Maximum pressure watch: North Korea, sanctions & diplomacy

The nature of human beings is to remember dramatic events longer than methodical processes, even when the methodical process may be of equal or greater importance. That may be why North Korea watchers remember the September 2005 action against Banco Delta Asia but tend to forget the greater part of the strategy that action served: sending Stuart Levey, Daniel Glaser, and other officials on a world tour to warn bankers and finance minister to cut their ties to Pyongyang or risk losing their access to the U.S. economy. It was not merely the stroke of one pen that brought Kim Jong-Il to the brink of insolvency; it was the stroke of a pen that put iron behind the velvet gloves that Levey and Glaser wore.

For months now, I’ve been watching for signs that the Trump administration would deploy such a strategy against Kim Jong-Un. The good news is that the signs of such an effort are now unmistakable. The bad news is that this effort is proceeding too slowly to deliver the necessary results in time. 

Starting in May, the President asked the leaders of the Philippines, India (see also) and Vietnam to step up their enforcement of North Korea sanctions and cut their economic ties to Pyongyang. More recently, Ambassador Joseph Yun visited Malaysia, Singapore, and Burma to ask those governments to do likewise. Both Singapore and Malaysia have been havens for North Korean money laundering. Burma has long hosted North Korean arms dealers and been involved in suspicious arms-related deals with North Korea, including some involving nuclear technology. Yun’s message to Burma was that it should not expect the U.S. to restore full diplomatic relations until those dealings end.

Recently, the U.S. delivered a similar message to Sudan, another North Korean arms client. Otherwise, however, there is little evidence that the U.S. has pressured Namibia to shut down a North Korean arms factory, Angola to end its arms deals and use of slave labor, Egypt to expel its local KOMID representatives, or Tanzania to ensure that it cancels the registrations of North Korean ships.

Congress has also joined the effort by pressing Taiwan to cut its commercial ties in a provision of the new Taiwan Security Act. For an ostensible U.S. ally, Taiwan has been implicated in transferring sensitive technology to North Korea with disturbing frequency. For example, starting in 2009, the Treasury Department designated (and the U.N. Panel of Experts has repeatedly mentioned) a Taiwanese arms dealer and several of his companies for selling machine tools to North Korea. 

Last week, banking regulators in Latvia fined two banks for flunking their due diligence obligations to detect and prevent North Korean money laundering. Let’s hope that this is only the first of many similar moves by states to enforce the financial due diligence obligations found in paragraphs 11 through 16 of Resolution 2094, and in subsequent resolutions.

In 2016, while the Obama administration slept, South Korea’s Minister of Foreign Affairs, Yun Byung-Se, also went on tour and secured commitments from multiple states to reduce their economic ties with North Korea. It should not surprise us that since the election of Moon Jae-In filled the Blue House with advisors with histories of addlebrained appeasement or alarming, even violent, pro-North Korean activism, the pace of Seoul’s diplomacy has dropped off to almost nothing. I’ve found evidence of one effort by Seoul in sympathy with this campaign, when Moon had a telephone call with the UAE’s Crown Prince, although it’s far from clear whether he asked the UAE for anything specific, such as sending North Korean slave laborers home. Diplomatically, one can hardly say that Seoul is an ally at all anymore. It barely suffers the burden of accepting a subsidized defense from North Korean missiles, courtesy of American taxpayers.

Tokyo, by contrast, has coalesced with us in much a more valuable way, by joining the U.S. in the collective enforcement of sanctions designations against businesses that deal with Pyongyang, and against the Bank of Dandong. That strategy, which I’ve referred to as “progressive diplomacy,” and which involves coalescing with our friends first, and approaching our enemies only after they’ve been isolated, will greatly multiply the power of each designation.

I’ve noted before that collectively, the U.S., Japan, and South Korea are China’s top three trading partners. I’ve sometimes wondered if that pressure would be even more effective if it took an analytical approach, akin to the Strategic Bombing Survey of World War II, that targets vulnerable or labor-intensive industries in cities such as Dandong and Dalian that trade with North Korea. There are some new tools in the KIMS Act that may be worth considering in the context of such a strategy. One that might be the most potentially devastating authorizes the President to target those cities’ ports.

If South Korea, Australia (see also), the U.K., and Europe were to join in this coalition, the diplomatic and financial pressure on Beijing and Pyongyang might be irresistible. Pyongyang sounds worried. For the long term, it should be. In the short term, however, promises by governments to enforce sanctions against North Korea sometimes mean less in practice than they do on paper, either because those governments backslide, or simply don’t understand what the sanctions require. It is helpful that the U.N. has finally published this summary of the sanctions. It would be more helpful if the U.N., the U.S., or the Financial Action Task Force would promulgate model legislation to ensure that states can easily enact legislation to enforce U.N. sanctions.

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But nothing would be more important in implementing the President’s new strategy than good management in the White House. One necessary step would be for the new Chief of Staff to seize control of the vetting and nominations for key cabinet posts from the political commissars and return that authority to the cabinet secretaries the President chose. Even a sound strategy will fail unless it’s executed competently. The diplomatic visits described in this post began in early May, and so far, the results they have produced are neither clear nor decisive. They have proceeded at too slow a pace to address a problem as urgent as this.

You won’t find a more strident critic than me of the thinking that has predominated in the State Department, particularly with regard to North Korea. But it is one thing to criticize an agency’s culture and the policies it continued to support long after their failure was manifest. It is another thing to destroy the agency itself. Good diplomacy will be an essential element of “maximum pressure.” That not only requires better direction from the White House, it also requires good diplomats.