdiction of the vessel Jie Shun was the largest seizure of ammunition in DPRK sanctions history,” according to the document. A source informed Kyodo News the Egyptian port was not the general cargo ship’s final destination, despite its strategic location near a number of regional conflict hot spots. However, the report said that seizures like it demonstrate “the country’s use of concealment techniques as well as an emerging nexus between DPRK entities trading in arms and minerals.” [Kyodo News, Seana K. Magee]

The M/V Jie Shun, IMO 851780, is a 2,825-tonne general cargo vessel that flies a Cambodian flag. Built in Japan in 1986, it previously sailed under the names Velox, Armon, and Northern Queen.

[As seen here in better days]

As recently as 2014, it was up for sale. Its current owner is Liaoning Foreign Trade Foodstuffs Co., Ltd. of 72 Luxun Lu, Zhongshan Qu, Dalian, China. That’s right next to the address listed in the Panel’s 2014 report for Dalian Sea Glory Shipping Company, which managed the suspected smuggling ship M/V Light. This is not a reputable neighborhood.

Shipping trackers last spotted the Jie Shun at “Skohna” (probably Sokhna), an Egyptian port on the Red Sea near the southern terminus of the Suez Canal.

Despite what the trackers say, the Panel’s report says the ship wasn’t headed for any port in Egypt. Egypt has been a buyer of North Korean missiles and missile parts, but not of large quantities of North Korean munitions, at least to my knowledge. Nope, this time, my top three guesses are Syria, Syria, and Syria:

[What do I win?]

Liaoning Foreign Trade also operates one other ship, the Chinese-flagged M/V Fu Yun 228, IMO 8888654. The small bit of good news is that if trackers still show the Jie Shun as stuck in Egypt, Egyptian authorities must have seized the ship as the resolutions require it to. Inshallah, Red Sea divers will soon have a nice new artificial reef, or the Somali Coast Guard will soon have a new Q-Ship for stalking pirates.

It’s unquestionably true that up to this point, Pyongyang has invested more effort in hiding its dollars and ships behind front companies and shell companies than we have in finding them. That’s why Anthony Ruggiero, who spent years at the Treasury and State Departments administering sanctions, asked Congress this week to give the feds more resources for these investigations.

Mandate additional resources to address North Korea’s activities. The North Korea Sanctions and Policy Enhancement Act of 2016 is a comprehensive law that provides a myriad of tools for the Trump administration to address the North Korean threat. It is important that Congress continue to address additional areas through legislation in the same overwhelmingly bipartisan nature, signaling to North Korea and China that focus on this issue will continue. Throughout my testimony, I have detailed the challenge we face with an adversary that seems to be one step ahead of us. Our entire approach to the North Korea issue needs to change. One area Congress can address immediately is providing additional resources to the Treasury Department, Justice Department, Intelligence Community, and other government agencies to investigate violations of the NKSPEA. [Anthony Ruggiero, Testimony before the House Foreign Affairs Committee, Feb. 7, 2017]

There are other, more immediate steps we can take, beyond those I recommended here. First, we should add the Jie Shun, Liaoning Foreign Trade Foodstuffs Co., Ltd., and (for good measure) the Fu Yun 228 to the U.N. designation list and the Treasury Department’s list of Specially Designated Nationals. Second, we should also demand that China expel any North Koreans involved in this transaction, freeze any accounts associated with the transactions or the parties to it, and prosecute any Chinese nationals involved.

[As Anthony explains, just after the 5-minute mark.]

For now, however, this is just the latest example of how China continues to be a part of the problem rather than a part of the solution. Almost weekly, we see fresh evidence that China’s cost-benefit calculation hasn’t changed. It’s time to use more forceful methods to shift that calculation:

The Treasury and Justice Departments’ actions in late September 2016 showed a troubling pattern of Chinese persons assisting North Korean-designated persons, including through the U.S. financial system. These transactions lasted six years, up to September 2015, making it hard to believe the Chinese government regulators were unaware of this conduct. It is important that Congress and the American people understand the extent of China’s efforts, or lack thereof, to combat money laundering, sanctions violations, and proliferation financing. I recommend that new legislation include specific sections on North Korea’s network within China. It should also address the broader issue of Chinese support for, and harboring of, North Korean nationals involved in prohibited conduct. In particular, the report could also focus on whether the financial institutions involved should have been designated or subjected to secondary sanctions. [Ruggiero testimony]

My next recommendation depends on whether the Cambodian government has retaken control of its shipping registry, as it promised to do last August, and whether it has de-registered the forty-plus North Korean ships it had reflagged, but is required by U.N. Security Council resolutions to de-register. For years, Cambodia’s shipping registry has been notorious for reflagging North Korean ships. What few of us knew until C4ADS informed us last year was that the International Ship Registry of Cambodia was “a joint venture between the Cambodian government and a South Korean company, the Cosmos Group.”

The seizure of the Jie Shun would have been around the same time as Cambodia promised to de-register rogue ships, and two months after South Korea very politely asked Cambodian dictator Hun Sen to enforce U.N. sanctions against Pyongyang. Good diplomacy always starts with a polite request, and also, it’s always backed by the prospect of ghastly and unspeakable consequences. That dual approach worked superbly the last time we tried it, in 2005, when Treasury officials Stuart Levey and Daniel Glaser went on their world Kim Jong-il Unplugged tour. If Cambodia didn’t act, it would make a damn good example for the likes of Tanzania, Sierra Leone, and other states that haven’t gotten the message about reflagging North Korean ships. And in the case of Cambodia, the Cosmos Group’s role gives us a willing South Korean partner with jurisdiction and a shared interest in shutting this dirty business down ppali-ppali.

The U.S. has an obligation to investigate how the financial transactions behind the shipment were denominated and processed — specifically, whether they were processed through the U.S. financial system. (Unfortunately, the seizure came before UNSCR 2321 banned the insurance of North Korean ships.) If the evidence shows that either the North Koreans or their Chinese partners misused our financial system to break the law, we should freeze and forfeit assets, issue indictments, and consider civil penalties or other appropriate enforcement actions against the banks involved.

Lastly, let’s not forget that under UNSCR 2270, China is supposed to be inspecting all of this North Korean cargo. The NKSPEA also provides a new legal tool for cracking down on ports that shirk that responsibility.

SEC. 205. ENHANCED INSPECTION AUTHORITIES.

(a) Report Required.—Not later than 180 days after the date of the enactment of this Act, and annually thereafter, the President shall submit to the appropriate congressional committees a report that identifies foreign ports and airports at which inspections of ships, aircraft, and conveyances originating in North Korea, carrying North Korean property, or operated by the Government of North Korea are not sufficient to effectively prevent the facilitation of any of the activities described in section 104(a).

(b) Enhanced Customs Inspection Requirements.—The Secretary of Homeland Security may require enhanced inspections of any goods entering the United States that have been transported through a port or airport identified by the President under subsection (a).

That means that if Dalian doesn’t comply with its requirements to inspect North Korean cargo, U.S. Customs and Border Protection might require more intrusive inspections of cargo coming from Dalian. Think of it as the shipping equivalent of a 311 action.

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Update: A reader writes that it’s just as possible that the weapons were headed for Hamas or Hezbollah. Yes, I suppose those are both plausible possibilities. North Korea is suspected of having sold arms to both groups in the past. Now that Hezbollah has a large contingent fighting in Syria, the easiest way to supply it would be by landing the ship at the Syrian ports of Tartous or Latakia. Supplying Hamas is a bit trickier, but would probably work something like this.

~   ~   ~

Update 2: I want to take on the argument, suggested in the Kyodo report, that North Korea’s money laundering and smuggling networks are so well-hidden inside China that we couldn’t possibly uncover them. Yeah, how can we do that? We put resources on the problem, for once. We use the same methods we used to expose the equally sophisticated money launderers who worked for Iran, Al Qaeda, and the Cali Cartel. We do what C4ADS did, when two smart researchers with no classified access whatsoever exposed a sophisticated, well-hidden network of North Korean money launderers and smugglers operating from China. Just like the Justice and Treasury departments did when they added their law enforcement authorities to the mix and came up with an indictment and a civil forfeiture count that reached 5 individuals, dozens of front and shell companies, and 12 different Chinese banks. We do it like the U.N. Panel of Experts has done, year after year after year after year after year after year. If we’d simply investigate and/or designate the dozens of Chinese and other third-country entities exposed by the Panel’s open-source reports and their confidential annexes, we’d tear huge holes in that network. We do it by trying, for once, and by not being afraid to break some china along the way.

Finally, let’s not forget the role of human intelligence, which shows us why we don’t have to expose the entire network at once to damage the integrity of the whole thing. The number of North diplomats and money launderers who defected last year probably exceeded the numbers seen in any previous year. Every time a fund manager brings his laptop or some bank account numbers to U.S. or South Korean intelligence, we gain another invaluable clue about the dimensions of that network and who operates it. Apparently, we’ve done some damage, too.

“As sanctions against North Korea have strengthened, trading companies are turning to products that are not included in the sanctions list. The recent activity comes from a decision by the Ministry of Foreign Trade demanding that trading companies double their contributions,” a source in Pyongyang told Daily NK on February 1.

The North Korean authorities are increasing the amount of loyalty contributions to compensate for dwindling exports of weaponry, which had previously been a significant source of revenue. As a result, the companies have no choice but to explore alternative items for export. [Daily NK]

Every time we freeze or seize money in one part of the network, we make other parts of the network fearful that they’ll miss their kick-up quotas. There are some encouraging signs that sanctions can trigger defections, which in turn raise the burden on remaining parts of the network and provide intelligence to help us freeze even more money. Eventually, it all becomes a death spiral:

The undercurrents of desperation amongst the trading companies is largely due to Kim Jong Un’s use of fearpolitik. Some officials returning from abroad for the end-of-the-year review, he said, were dismissed for not completing their assignments, sparking fierce competition to complete the trade assignments set at the beginning of each new year.

“Some traders are complaining, ‘If you pull a rubber band too much, it will snap. This is why there are growing number of defections among dispatched workers,'” he added.

The executives in charge of North Korea’s international trading companies are expected to come under intense pressure. It remains to be seen whether this will spark an increase in high-level defections to South Korea or other countries this year. [Daily NK]

This also has ripple effects on the banks, who are our most valuable sources of financial intelligence, via the Know-Your-Customer rules, and the Suspicious Activity Reports and Currency Transaction reports they’re supposed to file. If Treasury puts out the word that we’re going to enforce those requirements strictly against North Korea — which is a 311 jurisdiction, after all — banks may step up their compliance out of fear of being exposed by defectors, and of paying the massive fines like those we imposed on banks that violated other sanctions regimes.

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