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Category: Sanctions

March 18, 2015

Breaking news! FINCEN rehashes same old North Korea advisory.

To hear Yonhap tell it, the Treasury Department’s Financial Crimes Enforcement Network just stuffed Kim Jong Un into a size XXXXL iron maiden, financially speaking: The United States has issued another advisory on financial transactions with North Korea, designating the communist country as a jurisdiction with high money laundering and terrorist financing risks, a U.S. report said Wednesday. The guidance to U.S. financial institutions, issued Monday by the Treasury Department’s Financial Crimes Enforcement Network (FinCEN), is based on the international money...

Categories Money Laundering/Sanctions
March 12, 2015

Russia’s nuclear cooperation with N. Korea violates at least three UNSC resolutions

My final excerpt from the draft U.N. Panel of Experts report is a lengthy graf (below the fold) describing long-standing and continuing Russian assistance to, and cooperation with, some of the same scientists involved in North Korea’s nuclear weapons program. It’s hard for me to understand how this is not a violation of the UNSC sanctions. Despite the fact that key scientists in designated North Korean agencies (for example, its General Bureau of Atomic Energy) were invited to do research in...

Categories Proliferation/Russia & Korea/Sanctions/WMD
March 9, 2015

Why legal investments in North Korea are a money laundering risk

You’ve often seen me write about the importance of “financial transparency” in transactions with North Korea. For a decade, economic engagement has mostly been done by one of two models: (1) controlled interactions with members of the elite, the actual effects of which are negligible at best; and (2) barbed-wire capitalism, where a few North Korean officials relay orders from foreign managers to hand-picked workers, and where the regime seals the whole enterprise off to prevent it from influencing the local community. The former are, for the most part, of little...

Categories Engagement/Kaesong/Money Laundering/Sanctions/Sunshine
March 4, 2015

North Korea evades U.N. sanctions with shell games, spell games, and whack-a-mole

On any given day, the U.S. Treasury Department’s Office of Foreign Assets Control may publish several pages of new designations for the list of Specially Designated Nationals. Inevitably, most of the designations will be designations of aliases. That’s because one of the oldest sanctions-evasion tricks is renaming an entity, so that when banks type its name into their software, they don’t get a hit that might warn them to decline the transaction, block the account, or file a Suspicious Activity Report....

Categories "United" Nations/Proliferation/Sanctions/WMD
March 3, 2015

Yes, North Korea is still using the dollar system to launder its money.

The Financial Action Task Force has re-issued its call for “countermeasures” against the risks of money laundering and terrorist financing emanating from North Korea. The FATF’s call is not significantly different from advisories the FATF has issued since 2011, but it is significant in one way. More sensible Korea-watchers are accustomed to the pavlovian response of the South Korean press, and of certain American academics, whenever North Korea hints at being willing to talk. We saw this again after Kim Jong Un’s New Year speech, which...

Categories "United" Nations/Money Laundering/Sanctions
March 2, 2015

North Korea’s arms trade flourishes as U.S. diplomacy falters

The latest U.N. Panel of Experts report is a bleak one for the U.N., and for an Obama Administration that seems content to outsource its policy to it. North Korea shows no sign of complying with the resolutions, and every sign of pursuing its WMD programs at full speed. Yongbyon was active for a while last year, and as recently as last September, there were signs of new excavation at North Korea’s nuclear test site at Punggye-ri. North Korea has improved...

Categories "United" Nations/Sanctions
February 27, 2015

So, what “appropriate measures” *did* the feds take against Dennis Rodman for violating N. Korea sanctions?

The newest U.N. Panel of Experts report* on North Korea sanctions enforcement contains this buried treasure: The first question this raises is what those appropriate measures were. The use of passive voice conceals whether the feds took any measures at all. The second question is why there should be a “lack of information” from Rodman, when the Commerce and Treasury Departments have subpoena powers and an obligation to cooperate with U.N. authorities enforcing North Korea sanctions. The law applies to...

Categories Luxury Goods/Sanctions/Useful Idiocy
February 25, 2015

Kim Jong Un seeks friends and funds abroad as he isolates his people.

In the three years that he has been in power, His Porcine Majesty has found plenty of time for Dennis Rodman, but none for meetings with foreign leaders. Suddenly, in the last two months, he has flirted with (1) a summit with South Korean leader Park Geun-Hye, (2) inviting Japanese Prime Minister Shinzo Abe to Pyongyang, (3) and a visit to Vladimir Putin in Moscow in May. His central bank even “committed itself to implementing the action plan of ‘international...

Categories Capitalism/China & Korea/Class Warfare/Diplomacy/Russia & Korea/Sanctions
February 19, 2015

More food for hungry North Koreans is not “bad news” for sanctions proponents.

I don’t always agree with Scott Snyder’s views, but I’ve always enjoyed reading his work. In almost every case, I’ve found it to be well-researched and objective. In a blog post for the Council on Foreign Relations, Snyder cautiously concludes that North’s cereal production is “stable and improving” — from 5.93 million tons last year to 5.94 million tons this year, a more generous characterization than the U.N. Food and Agricultural Organization report he cites, which calls North Korea’s food production “stagnant.”...

Categories Famine & Food Aid/Sanctions
February 2, 2015

Why I’m concerned about the overuse of financial sanctions

As much as I’ve advocated the use of financial sanctions as a potentially effective tool against North Korea, and as much as financial sanctions against Russia appear to have played a significant role in crashing the ruble, it worries me that if we use this tool too much against the wrong targets, we risk blunting the power of our financial weapon. I think North Korea is a good target for financial sanctions because it is (a) dependent on the financial...

Categories Russia/Sanctions
January 23, 2015

Three Cheers for Obama’s Sony attribution, a golf clap for his “proportional” response.

In The Washington Post, Ellen Nakashima describes how Sony’s decision to cancel the premiere of The Interview catalyzed the Obama Administration’s decision to blame North Korea publicly: The next day, alarmed by the surrender, President Barack Obama convened his top officials in the White House Situation Room and, based on their unanimous recommendation, decided to take an action the United States had never dared before in response to a cyberattack by another nation: name the government responsible and punish it....

Categories Anju Links/Cyberwar/Russia/Sanctions
January 21, 2015

Wanna read about North Korea sanctions law? You know you do.

In the Fletcher Security Review, I attack the myth that our North Korea sanctions are strong, summarize the authorities, describe what has and hasn’t worked, and explain how to make sanctions work as part of a more coherent and effective North Korea policy. ~   ~   ~ Update: See also this Wall Street Journal column, citing yours truly, which I swear I didn’t see coming. If only the author had cited the paper linked above, after I knew the answer to the question...

Categories Sanctions
January 20, 2015

NHK Documentary: Money & Power in North Korea

I haven’t watched it all — was busy finishing another project — but it looks to be an interesting examination of the subject that interests me most about North Korea: its money. It talks about the regime’s “gift politics,” luxury goods trade, the “royal court economy,” money laundering, and hunger. Although the documentary itself is new, some of the info seems a bit dated. There were other things I didn’t know. For example, it claims that in Pyongyang, there’s a massive...

Categories Luxury Goods/Money Laundering
January 16, 2015

Actually, sanctions are looking like the best thing that ever happened to engagement

Since December 19th, when the President blamed North Korea for the Sony hacking and cyberterrorism attacks, Congress has been pushing for tougher sanctions against North Korea, and it has looked increasingly like it has been pushing against an open door. And suddenly, a North Korean leader who has never gone abroad or met a foreign leader during his three-year reign (no, Rodman doesn’t count) has taken a sudden — even urgent — interest in personal diplomacy. On January 1, Kim Jong Un made a highly...

Categories Diplomacy/Sanctions
December 23, 2014

White House considers sanctions, psyops, and cyber responses to N. Korea

Because I’ve begun to develop a certain sense of when interesting events are about to get much more interesting, yesterday morning, I decided to check the web site of KCNA, North Korea’s official “news” service. The site did not load, but it has always been slow to load. Then, news sites began to report that North Korea’s internet access had gone down, and that the White House wasn’t denying that it had a hand in this. This morning, kcna.kp loaded...

Categories Cyberwar/Propaganda/Sanctions/Subversion
December 22, 2014

What re-listing N. Korea as a state sponsor of terrorism would mean

The New York Times is reporting that President Obama is considering re-listing North Korea as a state sponsor of terrorism: As the United States moves closer to taking Cuba off the list of state sponsors of terrorism, President Obama said he would “review” whether to return North Korea to the list, part of a broader government response to a damaging cyberattack on Sony’s Hollywood studio. “We have got very clear criteria as to what it means for a state to sponsor...

Categories Sanctions/Terrorism (NK)
December 20, 2014

We are all North Koreans now

As far as I know, I didn’t liberate a single North Korean during my four-year tour with the Army in South Korea, although I’ve argued their distant and forgotten cause ever since I came home. The crimes of Kim Jong Un were still distant just five weeks ago, when Professor Lee and I, writing in The New York Times, sounded a lonely warning about Kim’s efforts to censor his critics in the South with terror and violence, writing that “[c]aving...

Categories Censorship/Human Rights/Sanctions/Terrorism (NK)/U.S. Law