Maximum pressure watch: The Dandong Zhicheng warrants foreshadow N. Korea-related indictments

Last fall, as America was consumed by (depending on your state of residence) post-election trauma or celebratory gunplay, China blew past the North Korean coal import caps it had just agreed to at the U.N., and the Obama administration issued what would be some of its final North Korea sanctions designations — of Daewon Industries (a coal exporter subordinate to the North Korean military) and Kangbong Trading Corporation (a coal exporter subordinate to the Munitions Industry Department and involved in the development of North Korea’s ballistic missiles).

At the time, I suggested that the administration might have shown a belated willingness to enforce the coal cap that China would not. A few months later, the Trump administration designated Paeksol Trading Company, a third coal exporter that answers to the Reconnaissance General Bureau, the agency that carries out Pyongyang’s foreign intelligence operations, terrorism, and cyberattacks, and some of its arms smuggling.

The real significance of these three coal designations was not the amount of money that Kangbong, Daewon, and Paeksol might have been laundering through the United States, although Americans tend to underestimate such things. Their real significance is that by designating these three entities, the Justice and Treasury departments were laying down a marker for anyone who was knowingly dealing with them, for violations of the International Emergency Economic Powers Act, money laundering, or conspiracy. What’s that, you say? It doesn’t matter if there’s no one here to arrest? Not to worry. The smarter strategy need not burden the taxpayers with feeding and housing crooked Chinese traders and bankers; it can be even more effective to seize their ill-gotten gains, bankrupt them, terrify other bankers into meeting their due diligence obligations, and depositing said gains into either of two U.S. government forfeiture funds that pay for the cost of other law enforcement operations.

That is to say, I don’t know how Donald Trump will make Mexico pay for the wall, but I do know how he can make the Chinese banks pay for bankrupting Kim Jong-Un.

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By now, it is now clear that Treasury’s designations of the North Korean coal exporters were only the first steps, and that there is substance, strategy, and policy behind the Trump administration’s talk of “maximum pressure.” The first clear sign came last month, when the Justice Department sued to forfeit almost $2 million Mingzheng International Trading Limited laundered for the Foreign Trade Bank of North Korea (FTB). A few weeks later, it cut the Bank of Dandong off from the financial system for laundering money for North Korean arms dealer KOMID and Korea Kwangson Banking Corporation, an FTB subsidiary. (Treasury blocked KKBC and FTB in 2009 and 2013, respectively, making it illegal to do business with them inside the United States, though corrupt trading companies stepped up to help them access the dollar system indirectly, for commissions of up to 25 percent per transaction). We can now see the feds’ emerging strategy taking shape — to bankrupt the Chinese trading companies that fill His Porcine Majesty’s coffers and make them toxic to the entire financial industry.

North Korea’s latest missile test changes the administration’s calculus, said Nicholas Eberstadt, a North Korea security expert at the American Enterprise Institute. He expects the White House to accelerate its sanctions against Chinese firms.

A central aim of the strategy of freezing out a Chinese bank from the U.S. financial system is to chill transactions by other Chinese institutions. Access to U.S. financial markets and the dollar are critical for trade and finance around the globe. But for that effort to be perceived as a credible, said Mr. Eberstadt, the administration will have to list other Chinese banks to instill broader fear.

“If I wanted to send a message, I’d probably send several postcards,” Mr. Eberstadt said.

Analysts and senior officials from two previous administrations say the existing sanctions regime against North Korea have so far been elementary compared with the thicket of actions applied against Iran at the height of the Obama administration’s punitive actions against Tehran. That effort pushed the country into recession and persuaded the country to negotiate, although many foreign-policy experts question the effectiveness of the subsequent deal the U.S. reached with Iran. [WSJ, Ian Talley]

Then, last week, the U.S. District Court for the District of Columbia unsealed this seizure warrant for funds of Dandong Zhicheng Metallic Materials Company that entered eight U.S.-based correspondent banks. According to the warrant, Dandong Zhicheng processed $700 million in prohibited North Korea-linked transactions through those eight correspondents since 2009, including $52 million in the last seven months alone. Yes, that’s right — Pyongyang was laundering its money through our banks and right under our noses all along, just like I’ve been saying.

Tantalizingly, the warrant cites a cites a grand jury subpoena that isn’t published on PACER, most likely because it’s still sealed under Rule 6(e) of the Federal Rules of Criminal Procedure, which protects the secrecy of grand jury material. This particular warrant is a “damming warrant,” a tool prosecutors use when they have probable cause to seize evidence or contraband that regularly transits through a specified place, even if it isn’t there at the moment (such as drugs through a dealer’s P.O. box, or funds through a money launderer’s account). It means that money goes into, but not out, of the account subject to the warrant. In this case, the damming warrant lasted 14 days, which may be as long as a depositor would continue to dump money into a bank account before wondering why his checks weren’t clearing.

I found the names of the correspondent banks on PACER so that wouldn’t have to: Bank of America, Deutsche Bank Trust Company Americas, Citibank, Bank of New York Mellon, HSBC, JP Morgan Chase, Standard Chartered Bank, and Wells Fargo. So far, the feds aren’t directly targeting those banks for legal action, and neither the banks nor the feds are saying anything else about that, but read on. You’ll also see in footnote 5 of the court’s order that the feds have now begun to make good use of the NKSPEA; evidently, the prosecutors cited section 104(a)(8) it in their warrant application.

By now, the more astute readers among you have picked up on the familiarity of Dandong Zhicheng’s name. No, this isn’t the Chinese network exposed in C4ADS’s report (and mostly undone by the Justice Department’s indictment and forfeiture complaint) last year. That was Dandong Hongxiang (or DHID). Dandong Zhicheng (or DZMM) is the Chinese network exposed by C4ADS’s most recent report, just last month.

In 2016, a single company, Dandong Zhicheng Metallic Material Co. Ltd. 丹东至诚金属材料有限公司, reportedly accounted for 9.19% of total North Korean exports to China. Established in July 2005, just as North Korean coal exports began to increase as a percentage of total exports, Dandong Zhicheng Metallic Material Co. Ltd. is a commodity company based in Dandong, China. The company’s archived website states that, as of April 6, 2016, it was recording annual sales of US$250 million, mainly of North Korean coal. This fact is recorded in trade data: 97% of the company’s imports were of North Korean coal. The company’s rapid growth and subsequent market position today is best described by a 2013 statement by one of the company’s traders, “The golden time for high profit has ended. It is now difficult to expand the market share further, and small players are out of the game.” Since 2014, Dandong Zhicheng Metallic Material Co. Ltd. has reportedly been the top overall importer from North Korea in China. [C4ADS]

If C4ADS is right that North Korea’s financial networks are centralized, limited, and vulnerable, the Justice and Treasury departments can damage or destroy the Chinese conglomerates that link Pyongyang to the financial system. To hear C4ADS tell it, DZMM is the single biggest Chinese importer of coal and other products from North Korea. Reuters backs that up by citing a 2013 online profile for DZMM, which claims that it imported $250 million worth of North Korean coal that year. By contrast, UNSCR 2321 capped North Korea’s total annual coal exports at $400 million. Thus, DZMM is almost certainly Pyongyang’s single largest coal customer and one of its key links to the global economy (no matter how many “experts” say that Pyongyang is already too isolated to sanction or that those links are too well hidden to find).

Nothing in the damming warrant mentions Kangbong, Daewon, or Paeksol, but it’s almost a sure bet that at least one of them is having some cash flow problems today, if not all three. The fact that the warrant reveals that a grand jury has been empaneled is also telling. Reuters got someone at DZMM to answer the phone, but they wisely refused to comment. If the cliché is correct that you can indict a ham sandwich, we should expect to see an indictment unsealed in the coming weeks or months, and we’ll learn the names of DZMM’s banks.

Asked about the issue, Chinese Foreign Ministry spokesman Geng Shuang reiterated that any infringements of U.N. resolutions on North Korea would be dealt with according to Chinese law, and that China opposed “long-armed jurisdiction”. [Reuters]

That is to say, China is opposed to unilateral sanctions, except when it isn’t. I can’t recall when I’ve ever heard China sound so upset and concerned about the prospect of paying a penalty for Pyongyang’s behavior.

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When the feds indicted Dandong Hongxiang last September, they hastened to add that the banks were not suspected of any wrongdoing. How much legal jeopardy are the banks in this time? Potentially, plenty. The court issued the DZMM warrant in May, so presumably, the affected transactions would have come after Treasury’s Financial Crimes Enforcement Network (FINCEN) issued this new regulation, based on its finding that North Korea is a jurisdiction of primary money laundering concern. The FINCEN regulation requires banks to cut North Korean financial institutions off from both direct and indirect access to the financial system, and requires due diligence of banks processing transactions to that end. Clearly, the banks should not have processed transactions for designated North Korean entities — including the FTB, KKBC, Daewon, Paeksol, or Kangbong. This time, DZMM’s Chinese banks and their U.S.-based correspondents both face higher legal burdens due to the new FINCEN regulation. The amount of jeopardy depends on how apparent DZMM’s links to North Korea were, or alternatively, how many hard questions they asked DZMM and each other about their customers.

What’s clear, regardless of the outcome, is that the banking industry has to step up its compliance game. And judging by the clarity of the message the feds are finally sending, I expect it already is.

Have all the shoes dropped? By no means. A grand jury is (or was) in session, indictments are thus more likely than not, the feds have plenty of other options short of that, and according to the Wall Street Journal, their strategy has backing at the highest levels of the administration. Our government is now promising — and taking steps to implement — a secondary boycott of North Korea’s enablers around the world, Nikki Haley is telling countries that they cannot trade with both the U.S. and North Korea, and the U.S. is moving to combine its economic power with that of South Korea and Japan (collectively, China’s three largest trading partners). Yes, China and Russia are stalling approval of a new U.N. sanctions resolution, but I’ve long felt that we’ve reached the point of diminishing returns from new U.N. sanctions anyway. What’s needed now is strict enforcement of the existing sanctions and anti-money laundering authorities, and that’s what I’ve just been talking about here.

Last year was a bad year for North Korean banks. Although the effects of that still aren’t clear, this year promises to be much worse for them. And we haven’t even gotten to the tools the Senate is about to give the feds.

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Why Moon Jae-In can’t make the sun shine again

Given the background of Moon Jae-In and some of his closest confidants, the question that has nagged at me is whether Moon is (1) a closet hard-left ideologue who has managed to let everyone around him say and do the extreme things he avoids saying and doing himself; (2) just another oleaginous opportunist who paddled his canoe to the swifter currents on the left side of the stream; or (3) a hopelessly naive squish who thinks he can simultaneously charm, tame, and please his hard-left base, moderate voters, Donald Trump, Xi Jinping, and Kim Jong-Un, and who is consequently fated to end as tragically as (if less horribly or bravely than) Andres Nin.

Whatever theory comes closest to the truth, it’s apparent that Moon is no fool and has enough political sense to know his limitations. Evidence of those limitations comes in the form of new polling data from the Asan Institute. Generally, South Koreans —

– dislike the United States much less than they dislike their neighbors (I’m suspicious of Asan’s use of an approval index instead of a straight percentage of favorables). They dislike North Korea the most intensely. The biggest shift is that they now dislike China as much as they dislike Japan. That’s a fairly stunning shift, and it has been persistent since China began sanctioning the wrong Korea.

– favor the U.S. over China as their “preferred partner” by an overwhelming margin of 67 to 22, a gap that has widened by 18 percentage points in the last year after having steadily narrowed between 2014 and 2016. We can guess that China’s sanctions against South Korea, and perhaps its failure to reign in North Korea, have caused immense damage to its favorability on the Korean street. (I’ve long felt that a nationalist message with distinctly anti-China overtones has potentially high appeal in both Koreas, and elsewhere in Asia. These numbers may support that supposition.)

– oddly, hold the most favorable views of Xi Jinping of any neighboring leader. Given the other findings in the survey, it sounds like South Koreans respect Xi more than they like him. Their views of Trump recovered considerably after his reassuring phone call to Park Geun-Hye last November, although favorable views of Trump remain far lower than their favorable views of the United States. They hold Kim Jong-Un in the lowest esteem, by far.

– favor the deployment of THAAD by 55 percent, compared to just 37 percent who disapprove. This, despite Trump’s ham-handed stumbles, demanding that South Korea pay for it despite an agreement to the contrary, just before South Korea’s election. Most South Koreans, however, believe the National Assembly should ratify the THAAD deployment, which almost certainly means gridlock and indefinite delay.

– disfavor reopening Kaesong by a margin of 50 to 46, and disfavor resuming humanitarian aid by an overwhelming 72 to 26, absent a change in North Korea’s behavior (personally, I’d be much more receptive to resuming humanitarian aid that reaches the poor than resuming Kaesong, which is a wage-theft scam to fund Bureau 39).

The other interesting finding is that South Koreans in their 20s are much more conservative on national security issues than those in their 30s and 40s. That tells us that if these young voters’ views have been shaped by recent experiences, and if they continue to hew conservative as they age, the U.S.-Korea alliance may have a stronger demographic future than I’d feared.

Overall, the numbers suggest, first, that as I suspected, Moon Jae-In has no mandate to revive the Sunshine Policy; second, that they expect Moon to maintain a strong alliance with the United States; and third, that they hold extremely dim views of North Korea and His Porcine Majesty. That explains why Moon was so eager to avoid a fight with Trump during his visit to Washington. He knows very well that security issues are a vulnerability, and that by appearing to put distance between himself and Washington, he stands to lose much of his currently stratospheric approval rating, which is certain to decline as his honeymoon wears off and the media stop covering him like KCNA covers Kim Jong-Un. That is to say, if Moon Jae-In was on his best behavior, it may be because, like any good politician, he knows how to read a poll.

For the last week, I’ve been picking away at a still-unfinished post, commute by commute, about Pyongyang’s rejection of Moon’s offers of “engagement,” and demands for supplication instead. Whatever the true feelings of Moon and his inner circle about North Korea, then, a return to Sunshine faces three obstacles that seem insurmountable for now: first, of course, Pyongyang itself; second, U.S. opposition to any engagement that would undermine “maximum pressure;” and third, the South Korean people themselves. That is to say, Moon is starting his term (as did Lee Myung-Bak and Park Geun-Hye) by offering Pyongyang conditional engagement, only to find that Pyongyang isn’t interested in anything conditional.

If Moon is an intelligent politician — and I suppose he is that, if nothing else — he’ll decide to emphasize other parts of his agenda instead: breaking up the chaebol, cracking down on public corruption, putting limits on working hours and making other improvements to the rights of workers and consumers, and giving Korea a better-functioning welfare state. If Moon makes progress on these initiatives and supports our North Korea policy until such time Pyongyang denuclearizes (unlikely) or overthrows its king (more likely), we should support him. If he actively undermines our North Korea policy, a few well-timed and carefully written tweets (that don’t look carefully written) could damage his party in the next round of National Assembly elections.

If Moon really wants to really make me cheer, he’ll reform the Korean legal system to give defendants a right to counsel that’s more than just pro-forma, the right to a trial by jury, the right to confront one’s accusers, robust discovery rights, a hearsay rule, and other procedural protections to ensure that people can get fair trials. Also, truth should be a defense in libel suits. But by now, I’m asking too much.

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Stop talking about bombing North Korea. Talk about the revolution it desperately needs.

The supreme art of war is to subdue the enemy without fighting.  – Sun Tzu

On the Fourth of July, I had a long talk with a Famous Person who would probably prefer that I not mention his name here. He’s famous (or infamous — your mileage may vary) for his association with a foreign policy philosophy described as “neoconservative,” whatever that means. Like many Famous Persons, this person’s public image is an injustice to his actual views, which sounded classically liberal to my ears. He had an easy and unpretentious manner, and great depth in both experience and intellect. He recalled, at length, his support for Kim Dae-Jung’s life and freedom during South Korea’s right-wing dictatorship and other events I watched in rapt attention years ago. Because I’m not naming him, he probably won’t mind me quoting a wise thing he said: “This talk of bombing North Korea is scaring our friends more than it scares our enemies.” I couldn’t agree more. The word I keep returning to is “madness.” Not that it should matter, but there are people in Seoul I love.

It will probably also scare some of our friends that I made the case to this Famous Person that we must match Pyongyang’s escalation and deter the next one by helping the people of North Korea to resist the regime, but at least that suggestion has the advantage of terrifying our enemies and merely dividing our friends. Already, some of you are thinking that I’m scaring the Chinese and the Russians away from cooperating with us, as if all of the State Department’s supplications of the last 20 years have achieved anything. Or, that I’m scaring Pyongyang away from the negotiating table, as if Pyongyang would come back to the negotiating table otherwise, and as if Pyongyang doesn’t already believe we’re trying to overthrow it. Or that I’m ignoring the danger of loose nukes — as if the danger of WMD proliferation isn’t just as great or greater with this regime intact.

If we’re really honest, we’re all praying for some kind of regime change in North Korea. Prayer, of course, is not a strategy. The Sunshine Policy didn’t work, but it was a strategy for regime change by other means. Former South Korean President Kim Dae-Jung, the architect of that policy, was extraordinarily cautious about suggesting an intent to catalyze political change in the North, but a careful reader could see that it necessarily had political objectives: “Through open interaction with the global economy, North Korea will emerge as a responsible member of the international community, contribute to the stability of the peninsula, and develop its economy efficiently.” As Professor Lee, Bruce Klingner and I explained in the pages of Foreign Affairs, that is also why Pyongyang couldn’t let the Sunshine Policy succeed. I also doubt that Kim Dae-Jung was only speaking of South Korea’s former right-wing dictators when he quoted Confucious in his Nobel acceptance speech: “The king is son of heaven. Heaven sent him to serve the people with just rule. If he fails and oppresses the people, the people have the right, on behalf of heaven, to dispose of him.” (This is a point I’ll return to later in this post.)

The same is true of Americans who believe (or believed) in the Sunshine Policy. As the unreconstructed arch-engager David Kang once wrote, “I am totally for regime change, or a regime that modifies its ways and introduces economic and social reforms that improve the lives of its people.” At the height of talks over the 1994 Agreed Framework, Wendy Sherman pined for something more kinetic: “We just thought all that would bring about the collapse of the North Korean government within two or three years.”

We’ve all wished for a change of regime in North Korea, if only on an emotional level, notwithstanding how expensive, chaotic, and dangerous we know Kim Jong-Un’s Götterdämmerung could be. For years, we desperately hoped there might be some path to easy, evolutionary change. The unstated part of this hope was that with sufficient time and engagement, that evolutionary process might terminate as it did in Eastern Europe. But as events have proven beyond a reasonable doubt, there is no path to easy, evolutionary change in North Korea. There is profiteering and outright theft, and Pyongyang’s rich are getting richer. Call that capitalism if you want, but it’s the capitalism of a predatory military-industrial complex that’s no more a harbinger of peace or political reform than Krupp, Messerschmitt, or I.G. Farben were.

Contrary to Wendy Sherman’s expectations, the North Korean government did not collapse, because the North Korean people were too afraid, too hungry, too exhausted, and (above all) too isolated from each other to challenge the state. That is why, though there have been a thousand small and not-small acts of armed and unarmed resistance by the North Korean people against the state in recent years, those acts could not threaten the state’s control or disrupt its oppressive strategy. The people of North Korea had no means to communicate, organize, or resist. For those things, they will need our help. We should give them that help, in ways that would be public knowledge, and in other ways that would necessarily remain covert or clandestine. I don’t see another way. If you do, the comments are open.

In this week’s posts, I’ve explained why every other option ends in either a nuclear war, a surrender of South Korea, the collapse of nonproliferation, or grave threats to our own security and freedom. The hard realities are, in no particular order, that we cannot live with a nuclear North Korea, and that neither talks, nor surrender, nor China, nor the Swiss-educated reformer who never was will solve this crisis for us. War would, but it would also be a catastrophe of incalculable proportions. All options that remain — including the option of doing nothing, or seeking an accommodation with the regime — come with a significant or unacceptable risk of ending catastrophically. There is no safe option left to us; there are only less-dangerous ones. Dramatically improved enforcement of sanctions is the only nonviolent one left, and while I continue to believe that vigorously enforced sanctions could bring the regime to an existential crisis that could dethrone His Porcine Majesty, only the removal of Kim Jong-Un from power (and consequently, from this Earth) can disarm Pyongyang now.

It is increasingly hard to avoid the conclusion that Kim Jong-Un must die so that Korea may live, and that the coup de grâce must come from within, and not from us. It may be that the only way to prevent a larger war is to catalyze a smaller one. But that smaller war — or even the credible threat of one — may stand the best chance of ending with a peace agreement worthy of its name, from which Korea would emerge intact, liberated, unoccupied by foreign powers, and on a manageable timetable for reunification.

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Let’s stop tiptoeing around what most of us have quietly wished for, but which we’ve done nothing — at least nothing I can see — to instigate: North Korea needs a revolution. It is in our interest to be rid of Kim Jong-Un, but above all, it’s in the interests of the North Korean people to be rid of him. The merchants who have waged an unarmed war of resistance against the state’s uniformed shake-down artists and press-gangs want to be rid of him. The nameless victims of torture who wanted nothing more than the right to live and move freely want to be rid of him. The people of North Hamgyeong, who are still waiting for an uncaring government to help them more than a year after floods devastated their homes and farms, want to be rid of him. The dirt-poor private farmers whose land is being confiscated, even as food prices rise, want to be rid of him. The collective farmers whose hopes for agricultural reform were dashed into the reality of exploitative sharecropping want to be rid of him. The poor in North Korea’s cities and towns, who scrape through life inside the confines of a state-imposed class system, want to be rid of him. The soldiers who are killing their abusive officers or walking through minefields to freedom want to be rid of him. The desperately hungry border guards who carry their guns into China and desert want to be rid of him. The elites in Pyongyang, who have begun defecting in greater numbers than ever — to include diplomats, money launderers, security officials, and (most recently) one of Kim Jong-Un’s bodyguards — want to be rid of him. The men, women, and children in the gulags must surely pray that they may live long enough to be rid of him. The 30,000 North Koreans who risked everything to flee to South Korea — and the countless others who died along the way, or in prison camps after they were recaptured — wanted to be rid of him.

Our real military option isn’t bombing, but a combination of overt, covert, and clandestine operations to catalyze the formation of a resistance movement by North Korea’s rural poor, historically its most exploited and discontented class, particularly in the northern and eastern provinces. The tried-and-tested argument for that uprising is the timeless appeal of class warfare. North Korea’s is a society of artificial, politically assigned, hereditary classes that mark every citizen for life and decide her access to education, a decent job or place to live, and even food.

As for the organizational foundations of such a movement, I’ve already discussed them at length, but they aren’t so different from the model used by Hamas or the Muslim Brotherhood. That model begins with a guerrilla banking system that seeds a multitude of unaffiliated, clandestine social welfare organizations and evolves into a shadow government, providing for the needs of the people that the state does not, and that resists the state’s violation of the fundamental human rights of the people in whatever ways it can. The essential and missing element is a means of communication, but even that isn’t far off. I’ll keep the discussion of logistics to myself or leave that to Dave Maxwell — he’s the retired Special Forces colonel, not me. I’ll only say that North Korea has two long coastlines, one long and partially porous border, robust smuggling networks, and a population that has learned to be extraordinarily resourceful to survive. The markets in North Korea seem to provide anything for which there is a demand.

I think — and there is a basis for my speculation — that Kim Jong-Un’s nightmare scenario is to wake up one day to hear that after an MPS officer beat a merchant who refused him a bribe, that the merchants rioted and killed the officer with a pistol bought from a deserting soldier, that riots spread throughout the province once people began texting the news on smuggled phones, and that people had set up roadblocks all over Hoeryong, within sight of journalists just across the border in China.

There would be no question, of course, of a peasant army marching on Pyongyang. That would be impossible, undesirable, and unnecessary. It would present Pyongyang with the sudden, use-it-or-lose-it choice that we must carefully avoid. The state’s loss of control would instead be gradual. If North Korea’s vast, almost roadless interior dissolved into anarchy as Syria and Libya did so unexpectedly, Pyongyang could lose its land access to the fisheries of the east, the coal mines and power plants in the interior, and all the remote places where it hides his missiles. Broadcasts directed at his elites, who are already defecting in growing numbers, would show them how the countryside was slipping into anarchy. If the security forces were already sanctioned to the verge of bankruptcy, they would be hard-pressed to pay, fuel, and maintain an army to patrol the borders, and the villages and fields near the most critical roads, railroads, and power lines. It is the economic and political blows, not the military one, that would be fatal, and that would force Pyongyang’s elites to demand peace talks on terms that would lead to a genuine peace.

As border control broke down, information would flow in and people would flow out. Trade links to China would become untenable, adding more financial pressure to the effects of sanctions. As Pyongyang functionally became a city-state surrounded by an ungovernable countryside and a patchwork of liberated zones, the elites might decide that the world was closing in on them and hedge their bets about the future. In exchange for our covert support, a thousand unseen eyes in the mountains could report the location of every missile truck, slip messages to unit commanders, or send out videos of gulags or abuses by soldiers. In the towns and villages of Ryanggang and North Hamgyeong, the State Security Department’s officers would become prisoners of the people, too afraid to patrol the markets and reduced to taking bribes from those they no longer dared to extort, in exchange for looking the other way at more open acts of subversion. No foreign power, including China, would dare wade into this mess. As for the generals, all that would be asked of them to save themselves and their families would be to make sure that at the critical hour, their troops don’t move and don’t shoot.

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What can America give to the people of North Korea? First, a means to communicate and organize among themselves; second, a message to galvanize and focus their discontent; third, a concerted legal attack on the finances of the security forces to give the people breathing space; and perhaps, as a deterrent to further acts of aggression and oppression, a covert supply of arms, or a way to manufacture them in small guerrilla workshops.

We already have specialized aircraft designed for hijacking the airwaves of hostile states. The message we broadcast must be tailored to different audiences — the elites, the military, and the rural poor. For the elites in Pyongyang, the message must be that there is a better future without Kim Jong-Un than with him. That for those who resist the state and refuse to take part in its crimes against humanity, there will be clemency, freedom, and a better life in the future. If the regime persists, they can expect to meet the same fate as Jang Song-Thaek and his family.

For the soldiers, it must be a message of rice, peace, and freedom. In the event of war, they must refrain from killing their brothers and sisters in the South. They must be told that the targets assigned to them are civilian targets, and that their duty as Koreans is to disable their weapons, refuse to fire, or intentionally miss those targets.

For the rural poor, it must be that they are poor and hungry because of the state’s choices — to build weapons and ski resorts, and to import yachts and missile trucks, instead of feeding them. That the state keeps them hungry to control them. That it divides them against each other by making them inform on one another. The message must be rich with actual, credible stories about people like them who have suffered from the regime’s abuse, corruption, and oppression. They must awaken to the fact that they alone can change that, because no one else is coming to save them.

For all North Koreans, we should help them begin a conversation about the difficulties that sudden change will mean to a society that isn’t prepared for them. Should they stay in place or move? Who will own the soil, and who will till it? Will they be allowed to sell the land, and for what price? Will rich South Koreans flood in and make them second-class citizens in their own country? Will they acquire legal ownership of their own homes? Will industries in the hands of the state, the donju, or foreign investors be nationalized and sold off? Will the communes be broken up or consolidated? How can they prevent foreign occupation? What is the right balance between free speech and social stability? Who will be held responsible for crimes against the North Korean people, and who will be forgiven in the name of ending them? They must feel that they will have a say in how those questions are answered.

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Our sanctions-targeting strategy must also evolve with the recognition of these same hard realities. During this event on Capitol Hill several weeks ago, former Treasury Undersecretary and former CIA Deputy Director David Cohen made a profoundly important statement that would have been easy to miss. Cohen said that the strategy for sanctions enforcement depends on the objective of sanctions. Until now, it has been to pressure Kim Jong-Un to negotiate away his nukes, based on the flawed premise that he cares about the welfare of his people and the development of his country (in fact, those things would pose serious threats to his internal control by breaking the peoples’ material and ideological dependence on the state).

If we agree that Kim Jong-Un will never disarm voluntarily, then our sanctions should instead target the regime’s security forces and their capacity to suppress the population. How? We know, for example, that two sanctioned North Korean coal export companies support the military and that a third supports the Reconnaissance General Bureau. The security forces fund themselves with certain trading companies. If so, our sanctions should preferentially target the regime’s immune system to disrupt its capacity to oppress, to compel its security forces to rely on corruption, and to break down barriers to the smuggling of goods, people, and information across North Korea’s borders.

Part of this strategy could take several years to prepare, unfortunately. The critical communications technology to allow North Koreans to organize still isn’t in place. Once resistance begins, it’s difficult to know whether it would spread or how quickly. If we controlled its funding, we could exercise some control over its conduct, but only to an extent. We can expect Pyongyang to hit back (though in limited, non-suicidal ways) if it knows or assumes that we’re supporting internal resistance. In the meantime, we’ll need an interim containment strategy, including aggressive sanctions enforcement, the accelerated deployment of missile defenses and deterrence, and perhaps a blockade. The President may have to use force to deter the next Yeonpyeong-do incident or slow North Korea’s missile development, and hope that a limited conflict stays limited. At the same time, we must never close the door to an agreement in which Pyongyang would disarm and begin a graduated process of humanitarian reform in exchange for the suspension of sanctions. But in the end, containment alone is not a permanent solution to this problem, and deterrence has been failing since 2010.

For years, the experts who have held the tiller of our policy for so much of the last three decades have offered Pyongyang “security guarantees” for a disarmament deal. Pyongyang either didn’t take them or took them and reneged. It’s time to turn this formula on its head and offer Pyongyang insecurity guarantees as long as it refuses to disarm. Once we pose a credible threat of destabilizing the countryside between Pyongyang and Dandong, our chances of a diplomatic solution rise from zero to something more than zero. How much more depends on the credibility of the threat and how much we have to offer in terms of trading stability for a lasting peace.

~   ~   ~

When Kim Dae Jung quoted Confucious in his Nobel speech, he reminded his audience that Confucious spoke those words 2,000 years before John Locke wrote of his version of the social contract theory, which incorporated a right of revolution. Against Locke, Thomas Hobbes argued, based on his bitter experiences during England’s civil war, that the subject’s duty was to obey the sovereign for better or for worse lest he reduce his kingdom to a state of anarchy where life would be “nasty, brutish, and short.” But North Korea, where the regime has imposed its social contract on the people, is as Hobbesian a place as you will find — it is a living (if one can call it that) exhibit to Locke’s brief for the right to revolution. In another hundred years, Thomas Jefferson would write that when a government becomes destructive of the ends of the life, liberty, and happiness of the people, “it is the right of the people to alter, or to abolish it.” I do not reserve that right to Americans alone. That would make me an American exceptionalist.   

In our long war of skirmishes against the Kim Dynasty, it has always been the people of North Korea who have been our most important — and most overlooked — potential allies. Kim Jong-Il now presents a grave threat to our freedom, our security, our prosperity, and our way of life. We are justified in threatening the integrity of his political system in return. The perpetuation of that system represents a grave threat to us, to our allies, and to the people of North Korea most of all. We also compelled to do this in a way that reduces the risk of catastrophe as much as that is still possible, and that minimizes unnecessary suffering by the North Korean people. Our support for any resistance group must be strictly conditioned on its adherence to the Law of Armed Conflict. It must tolerate no attacks against noncombatants, no banditry, and no theft. The choice to resist, of course, is a choice that belongs to the people of North Korea. But if they are willing to make it, they should find no better friend than us.

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We can neither talk, bomb, nor wait our way out of the North Korea crisis

“The era of procrastination, of half-measures, of soothing and baffling expedients, of delays is coming to its close. In its place we are entering a period of consequences.” – Winston Churchill

In one sense, North Korea’s first test of an ICBM should change little about our analysis of this crisis, other than to compress its timeline by two years. Two years ago, in fact, I predicted that we’d have reached this point by January. Most Korea-watchers have long assumed this development to be imminent, and have assumed for at least two years that Pyongyang could nuke Seoul or Tokyo. I’m no expert in missiles or missile defense, but when I ask the expert I trust the most on this subject (an Army friend) whether we can stop a North Korean strike, he says, “probably.” Pyongyang’s nuclear threat to the United States is probably still limited. Its missiles probably aren’t accurate, reliable, or numerous enough to overwhelm our nascent defenses — yet. The same is probably still true of our defenses against a nuclear strike against Seoul or Tokyo once THAAD is deployed, although Pyongyang’s rocket artillery (with its chemical and biological warheads) would likely overwhelm our defenses, as it would have when I was stationed in South Korea and had to get seven anthrax shots. Reassured?

But many other things have changed. North Korea is, for the first time ever, our top foreign policy priority. President Trump has done what his last three predecessors could not do — abandon the palliative illusion that China, which has done so much to weaponize Pyongyang, would enforce sanctions against it. There is bipartisan support in Congress for using all instruments of our national power short of war to deal with Kim Jong-Un. Whatever plans for Sunshine 1.1 Moon Jae-in may have delicately negotiated at the White House are in cinders. Even Moon had no choice but to call for more sanctions and support a new U.S. push for sanctions at the U.N. Security Council. Fine, but this is 2017, and an all-out campaign to bankrupt Pyongyang and subvert it politically would take from one to three years to work. That’s too late for some purposes, but not for others.

~   ~   ~

This week, I’ve read more snark at President Trump for giving Xi Jinping three months to bring Kim Jong-Un to heel than Barack Obama got for outsourcing his entire North Korea policy to China for eight years. Regardless of your views of Trump, he inherited a problem that Obama (and lest we forget, Secretary of State Clinton) ignored for eight critical years. History should record that Obama, Clinton, and Kerry squandered our last, best chance to block Kim Jong-Un’s path to nuclear breakout without the use of force or violence.

Now, every option bequeathed to Trump — the man we elected to deal with this mess, for better or for worse — carries a significant risk of catastrophe. Building on yesterday’s parade of horribles, let’s start with the easiest option: doing nothing, or whatever it is we’ve done for the last eight years. If events continue on their present course, the region’s alliances and security framework will collapse, and South Korea will either be forced into a negotiated capitulation or will refuse (perhaps after a military coup) and start a war of its own accord. South Korea’s democracy and economy will collapse under the stress of political divisions, security risks, and ideological and regional factionalism before the neighbors tear at its carcass. Japan will be finlandized by China. China, which might subdue Pyongyang in the same way it nearly subdued Seoul, will inherit control of all of Korea, the western Pacific and Indian Oceans, and with them, the windpipe of our economy. There will be a regional (and perhaps, global) refugee crisis and recession.

Negotiate a “peace” treaty with Pyongyang on its terms and rest assured that we would, at best, delay all of the same outcomes. The capitulation of South Korea would not mean the end of North Korea as a threat to the United States and the rest of the world, of course — that threat has its origins in the ideology and extreme xenophobia of the regime itself. Pyongyang would continue to build its arsenal until it presented a serious threat to the U.S. mainland. It would become eBay for every terrorist and rogue state for both profit and sheer spite. Insecurity and terror would metastasize globally, just as they did when Syria collapsed. Free trade and immigration would come under greater pressure from the security state and isolationist sentiments. Pyongyang would not be content to allow our diplomats, scholars, and authors to criticize its crimes against humanity (and consequently, attack its greatest weakness — its domestic legitimacy). It would use every instrument of its unchecked power to demand a veto on what you see and read. And if you still believe that Kim Jong-Un has reformist ambitions, that those ambitions would make him less threatening to us, or that we’d see their positive effects in the next decade, you’re living in your own reality.

I suppose there are still people who believe that we can talk Pyongyang into a freeze or some other soothing and baffling expedient in exchange for giving up whatever leverage we have left. To believe that requires you to ignore that Pyongyang has said again and again and again that its nukes aren’t up for negotiation.

I find John Delury so personally likable that I really, really want to believe this tweet was a parody.

[Come out of the jungle, Lieutenant Onoda. The war is over.]

Pyongyang wants to negotiate, all right. Just as I predicted, it wants to negotiate South Korea’s unilateral disarmament and its incremental submission to Pyongyang’s political control. Here it is, in plain and stark terms: Pyongyang’s demand for surrender, for unification on its terms. I’ve pasted the full text in, below the fold, as a public service (click “continue reading”). Read every sobering word of it. That goes double for those of you living under the stupidity of South Korea’s censorship. It is you who have the greatest need to know what the future may hold for you, and to decide accordingly.

Or, we could launch a preemptive strike and risk a war that would kill millions. This option may present a marginally lower risk of an even greater catastrophe. It does have the advantage of preventing the greater, longer-term catastrophes of a nuclear North Korea. It is also madness.

We can neither bomb nor surrender our way out of this crisis. We cannot wait or talk our way out of it. It is too late for some options, but it is never too late for the least-worst options we still have. There is no option that does not risk catastrophe. The only question is which option carries the lowest risk of a catastrophe, that makes catastrophe the most amenable to diplomatic preemption, and that gives us the most potential to mitigate the consequences. The paradox before us now is to find a policy that convinces the generals in Pyongyang that time is not on their side and is quickly running out, but that Götterdämmerung is not so imminent that they must either use their nukes or lose them.

Also, the person who must now find that delicate, nuanced policy formula is Donald J. Trump.

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We cannot live with a nuclear North Korea (or rather, it will not live with us)

Yesterday, the North Korean threat finally crossed the ocean to our shores. As it is after every fresh outrage from Pyongyang, the question many will ask is, “Now what?” Certainly, there are plenty of legal, financial, and diplomatic options on this list that President Trump’s cabinet can exercise. Congress is also ready to act, or nearly so. You should expect to see the Senate move legislation you’ve seen (or something similar to it) and legislation you have not yet seen. That is good, but is there still time? After years of indecision and neglect, it will take concerted diplomatic and law-enforcement efforts for financial pressure to show its effects on Pyongyang, and no pressure that fails to threaten the very end of Kim Jong-Un’s misrule will be sufficient.

As you read this, “experts” across Northwest D.C., including some of those who are most responsible for getting us into this mess in the first place, are proof-reading their next op-eds calling for us to beg for a deal that Pyongyang doesn’t want and wouldn’t keep. As Pyongyang has said repeatedly (though too many of us choose not to hear it) it will not negotiate away its nuclear arsenal. A freeze would only trade away valuable concessions until Pyongyang seizes on the slightest pretext to renege on it.  Those who tell us that we must talk to North Korea ignore the evidence of how often we have tried. Indeed, it is they who aren’t listening to North Korea. These people are deluding everyone — most of all themselves. Pyongyang did not starve millions of “expendable” people to build a nuclear arsenal so that it could trade that arsenal away. Kim Jong-Un does not want nuclear weapons merely to defend himself from us. He will use them to blackmail Seoul into a “peace process” that would achieve the incremental surrender of South Korea and ultimately, the legacy to which his father and grandfather devoted their lives — the reunification of Korea under his rule. I believe he now sees that goal as within his reach. He may be right.

Can we learn to live with a nuclear North Korea that sold missile technology to Iran, built a nuclear reactor in a part of Syria now controlled by ISIS, and threatened to sell nuclear weapons to terrorists? That attacked our South Korean treaty ally or U.S. forces stationed in Korea in 1968, 1969, 1970, 1976, 1983, 1987, 1998, 2002, 2010, and 2015, killing 50 South Koreans in 2010 alone? That sends assassins to murder human rights activists and dissidents in exile? That has launched cyberattacks against banks, newspapers, nuclear power plants, and the Seoul subway? That launched another cyberattack against a Hollywood movie studio, made terrorist threats against movie theaters in the United States, and chilled the freedom of expression that Americans cherish and have given their lives for? That murdered the half-brother of its tyrant with a deadly nerve agent, in a crowded airport terminal, in the capital city of a friendly nation, 5,000 miles away? That may already be able to strike the United States with a nuclear weapon? The very idea is madness. One day, Kim Jong-Un, whose tolerance for risk always exceeds the calculations of our “expert” class, will go further than we are prepared to tolerate. Down this path lies war — a war whose potential will grow more destructive with each passing year.

Any fool who can hear the rising roar and see the boiling cloud of mist ahead knows where this current is carrying us. We cannot live with a nuclear North Korea if it means — as it assuredly does — the end of nonproliferation and the beginning of an age in which nuclear, chemical, biological, and cyber-terrorism will cease to be theoretical and become imminent and frequent. Fundamentally, the question isn’t really whether we can live with a nuclear North Korea, but whether a nuclear North Korea so inculcated with hatred of America, and with contempt for our open and democratic society, would live with us.

For now, I doubt we’ll make much progress with Russia or China at the U.N., though I think we should give it a token try. One additional provision that’s now worth asking for is an air and sea blockade in which only imports of food, non-luxury consumer goods, and humanitarian supplies should go through. But China and Russia would not agree to this, and I increasingly incline toward not wasting our political capital there. Instead, we should re-focus our diplomatic energy on progressive diplomacy to build a coalition outside of the U.N. to enforce existing U.N. sanctions and deny the North Korean regime the funds that sustain it. But is there still time? And more importantly, don’t Pyongyang’s escalations call for a reassessment of what sanctions are meant to achieve, and therefore the targeting strategy?

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The Moon-Trump Summit: Catastrophe averted, for now

Korea-watchers are relieved that the uniquely volatile combination of Moon Jae-In and Donald Trump did not cause a catastrophe at last week’s summit. If avoiding catastrophe was the objective, then mission accomplished, for now. But if the objective was to build trust between the two governments or resolve the thorniest issues between them, the two governments achieved little. They tabled the issue of THAAD and already have an emerging split on free-trade renegotiations. Difficult USFK cost-sharing talks lie ahead.

On North Korea policy, they agreed on “a phased and comprehensive approach using sanctions and dialogue,” which just about every pundit calls for, with significant variations in sequencing. They only agreed on Moon’s plans to “engage” North Korea in the vaguest possible terms:

The two leaders expressed deep concern about the well-being of the DPRK’s people, particularly in light of the egregious human rights violations and abuses committed against them by the government, and noted their intention to ensure sanctions have minimal impact on the DPRK’s vulnerable populations. President Trump expressed support for President Moon’s aspiration to restart inter-Korean dialogue on issues, including humanitarian affairs. The two leaders reaffirmed the importance of cooperating with the international community to hold the DPRK accountable for substantial progress on the deplorable human rights situation in that country. [Joint Statement of the U.S. and S. Korean governments, via the White House]

Interestingly enough, Yonhap’s version of this text contained some small-but-significant variations from the White House’s version:

The two leaders expressed deep concern about the well-being of the North Korean people, including the egregious human rights violations and abuses committed by the government, and noted their intention to ensure sanctions have minimal impact on North Korea’s vulnerable populations. President Trump supported President Moon’s aspiration to restart inter-Korean dialogue on issues including humanitarian affairs. The two leaders reaffirmed the importance of cooperating with the international community to ensure accountability and achieve substantial progress in North Korea’s deplorable human right situation. [Joint Statement of the U.S. and S. Korean governments, via Yonhap]

The phrase “issues including humanitarian affairs” is so vague as to be meaningless. It could mean anything from the exchange of baton-twirling teams to donating food aid to reopening Kaesong. Did the U.S. side agree to any such project that would violate U.N. sanctions, subsidize Pyongyang, and undercut the “maximum pressure” that Trump has just begun to apply in earnest? Almost certainly not, but Seoul may not understand it the same way.

The agreement has helped ease concerns about a possible mismatch in the allies’ approach toward the nuclear-armed North. It’s apparently one of the biggest accomplishments for Moon, a liberal president who took office in early May, in his first talks with Trump.

“With regard to our government’s resolve to resume South-North talks, it’s true that there was some burden from worries that it may undermine (international) sanctions on North Korea,” a government official said on the condition of anonymity. The summit deal, however, has dispelled such a view and laid the groundwork for the Moon government to push for its North Korea policy “with more confidence,” he added. [Yonhap]

Left-of-center South Korean pundits are still speaking of negotiating concessions for a freeze agreement, which the Trump administration has never expressed support for. It’s as if these pundits remain uninformed of the overwhelmingly negative U.S. reaction to Moon Chung-In’s trial balloons. 

Nor did the visit resolve U.S. concerns over Moon’s shifting positions on security issues. One very influential person in government said to me on the last day of Moon’s visit, “I’m very worried about this South Korean president.” This letter from 18 senators of both parties, asking President Trump to push for a quick deployment of THAAD, barely masks Congress’s concerns that Moon’s delay of the deployment pending an environmental review was pretextual.  Most amusing was Ambassador Nikki Haley’s episode of a politician accidentally telling the truth:

President Moon Jae-in has made “good strides” towards the United States and away from North Korea, and the communist nation is pushing the South Korean leader further away from it with a series of missile tests, U.S. Ambassador to the U.N. Nikki Haley said.

Haley made the remark during a House Foreign Affairs Committee hearing as she talked about the deployment of the U.S. THAAD missile defense system in South Korea, which Moon has suspended pending an environmental assessment.

“He has actually made good strides towards us and away from North Korea on many levels and, you know, those missiles that continue to be tested continue to push him the other way. I do think he was trying to slow-walk THAAD to see where it was going to be,” Haley said. [Yonhap]

Unfortunately for President Moon, there is another necessary party to that dialogue, and that party isn’t pleased with the outcome of the summit at all.

North Korea on Sunday condemned the South for what it called Seoul’s “submission to the U.S.,” as leaders of the two countries joined their voices last week in urging Pyongyang to give up its nuclear ambition.

The Rodong Sinmun, the North’s main newspaper, published a commentary that assessed Seoul’s senior officials as having “revealed their miserable appearance seized with sycophancy and submission to the U.S. occasioned by the chief executive’s first junket to the U.S.,” referring to South Korean President Moon Jae-in’s recent first trip to Washington.

The newspaper argued that albeit talks of alliance between the two sides, the U.S. “regards them (South Korea) as a mere puppet and colonial servant.”

The Rodong Sinmun further lashed out at the new Seoul administration, saying that its senior leadership would end up “into the rubbish heap of history” if the South “yields to the U.S” while antagonizing the North. [Yonhap]

Even mentioning the well-being of the North Korean people and their “deplorable human rights situation” was sure to quake Pyongyang into a volcanic rage. Pyongyang also unleashed this angry screed at Moon’s Foreign Minister, Kang Kyong-Hwa, calling her a “dolt.” 

More fundamentally, there is an unbridgeable gap between the forms of engagement that Washington and Pyongyang would both accept. Washington’s consent is not only necessary because it is Seoul’s main security guarantor, but because it holds a vote in the U.N. Security Council and the U.N. committee that must agree to any “public or private support for trade” with North Korea, such as at Kaesong. And while Trump’s smart move would be to support Moon’s pursuit of forms of engagement that do not undercut sanctions — such as revenue-neutral athletic and cultural exchanges, and the donation of food and medicine in-kind to relieve the suffering of the North Korean people — Pyongyang has made it clear that it does not want those things; it wants cash and sanctions relief.

Worse, as tomorrow’s post will detail, Pyongyang has begun behaving like a nuclear hegemon with a right to make decisions about matters of governance inside South Korea itself. 

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Commence Primary Ignition: Treasury zaps the Bank of Dandong for laundering Kim Jong-Un’s money

And so, the “maximum pressure” we’ve been waiting for begins in earnest. Yesterday afternoon, the Treasury Department announced a series of legal actions against Chinese enablers of North Korea’s proliferation, smuggling, and money laundering. First, Treasury’s Office of Foreign Assets Control froze the assets of two businessmen and a shipping company. One of those businessmen, Sun Wei, was the sole shareholder of Mingzheng International Trading, the Chinese company targeted in this recent civil forfeiture action. The shipping company was sanctioned for smuggling luxury goods to North Korea, in violation of UN sanctions.

The more potentially significant action, however, was  Treasury/FINCEN’s action against a Chinese bank. The target was the Bank of Dandong, and the weapon was 31 U.S.C. 5318A(b)(5), otherwise known as the Fifth Special Measure of Section 311 of the Patriot Act — the same provision used against Banco Delta Asia in 2005. The action effectively makes the BoD a global pariah and cuts it off from the financial system.

[Alderaan shot first.]

Interestingly enough, if you had asked me to pick just one Chinese Bank to make an example of, I would have named the Bank of Dandong. Yes, the Bank of China was the most flagrant violator, but a large bank calls for a different strategy (which I’ll discuss below). Based on the open-source evidence, it was the BoD that had the most integration into Pyongyang’s palace economy. This 2013 report documented its ties to US- and UN-sanctioned Korea Kwangson Bank (KKBC). This report from early 2016 indicates that Chinese merchants trading with North Korea (temporarily) shifted away from the Bank of Dandong after the U.N. Security Council passed Resolution 2270. A few months later, the Justice Department indicted a Chinese company, Dandong Hongxiang Industrial Development, for laundering money for KKBC through 12 Chinese banks, including the BoD. Just a few days before, the Center for Advanced Defense Studies had revealed that DHID had an equity stake in the BoD.

To this body of evidence, the Treasury Department now adds a Notice of Proposed Rulemaking to support the 311 action. Treasury accuses the BoD of facilitating money laundering by trading companies that are fronts for North Korean banks and agencies designated for proliferation. Sorry for the long money quote, but it’s all worth reading:

Bank of Dandong serves as a gateway for North Korea to access the U.S. and international financial systems despite U.S. and UN sanctions….  For example, as of mid-February 2016, North Korea was using bank accounts under false names and conducting financial transactions through banks located in China, Hong Kong, and various southeast Asian countries. The primary bank in China was Bank of Dandong.

In early 2016, accounts at Bank of Dandong were used to facilitate millions of dollars of transactions on behalf of companies involved in the procurement of ballistic missile technology. Bank of Dandong also facilitates financial activity for North Korean entities designated by the United States and listed by the United Nations for WMD proliferation, as well as for front companies acting on their behalf.

In particular, Bank of Dandong has facilitated financial activity for Korea Kwangson Banking Corporation (KKBC), a North Korean bank designated by the United States and listed by the United Nations for providing financial services in support of North Korean WMD proliferators. As of May 2012, KKBC had a representative embedded at Bank of Dandong. Moreover, Bank of Dandong maintained a direct correspondent banking relationship with KKBC since approximately 2013, when another Chinese bank ended a similar correspondent relationship. As of early 2016, KKBC maintained multiple bank accounts with Bank of Dandong. 

Bank of Dandong has also facilitated financial activity for the Korea Mining Development Trading Corporation (KOMID), a U.S.- and UN-designated entity. As of early 2016, a front company for KOMID maintained multiple bank accounts with Bank of Dandong. The President subjected KOMID to an asset blocking by listing it in the Annex of Executive Order 13382 in 2005, and the United States designated KOMID pursuant to Executive Order 13687 in January 2015 for being North Korea’s primary arms dealer and its main exporter of goods and equipment related to ballistic missiles and conventional weapons.

FinCEN is concerned that Bank of Dandong uses the U.S. financial system to facilitate financial activity for KKBC and KOMID, as well as other entities connected to North Korea’s WMD and ballistic missile programs. Based on FinCEN’s analysis of financial transactional data provided to FinCEN by U.S. financial institutions pursuant to the BSA as well as other information available to the agency, FinCEN assesses that at least 17 percent of Bank of Dandong customer transactions conducted through the bank’s U.S. correspondent accounts from May 2012 to May 2015 were conducted by companies that have transacted with, or on behalf of, U.S.- and UN-sanctioned North Korean entities, including designated North Korean financial institutions and WMD proliferators.

In addition, U.S. banks have identified a substantial amount of suspicious activity processed by Bank of Dandong, including: (i) transactions that have no apparent economic, lawful, or business purpose and may be tied to sanctions evasion; (ii) transactions that have a possible North Korean nexus and include activity between unidentified companies and individuals and behavior indicative of shell company activity; and (iii) transactions that include transfers from offshore accounts with apparent shell companies that are domiciled in financial secrecy jurisdictions and banking in another country. [FINCEN NPRM]

For a brief discussion of the BoD’s rights to challenge this action before it officially becomes final in 60 days, see this post. The Bank of Dandong can’t say it wasn’t warned; in its notice, Treasury cites its November 2016 regulation at 31 C.F.R. 1010.659, calling on banks to exercise enhanced due diligence with regard to North Korean customers, and to deny North Korean banks direct or indirect access to the financial system. That regulation was promulgated to implement Treasury’s designation of North Korea as a jurisdiction of Primary Money Laundering Concern in November, which in turn was in response to section 201 of the North Korea Sanctions and Policy Enhancement Act, which effectively forced Treasury to make that designation.

Naturally, the principal congressional leaders behind passing the law that led to this result welcomed Treasury’s decision. Rep. Ed Royce (R-CA), chairman of the House Foreign Affairs Committee called the action “a big step,” adding, “The administration is right to target any around the world who act as financial lifelines to Kim Jong-un, and to give them a clear choice: You can do business with North Korea or with the U.S., but not both.” Royce also called on the Senate to pass his KIMS Act. Senator Cory Gardner (R-CO) issued a statement applauding the action and calling it long overdue.

It’s hard to believe that it was a complete coincidence that Treasury took this action while Moon Jae-In was in town. The message thus sent is that the U.S. and South Korea must be aligned on sanctions enforcement. We cannot have a repeat of 2005, when South Korea undermined the sanctions the U.S. imposed (Roh Moo-Hyun opened Kaesong, which became a $100-million-a-year subsidy for Kim Jong-Il, just as the Banco Delta Asia sanctions were achieving their effects). Someone in the White House clearly understands that we cannot make a coherent policy of sanctioning and subsidizing the same target at the same time. Treasury Secretary Steven Mnuchin emphasized that yesterday’s action was directed at North Korea, not China, and expressed the hope that China would “continue to work with us” to pressure North Korea.

So noted.

What should we watch for next? First, for North Korean money men to step up their bulk cash smuggling game, or shift to non-dollar currencies or trade-based money laundering as sanctions dodges. The excellent Noon in Korea Twitter feed, for example, points to a Korean-language report that authorities in Vladivostok have seized bulk cash from North Korean money launderers who are apparently having trouble sending wire transfers (an increasingly rare case of Russia enforcing sanctions). Interestingly, Treasury says that BoD also maintains “euro, Japanese yen, Hong Kong dollar, pound sterling, and Australian dollar correspondent accounts that would not be affected by this action.” That’s why it will be important for State and Treasury to engage in some good financial diplomacy to get those third-country regulators to blacklist the BoD under their own authorities.

Also, look for the “death spiral” — North Korean money launderers who defect because they can’t pay their kick-up quotas because of sanctions, who then provide us more intelligence, leading to yet more sanctions. Rinse and repeat. (We might as well put out the word now that they’ll get better living arrangements if they bring their ledgers and laptops.) For a fascinating interview of one of those money launderers who defected after the Jang Song-Thaek purge, read this. North Korean money launderers’ fear of coming home to Pyongyang short-handed may be one of our intelligence agencies’ best tools to be a major player in the sanctions game. For reasons I explained here, that death spiral could pose a serious threat to the survival of the regime.

We should also watch for local regulators stepping in to take over the Bank of Dandong to prevent a run and shield other local banks from secondary effects. We should look for more reports that other Chinese banks are closing North Korean accounts. We should also look for correspondent banks in the United States to raise their scrutiny of Chinese banks that try to clear dollar transactions on behalf of suspicious or poorly documented customers. If FINCEN plays its cards right, Chinese banks that don’t step up their compliance game may find it difficult to clear their transactions. For more on how EU and New York state regulators have applied similar strategies, see this post.

Finally, we should look for China to send more mysterious convoys to North Korea and engage in conspicuous sanctions violations to deter any more actions by Treasury. We must be prepared to escalate in kind. Chinese retaliation may be Trump’s excuse to do what some in his administration have wanted to do all along — hit China with, say, steel tariffs. Fortunately, Trump has backed off from a threat to withdraw from NAFTA. And needless to say, the worst possible time to drop or renegotiate the Free Trade Agreement with South Korea is when China is bullying it with unilateral trade sanctions. After all, you can’t wage a trade war with everyone at once. If you trade less with China and you aren’t willing to eat a recession, you have to trade more with someone else. Given that most of the economies that compete with China as providers of low-wage labor or high-technology manufacturing (or both) are in East Asia, Trump should consider making some face-saving changes to the Trans-Pacific Partnership and reviving it as part of a long-term plan to encourage an emigration of manufacturers from China to friendlier venues in Southeast Asia and Japan. While I’m not a fan of protectionism, Xi Jinping’s behavior in the South China Sea, North Korea, and Hong Kong has also convinced me that “peaceful rise” is a self-serving delusion, and that our economic interest in robust trade with China is outweighed by the threat that we’re selling Xi the rope to hang us with.

We also need a strategy for banks like the Bank of China that may think they’re too big to sanction. The Bank of Dandong is expendable, but the Bank of China is not. Unlike the Bank of Dandong, however, the Bank of China has deep links to the U.S. financial system, is under pressure from the Chinese Finance Ministry to improve its anti-money laundering compliance, and has a branch in New York (which regularly checks in on this humble blog for … for posts like this one, I suppose). The better approach for Treasury, then, would be to use FINCEN to treat the BoC’s North Korea ties as an anti-money laundering compliance problem and, in the event the feds smell something fishy, issue subpoenas with a mind toward doing to the BoC what it did to BNP Paribas — impose heavy fines and a deferred prosecution agreement for data stripping and flunking Know-Your-Customer obligations. That is to say, there is no such thing as “too big to sanction,” merely different strategies for different targets. Another advantage of a deferred prosecution agreement, of course, is that it can force a bank to cooperate by providing financial intelligence — intelligence the feds can use to take action against other targets.

Some of these effects should be evident within the next week or two. The effects that matter most, however, are on the stability of the North Korean system. To have any chance at all for a negotiated denuclearization of North Korea, we will have to force the regime to choose between its nukes and its survival. My guess is we’ll see effects of that kind within a year or two if — and only if — we continue to press the financial, law enforcement, and diplomatic campaign needed to starve the regime of funds.

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N. Korea just threatened to kill S. Korea’s ex-president & any of its critics anywhere

Here at OFK, we collect small bits of North Korea trivia, such as the fact that President Bush removed North Korea from the list of state sponsors of terrorism on October 11, 2008, and the related fact that the State Department’s official position is that North Korea has not sponsored acts of terrorism since 1987.

Discuss among yourselves.

In other news, the official North Korean “news ” agency, KCNA, has just published a call by the North Korean government for the extradition of former South Korean President Park Geun-Hye and the former head of South Korea’s National Intelligence Service to Pyongyang, where it has been decided, in absentia, that they are to receive “capital punishment” over an alleged plot to assassinate Kim Jong-Un.

1. We declare at home and abroad that we will impose death penalty on traitor Park Geun Hye and ex-Director of the puppet Intelligence Service Ri Pyong Ho and their groups, criminals of hideous state-sponsored terrorism who hatched and pressed for the heinous plot to hurt the supreme leadership of the DPRK.

Further on, I’ll examine how North Korea defines terrorism, but it may be helpful to begin with a more rigorous and predictable definition. For an act to be terrorism under U.S. law, it must —

  1. be unlawful under the laws of the place where it is committed;
  2. involve a violent act; an act dangerous to human life, property, or infrastructure; or a threat of such an act;
  3. be perpetrated by a subnational group or clandestine agent;
  4. be directed against a noncombatant target; and
  5. 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.

Although this definition is based on American law and precedent, most civilized nations define the term in similar ways. (Good luck finding an internationally agreed definition of terrorism, for reasons that should be obvious.) Also, that Ms. Park has been found guilty and sentenced to death in absentia without so much as prior notice of a trial might raise a procedural concern or two for the extradition hearing.

Just as I predicted, as Pyongyang perfects its nuclear capability, it is growing more aggressive and more extraterritorial with its threats (in this case, through the use of journo-terrorism).

IS men, to say nothing of Park Geun Hye and Ri Pyong Ho group, can never make any appeal even though they meet miserable dog’s death any time, at any place and by whatever methods from this moment.

The south Korean authorities should hand Park Geun Hye and Ri Pyong Ho group, organizers of the hideous international terrorist crimes, over to the DPRK without delay under international convention and laws and regulations.

The south Korean authorities have to judge themselves what adverse effect their act of shunning this crucial demand related to the dignity of the supreme leadership of the DPRK will have on the future north-south relations.

But KCNA does not stop here. It also threatens to “ferret out” Park and Ri “wherever they might be on the earth” and “mercillessly cut their dirty bodies to pieces.” 

The supreme leadership of the DPRK is a symbol of the dignity and might of the DPRK and it represents the life and destiny of the army and people of the DPRK.

It is the resolute will of our army and people regarding it as their life to safeguard the headquarters of the revolution to ferret out those keen on hurting the security of the DPRK supreme leadership wherever they might be on the earth and mercilessly cut their dirty bodies to pieces.

Clearly stipulated in the DPRK Criminal Code is that all those who organized, took part or pursued state-sponsored terrorism targeting the supreme leadership of the DPRK are subject to criminal prosecution irrespective of nationality and that no statute of limitations is applicable to such crime.

Just to be clear, then, Pyongyang is threatening to send its agents to South Korea to murder and dismember the former president of the Republic of Korea. And as you know by now, because you’ve stopped to read the links with which I’ve laboriously braced this argument, North Korea has sent assassins to commit murders in the South before. They’ve been caught and pled guilty in South Korean courts.

We officially declare that if the U.S. and the south Korean puppet forces again attempt at state-sponsored terrorism against the supreme leadership of the DPRK, we will track down those who organized, took part in and pursued the plot and carry out the summary execution of them without advance notice under wartime law.

But at least Pyongyang is only threatening those who take part in or plot “attempt[s] at hideous state-sponsored terrorism targeting the supreme leadership of the DPRK.” Except that on further research, we soon learn that North Korea has defined “terrorism” and “state-sponsored terrorism” to include everything from parody to criticism to legislation to the enforcement of UN sanctions. My  search of news reports, the S.T.A.L.I.N. archive, and the excellent KCNA Watch Twitter feed yielded the following examples:

  • In 2014, Pyongyang accused the United States of “agitating terrorism” for allowing Seth Rogen to make “The Interview,” a stupid movie parodying His Porcine Majesty.
  • In July 2016, it accused South Korea of terrorism for granting asylum to the Ningpo 12, as it was obligated to do under the Refugee Convention.
  • In March of this year, it accused Seoul of terrorism for alleged surveillance and blacklisting of its domestic political opponents — something that would be authoritarian and worthy of condemnation by someone with more stature that the government of North Korea on such topics, but would not qualify as terrorism (the acts are not violent, and to not appear to be intended to influence the conduct of civilians through intimidation).
  • In May, it called defensive military exercises and sanctions (presumably including those approved by the U.N. Security Council) terrorism.
  • In June, it accused the CIA and the South Korean National Intelligence Service of “state-sponsored terrorism” for allegedly planning preemptive strikes against North Korea (which would be an act of war by uniformed, conventional forces and a catastrophically terrible idea, but not terrorism).
  • At other times, it’s hard to tell what Pyongyang is even calling terrorism.

My guess, however, is that the specific pretext for Pyongyang’s latest threat is its claim from May 13th, that the CIA and the NIS “hatched a plot to commit a state-sponsored terrorism targeting the supreme leadership of the DPRK by use of bio-chemical substance.” Now, to state the obvious, I am … skeptical of this claim. I could cite many examples of Pyongyang lying flagrantly, but the most obvious one is its claim that the NIS kidnapped the Ningpo 13 (because that claim was tested in court and rejected, or so we can safely assume despite the confidentiality of the proceedings, because the women were granted asylum). The alleged modus operandi also sounds suspiciously like Pyongyang’s own assassination of Kim Jong-Nam, news of which spread rapidly inside North Korea and shocked even North Koreans. Now, with the rising reaction to the death of Otto Warmbier, Pyongyang might be projecting to change the subject.

For the sake of argument, however, let’s assume that Pyongyang’s allegation is true. If so, a plot to slime His Porcine Majesty with some toxin might qualify as terrorism under certain circumstances. The North Korean allegation suggests a violent act that could only be perpetrated by clandestine agents, so assume we meet those elements. If the alleged attack was meant to disrupt a military command structure during hostilities it would not meet the intent element, but let’s assume that this was to be a political murder by stealth. This might qualify, except that Kim Jong-Un isn’t a noncombatant; he’s the commander of North Korea’s military junta. So the merits of the “terrorism” claim would depend on whether this alleged plot was to be carried out for strictly political purposes or to disrupt military command and control as part of an armed conflict. (Suspend your disbelief that North Koreans would be terrorized, as opposed to ebullient, as the demise of His Porcine Majesty.) Of course, as peace treaty advocates point out unceasingly, North Korea is technically still at war with both the United States and South Korea. As they tend not to point out so unceasingly, Pyongyang itself as repeatedly repudiated the 1953 Armistice.

For the same reason, it wouldn’t be terrorism (but would be an act of war) if Pyongyang assassinated Moon Jae-In for the purpose of disrupting South Korea’s military command structure in the course of armed hostilities. It would certainly be terrorism if Pyongyang made good on its threat to assassinate Park Geun-Hye, who is now a private citizen, in her own home. Furthermore, it is also terrorism to threaten to assassinate Ms. Park, and it’s most likely terrorism when Pyongyang says this:

Whether such crime is committed within the territory of the DPRK or outside it, we will mercilessly carry out the punishment in the name of our people in field by our style merciless punishment measure.

We make it clear once again that those who dare challenge the dignity of the supreme leadership of the DPRK should never hope of staying alive under the sky.

We do not hide that should the U.S. and the south Korean authorities defy this warning and challenge our resolute measure, they will be made to pay a dear price in an irresistible physical way.

Those dare challenging the sun of the sky can never evade divine punishment.

Pyongyang appears to be claiming the right to kill any person in any place of its choosing, for conduct that it defines broadly enough to cover anyone from a stoner filmmaker to the Secretary of Defense to a human rights activist to the Chairman of a Committee of Congress. What it all sounds like more than anything else is a pretext for the next unconscionable, murderous outrage Pyongyang is already premeditating, and that it will subsequently get away because it always gets away with everything. As Professor Lee and I predicted before and after the Sony cyberterrorist threat, our failure to respond to North Korea’s attacks on our freedom of speech would draw more and bolder attacks on our freedom of speech. That prediction is coming true. To a small but growing degree, we are all living under the shadow of Kim Jong-Un’s censorship. In that small, yet profoundly disturbing way, we are all North Koreans now.

And so, I am left to ask this: if North Korea holds our political system in contempt and means to disrupt it, why don’t we show more determination and creativity in disrupting North Korea’s own political system? With North Korea’s refusal to negotiate or coexist peacefully, and the madness of war, our options for averting nuclear war in Korea increasingly narrow down to empowering the North Korean people to end Kim Jong-Un’s misrule. What else is even remotely plausible now? And whatever the cost, if Kim Jong-Un must die so that freedom of speech can live, I know what choice I’d make.

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China finally pays a (symbolic) price for its North Korean slave trade

This blog has long posited that a nuclear North Korea will not coexist with us and that war with it would be inevitable; that preventing another Korean War will require a focusing an assortment of financial, diplomatic, and political pressures on Pyongyang; and that to deter China’s government and industry from undermining that pressure will require us to pressure China itself. This will carry costs for both economies, and to the relationship between the two governments. Relations with China will have to get worse before they can get better. That is unfortunate, but it is a far better outcome than nuclear war, the collapse of global nonproliferation, or effective North Korean hegemony over South Korea.

Since the Mar-a-Lago summit in April, I’ve worried that President Trump’s tough talk about secondary sanctions against Kim Jong-Un’s Chinese enablers was a bluff. It’s still too early to say that it wasn’t, but the news that Secretary of State Rex Tillerson has dropped China from Tier 2 to Tier 3 under the Trafficking Victims Protection Act — specifically for its use of North Korean slave labor — is a welcome sign that the administration has begun (and hopefully, just begun) to escalate its pressure on Beijing.

“China was downgraded to the Tier 3 status in this year’s report in part because it has not taken serious steps to end its own complicity in trafficking, including forced laborers from North Korea that are located in China,” Tillerson said during a ceremony to release the report.

Tillerson said that forced labor is a key source of illicit revenues for the North.

“An estimated 52,000-80,000 North Korean citizens are working overseas as forced laborers primarily in Russia and China, many of them working 20 hours a day. Their pay does not come to them directly. It goes to the government of Korea, which confiscates most of that, obviously,” Tillerson said.

The North regime receives hundreds of millions of dollars per year from forced labor, he said.

“Responsible nations simply cannot allow this to go on and we continue to call on any nation that is hosting workers from North Korea in a forced-labor arrangement to send those people home. Responsible nations also must take further action,” he said. [Yonhap]

Tillerson’s decision reflects rising anger within the administration that Beijing is (sit down for this) still not fully implementing U.N. sanctions against North Korea.

So what does this action mean for China’s economy and trade, in practical terms? For now, not much. Beijing probably doesn’t care if the U.S. denies it foreign assistance or votes against World Bank loans for it. Any of the TVPA’s sanctions can be waived, and often are. But as Erik Voeten writes in the Washington Post, governments really do care about their tier rankings for reasons of national honor and reputation. I don’t think I’m speaking out of school by saying that during my time at the Foreign Affairs Committee, the competing appeals of diplomats and NGOs to raise or lower a government’s tier status in the next TVPA report consumed an inordinate amount of staff time. The Chinese government, being hypersensitive about its own reputation, will care very much about this.

In Beijing, foreign ministry spokesman Lu Kang said the government was resolute in its resolve to fight human trafficking and the results were plain to see. “China resolutely opposes the U.S. side making thoughtless remarks in accordance with its own domestic law about other countries’ work in fighting human trafficking,” he told a daily news briefing. [Reuters]

Beijing is furious, naturally. I expect it to make some ostentatious displays of non-cooperation to punish Washington. It would be especially tragic if China decides to take its anger out on North Korean refugees. Hopefully, the State Department has already gamed out its responses to potential Chinese escalations. Our message to Beijing must be that we’re also prepared to escalate. China, which needs another decade of high growth rates to pay its coming crop of pensions, cannot afford this. Both sides would suffer in an economic war between the U.S. and China, but China’s export-dependent, labor-intensive economy and fragile banking sector would suffer more. That may give us more leverage to press China to expel its North Korean laborers or the U.N.-designated North Korean proliferation and money laundering networks that have operated openly on its soil for years.

The Chinese companies using the North Korean labor will care much less — at first — but they are facing far greater financial consequences, especially if the KIMS Act passes the Senate. (I sense a particularly strong appetite in both chambers of Congress and both parties for secondary sanctions against North Korean forced labor.) Under section 201 of that legislation, the products of those companies may face exclusion from U.S. markets, and their dollar assets may be frozen. (Needless to say, prospective Kaesong recidivists will not find this news reassuring.)

Dropping China to Tier III will have little immediate legal or economic effect. It still isn’t the “maximum pressure” President Trump promised us. It is an escalation and a warning. It is symbolic, but powerfully so. Ultimately, Beijing may care about being listed as Tier III for human trafficking for the same reason that Pyongyang cares about being listed as a state sponsor of terrorism — because to governments obsessed with their images, symbols can be powerful things. One hopes that this will cause more Chinese citizens to see that North Korea is a ball-and-chain on their country’s acceptance into the family of civilized nations and continued economic growth. One hopes that more of them will say that it’s time to take a hacksaw to the chain.

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Five North Koreans, including two soldiers, have defected in June 2017 (so far)

Nat Kretchun’s latest report on Pyongyang’s efforts to control the spread of outside and subversive information suggests that the state has mostly written off its thirty- and forty-somethings as a lost generation, irrecoverably disillusioned by the collapse of the state’s rationing system, corruption, and the influx of South Korean DVDs. Instead, Kim Jong-Un is focusing his War on Glasnost on the detection of cellular signals and the watermarking of digital files to control the spread of dissent. Demographically, he is concentrating his indoctrination efforts on the younger generations. But judging by a small surge of north-to-south defections this month, the Propaganda and Agitation Department has some work to do.

  • On June 8th, a fishing boat drifted across the maritime boundary with four men aboard. As noted in this post, two opted to defect to the South.
  • On June 14th, less than a week later, a soldier walked through the mine fields of the DMZ in Gyeonggi-do, not far Kaesong, generally thought to be the place where Pyongyang puts its most disciplined forces. According to this Korean-language report, South Korean loudspeaker propaganda was a factor motivating his defection. South Korea expanded the use of the loudspeakers in February, to inform the North Korean soldiers of the assassination of Kim Jong-Nam.
  • On June 18th, a man in his 20s swam across the Han River estuary using styrofoam floats. Contra UPI, which reported that the man was a soldier, NK News’s Hamish Macdonald thinks the man was a civilian (though he does not specify in his report).
  • On June 23rd, another soldier walked through the minefields of the DMZ to defect, this time in the central sector (so presumably somewhere in the vicinity of Cheorwon).

Thanks to Hamish Macdonald for pointing out that, contra this tweet, the number of defections this month is five, not six (one of the incidents I linked here turns out to have been from 2015 — duh).

For an aggregation of other reports of North Korean military defections or disciplinary problems, click here. Collectively, the reports suggest that Pyongyang is having difficulty maintaining the discipline and cohesion of its forces along both borders, and across the whole length of the DMZ. When discipline erodes sufficiently in an area, there are small surges of defections there (admittedly, two defections may not qualify as a surge). The regime then sends inspection teams in to crack down and rotates new units in to reverse the decay. It usually works … for a year or two. Then, corruption starts to take its toll and the cycle repeats.

Any defection from a front-line until along the DMZ is telling. For at least two to occur in the space of nine days says that even in the North Korean army’s best regular units, discipline is uneven. (The qualifier “regular” distinguishes them from the North Korean Special Forces, who are the most cohesive.)

The June 14th incident suggests that information operations have the potential to catalyze more dissent. So does the fact that Pyongyang made the termination of the loudspeaker propaganda broadcasts a top demand for “resolving” that incident suggests. Pyongyang is deathly afraid of subversive broadcasts. All of which suggests that they may be one of the South’s most effective deterrents. I’ve previously taken a skeptical view of the loudspeaker broadcasts. I may have to reevaluate that skepticism.

Unfortunately, these factors almost guarantee that Moon Jae-In won’t use the information weapon, at least until Pyongyang commits some egregious provocation. Too bad. The message Seoul should deliver to the soldiers is a message of peace. That message would offend Pyongyang, but it would also help to protect the lives of Koreans on both sides of the DMZ by mitigating the threat of war.

First, the broadcasts should urge the soldiers to refuse orders to kill their brothers and sisters in the South. Naturally, their officers will tell them that they’re firing on Yankee Bastards. The soldiers should know that their targets are more likely to be South Korean cities — and the men, women, and children who live in them. Targeting them is a crime against both the law and the nation itself. And by firing on targets in the South, they will also draw counter-battery fire. The best way to prevent both consequences is to quietly disable their weapons or intentionally miss their targets (they can be provided the coordinates of unpopulated areas to target instead).

Or, we can tell them how to cross the minefields to the South, where rice, peace, and freedom await.

~   ~   ~

Update: See Hamish Macdonald’s updated post for a statement by the ROK government confirming that the June 18th defector/refugee was a civilian.

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Pyongyang’s freeze gambit is a transparent pre-summit ploy.

I’m going to give the reports that North Korea’s Ambassador to India floated the idea of negotiations for a freeze deal all they attention they deserve. The proposal, such as it is, came during an English-language interview with a local journalist.

First, the proposal is an obvious ploy to divide the U.S. and South Korean governments just before Moon Jae-In’s visit to Washington. (As I noted yesterday, that visit already looks to be a difficult one.) Even Moon Jae-In appears to see through this ploy, urging his people not to read too much into it. A secondary purpose is to manipulate the usual suspects in the left-of-center, Libertarian, and far-right commentariat* into writing a flurry of pro-appeasement op-eds.

Second, several of the phrases conveyed with the proposal have the potential to make it illusory, including, “we can negotiate in terms of,” “under the right circumstances,” and especially, “if our demands is [sic] met.”

[Such as?]

Third, if Pyongyang is willing to freeze or dismantle its nuclear or missile programs, why did its Foreign Ministry representatives so recently tell Bruce Klingner and Sue Terry (among others) that it isn’t? That Pyongyang did not convey its proposal directly to the Americans during recent Track 2 talks suggests that it didn’t want to answer obvious questions about “circumstances” and “demands,” and that the proposal is spurious.

Fourth, even if a freeze agreement can be reached before the U.S. gains a persistent source of leverage over Pyongyang, how long would it be before the North Koreans renege again? The sine qua non of successful diplomacy with Pyongyang (if that’s still possible at all) is leverage.

If nothing else, a ploy this transparent should advance our recognition of how Pyongyang sees diplomacy, and what it really thinks diplomacy is for. The U.S. and South Korean position should be that if Pyongyang is serious about meeting the obligations it has undertaken — and broken — again, and again, and again, it knows how to contact the U.S. and South Korean missions at the U.N. After all, it knew how to contact Nikki Haley when it decided to dump the soon-to-be-lifeless body of Otto Warmbier.

~   ~   ~

* Update: To give you an idea of what strange bedfellows North Korea makes, see this blog post at David Duke’s website, approvingly reprinting a Bruce Cumings op-ed in full. Yes, Professor Cumings knows. I emailed him to confirm it.

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Moon Chung-In’s visit was a fiasco. Moon Jae-In’s summit with Trump might be the next one.

Next week, South Korean President Moon Jae-In will arrive in Washington for his first meeting with President Trump. North Korea policy is certain to be at the top of their agenda. Months ago, I predicted that the combination of Moon Jae-In and Donald Trump would be a uniquely volatile one, and all the indications so far are bearing this prediction out. Volumes of august and cerebral analysis may soon be nullified by 140 characters.

This is partially (but only partially) due to differences of policy and ideology. As I’ve noted more than once, Moon has spent his entire political career in the brain trust of South Korea’s hard left, among those who’ve shown more solidarity with North Korea than with America. Moon started with the left-wing lawyers’ guild Minbyun (which once resisted right-wing dictators in the courts, and which has since become Pyongyang’s instrument for waging lawfare against North Korean refugees). He was legal advisor to the Korea Teachers’ and Educational Workers’ Union, whose members were often exposed for propagating pro-North Korean views to their pupils. He managed Roh Moon-Hyun’s presidential campaign, which rode to power on a wave of sometimes-violent anti-Americanism, and served at the highest levels in the Roh administration, where Moon made the decision to solicit Pyongyang’s views before Seoul abstained from a U.N. vote to condemn the North’s crimes against humanity (and later lied about it).

Thus, President Moon entered office with a collection of ideas and advisors whose moment came in 2002 and went in 2008, when South Korea’s electorate regressed back to the mean. As Moon entered office, he knew very well that he had no mandate for a return to a policy of appeasing North Korea called Sunshine, a policy that was a demonstrable failure, that had undermined international sanctions, and that probably helped Pyongyang pay for its nuclear arsenal

That Trump and Moon are also temperamental opposites may be just as great a problem. Whatever one thinks of Moon Jae-In’s ideology, he is an extraordinarily smooth, personally likeable politician. Throughout his career, Moon had climbed the shoulders of men who expressed extreme views that he was careful not to express himself. Trump, by contrast, is an impulsive man without ideological convictions or caution, who expresses every extreme idea that enters his head, whether it be direct talks with Kim Jong-Un or urging China to assassinate him. 

Since I was a soldier in Korea years ago, I’ve felt that the interests of the allies were diverging. For years, rather than confront and try to check this divergence, the leaders of both countries concealed it with quiet diplomacy that left South Korean politicians free to engage in nationalist demagoguery, even at the sacrifice of the alliance’s popular support. But in this regard, the United States has just unexpectedly overmatched South Korea. That is why, unlike most Korea-watchers, I suspect that the U.S.-Korea alliance is one tweet away from a crisis that will harm the interests of both countries. Recent events bear out my pessimism:

U.S. President Donald Trump expressed fury over South Korea’s decision to delay the full deployment of the U.S. THAAD missile defense system pending an environmental assessment, a senior official said Sunday. Trump showed the reaction when he discussed the matter with Secretary of State Rex Tillerson and Defense Secretary Jim Mattis at the White House on June 8, the official told Yonhap News Agency on condition of anonymity.

The revelations, if true, raise concern that the issue could affect the first summit meetings between President Moon Jae-in and Trump set for June 29-30 at the White House, though it is not clear if it would be on the agenda.

Earlier this month, South Korea suspended the deployment of an additional four THAAD launchers pending an environmental assessment, spurring doubts in the U.S. that the halt might be a precursor to the South ultimately rejecting the THAAD deployment altogether. But Seoul has promised the environmental study won’t lead to a reversal on the deployment itself. [Yonhap]

Moon’s position on THAAD shifted so much during his presidential campaign that it became all but impossible to pin it down in a debate. That’s certainly a function of public sentiment that still favors the deployment of THAAD, even (incredibly enough) after Trump’s ill-advised, pre-election demand that Seoul pay for it. And while I have little sympathy for Moon’s ideology, I have plenty of sympathy for his position. He now finds himself bullied by both China’s unilateral sanctions and Donald Trump’s extortionate demands that Seoul pay for THAAD, notwithstanding a prior agreement that the U.S. would pay, at least up front. That Moon finds himself in that position, however, owes much to his flawed reflex for trying to please everyone (which seldom pleases anyone). In doing so, Moon has created the perception in Beijing that he’s weak, soft, and an easy mark, and the perception in Washington that he’s a faithless ally. I can see the reason for both perceptions. (To make matters worse for Moon, even the North Koreans are unhappy with him, have refused Seoul’s offers of humanitarian aid, and want to sideline him in any talks with the U.S.)

By the time Moon took office, two THAAD launchers were in place and four others were set to be deployed. All of this had been agreed between the Pentagon and the Ministry of Defense, yet in what looked like an effort to manufacture a controversy to manipulate public opinion — a preparation for a capitulation to Beijing — Moon denied knowing this. Any such miscommunication looks to have been wholly intra-Korean, between the Blue House and the Defense Ministry. This gambit having backfired, the Moon administration began an “environmental review” of the deployment that looked suspiciously pretextual. His administration later added that the review might take as long as a year. All of these missteps cost Moon friends in the White House.

“One official at the National Security Council told me that there is a general distrust toward the Korean government in the United States, that the new administration may be lying,” said a diplomatic insider in Washington D.C. under condition of anonymity, especially after Moon complained that Washington had deployed four missile launchers for the Thaad battery without informing his government. “The U.S. government has confirmed that the South Korean government was aware of the arrival of the four additional Thaad launchers all this time.”

Moon had ordered last month an investigation into how four extra Thaad launchers had been brought into the country without his knowledge. The Blue House said earlier this month that the Ministry of National Defense intentionally omitted the delivery of the launchers in its report to the National Security Office. [Joongang Ilbo]

Now, instead of being able to blame any fissures in the alliance on a mercurial American president, Moon has irritated Ed Royce (possibly the best friend South Korea ever had in Congress), provoked a public spat with Democratic Senator Dick Durbin, and alienated key senators and representatives from both parties:

Meetings between President Moon and members of the U.S. Congress also fell through recently. Senator John McCain, chairman of the Senate Committee on Armed Services, had requested a meeting with Moon sometime between May 27 and 28, but the meeting was not scheduled after days of attempts.

“The date that McCain asked for did not work with Moon’s schedule initially, so we got back to him in a few days about holding a meeting on May 28, as he requested, but McCain in the end decided not to stop by Korea in his trip to Asia for the IISS Shangri-La Dialogue.” “The correct protocol would have been confirming first that Moon will meet with McCain before scheduling a date,” said a Foreign Ministry insider.

Rep. Mac Thornberry from Texas, chairman of the House Armed Services Committee, and Rep. Cory Gardner from Colorado, chairman of the Subcommittee on East Asia, the Pacific, and International Cybersecurity Policy, also requested meetings with Moon in late May but they did not take place. [Joongang Ilbo]

“But don’t worry,” President Moon must have said to his cabinet at one point. “Moon Chung-In can explain everything.” It’s too bad we don’t have surveillance video of the cabinet meetings that must have followed in Seoul since then. It would make for an epic “Downfall” parody.

~   ~   ~

I can’t say who picked Moon Chung-In, a left-wing South Korean academic and President Moon’s Special Advisor for Diplomacy and Security Affairs, to be the one to explain President Moon’s putative North Korea policy to American audiences at such a determinative moment. If President Moon’s objective for Professor Moon’s visit was to gain some room to maneuver by reassuring Washington that he is not as extreme as some of us think he is, that he will be a reliable ally, and that he won’t act like a spoiler of “maximum pressure,” then his badly received speech at the Wilson Center in Washington last week was an unmitigated fiasco. The sample of opinions that follows will give you a sense of just how universally Professor Moon’s visit has been panned from left, right, and center. Let’s start with the center-left Korea Herald:

Such worries intensified after Moon’s special adviser Moon Chung-in said on his trip to Washington on Saturday that South Korea would consult with the US on whether to scale back the scope of annual joint military drills and US deployment of strategic assets in exchange for “suspension” of the North’s nuclear and missile activities. The Trump administration has maintained that the North’s “complete removal” of its nuclear arsenal is a prerequisite to any dialogue.

The envoy’s remarks sparked criticism that it would undermine the allies’ efforts to present a united front against the North, which has been facing international condemnation over its relentless ballistic missile tests and brutal treatment of a US prisoner.

“With the summit around the corner, the Moon Jae-in administration is pouring out a series of diplomatic remarks that could endanger the Korea-US alliance. If we begin talks unilaterally, what would happen to the international coalition (against the North?),” said Rep. Kim Young-woo of the opposition Bareun Party, who serves as chairman of the parliamentary defense committee.

“Talking about reduced combined exercise and the US deployment of strategic assets is nothing but succumbing to the North Korean pressure when the North has continued its provocations with nuclear and missile development.”

Washington also expressed skepticism about the envoy’s proposal. US State Department spokeswoman Alicia Edwards said that they view Moon Chung-in’s proposal as a personal view, not the official stance of the South Korean government, according to a report from VOA on Saturday. [Korea Herald]

The subhed to the center-right Joongang Ilbo’s coverage conceded that Professor Moon’s proposal went down “badly” in Washington. Even the far-left Hankroyeh, which frequently publishes Professor Moon’s views and expressed support for Professor Moon’s proposals, allowed that his speech “does not seem very cautious for such sensitive information to be coming from a special advisor just ten days before a South Korea-US summit.” There are already calls from the opposition for Professor Moon to resign. The speech was also widely panned by Americans, starting with the centrist Korea-watcher Gordon Flake:

 

On the right, where sentiment matters most right now in the U.S., Bruce Klingner told Yonhap that Moon’s comments would “exacerbate U.S. concerns about President Moon Jae-in’s potential policies on North Korea and the U.S. alliance,” and about a return to Roh Moo-Hyun-era appeasement policies. Klingner, one of the few academics the Trump administration listens to, called the speech “counterproductive” to President Moon’s objective of reassuring Washington on the eve of his summit with President Trump. Robert Manning of the Atlantic Council observed, “Some of the ideas floated by President Moon and his top advisers seem to be dusting off old ‘sunshine’ ideas that failed.”

The Blue House itself backpedaled furiously, distanced itself from Professor Moon, and seemed to fling him under every passing bus on the Jongro:

An official from South Korea’s presidential office Cheong Wa Dae in Seoul insisted the professor was voicing his own personal views, saying they had not been coordinated with the presidential office, let alone the president. The Cheong Wa Dae official, speaking to reporters on the condition of anonymity, noted the special adviser had met with a ranking official from the presidential National Security Office prior to his U.S. trip, but said the two had merely exchanged greetings.

Another Cheong Wa Dae official said the presidential office has since contacted the special adviser and sternly warned him of the danger of making such comments even if they were his personal views. “We sternly spoke of the fact that this may not be helpful to Korea-U.S. relations in the future,” the official said, also speaking on condition of anonymity. [Yonhap]

Moon Chung-In now finds himself blamed for the disastrous visit by his friends and foes alike, but that isn’t quite fair. The idea that Professor Moon was speaking only for himself strains credibility. Are we to believe that the Blue House did not vet his remarks? Or that it failed to consult the South Korean Embassy in Washington to solicit its views on how badly this proposal would go down here? Or that it had no role at all in selecting Professor Moon as spokesman for the views of his president at such a critical moment? If any of these things is true, this was extraordinarily incompetent.

Perhaps as an academic, Professor Moon is miscast as a diplomat. But who would have been a better choice? President Moon’s Chief of Staff, who served three years in prison for organizing Lim Soo-Kyung’s propaganda tour of Pyongyang, and who formerly led a radical, pro-North Korean student group that (shortly after his departure) tried to firebomb the U.S. Embassy in Seoul? Or his just-confirmed Foreign Minister, a self-professed human rights specialist who served in South Korea’s U.N. Mission and at the U.N. as Seoul abstained, year after year, on resolutions condemning North Korea’s crimes against humanity? What about the man who recently withdrew as nominee to be Justice Minister under an ethical cloud, and who led the National Human Rights Commission during the Roh Moo-Hyun era as it resisted (with only partial success) withering criticism for its refusal to criticize Pyongyang’s crimes against its own people? Or President Moon’s new Unification Minister, who was indicted for destroying a transcript of a meeting in which Roh allegedly promised to cede South Korea’s maritime border with the North? It’s not apparent who could have represented the new president’s views better without becoming a lightning rod.

And of course, both the Blue House and American Korea-watchers were certainly aware of Professor Moon’s long history of anti-anti-North Korean sentiment and thinly veiled anti-American nationalism. See, for example, this recent op-ed Professor Moon recently published in the Joongang Ilbo, in which he called for immediate and unconditional negotiations with Pyongyang and hinted at reopening Kaesong. The op-ed proposed “the adjustment or temporary halt of the Korea-U.S. joint military exercises” as a precondition to a nuclear and missile test freeze, and “[p]arallel pursuit of denuclearization and establishment of a peace system … because again, it is important to show a flexible attitude.” Endlessly flexible. These, of course, are the same views that went over so badly in Washington last week. Let no one say that Professor Moon’s views were spontaneous or thoughtless utterances. This was the trial balloon for the trial balloon.

Maybe the Blue House should have toned Professor Moon’s remarks, except that my guess is that these were the toned-down remarks. Keep reading Professor Moon’s Joongang Ilbo op-ed and decide for yourself whether he was at least arguably calling the alliance with the U.S. a “colonial occupation,” making a thinly veiled appeal to nationalism, and threatening to call for anti-American protests (which have historically turned violent).

The 25 years of the North Korean nuclear threat has taught us the painful lesson of how important imagination and determination are. Until now, Korea has been easily decided by foreign powers. Last century’s colonial occupation, war and division were tragic products of foreign powers’ political contests. Considering the weight of the Korea-U.S. alliance and the geopolitical structure of Northeast Asia, it may be reckless to block the influence of our neighbors. However, it won’t be easy to give priority to inter-Korean relations over Korea-U.S. or Korea-China relations, either.

The time has come for us to turn the power of the people and the miracle of the candlelight demonstrations into a driving force for peace on the Korean Peninsula. The nuclear issue is a complicated challenge, but we can overcome it when we become one. Korea needs to stand at the center of the Korean Peninsula and East Asian diplomacy. In order not to be limited as a dependent variable of foreign powers, and to not repeat the fate of the Balkans, Korea needs to take initiative in resolving the North Korean nuclear crisis. This is how Moon will succeed — or fail. [Joongang Ilbo]

As an American and a former USFK soldier myself, whenever I hear my country called a colonial occupier, my first reaction is to test that assertion by offering to withdraw our forces. Indeed, if South Koreans want us to leave, it would be our obligation to respect their will. For now, that isn’t the will of South Koreans, even if they see U.S. forces as a necessary evil. Yet Moon Chung-In carried this offensive and extreme viewpoint to Washington just as the mood toward North Korea was as furious as it has been at any time since North Korea’s last nuclear test, as Otto Warmbier returned from Pyongyang in a coma (and subsequently passed away). How much of this is really Moon Chung-In’s fault? The real blame for the catastrophe that followed lies with Moon Jae-In’s own failure to perceive that Moon Chung-In’s tone, and the substance of his proposals, were sure to alarm most members of Congress, the administration, and academia.

Of course, not all Americans were alarmed. There is a fringe of left-of-center American opinion that Moon Chung-In is close to, and it’s more than a fringe in academic circles. What Moon said in his Wilson Center speech isn’t far removed from what you can read in an unceasing stream of op-eds by American academics calling for freeze deals that neither the U.S. Congress nor North Korea seems particularly interested in. I don’t know how much exposure Professor Moon has to centrist or right-of-center views in America, but if he believed that his proposals were within our mainstream, it may be because he cocooned himself with too many simpaticos. Perhaps the approval of this group gave Professor Moon a false sense of affirmation. Either way, Moon Jae-In can’t blame anyone but himself for this disastrous tone-deafness.

Maybe next week, the two presidents will cobble together a show of unity, like two divorcing parents at their daughter’s wedding. Maybe Trump will end the summit by tweeting that Manchuria was historically part of Korea. Maybe Trump will behave so boorishly that Moon will be able to pin the consequences of his own extreme world view and ineptitude on Trump, and play the nationalist card that the deck hasn’t dealt him yet. Or, maybe both leaders will conclude the summit with a spat that will harm both of their own political reputations, and the long-term interests of both nations.

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How to hold North Korea accountable for Otto Warmbier’s death

In North Korean prisons (at least, in those from which release is possible at all) when the guards conclude that a prisoner is about to die, they release her and send her away to die at home, so that disposing of her body will be someone else’s problem, and so that the warden can manipulate the camp’s rate of in-custody deaths downward. (Perhaps in some small way, even the wardens of North Korean prisons fear being held accountable, one day, for what they do.) The same is true when North Korean officers conclude that a soldier is about to die of starvation or tuberculosis — the army will send the soldier home to die.

So it was when North Korean diplomats at the U.N. reached out to their American counterparts to inform them that they had an American patient to dump. That the Warmbiers were able to see and touch their son one last time before he died was merely incidental to Pyongyang’s true purpose. It reminds us that Pyongyang has the means to talk to us when it decides that it’s in its interest to do so. Above all, Otto Warmbier’s death should remind us that governments that murder their own people will eventually murder ours. Pyongyang has made the hatred of Americans a national virtue. It indoctrinates its little children to hate and kill us. All that prevents it from murdering us on a greater scale is that it still lacks the means to do so.

An autopsy should now be done to determine the precise cause of Mr. Warmbier’s death, to rule out Pyongyang’s explanations of botulism or a drug reaction. Even if this explanation turns out to be plausible, however, it would not excuse holding Mr. Warmbier in Pyongyang in a coma for a year and denying him access to medical care that might have saved him. The coroner should look for evidence of what event put Warmbier into a coma to begin with, whether it was a beating, a suicide attempt, or some other cause. If prompt medical attention might have saved his life, a willful decision to deny him life-saving care would still be murder. And here, the chronology supplies circumstantial evidence of a political motive, and thus, a darker explanation:

  • Jan. 2: North Korea arrests Otto Warmbier.
  • Jan. 6: North Korea carries out a nuclear test, an event that took weeks of preparation. International condemnation follows; the U.S. calls the U.N. Security Council into emergency session.
  • Jan. 12: North Korea arrests a second U.S. citizen, Kim Dong-Chul, a humanitarian aid worker from Fairfax, Virginia.
  • Jan. 22: North Korea reveals Warmbier’s arrest publicly for the first time.
  • Feb. 5: The House introduces H.R. 757, a North Korea sanctions bill. It advances quickly through Committee to the House floor, where it passes by 418 to 2.
  • Feb. 10: The Senate passes H.R. 757 by a vote of 96 to 0.
  • Feb. 18: The President signs H.R. 757 into law.
  • Mar. 2: The U.N. Security Council approves new sanctions in Resolution 2270.
  • Mar. 15: President Obama signs Executive Order 17722, implementing the sanctions in H.R. 757.
  • Mar. 16: North Korea holds a show trial for Otto Warmbier and sentences him to 15 years’ hard labor.

In retrospect, then, Pyongyang’s “arrests” of both Otto Warmbier and Kim Dong-Chul appear to have been part of its coordinated plan to test a nuke, and to blunt a U.S. push to sanction it for doing so. It was at this point, shortly after Warmbier’s show trial, that something put him into a coma. This was when Pyongyang had the greatest motive to use Warmbier to punish the U.S. government. (North Korea’s dogma is one of collective rights and collective punishment. It does not recognize the individual as separate from the state. It would be consistent with Pyongyang’s dogma to punish one American to punish the U.S. government.) This was also when North Korea had a political disincentive against sending Warmbier home, lest it show the world a less defiant face or give up the leverage of holding one more American hostage. Shortly before Otto Warmbier passed away, the North Koreans doubled down and said that he got what he deserved.

President Trump reacted to Otto Warmbier’s passing appropriately:

Ambassador Haley said it best, however:

But it is with regard to Secretary of State Tillerson’s reaction where I might offer some help:

Presumably, they’re having a good laugh about this in Pyongyang, where crime always pays and there are never consequences. Pyongyang has been getting away with murder for 70 years; why should it be different this time when it still has three American hostages? Perhaps, at some point, the U.S. government will cease to allow Pyongyang to benefit from this tactic. It is not legally terrorism, because it is not carried out by clandestine agents or subnational groups, but it is a use of violence against innocent non-combatants with the apparent intent to influence the conduct of our government. Of course, Pyongyang has done many other things recently that do fit the legal definition of terrorism, so re-listing North Korea as a state sponsor of terrorism would be both well-justified and appropriate. (If you still haven’t read my 100-page, peer-reviewed legal analysis of the evidence, then by all means, feel free to do so now.)

The question of a travel ban will invariably be raised again. Even without legislation, the President has the authority to restrict U.S. passports to prevent them from being used by U.S. citizens and permanent residents to visit North Korea, but such a limited ban would be difficult to enforce in practice — it’s not as if the North Koreans would cooperate by turning paying hostages away just because the State Department wants them to. For reasons I’ve explained before, the President would need legislation to make a travel ban truly effective. The way to do this is to block the North Korean tourist industry’s access to the dollar system entirely. That would have the benefit of making the U.S. designation of Air Koryo more effective by closing a key legal loophole. (Air Koryo has been implicated repeatedly in the smuggling of WMD components and luxury goods, in violation of U.N. sanctions.)

An even more effective ban would include secondary immigration sanctions, by denying recent visitors to North Korea visa-free entry into the United States (section 4, below the fold). That would render North Korea’s recent investments in a ski resort, a water park, and a new airport terminal largely worthless. Yes, journalists, I wrote in a special exemption just for you — you’re welcome.

Don’t get me wrong; I’d be all for passing H.R. 2732 now. I also recognize that Congress is politically hesitant about travel bans for various reasons. The problem is that Pyongyang’s hostage-taking is now endangering other Americans, and the citizens of other countries, by interfering with the execution of a more coherent North Korea policy. In the interests of making the perfect the enemy of the good, then, I offer a text below the fold, of a travel ban that’s conditioned on the President certifying that it’s safe for Americans to travel to North Korea, and that also maximizes the effect of a ban on tourist and commercial travel to North Korea by non-U.S. citizens that is paid for in U.S. dollars. By linking the ban to the release of U.S. hostages, it gives Pyongyang a powerful financial incentive to set them free.

Finally, it’s long past time for the Senate to take up Chairman Royce’s bill, the KIMS Act, to further toughen existing sanctions on Pyongyang. That bill passed the full House 419 to 1 weeks ago. The Senate has yet to introduce it.

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Breaking: DOJ files $1.9M forfeiture complaint against North Korean front company in China

The U.S. Attorney for the District of Columbia issued a press release this afternoon announcing that it has filed a complaint under the civil forfeiture statute at 18 USC 981, to forfeit $1,902,976 from Mingzheng International Trading Limited of Shenyang, China. According to the complaint, Mingzheng conspired to evade sanctions and launder money through the United States on behalf of the Foreign Trade Bank of North Korea (FTB). Treasury designated the FTB under Executive Order 13382 in March 2013, for proliferation financing. Under the International Emergency Economic Powers Act, a designation blocks the target out of the dollar system. Knowingly dealing with a designated person using the dollar system is a violation of the IEEPA. According to DOJ:

The action represents one of the largest seizures of North Korean funds by the Department of Justice.

“This complaint alleges that parties in China established and used a front company to surreptitiously move North Korean money through the United States and violated the sanctions imposed by our government on North Korea,” said U.S. Attorney Phillips. “Sanctions laws are critical to our national security and foreign policy interests, and this case demonstrates that we will seek significant remedies for those companies that violate them.”

[….]

According to the complaint, Mingzheng is owned by a Chinese national and is based in Shenyang, China. Mingzheng allegedly operated as a front company for a foreign-based branch of the North Korea-based Foreign Trade Bank (FTB). In March 2013, the U.S. Treasury Department designated the Foreign Trade Bank as a sanctioned entity pursuant to the Weapons of Mass Destruction Proliferators Sanctions Regulations. The designation noted that the Foreign Trade Bank is a state-owned bank, and “acts as North Korea’s primary foreign exchange bank.” The designation further noted that North Korea uses the Foreign Trade Bank to facilitate millions of dollars in transactions on behalf of actors linked to its proliferation network.

Under 18 USC 981, the feds can forfeit property that constitutes proceeds of, or that is “involved in,” a specified unlawful activity (as defined in 18 USC 1956(c)(7)), the money laundering statute. The specified unlawful activities alleged here are conspiracy and violations of the IEEPA.

An FBI investigation revealed that Mingzheng’s alleged activities mirror this money laundering paradigm. Specifically, Mingzheng acts a front company for a covert Chinese branch of the Foreign Trade Bank. This branch is operated by a Chinese national who has historically been tied to the Foreign Trade Bank.

According to the complaint, Mingzheng used its accounts at China Merchants Bank, Bank of Communications, and Shanghai Pudong Development Bank to launder money on behalf of the FTB. All three banks were also involved in the Dandong Hongxiang money laundering case. In that case, the Justice Department said at the time that the Chinese banks were not suspected of wrongdoing. This time, DOJ’s press release doesn’t say one way or the other; however, the transactions alleged here all predate the new Treasury regulation establishing heightened due diligence obligations for North Korea.

The government is seeking to forfeit $1,902,976 that was transacted in October and November of 2015 by Mingzheng, via wire transfers, using their Chinese bank accounts. These U.S. dollar payments, which cleared through the United States, are alleged to violate U.S. law, because Mingzheng was surreptitiously making them on behalf of the Foreign Trade Bank, whose designation precluded such U.S. dollar transactions.

Interestingly, this complaint doesn’t have anything to do with the conduct unmasked in C4ADS’s latest report this week. Rather, this is more of a sequel to the Dandong Hongxiang case filed in the District of New Jersey last September, which arose from the first C4ADS report on North Korea. The new complaint makes the link:

48. The criminal complaint identified Luo Chuanxu as one of the Dandong Hongxiang co-conspirators. The complaint indicates that Luo is a Chinese National who established multiple front companies in Hong Kong, Anguilla, and the British Virgin Islands to facilitate payments on behalf of KKBC, a sanctioned North Korean bank. Luo handled these payments as an employee of Dandong Hongxiang, and was working to assist KKBC in violation of U.S. laws. The criminal complaint noted that Deep Wealth was owned or controlled by Dandong Hongxiang, at least as of June 10, 2015.

49. Additionally, Luo facilitated numerous payments to Mingzheng using Deep Wealth Ltd. (“Deep Wealth”), a Dandong Hongxiang front company established in Anguilla, in the months prior to the transactions related to the Defendant Funds.

50. Specifically, Luo received confirmation of two large payments to Mingzheng from Deep Wealth in 2015. On July 31, 2015, Luo received confirmation from China Merchants bank showing that Deep Wealth remitted $660,000 to Mingzheng’s account ending in 6150. On August 04, 2015, Luo received another confirmation from China Merchants Bank showing that Deep Wealth remitted $900,000 to the same Mingzheng account. These payments are consistent with the North Korean money laundering activities observed between sanctioned North Korean banks via related front companies.

The complaint is available on the federal public docket system (PACER), under United States v. $1,071,251.44 of Funds Associated with Mingzheng International Trading, Ltd., No. 17-cv-01166-KBJ. Unfortunately, WordPress doesn’t like to post pdfs, but you can pull it yourself if you have a PACER account. Civil forfeiture cases have odd case names because they’re in rem actions, which means the property is the defendant. In this case, the case name is based on the first of several listed bank accounts “associated with” Mingzheng. Claimants to the defendant property then have an opportunity to file claims for the defendant property (such as innocent ownership, or contesting the connection between the property and the specified unlawful activity).

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Meet the fresh-faced kids who want you to commit a felony for Kim Jong-un

I confess that I’ve always hated Facebook, but every now and then, I see something there that interests me. One such example is the Facebook page of a group called Delegations for Dialogue, which led me to this slickly produced website. As it turns out, Delegations is run by a cast of improbably young characters promoting investment in North Korea through a “fact-finding” trip to Rason this August.

Now, I suppose there are two kinds of people in this world by now — those who’ve concluded that throwing money into North Korea has only made it more repressive and dangerous, and those who are (for whatever reason) simply incapable of drawing that conclusion. The same goes for understanding the moral hazard of investing in (and thus perpetuating) a system whose crimes against humanity, according to a U.N. Commission, are “without parallel in the contemporary world.” The same goes for those who believe anyone but Pyongyang will ever get rich from foreign investment in North Korea. Just ask Jim Rogers, Naguib Sawaris, James Passin, or a long list of other fools who have parted with their money there.

Rather, anyone who would seriously consider investing in North Korea by now can only be responsive to legal risk. As I’ve said before, I’m a lawyer but not your lawyer, so take what follows as advice to hire a lawyer of your own if you’re giving serious thought to taking part in this trip. For one thing, I found nothing on Delegations’ site about compliance with either national or U.N. sanctions — not even the standard, we-never-violate-sanctions disclaimer one sometimes sees with such programs. It quickly becomes clear that Delegations either has no idea of the legal framework it’s getting itself and its clients into or doesn’t care.

From the very first sentence, for example, Delegations shows the limits of its legal knowledge of the sanctions regime against North Korea by calling the North “the world’s most sanctioned nation,” something that still isn’t remotely accurate, either de jure or de facto, despite the significant escalation of sanctions over the last year. And while it’s usually a harmless error for an investor to overestimate a sanctions regime, the same can’t be said for underestimating one.

On examining the program materials for the August trip, things go downhill fast. For example, Delegations promises participants a tour of a local bank, but several of the banks located in Rason (and, as near as I can figure, all of them) are joint ventures, which are prohibited under UNSCR 2270, paragraph 33. Delegations promises its clients a meeting with North Korean trade officials; yet UNSCR 2321, paragraph 32, bans all public and private support for trade with North Korea, except when specifically approved by a U.N. committee. Delegations even promises participants an opportunity to open a bank account in a North Korean bank, directly contrary to UNSCR 2321, paragraph 31, which required U.N. members states to close any bank accounts in North Korea 90 days after the resolution passed (more than 90 days ago).

Then, on the banner of Delegations’ website is an image of the Pyongyang International Trade Fair, where one of the companies making an appearance this year was Green Pine, an entity designated by both the U.N. and the U.S. Treasury Department for its involvement in proliferation.

Fine, you say, who’s going to enforce a U.N. resolution anyway? But given the extensive evidence that North Korea continues to depend on the U.S. dollar system for trade and finance (note well: Delegations allows participants to pay their fees in euro or dollars), any favorable response to Delegations risks running smack into a very significant legal obstacle, namely Executive Order 13772, section 3 of which prohibits new investment in North Korea:

   (a) The following are prohibited:

      (i) the exportation or reexportation, direct or indirect, from the United States, or by a United States person, wherever located, of any goods, services, or technology to North Korea;

Here, the term “services” is key, and courts have generally interpreted this to include financial services. It would likely be interpreted to include promotional and marketing services on behalf of North Korean state-controlled enterprises, too.

      (ii) new investment in North Korea by a United States person, wherever located; and

This is the provision that stumped Jim Rogers, Naguib Sawaris, et al.

      (iii) any approval, financing, facilitation, or guarantee by a United States person, wherever located, of a transaction by a foreign person where the transaction by that foreign person would be prohibited by this section if performed by a United States person or within the United States.

This covers the provision of correspondent services by U.S. financial institutions and their subsidiaries, effectively blocking transactions related to investment in North Korea out of the dollar system.

   (b) The prohibitions in subsection (a) of this section apply except to the extent provided by statutes, or in regulations, orders, directives, or licenses that may be issued pursuant to this order or pursuant to the export control authorities implemented by the Department of Commerce, and notwithstanding any contract entered into or any license or permit granted prior to the effective date of this order.

This incorporates Commerce Department licensing requirements, which cover almost any transfer of U.S.-origin goods, services, and technology to North Korea, except the most innocuous consumer goods and food items classified as “EAR 99.” For more information on what all of that means, consult a more expensive lawyer than me, because violations of this executive order are punishable under section 206 of the International Emergency Economic Powers Act (20 years in prison, a $1 million fine, and a $250,000 civil penalty). And just in case you think the euro system is an easy escape valve from these prohibitions, not so much, given the new EU restrictions on financial services to North Korea, new anti-money laundering regulations, and new beneficial ownership disclosure rules.

To summarize: lawyer up, caveat emptor, or (better yet) find a safer place to put your money.   

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One American tragedy, millions of North Korean statistics

The idea that foreign tourists in North Korea could escape the evil they help, however minimally, to propagate, was never sustainable. Tourism in North Korea reduces the physical and mental slavery of totalitarianism to a circus performance and its subjects to zoo animals. It doesn’t only endanger the tourist, it plays some unquantifiable role in sustaining that horrid system, and in endangering the lives of people from Seoul to Seattle to Aleppo by giving cash to a regime obsessed with the capacity to terrorize and destroy life. To tour North Korea is a morally shallow act for which some just punishment is warranted. That just punishment is a week in a North Korean jail, one day as a global Twitter laughingstock, and a one-way ticket back to one’s angry family and laughing friends. It was not this. There was nothing just in this.

The specifics of Mr. Warmbier’s condition were not known. His family was told that he had contracted botulism and had been given a sleeping pill, causing him to slip into a coma, according to the people briefed on the situation, who insisted on anonymity to discuss the highly sensitive matter. But American officials suspect his condition is the result of his treatment at North Korean hands, given the record of the brutal treatment of past prisoners there.

[….]

A senior American official said the United States obtained intelligence reports in recent weeks indicating that Mr. Warmbier had been repeatedly beaten while in North Korean custody. The official, who was not authorized to publicly discuss intelligence and spoke on the condition of anonymity, said there had been earlier concerns that Mr. Warmbier had died as a result of the beatings.

A second person who was involved in early discussions with North Koreans about American prisoners said Mr. Warmbier’s family at one point told friends they believed the North had killed their son. [N.Y. Times]

Let anyone forget, this was Otto Warmbier at his show trial. As lawyers say, res ipsa loquitur.

Yes, initial reports are often wrong. Rumors of dark and unknowable things from inside the world’s most opaque regime should be treated with skepticism. Mr. Warmbier is at a hospital now, where the doctors will examine him for evidence of torture. In due course, we’ll have medical evidence of what really happened, and whether Mr. Warmbier will ever walk or speak again. But clearly, the people who had him in their custody did something to him to reduce him to the comatose state in which he has lingered for a year. And whatever happened to Mr. Warmbier happened to him at a time when he was held without legitimate justification. Even allowing for differences of culture and government, there is no system of justice in which vandalizing a poster (if Mr. Warmbier did that) warrants two months in jail, much less a year and a half, much less a 15-year sentence to hard labor.

The editors of the Washington Post write that “the harm done to an innocent student is the result of North Korea’s odious practice of seizing Americans to use as political pawns.” It’s beyond serious question that Mr. Warmbier was held as a hostage, and by extension, this suggests that the charges against three other Americans in North Korean custody are also fabricated and their punishments arbitrary. 

The Post calls Mr. Warmbier’s treatment “outrageous behavior even by the standards of one of the world’s most vicious and isolated regimes,” says that “it should not go unpunished,” and calls for more sanctions, including secondary sanctions. I obviously agree with the latter statements, but not the former (we’ll turn to it later).

As to the punishment, one appropriate option would be to return North Korea to the list of state sponsors of terrorism, despite the fact that Mr. Warmbier’s torture does not meet the legal definition (it was done by a state, not by clandestine agents or subnational groups). There are plenty of other reasons, including the assassination of Kim Jong-Nam, that would make a re-designation of North Korea well-grounded in evidence and law.

And yes, Congress should enact a travel ban. Depending on how it’s drafted, an added feature of a travel ban could be to wreck Moon Jae-In’s addlebrained, sanctions-busting plans to reopen Kumgang or share the Olympics with North Korea. And yes, the Warmbier family’s lawsuit against the reckless and unethical Young Pioneer Tours, which continues to say that travel to North Korea is safe, and which has boasted that the arrests of tourists are good for business, should be an extinction-level event. 

I disagree with the Post, however, when it says that Mr. Warmbier’s treatment was “outrageous behavior” by North Korean standards. On the contrary, by North Korean standards it was entirely ordinary. The reason why tourism to North Korea is immoral is the very fact for North Koreans, brutality is an everyday fear, whether they’re market traders being extorted and beaten by corrupt MSS officers, women refugees who are beaten after being repatriated by China, women in “Kangan” Province who are raped by soldiers with impunity, or the child prisoners in places like Camp 16, where death rates may be as high as 20 percent each year.

Is Mr. Warmbier’s fate more inhumane than the slow, agonizing death of my friend Jinhae Jo’s baby brother, who starved to death in her arms so that Kim Il-Sung could have a new mausoleum and his son could have nuclear weapons? According to the U.N. Commission of Inquiry, that slow, agonizing process repeated itself perhaps two million times for North Koreans, out of our sight. For every person who starved to death from Pyongyang’s priorities, countless others were traumatized by the loss of them.

What Mr. Warmbier experienced is not even the worst treatment North Korea has meted out to foreigners in recent years. Contrast it to the kidnapping and slow starvation of U.S. resident Kim Dong-shik from China to North Korea, where he died far from his wife and children. Or Megumi Yokota, kidnapped from the shores of her home country and held in North Korea until she finally gave in to despair and committed suicide. Or the brave dissidents and human rights activists like Patrick Kim, stabbed by North Korean agents with poisoned needles.

It is as if the greater the scale of the horrors, the less they affect us. The more we ascribe them to differences of policy, nation, and culture. The more arguments we summon to dull their moral relevance. One death is a tragedy, but the death of millions is a statistic from a dying star in a distant galaxy. As we look on one tragedy, let’s remember the statistics, too.

[Statistics, buried in the hills near Hamhung, North Korea]

That will better inform us how to respond to all of these tragedies. North Korea’s is a system dedicated to the proposition that all men must submit to evil. The sooner we grasp that all of these statistics are tragedies, the sooner we will draw the appropriate conclusions about how to respond to them.

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C4ADS: Pyongyang’s networks in China are “centralized, limited, and vulnerable” to sanctions 

Because I’ve already given too many minutes of my life to the moveable farce named Dennis Rodman, I’m devoting today’s post to something more consequential: the Center for Advanced Defense Studies’s new report exposing more North Korean financial networks in China, and dispelling the misinformation that North Korea is isolated from the financial system and thus sanctions-proof. (Full disclosure: I advised C4ADS on the drafting of the report, without compensation of course.) Money quote:

The continuing misperceptions of North Korea as the “Hermit Kingdom” or “the most sanctioned country in the world,” are fueling the narrative behind the narrowing of non-military options on the Korean peninsula. In truth, the North Korean regime, far from being isolated, is globally active throsugh its overseas networks. The impact of these misperceptions is considerable, most notably in the false belief that sanctions cannot succeed on a “closed” country like North Korea. 

Following on last September’s exposé on Dandong Hongxiang, C4ADS sifted through public databases, shipping registries, and business records to widen its focus and try to find the extent of North Korea’s financial network in China. From this, C4ADS found, contrary to a lot of widely disseminated misinformation, that North Korea’s network is centralized, limited, and vulnerable to detection and sanctions:

Centralized. For example, C4ADS dug further into the role of Dandong Hongxiang and found it to be highly centralized around key nodes. It also exposed two more networks that were similarly centralized. In one case, C4ADS started with the seizure of the M/V Jie Shun at the southern entrance to the Suez Canal with a record haul of North Korean weapons (mostly PG-7 anti-tank rockets) aboard, which I figure were probably bound for Syria. Starting from the findings of the UN Panel of Experts (see paragraphs 61 through 71), C4ADS worked backward through shipping registries and corporate records and identified the holder of the Jie Shun’s compliance document as a Chinese national named Fan Mintian. Fan runs a company called V-Star Ships.

Fan and V-Star have been operating openly in China, helping North Korea evade shipping sanctions for at least four years. V-Ships did (much? all?) of its business through the dollar system, clearing its payments through the United States. Sadly, C4ADS doesn’t identify the author of the “please do not send us any instructions” email, which sounds like the kind of thing the FBI and the Justice Department may find worthy of further investigation, to say the least.

In another case, Wells Fargo was the correspondent bank, and its compliance officers were alert and on the job, and refused to process V-Star’s transactions. People may praise bankers even less than they praise lawyers, but here’s to Wells Fargo, for taking its compliance obligations seriously and refusing to launder money for North Korea.

Yet another major Chinese network, Dandong Zhicheng Metallic Material Inc. (DZMM) may be an even more important node for Pyongyang than Dandong Hongxiang. DZMM buys coal from North Korea. 

Three North Korean companies are currently designated by the Treasury Department: Daewon Industries (a part of Pyongyang’s military-industrial complex, designated in December), Kangbong Trading Company (same), and Paeksol Trading Corporation (controlled by the Reconnaissance General Bureau, designated in March). If DZMM willfully engaged in dollar transactions with any of those companies after their respective designations — and I stress that I don’t see proof of all of these elements from C4ADS’s report alone — that could constitute any of several federal felonies: violation of the International Emergency Economic Powers Act, money laundering under 18 U.S.C. 1956(a)(2), or conspiracy to commit either of the aforementioned under 18 U.S.C. 371. Even if you don’t arrest a single suspect, the Justice Department can bankrupt those networks by blocking their funds as they move through the financial system and forfeiting them.

Limited. C4ADS found that just 5,233 companies are involved in bilateral trade between China and North Korea, with the top ten companies controlling about 30 percent of it. If 5,233 sounds like a lot, last year, there were 67,163 Chinese companies exporting to South Korea. The concentration of wealth in the hands of a few state-controlled companies is consistent with Pyongyang’s centralized and controlling ways of running everything else. Even then, further research revealed that many of these companies were interconnected:

That means knocking over a few major networks could collapse much of the system that sustains His Porcine Majesty’s rule. C4ADS’s report even lays those connections out in charts.

And yet again, as with Ma Xiaohong, the person running a North Korean trade network turns out to be a member of the Chinese Communist Party. Arguably, our third attribute should be “inculpatory,” but it isn’t.

Vulnerable. Regular readers of the U.N. Panel’s reports will find North Korea’s methods of concealing its network aren’t qualitatively different than those used by terrorists, narco-traffickers, or other rogue regimes to launder money and evade sanctions; hence, the limiting reagents in U.S. sanctions enforcement are primarily political will and resources (cops, intelligence analysts, and lawyers). Contrary to widely-held assumptions, the networks are detectable.

The report goes on to note that because of “these networks’ reliance on the licit systems of finance, trade, and transportation … they leave behind a digital trail within public records, and other data sources, and are acutely vulnerable to targeted sanctions.” They also leave money trails. C4ADS’s conclusions reinforce what the U.N. Panel of Experts and the Justice Department have already established — that North Korea’s networks continue to launder their money through the dollar system. That’s a critical vulnerability that no U.S. president has yet had the political will to exploit. 

The last time C4ADS published a report, Treasury designations, an indictment, and a civil forfeiture complaint soon followed. Which doesn’t sound imminent this time, judging by this Wall Street Journal report covering the C4ADS report. It suggests that the Trump administration is still in the bargaining stage with Beijing, asking it to curtail the activities of Chinese companies, run by party members, that are knowingly violating U.N. sanctions. 

The Trump administration has asked Beijing to take action against nearly 10 Chinese companies and individuals to curb their trading with North Korea, according to senior U.S. officials, as part of a strategy to decapitate the key networks that support Pyongyang’s nuclear-weapons program.

Although there is no firm deadline, the U.S. has indicated the Treasury Department could impose unilateral sanctions on some of these entities before the end of the summer if Beijing doesn’t act, the U.S. officials said. [WSJ, Jay Solomon]

While you’re at it, don’t miss Solomon’s other recent report on another North Korean network in China, which I didn’t have time to blog about when it came out.

So as with the Obama administration, we’re back to asking Bejing to enforce sanctions it has spent the last ten years willfully violating. That similarity must owe a great deal to the fact that Trump can’t get key appointees in place to execute a policy that resembles his tough talk. For all the talk of sabotage by the “deep state,” the effect of slow appointments is that the administration ends up abdicating a lot of policy decisions to holdovers and similarly disposed career civil servants. In any event, let no one say that sanctions against North Korea can’t work, if we ever muster the will to use them.

~   ~   ~

Update: At the Washington Post, Anna Fifield adds:

Targeting just a few pivotal Chinese companies could severely disrupt North Korea’s ability to circumvent international sanctions and buy illicit goods — and could even cause its entire overseas network to collapse, according to a report out Tuesday.

[….]

The new report, by Washington-based research group C4ADS, lays out multiple ways for Beijing to cut off North Korea’s trading routes to the outside world, if it wanted to. It also found a Chinese citizen who was conducting large amounts of trade with North Korea while serving as president of a company in the United States — a status that would allow him to open bank accounts and send or receive shipments.

“By being centralized, limited and ultimately vulnerable North Korean overseas networks are, by their nature, ripe for disruption,” C4ADS researchers wrote in the report, titled “Risky Business.”

[….]

There is still plenty more to be done, C4ADS writes. “Although to date economic coercion has been ineffective in persuading North Korea to abandon its pursuit of nuclear weapons, this does not mean it cannot work,” the researchers say. 

On the contrary, targeting key companies could cripple multiple networks across multiple countries simultaneously, they write, because so many of these firms are intertwined.

[….]

The C4ADS researchers said focusing on these kinds of logistical “chokepoints” could cut off North Korea’s centralized, global system of illicit finance. 

For example, the Dandong Hongxiang Industrial Development Co., which was sanctioned by the U.S. Treasury Department last year — sending a sudden chill through the border city that acts as North Korea’s main commercial gateway to the outside world — is one of 18 companies that make up the Liaoning Hongxiang Group. This suggests the potential for an indirect effect if one company is stopped from helping North Korea, perhaps disrupting numerous other linked companies.

“Based on what we’re seeing in the data in terms of the reach and scope of these networks and the limited nature of the system that they live in, and the contamination with illicit activity, there is inherent value to enforcement actions,” said David Thompson, a senior analyst at C4ADS.  [WaPo, Anna Fifield]

See also this Washington Post editorial, citing the C4ADS report.

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Moon Jae-In passes an early test on North Korean refugee policy, but for how long?

In recent years, growing numbers of North Korean boats have drifted into the waters of neighboring countries. Most of these incidents probably weren’t attempts to defect, but cases of North Korean fishermen coming under rising pressure to stray further out to sea, to bring home bigger catches (which are often exported for hard currency, including to the U.S. and South Korea) and who are given only a marginal amount of fuel to make the journey home. Dozens of these North Koreans have arrived in Japan, though little remained of them by then but desiccated corpses and bleached bones.

Those who arrive in South Korea, thankfully, usually arrive alive, at least until the ROK authorities question them as to whether they wish to return to the North, and repatriate those who (it says) do. I’ve often privately wondered just how much various South Korean governments have, for political reasons, put their thumbs on the scales in questioning these North Koreans and judging their intentions. It worried me that the Moon Jae-In administration, with its origins in a viewpoint that has been, at best, ambivalent about protecting North Korean refugees and human rights, would repatriate North Koreans with a well-founded fear of persecution, in violation of the U.N. Refugee Convention. Now, we have a least one case in which the Moon Jae-In administration seems inclined to offer asylum to two of four North Koreans who drifted into South Korean waters along its east coast.

South Korea’s navy and coastguard rescued four people from two vessels on Friday and Saturday, and the four were then questioned by South Korean authorities, who offered to send them home, South Korea’s Unification Ministry said.

The two who told authorities they wanted to defect to South Korea were a man in his 50s and his son in his 20s, an official from the ministry, which handles relations with North Korea, said by telephone.

“We will provide education for them to settle in South Korea, for a certain period of time, as is usual for North Korean defectors,” the official said.

The official, who declined to be identified, said he did not know if the two had originally planned to defect or decided to only after being rescued. The Yonhap news agency said the father appeared to have planned to defect.

The other two would be sent home, as they had requested, the ministry official said. [Reuters]

On refugee policy, Moon Jae-In now faces a test. Will he bow to Pyongyang and his own most extreme supporters, and roll up the welcome mat for North Korean refugees, or will he follow international human rights law and the values we hope South Korea still shares with us? Pyongyang is making its expectations clear:

A vigorous struggle for the repatriation of detained Kim Ryon Hui and other twelve DPRK women citizens was launched in south Korea with the people of different strata involved, amid the growing demand for the liquidation of evils done by the Park Geun Hye group of traitors for confrontation with the fellow countrymen. [….]

If the south Korean authorities are truly interested in the issues of “human rights”, “humanitarianism” and “separated families”, they should pay attention to the strong demand of the families of those abductees and settle the issue of their repatriation at an early date before anything else.

It is preposterous to discuss on the “humanitarianism” and reunion of divided families and relatives, in disregard of such hideous unethical crimes as imposing bitter pains and misfortune on the compatriots by artificially making new “divided families”.

Any humanitarian cooperation between the north and the south, including reunion of divided families and relatives, can never be expected before the unconditional repatriation of the detained women citizens of the DPRK.

We will watch the attitude of the south Korean authorities and strive for the repatriation of the detained women citizens to the last. [KCNA]

See also. The pro-Pyongyang extremists at KANCC (profiled here) and Minjok Tongshin (profiled here) are also calling for sending the women back to North Korea, for what it’s worth — probably not much, except as a barometer of pro-Pyongyang opinion in South Korea, where both websites would be illegal. The pro-Pyongyang crowd continues to repeat the transparent lie that the Ningpo 12 were kidnapped, though this assertion has been tested and rejected by a South Korean court, which granted asylum to all 12 of the women. All have since been given their freedom in South Korean society, and most have been admitted into universities. You’d think that if they had been abducted, one of them would have said so by now, although Pyongyang’s agents have previously contacted North Korean refugees in the South and coerced them into “re-defecting” and making propaganda statements before audiences of gullible journalists.

If you think this is just a fringe view in South Korea, think again. More than once, I’ve highlighted the disgraceful and unethical efforts by the hard-left “human rights” lawyers’ group Minbyun to breach the women’s internationally recognized right to confidentiality in asylum proceedings, an effort that could only have been calculated to intimidate the women into re-defecting. Given Moon’s own long history with Minbyun, no one should have taken the rejection of Pyongyang’s demand, no matter how outrageous, for granted. Moon Jae-In’s Chief of Staff, for example, has a history of anti-American and pro-North Korean activism so extensive and troubling that he couldn’t pass a U.S. government background investigation, much less be granted a security clearance here. We should be thankful that Moon was at least pragmatic enough to reject Pyongyang’s demand on its face:

The Unification Ministry in South Korea has rejected Pyongyang’s demand to return a group of North Korean restaurant employees who defected from China last year.

A ministry official told reporters on Thursday that the families divided by the Korean War are a separate and different issue from North Korean defectors.

He added that the North’s move to link the return of the restaurant employees with cross-border family reunions is incomprehensible, stressing that the issue of family reunions cannot be resolved if more time passes. [KBS]

It’s still too early to let out a sigh of relief. As Moon must surely know, sending these women back to North Korea would have caused global outrage, starting with a white-hot apoplexy in large segments of the U.S. Congress. Such a decision would reveal that the alliance itself lacks the foundation of a unity of legal, moral, political, or humanitarian interests. It would militate for sending a clear message to South Korean voters that even if the lives of North Koreans mean nothing to them, such a disunity of interests will raise calls (probably including my own) for U.S. disengagement from South Korea, if only to achieve an overdue restructuring of U.S. Forces, Korea and to damage Moon’s domestic political support. Given the fact that Moon has already managed to piss off both Dick Durbin and Ed Royce over his shifting position on THAAD, he probably concluded that the last thing his voters want to see right now is a crisis in the U.S.-Korea alliance in the middle of a nuclear crisis that even Moon recognizes as existential for South Korea’s survival.

There will be other tests of South Korea’s commitment to its fellow Koreans who had the misfortune to be born north of the DMZ, of course. Moon may not be as helpful as Park Geun-Hye was in helping the next group of expatriated North Koreans who try to defect. He may also find more subtle ways of making refugees unwelcome, such as by breaching their confidentiality. Rather than returning the Ningpo 12 outright, someone within Moon’s administration could leak the locations of the Ningpo 12 to North Korean agents working in South Korea, and then allow one or more of them to “re-defect” through some lapse in security. There would, of course, be another sham news conference. (Will Ripley, take note.) The only real question is how complicit Moon Jae-In’s government is prepared to be in this sham. Evidence of complicity would arguably obligate the United States to accept North Korean refugees who, reasonably enough, would then feel unsafe in South Korea. That would also lead to frictions in the U.S.-South Korean alliance.

Decision points like this remind us why the Trump administration’s failure to appoint a Special Envoy for North Korean Human Rights is an important oversight in its North Korea policy. Eventually, the administration will have to realize that the North Korean people themselves could be our most important allies in any effort to disarm, reform, and change North Korea. We will have little influence with these potential allies if they look to us as protectors and allies and we let them down. Pyongyang’s reaction to this particular decision point also reminds us that Seoul’s decision to receive North Korean refugees has the potential to be historically determinative by setting off a preference cascade among key constituencies inside North Korea, maybe even including the military. One could say that a welcoming, prosperous, and free South Korea presents Pyongyang with the most “maximum” pressure of all.

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