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Congress is losing confidence in Trump & Treasury on North Korea sanctions

Yesterday, Senators Chris Van Hollen (D-MD) and Pat Toomey (R-PA) introduced a new version of the Otto Warmbier Banking Restrictions Involving North Korea, or BRINK Act, which I wrote about here in 2017. You can read the two Senators’ summaries of the bill here and here. Otto’s parents also provided a supportive statement. Congress’s patience, which has long been near a breaking point, has reached it. Perhaps it’s not completely fair that Trump is now reaping the frustrations that were building while Barack Obama was still in office, but Congress knows (even if too many journalists don’t) that Trump promised more pressure than he delivered, and grasps too well the potential consequences of its failure. Its distrust of Kim Jong-un may only be exceeded by its dismay at Trump’s witless micromismanagement of affairs best delegated to his cabinet.

Congress was probably right to give President Trump some leeway to pursue his experiment with personalist, top-down diplomacy. Unsurprisingly, this experiment did not end well at Hanoi, where Kim Jong-un proved the skeptics right again that he isn’t negotiating in good faith. Engagers are already pining for a third summit, but Trump left Hanoi with no payoff, blemished by his own disgraceful fawning over Kim Jong-un and his tactless words about the death of Otto Warmbier, and overshadowed by Michael Cohen’s testimony. Trump now faces a more hostile House, a less compliant Senate, and the beginning of a long reelection campaign burdened by the particular disadvantages of an incumbency that could never live up to its fantastic expectations.

Although true “maximum” pressure would include many elements that are missing from Trump’s policy now–such as better resourcing of the sanctions effort, more political pressure on the regime, progressive diplomacy, maritime interdiction, and enhanced inspections of cargo from ports that are havens for North Korean smuggling–I’ve always said I’ll believe it’s “maximum” pressure when I start to see nine-digit civil penalties against the Chinese banks that we know are still laundering Pyongyang’s money. (I’d also be content with deferred prosecutions that yield evidence against other offenders). That is the vulnerability the BRINK Act targets.

I continue to believe that the BRINK Act would complement parts of Senator Gardner’s (R-CO) LEED Act perfectly, and I doubt we’ve heard the last from Senator Gardner on this. Congress has been skeptical of the bureaucracy’s enforcement of the NKSPEA for some time now, and the Democrats are, if anything, even more hawkish on sanctions than the Republicans. Van Hollen and Toomey are first out of the gate, but I doubt they’ll be the last. Congress is losing confidence in how the President and the Treasury Department are managing this issue, and it’s safely within its Article I power to legislate what Treasury refuses to do with its statutory authority. What follows is a list that documents how Congress’s sentiment has built over the last three years.

  1. Letter from Senator Markey to President Obama, Jan. 8, 2016, available at https://www.markey.senate.gov/imo/media/doc/Markey%20DPRK%20Letter%20January%208%202016.pdf (“Given China’s past reluctance to vigorously enforce or expand existing sanctions against North Korea, it could use its Security Council veto to block any efforts to strengthen the UN sanctions regime. To ensure that North Korea’s nuclear test is met with a firm response, the United States could impose secondary sanctions on entities that facilitate North Korea’s evasion of UN sanctions, its pursuit of nuclear weapons and ballistic missiles, and its violation of human rights.”).
  2. Congress passes the North Korea Sanctions and Policy Enhancement Act on February 18, 2016, finding that “financial institutions [that] engage in transactions with, or provide financial services to, the Government of North Korea and its financial institutions without establishing sufficient financial safeguards against North Korea’s use of such transactions to promote proliferation, weapons trafficking, human rights violations, illicit activity, and the purchase of luxury goods … aid and abet North Korea’s misuse of the international financial system; and … violate the intent of the United Nations Security Council resolutions ….”
  3. Statement by Sen. Klobuchar, Feb. 10, 2016, available at https://www.klobuchar.senate.gov/public/index.cfm/events-speeches-and-floor-statements?ID=9231A005-B18F-41F2-AD97-A9A1F65FD267 (“Beyond enacting swift and severe sanctions against those associated with North Korea’s weapons suppliers, hackers, and human rights violators, we must pressure China to get serious about sanctioning the North Korean regime. Unless we have China’s help, the regime will not truly feel the repercussions of its actions.”).
  4. Letter from Sens. Boozman, Capito, Cotton, Cruz, Daines, Fischer, Isakson, Moran, Perdue, Risch, Sessions, Roberts, Rounds, Rubio, Sasse, Shelby, Sullivan, and Wicker to President Obama, Sept. 16, 2016, available at https://thehill.com/policy/defense/296369-gop-to-obama-sanction-chinese-entities-to-get-to-north-korea (“First and foremost, you must begin to designate entities that are assisting the North Korean regime, especially those based in China – the country with which North Korea currently conducts an estimated 90% of its trade and that has historically served as Pyongyang’s largest military and diplomatic protector. As you know, Section 102 of [the NKSPEA] mandates, not simply authorizes, investigations against all entities, no matter where they are based, ‘upon receipt by the President of credible information indicating that such person has engaged’ in illicit conduct outlined in the legislation.”).
  5. Statement of Sen. Gardner, Sept. 27, 2016, available at https://www.gardner.senate.gov/newsroom/press-releases/administration-heeds-gardners-call-to-impose-secondary-sanctions-on-north-koreas-enablers (“I welcome the Administration’s sanctions against Chinese nationals and a China-based company for their evasion of U.S. economic sanctions and propping up Kim Jong-un’s regime.”).
  6. Rep. Ed Royce & Rep. Todd Young, The Hill, Oct. 13, 2016, available at https://thehill.com/blogs/congress-blog/foreign-policy/300708-to-keep-america-safe-us-sanctions-programs-must-be (“The administration has yet to impose sanctions on the array of Chinese companies and banks that, according to a recent U.N. report, continue to support the North Korean regime.”).
  7. Letter from Sen. Gardner to President Trump, Feb. 10, 2017, available at https://www.gardner.senate.gov/newsroom/press-releases/amidst-missile-test-gardner-urges-administration-to-prioritize-north-korean-threat (“In order to exert the most effective economic leverage with Pyongyang, I urge you to employ all diplomatic tools to pressure the People’s Republic of China (PRC) ”“ a nation with which North Korea conducts around 90% of its trade ”“ to fully and unequivocally enforce its North Korea sanction commitments, in particular United Nations Security Council Resolutions 2270 and 2321. In addition, we encourage you to impose secondary U.S. sanctions on any PRC-based entities found in violation of the U.S. or UN sanctions regimes, or engaged in evasion of these sanctions.”).
  8. Letter from Sens. Gardner, Cruz, Tillis, Rubio, Toomey, and Perdue to Secretary Mnuchin, Feb. 14, 2017, available at https://www.cruz.senate.gov/files/documents/Letters/20170214_NorthKoreaLetter.pdf (“Yet in many cases, Chinese banks, including the Bank of China, have disregarded their obligations to enforce U.N. sanctions on North Korea and have ignored their Know-Your-Customer obligations, thus facilitating North Korean proliferation.”).
  9. Letter from Reps. Yoho and Sherman to Secretaries Tillerson and Mnuchin, Aug. 2, 2017, available at https://minbane.wordpress.com/2017/09/21/httpwp-mep1xtjg-5vy-2/ (“We write to draw your attention to the 2017 report of the United Nations Panel of Experts (U.N. Panel) monitoring compliance with sanctions against North Korea. This detailed and credible report adds to the extensive evidence that China’s banking industry has failed to comply with its obligations under U.N. resolutions, and with U.S. sanctions and money laundering laws.”).
  10. Congress passes title III of the Countering America’s Adversaries Through Sanctions Act, further tightening financial sanctions on North Korea.
  11. Letter from Sens. Gardner, Inhofe, Risch, Rubio, Young, and Johnson to President Trump, Mar. 8, 2018, available at https://www.gardner.senate.gov/imo/media/doc/scan.pdf (“We must continue to close every avenue of commercial activity with the regime, including by targeting businesses, financial institutions, and third-country nationals for secondary sanctions. These businesses must know that the cost of doing business with the DPRK is global financial isolation.”);
  12. Letter from Sens. Gardner and Markey to Secretaries Tillerson and Mnuchin, Mar. 31, 2017, available at https://www.gardner.senate.gov/newsroom/press-releases/gardner-markey-urge-trump-administration-to-fully-enforce-north-korea-sanctions (“[T]the recent report of the U.N. Panel of Experts on North Korea documents Pyongyang’s success in evading many of these sanctions, and highlights the troubling failure of a number of countries to effectively stem the flow of illicit North Korean commercial and financial activity.”).
  13. Statement by Sen. Gardner, June 29, 2017, available at https://www.gardner.senate.gov/newsroom/press-releases/gardner-backed-sanctions-against-north-korea-to-be-implemented-by-trump-administration (“China is responsible for around 90 percent of North Korea’s trade, and Beijing’s reluctance to impose necessary pressure on North Korea is what has enabled Kim Jong Un to continue his illicit nuclear and ballistic missile program, whose ultimate goal is to develop a proven and capable delivery system to launch a nuclear strike against the United States homeland.”).
  14. Statement by Sen. Gardner, July 4, 2017, available at https://www.gardner.senate.gov/newsroom/press-releases/gardner-calls-for-a-global-economic-embargo-against-north-korea (“Time for words is over. China can inflict the diplomatic pressure and serious economic damage to North Korea that could move Pyongyang toward peaceful denuclearization and Beijing should do so now. If China fails to act, as it has to date, its relationship with the United States cannot remain the same.”).
  15. Opening Statement by Sen. Gardner, Chairman, at a hearing of the Senate Foreign Relations Subcommittee on East Asia, the Pacific, and International Cybersecurity, July 26, 2017, available at https://www.gardner.senate.gov/newsroom/press-releases/icymi-gardner-chairs-hearing-focused-on-north-korea-policy (“According to the South Korean state trade agency, China accounts for 90 percent of North Korea’s trade, including virtually all of North Korea’s exports. From 2000-2015, trade volume between the two nations has climbed more than tenfold, rising from $488 million in 2000 to $5.4 billion in 2015. Beijing is the reason the regime acts so bold and with relatively few consequences. China must now move beyond an articulation of concern and lay out a transparent path of focused pressure to denuclearize North Korea. A global power that borders this regime cannot simply throw up its hands and absolve themselves of responsibility…. I am encouraged by the actions the Administration took last month to finally designate a Chinese financial institution. But this should just be the beginning.”).
  16. Statement by Sen. Gardner, July 13, 2017, available at https://www.gardner.senate.gov/newsroom/press-releases/gardner-introduces-legislation-to-impose-economic-embargo-on-north-korea-and-its-enablers (“Senator Gardner has applauded recent steps taken by the Trump Administration to ramp up pressure on North Korea, including for the first time designating a Chinese financial institution doing business with North Korea. Ninety percent of North Korea’s trade is conducted with China and Beijing must use its economic leverage to stop North Korea’s illicit and dangerous behavior. Recent reports indicate that China’s trade with North Korea has significantly increased instead.”).
  17. Letter from Sens. Mendez, Schumer, Durbin, Feinstein, Warner, Leahy, and Brown to President Trump, June 4, 2018, available at https://www.foreign.senate.gov/imo/media/doc/06-04-18%20Menendez%20joint%20letter%20to%20Trump%20on%20NK%20Summit.pdf (“[W]e urge you to maintain a tough approach to China to assure that it, in turn, will do all it can to help secure an agreement and then insist on strict North Korean compliance with such an agreement. “).
  18. Statement by Sen. Gardner, Aug. 22, 2017, available at https://www.gardner.senate.gov/newsroom/press-releases/gardner-applauds-new-sanctions-targeting-russian-and-chinese-entities-aiding-north-korea (“I applaud this step by the Administration to impose long-overdue sanctions on these Russian and Chinese entities. However, we need to do more ”“ much more ”“ in imposing penalties on all North Korean enablers, no matter where they are based. We must give every entity doing business with Pyongyang a choice ”“ you either do business with this outlaw regime or the world’s economic superpower.”).
  19. Letter from Sens. Gardner, Graham, Rubio, and Sullivan to President Trump, Aug. 2, 2018, available at https://www.gardner.senate.gov/imo/media/doc/NK%20Letter%2008.02.18%20(signed).pdf (“Moreover, we are now seeing disturbing reports that China and Russia are openly defying the enforcement of United Nations sanctions, including possibly violating oil export quotas and by continuing to host illicit North Korean slave labor.”).

The BRINK Act makes 20.