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Category: Sanctions

October 23, 2013

Not all sanctions were created equal.

David Albright has questioned the conclusions of Josh Pollack, in a to-be-released academic paper, that North Korea has now acquired the ability to advance its nuclear weapons with indigenous technology, that the technological horse is out of the barn door, and that there’s nothing more that sanctions can do. (Implication: North Korea is a nuclear state, and we just have to live with that.) Only we really don’t know the exact parameters of what Pollack concludes, because (at least according to...

Categories Sanctions
October 10, 2013

Review: Treasury’s War, by Juan Zarate

Let me begin with an apology for the lack of posting lately. While tossing a football around with some friends, I took a direct head-on hit to that finger you need for typing words that contain the letters “l” or an “o,” which turn out to be less dispensable than you might think. The time I didn’t spend typing, I spent reading instead: [clicking the image takes you to Amazon] If you want to understand why the Banco Delta Asia...

Categories Axis of Evil/Books & Films/Counterfeiting/Money Laundering/Proliferation/Sanctions
October 3, 2013

Sanctions are working in Iran. They’ll work better against North Korea, and here’s why.

Drag a modest grant check through DuPont Circle and you’ll accumulate at least ten pundits, several dozen grad students, and a multitude of assorted kooks who would willingly write you an academic paper entitled, “Why Sanctions Never Worked.” And that’s true, except for South Africa, Yugoslavia, Burma, Nauru, Al Qaeda, Iran, and North Korea, and only if you limit the argument to trade sanctions and exclude other tools of economic pressure, like coordinated divestment, third-party financial sanctions like those in Section...

Categories Axis of Evil/Iran/Money Laundering/Sanctions
October 1, 2013

I can’t wait to read this one: “Treasury’s War,” by Juan Zarate

I wonder if Amazon can deliver this while I still have an unexpected windfall of leisure time: Zarate, a senior adviser at the Center for Strategic and International Studies, plays the role of the bureaucrat. He joined the Treasury Department just weeks before the 2001 attacks to aid the agency’s enforcement wing. [….] Treasury launched its most ambitious assault with this new weapon on a tiny bank in Macau. That bank, Banco Delta Asia (BDA), caught the department’s attention in...

Categories Books & Films/Money Laundering/Sanctions
September 21, 2013

Kaesong investors beware: Treasury issues new warning about N. Korea money laundering risk

Precisely what North Koreans do with earnings from Kaesong, I think, is something that we are concerned about.” – David Cohen, Undersecretary of the Treasury for Terrorism and Financial Intelligence Just as Kaesong begins the process of reopening, and as the South Korean government seeks to “internationalize” investment there, the Treasury Department has issued a new warning about money laundering risks emanating from North Korea. The warning echoes longstanding concerns by the global Financial Action Task Force. Every potential investor in...

Categories Money Laundering/North-South/Sanctions/Sunshine
August 27, 2013

European NGOs protest enforcement of U.N. sanctions, but not the millions Kim Jong Un wastes on European luxuries

Last week, the Swiss government announced that it had blocked an attempt by North Korea to buy $7.24 million worth of ski lifts, plus “golf, horseback riding and water sports” gear. That this transaction was beneath even the Swiss is saying something. Switzerland is near the top of any list of countries suspected of hosting North Korean slush funds that are variously estimated to be worth between $1 billion and $4 billion. Throughout the duration of a famine that, according for former USAID Administrator Andrew Natsios, killed...

Categories "United" Nations/Europe/Famine & Food Aid/Sanctions
August 22, 2013

Is North Korea importing oil from Iran?

Remember when Marcus Noland and Stephan Haggard wrote that North Korea, notwithstanding the deepening misery of most of its people, had begun to show a current account surplus in recent years? Their conclusion was based largely on trade data showing that North Korea was importing more foreign goods, mostly through China.  If you believe these official Chinese government statistics for the last six months, however, Pyongyang’s imports from China fell sharply … for the first time in four years. Is this welcome evidence that sanctions...

Categories Anju Links/Axis of Evil/Iran/Sanctions
August 21, 2013

North Korea’s “charm offensive” coincides with growing international financial pressure

Observers in the West and South Korea tend to grasp (even gasp) at subtle or superficial changes in the tone of North Korea’s words, but the consistency of North Korea’s actions has always refuted the interpretations of these observers.  No charm offensive ever interrupted Pyongyang’s pursuit of nuclear weapons or its willingness to proliferate nuclear or chemical weapons technology.  Even its provocations, often described as “unpredictable,” follow a cycle that has become familiar to Korea-watchers, including the President of South Korea....

Categories Anju Links/Money Laundering/Sanctions
March 20, 2013

Follow the money. All of it.

Marcus Noland has published two fascinating charts on recent changes in North Korea’s palace economy. According to one, North Korea has begun posting a current account surplus by squeezing its poor, and by taking in foreign exchange from mysterious (but probably Chinese) sources.  That would certainly explain some of its recent, more aggressive behavior — a well-funded North Korea is menacing; an underfunded North Korea is relatively, if temporarily, conciliatory.  Judging by North Korea’s aggressive WMD development and investment in white elephants (gray...

Categories Money Laundering/Sanctions
March 19, 2013

Open Sources, March 17, 2013: Plan B Watch Edition

WHACK-A-MOLE:  The news that Treasury has designated North Korea’s Foreign Trade Bank under Executive Order 13382 leaves me underwhelmed.  This executive order provides for the blocking of assets of entities involved in the proliferation of weapons of mass destruction, and restricts transactions with those entities, assuming we can reach them.  I’m dubious about how many assets or transactions are within our reach, but the pin-pricky targeting suggests that this approach is far less comprehensive than what’s needed to defang North Korea....

Categories Anju Links/Money Laundering/Sanctions
March 7, 2013

Plan B Watch: China’s U.N. Bait-and-Switch

We’ve seen enough of China’s past conduct when it comes to U.N. resolutions aimed at North Korean proliferation that we ought to recognize duplicity when we see it.  We should also know by now that our hapless U.N. Ambassador isn’t very good at recognizing that duplicity.  That’s why the news that China is expected to vote for another U.N. Security Council resolution this morning underwhelms me.  I even think I have a pretty good  idea what China’s game is here. Like I said before — China...

Categories "United" Nations/China & Korea/Sanctions
February 23, 2013

Plan B Watch

Via the Chosun Ilbo, and according to “a diplomatic source:” The U.S. government is considering labeling North Korea as a money-laundering state to pave the way for sanctions after Pyongyang’s latest nuclear test.  [….] Article 311 of the Patriot Act was created following the Sept. 11, 2001 attacks and authorizes the U.S. Commerce Department to identify an individual, financial institution or state as a “primary money-laundering concern.” This would ban the target from transacting business with any system that handles...

Categories Money Laundering/Sanctions
February 19, 2013

How North Korea evades international financial sanctions

There is no such thing as a perfect plan, and the idea of pressuring North Korea through international financial sanctions is no exception. Like money launderers everywhere, the North Koreans have adapted to get around anti-money laundering controls. Reuters has an excellent, must-read report on North Korea’s use of bulk cash transactions to avoid the scrutiny of banks and law enforcement. The report features an interview with Kim Kwang Jin, who defected and revealed his role in an international re-insurance...

Categories Money Laundering/Sanctions
February 12, 2013

OFK in the WaPo

Many thanks to my friend Prof. Sung Yoon Lee for offering me the opportunity to co-write this with him, especially since he frankly did most of the writing this time.  It’s a pleasure to write with Prof. Lee.  He’s a terrific writer, and our views align so closely that there’s no need for painstaking negotiations over wording and content.  Really, I don’t know of anyone who (1) understands the pathology of North Korea better, and (2) can express it so...

Categories Human Rights/Sanctions/The Camps
February 12, 2013

Good Sanctions and Bad Sanctions

Weeks before North Korea’s latest nuclear test, it was clear that the political climate surrounding North Korea policy was ready for a big shift away from honor-system diplomacy and toward tougher sanctions.  This test is likely to mean a major legislative push here in Washington — not just to punish North Korea, but to craft and enact sanctions that attack the regime’s structural weaknesses, with the intent of either coercing its disarmament or destroying it.  For all the tension that will...

Categories Anju Links/Famine & Food Aid/Sanctions
January 27, 2013

Why Susan Rice’s new Security Council resolution is a great victory … for China and North Korea

The Obama Administration spin on the long-stalled U.N. Security Council Resolution 2087 is that it “tightened” U.N. sanctions against North Korea, and that securing China’s vote for that resolution represents some sort of diplomatic accomplishment for the U.S. and Susan Rice. Despite China’s rejection of proposals by the United States to add new sanctions, the Obama administration sought to characterize the vote as a tough response. “This resolution demonstrates to North Korea that there are unanimous and significant consequences for its...

Categories "United" Nations/Sanctions
January 9, 2013

Over at Foreign Policy …

… Professor Sung Yoon Lee and I have a piece up discussing the world’s next, almost-certain-to-be-lost opportunity to respond to North Korea more effectively than having Susan Rice continue to beat her cranium against the Great Wall of China at the Security Council.  It’s a blend of Professor Lee’s prognostications about what the North will do next, and some of the financial constriction ideas I’ve been pushing as one of those Three C’s. I’ll say this about FP — it’s...

Categories Counterfeiting/Missiles/Money Laundering/North-South/Proliferation/Sanctions/WMD
December 6, 2012

North Korea’s missile test will be Susan Rice’s big chance to be effective (for a change). Update: They did it.

As North Korea completes preparations for its latest ICBM test, the United States, Japan, and South Korea are trying to deter it with state-of-the art, laser-guided words.  Success, while unlikely, isn’t completely out of the question; after all, Kim Jong Un seemed to be preparing to conduct a nuke test several months ago, but never went through with it.  If Kim Jong Un really did defer a nuke test, I have no idea why, but it probably wasn’t because he wants...

Categories "United" Nations/Missiles/Sanctions