I’ll give you a topic. The final voyage of the “Wise Honest” was neither. Discuss.

The U.S. Attorney’s Office for the Southern District of New York has seized and sued to forfeit a 17,000-ton North Korean bulk carrier that was hauling neither rice, nor corn, nor milk, but coal to enrich Kim Jong-un, and machinery to keep his mines and his military-industrial complex from shutting down.¹ And it was doing it with money laundered through correspondent banks in our country, in New York City.

This is the great, uncharged crime of the M/V Wise Honest, the in rem defendant in this new civil forfeiture complaint in the U.S. District Court for the Southern District of New York–that as the North Korean people go hungry, their government remains fixated on squandering their scarce resources for proliferation and kleptocracy. But that is not what the prosecutors’ complaint alleges. Instead, it alleges is that the vessel was “involved in” violations of the North Korea Sanctions and Policy Enhancement Act, the executive orders and the regulations at 31 C.F.R. Part 510 that implement it, and the International Emergency Economic Powers Act.

Most forfeiture cases start with evidence of a “specified unlawful activity,” an offense listed in 18 U.S.C. 1956(c)(7). For our purposes, the crimes on that list include sanctions violations under the International Emergency Economic Powers Act and section 104 of the North Korea Sanctions and Policy Enhancement Act. Next, the feds must prove that the property they’re trying to forfeit is either proceeds of that crime, or property “involved in” that crime, including what’s known as “facilitating property.” That often means things like drug houses and cars used for smuggling, but it can certainly mean a ship. This is a civil forfeiture case under 18 U.S.C. 981, so the court will have to find by a preponderance of the evidence that the ship is subject to forfeiture to the United States.

Why civil forfeiture, as opposed to criminal forfeiture? Because the feds can’t prosecute a person they can’t arrest and arraign, but they can seize and forfeit money laundered through U.S. jurisdiction, and (so I’ve just learned) they can also reach ships half a world a way. We designed the North Korea Sanctions and Policy Enhancement Act around this jurisdictional gap. My specific intention was for prosecutors to use a provision at 18 U.S.C. 981(k) that allows the feds to forfeit money right out of a correspondent bank to close that gap. The feds haven’t used that 981(k) because of reasons related to internal DOJ bureaucracy, but prosecutors have validated the broader strategy. Since 2016, the FBI and DOJ have used civil forfeiture as a powerful and effective tool to pursue, freeze, and forfeit North Korean property, and since 2017, they’ve specifically used the NKSPEA as a legal basis for doing so.

The claimant in a forfeiture case may argue that the forfeiture of expensive facilitating property, like a house or a ship, is excessive under the Eighth Amendment, because the amount of contraband found was small and the value of the property was disproportionately higher. That argument has gotten some traction in the Supreme Court recently. It won’t in this case for a few reasons. First, North Korea won’t enter an appearance and the feds will win their case by default. That’s their choice, and it’s the wrong one, and I urge them to continue to make it. Second, the ship is probably a floating rust pile that was ready for the scrap yard anyway. Third, the coal the ship was carrying was previously off-loaded to another ship and (as of a few weeks ago) was hovering off the coast of a nearby country. Finally, the ship had made multiple voyages with its AIS locator switched off, which is strong circumstantial evidence that the illicit use of the ship was primary and not trivial.

Prosecutors in three federal districts have now cited the NKSPEA as the legal basis to forfeit property–the D.C. District, the Eastern District of New York, and now, the Southern District, known among practitioners as the “Sovereign District” for its notorious (or to some, glorious) independence from Washington’s political preferences. It is even said that SDNY is the only district in the country with its own foreign policy, which is one reason why those who will cast aspersions of political motives at the prosecutors today will be self-identifying as Twitter lawyers. They should also note well that Indonesian authorities detained the ship in April 2018 and a federal magistrate in New York issued a seizure warrant in July. At a time when the State Department bureaucracy remains institutionally dead-set against enforcing the NKSPEA as Congress intended—and has convinced an intermittently bamboozled President and an overworked, understaffed, and directionless Treasury Department not to enforce it—leadership of the sanctions enforcement effort has defaulted to the FBI and the Justice Department.

The two most important districts for North Korea sanctions enforcement are the District of Columbia and the Southern District of New York, for reasons that have to do with venue, and with the political independence and skill of their prosecutors. The District of the District of Columbia is critical because it’s where the agencies like the Treasury Department that publish the regulations are located. That makes D.D.C. a proper venue for enforcement actions, and D.D.C. has a small but highly skilled team of prosectors who specialize in asset forfeiture and money laundering. The Southern District of New York, of course, is the home of Wall Street and most of the correspondent banks, and it’s the most prestigious district for prosecuting financial crimes.

D.D.C. was the first to begin using the NKSPEA aggressively as tool for seizure and civil forfeiture, and in the broader context, its recent subpoenas of records from three major Chinese banks are still the most important enforcement actions against North Korean money laundering ever—to include the action against Banco Delta Asia—because of the chilling effect they’re likely to have on both major Chinese banks and their correspondents in the United States. Still, I can’t overstate the importance of having the Southern District of New York not only join this fight, but treat the NKSPEA like the mandate Congress intended it to be.

We’ve also seen it demonstrated again that North Korea’s money launderers know they’re in grave danger when paying or receiving dollars. They are desperate to escape from the dollar system, but have found it difficult to do so, because sellers and buyers want to deal in dollars.

Don’t tell me sanctions don’t work. Tell it to Kwon Chol-nam and Korea Songi Trading Company.

Most forfeiture cases against North Korea-related property have sat on the docket for months before the judge finally ruled. This one won’t, because either the U.S. Navy or Coast Guard is currently towing the Wise Honest to American Samoa, where it’s likely to be drained, searched, and repurposed as an artificial reef. Presumably, neither the U.S. nor American Samoan governments wants the ship sitting around as a hazard to navigation, so SDNY will file its Motion for Summary Judgment promptly. The UN’s North Korea sanctions resolutions require states to seize contraband and property of persons engaged in sanctions violations, and following the cases of the Chong Chon Gang, intercepted in Panama, and the Mu Du Bong, intercepted in Mexico, the Panel of Experts has clarified that this also applies to smuggling ships. The resolutions require a state to “seize and dispose of” a ship that’s smuggling in violation of them. As I explained here—back when I was trying to suggest a muscular, Trumpy alternative to the catastrophically awful idea of bombing North Korea—the resolutions also give us limited authorities to board, search, seize, and sink smuggling ships.

Where does the Justice Department get the authority to seize a North Korean ship half a world away? The Complaint doesn’t specify, but there are several possibilities. The 2019 report of the Panel of Experts, which discusses the Wise Honest, mentions one of them—that the ship switched between the flags of North Korea and Sierra Leone, which would have rendered it stateless and given us or the Indonesians a right of visitation. Alternatively, because the ship was in Indonesian waters and there were “reasonable grounds to believe” it was smuggling, the Indonesians would have had the authority to inspect it under UNSCR 2397, paragraph 9, which would have triggered “seize and dispose of” authority once the Indonesians found evidence confirming that it was involved in sanctions violations. It’s also possible that our diplomats in Sierra Leone asked that purported flag state for consent to board and search under UNSCR 2375, paragraph 7.

Historically, states such as Mexico and Panama have found it burdensome and expensive to seize North Korea’s floating jalopies. My private advice to the State Department then was to offer to take the ships off the seizing states’ hands and dispose of them ourselves. My guess is that we offered an arrangement like that with Indonesia here. The Wise Honest left Nampo, North Korea in March 2018 with a load of anthracite coal and entered Indonesian waters in April. The Complaint alleges that it had its AIS switched off, but also suggests that our satellites or our navy tracked its voyage. By this time, OFAC had designated the ship’s owner, Korea Songi Trading, which means the Indonesian authorities might have put two and two together on their own, although I’d guess there was probably a tip-off from the Americans that the ship was smuggling contraband. Sometime between March and July, the Americans made a decision to seize and forfeit the ship. This would have necessitated extensive discussions with the Indonesian authorities, who had not only detained the ship but also prosecuted its North Korean captain. Three months and one Trump-Kim summit went by before a magistrate in the Southern District of New York found probable cause to seize the ship. The Indonesians’ behavior here was commendable. To the extent this case yields anything of monetary value, I hope the Justice Department will be mindful of the revenue sharing provisions of 18 U.S.C. 981(i), which gives the feds the authority to compensate them for their trouble.

Taken together, the D.C. District’s subpoenas and the Sovereign District’s contribution of a large cadre of DOJ’s most skilled and aggressive prosecutors means that the financial system is becoming unsafe at any speed for Kim Jong-un. Because of DOJ’s independence generally and SDNY’s independence in particular, that’s probably regardless of not only Steve Mnuchin’s inattention, but also regardless of Donald Trump’s whims. This still isn’t maximum pressure, but it’s a giant leap toward it.

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1. I take a certain perverse pleasure in using one of the hard left’s favorite cliches against Pyongyang, which is a military-industrial complex, sustained by crime, terror, and slavery, only with a flag and a seat in the UN General Assembly.