Treasury plays catch-up on North Korea sanctions, designates 10 proliferators & shippers

Yesterday afternoon, the Treasury and State Departments designated ten more North Korean targets:

• six individual North Koreans for involvement in WMD-related financial transactions,
• three shipping companies, for being fronts of Ocean Maritime Management, and
• one entity, North Korea’s Strategic Rocket Forces.

From Treasury’s press release:

OFAC designated six individuals pursuant to E.O. 13382, which targets proliferators of WMD and their supporters.  Kim Kyong Nam was designated for acting, or purporting to act, for or on behalf of, directly or indirectly, the Foreign Trade Bank (FTB), North Korea’s primary foreign exchange bank.  FTB is an entity whose property and interests in property are blocked pursuant to E.O. 13382 for facilitating transactions on behalf of Specially Designated Nationals linked to North Korea’s proliferation network.  Kim Kyong Nam is FTB’s representative in Khabarovsk, Russia.

OFAC also designated the following five Tanchon Commercial Bank (TCB) representatives pursuant to E.O. 13382 for acting for or on behalf of, directly or indirectly, TCB, which was previously designated by the U.S. and UN as a financial arm of Korea Mining Development Trading Corporation (KOMID): Jang Bom Su, Jon Myong Guk, Ko Tae Hun, Choe Song Il, and Kim Jung Jong.  Jang Bom Su and Jon Myong Guk are TCB representatives in Syria.  Ko Tae Hun and Jon Myong Guk facilitate the cross-border movement of KOMID funds.  Choe Song Il and Kim Jung Jong are TCB representatives in Vietnam.

In addition to OFAC’s designations, the U.S. Department of State designated the Strategic Rocket Force of the Korean People’s Army pursuant to E.O. 13382 for engaging in activities that have materially contributed to the proliferation of weapons of mass destruction or their means of delivery. [….]

OFAC designated the following three shipping companies pursuant to E.O. 13551 for being owned or controlled by or acting for or on behalf of U.S.- and UN-designated Ocean Maritime Management Company (OMM):  Haejin Ship Management Company Limited, Pyongjin Ship Management Company Limited, and Yongjin Ship Management Company Limited.  OMM is a North Korean shipping company that uses a variety of aliases and front companies to operate internationally.  OMM attempted to import a concealed shipment of arms and related materiel to North Korea aboard the DPRK-flagged cargo vessel Chong Chon Gang in July 2013.  It used deliberate and evasive methods to conceal the illicit cargo of arms and related materiel. [link]

State’s press release is here.

First, the good. The administration has finally been shamed into a certain token degree of action. The number of entities designated under North Korea sanctions, or for supporting North Korean proliferation, has now hit 100. Around 37 of these targets were designated this year (meaning that the Obama Administration has now designated about as many North Korea-related targets as the Bush Administration did). The designations show a continued focus on targeting North Korean shipping (see here, here, and here).

Now, the bad news. First, the designations still include no senior North Korean officials, with the arguable exception of O Kuk-Ryol. Despite hints by the Obama Administration earlier this year, no North Korean officials have been designated for censorship or human rights abuses. No North Korean entities, including Unit 121, its leaders, or its Chinese enablers, have been designated under President Obama’s new cyber sanctions order.

The designation now of the Strategic Rocket Forces comes nine years after the U.N. Security Council first approved Resolution 1718, which prohibited any financial transactions in support of North Korea’s WMD and missile-related activities. The most glaring omission is Treasury’s failure, thus far, to designate the National Aerospace Development Administration, which has been implicated by the U.N. Panel of Experts for its missile development work.

Also telling is that while several North Koreans have been designated for their associations with two dirty North Korean banks, Tancheon Commercial Bank and the Foreign Trade Bank, those two banks could not have moved dollars through the financial system on their own. To date, I’m not aware of any third-country financial institution or money launderer being designated, fined, or penalized for facilitating those transactions since the action against Banco Delta Asia in 2005. The Obama Administration has designated no Russian targets for assisting North Korea with its arms smuggling or nuclear research, and no Chinese entities for helping North Korea nuke up, do arms deals or launder money. As long as that continues to be the case, there will be actors in the low reaches of the financial ecosystem who will continue to move Kim Jong-Un’s money through our banking system.

Finally, Treasury still hasn’t closed a key gap with the European Union by designating the Korea National Insurance Corporation, or the Korea Shipowners’ Protection & Indemnity Association. U.S. and EU cooperation in blocking the insurers of North Korean ships would be consistent with Security Council resolutions, and would make it extremely difficult for North Korean ships to land in foreign ports.

It isn’t clear why Treasury went to the extra trouble of designating the ten new targets under older conduct-based sanctions orders, rather than the new status-based 13687. One possibility is that Treasury was working on these actions before January 2, 2015, when the President signed 13687, and has just gotten around to issuing the new designations.

The total number of persons, vessels, and entities designated for North Korea-related conduct under the three sanctions orders (EO 13382, EO 13551, and 13687) now comes to precisely 100. That compares to 172 targets under the Zimbabwe sanctions program, 104 under Cuba sanctions (down from over 300 earlier this year), 209 under Syria sanctions, and 843 under Iran sanctions programs (a figure that does not include Iranian entities designated exclusively under terrorism or proliferation-related sanctions programs). A total of 711 targets are designated under Executive Order 13382 for WMD proliferation related activities; of these, 52 are either North Korean or designated for material support for North Korean proliferation. Thousands of targets are designated under anti-drug and anti-terrorism sanctions programs.

Below the fold, I’ve published a list of North Korean entities designated, and third-country entities designated under North Korea sanctions programs. Unfortunately, the list isn’t complete, because Treasury’s SDN search list still has some bugs to be worked out.

Designated under Executive Order 13382:

WMD Proliferation

Designated under Executive Order 13551:

Arms trafficking, money laundering

Designated under Executive Order 13687:

Entities and officials of the N. Korean government or ruling party, third-party enablers of.