Plan B Watch: Clinton Announces Tightening of N. Korea Sanctions

Well, it’s about damn time:

The Obama administration announced Wednesday that it would impose further economic sanctions against North Korea, throwing legal weight behind a choreographed show of pressure on the North that included an unusual joint visit to the demilitarized zone by Secretary of State Hillary Rodham Clinton and Defense Secretary Robert M. Gates.

The measures, announced here by Mrs. Clinton after talks with South Korean officials, focus on counterfeiting, money laundering and other dealings that she said the North Korean government used to generate hard currency to pay off cronies and cling to power. [N.Y. Times]

Clinton announced the sanctions as she visited the DMZ, while accompanied by SecDef Gates, and while displaying her supernatural frost-projection powers against a hapless North Korean border guard. I count at least three priceless expressions in this photo.

The Treasury Department announcement I linked here yesterday now looks to be just the first part of the Obama Administration’s dangerously overdue and initially weak response to the sinking of the Cheonan, using at least some of the legal and financial tools I’ve advocated using for the last several years.

“Today, I’m announcing a series of measures to increase our ability to prevent North Korea’s proliferation, to halt their illicit activities that helped fund their weapons programs and to discourage further provocative actions,” Clinton told a news conference in Seoul after high-level security talks with South Korean officials.

Clinton said Washington’s “new country-specific sanctions” will target the North’s “sale and procurement of arms and related material and the procurement of luxury goods and other illicit activities.”

“Let me stress that these measures are not directed at the people of North Korea who have suffered too long due to the misguided and malign priorities of their government,” she said. “They are directed at the destabilizing illicit and provocative policies pursued by that government.” [Yonhap]

With apologies to KCJ, this is encouraging — a strong opening message that will get the attention of the investors on whose cash North Korea depends. Unfortunately, Clinton offered few details about the sanctions, and via some inside sources, I’ve learned that the administration is still debating just what specific measures it’s going to announce. Until I see what those specific measures are, and how strong and comprehensive they are, I will reserve judgment. Or, as one observer put it:

Nicholas Szechenyi, a northeast Asia policy analyst at the Center for Strategic and International Studies in Washington, said the key to effective U.S. sanctions is how they are implemented.

“If the U.S. is doing this in isolation, doing this piecemeal, then I don’t think they’ll have much effect,” he said. “But if there’s a unified effort to not only announce these sanctions as an act of solidarity with our South Korean allies but also to apply some pressure on North Korea, then I think over time it might work.”

That sounds exactly right to me. Nick Eberstadt is more skeptical, and maybe he knows something I don’t:

The moves resemble piecemeal steps of the past, they add, and are unlikely to strike where it hurts: the regime’s access to under-the-table international funds.

“If I were in Pyongyang, I would not be trembling in my boots about this,” says Nick Eberstadt, a North Korea specialist at the American Enterprise Institute in Washington. [Christian Science Monitor]

The real question here is what the sanctions will be designed to achieve:

“The real question, if the talks resume, is so what?” says Mr. Lieberthal. Neither Republican nor Democratic administrations have been successful over two decades at curtailing the North’s nuclear ambitions, he says, adding that the Obama administration “shows no signs of being in the mood to reward North Korea” to prompt its cooperation, a pattern he says the North has become accustomed to.

“So even if the talks resume at some point, would they produce any serious results?” he asks. “I remain very skeptical about that. [Christian Science Monitor]

If the administration is looking for sanctions that are undone as easily as they’re done, this won’t work. Our financial power over North Korea is our power to scare away investors and sever its financial lifelines, including those that originate in China. If we try to spare Chinese entities and only target isolated investors like Orascom and various shady bankers here and there, this won’t work. If the administration nips at North Korea’s illicit financing at its fringes, a U.S.-led sanctions program will fail just as U.N. sanctions always have, because North Korea is very nimble at setting up new banks and companies to evade sanctions, and because Chinese entities will adopt a see-no-evil approach to transactions with North Korea unless it’s made clear to them that their own comingled assets are also at risk.

For what it’s worth, Hillary Clinton and Robert Einhorn will both be traveling to China to seek its cooperation. Wish them luck.

But if the administration goes all-in to hit North Korea’s finances hard before its big succession-focused party conference in September, this could be extremely effective, and might even disrupt Kim Jong Il’s plans to purge his and promote the next generation of apparatchiks to preserve his dynasty for another generation.