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April 6, 2016

The Panama papers, Pyongyang, and Nigel Cowie

Here at OFK, we keep a running list of gullible foreigners who’ve tried to get rich in North Korea, justified their support for its regime as ways to reform and open it to global commerce, and instead met the same fate as Hyundai Asan, Volvo, Yang Bin, David Chang and Robert Torricelli, Chung Mong-Hun, Roh Jeong-ho, and Orascom’s Naguib Sawaris, who I predicted back in 2008 would “eventually meet the same fate.” Regulators should require securities issuers to disclose their investments in North Korea...

Money Laundering/Sanctions

April 5, 2016

Radio Free Asia launches investigation of N. Korean forced labor

Radio Free Asia has launched an investigative reporting project into the use of North Korean labor on three continents, and the dangers those joint ventures pose not only to the North Korean workers, but to their customers abroad. RFA also published this infographic about where the North Korean workers are, doing everything from logging and construction to staffing medical clinics. No doubt, the conditions in which the North Korean workers labor also vary, which causes some to criticize the description...

Anju Links/Human Rights/Sanctions

April 4, 2016

North Korea: Let the (information) war begin (updated).

Itâ€™s still much too early to say that the new campaign to cut off the hard currency that sustains His Corpulencyâ€™s misrule will result in either behavior modification or the termination of that misrule, but we continue to see signs that are consistent with Pyongyang feeling the pressure from sanctions. One of these is its exceptional belligerency of late â€” exceptional even by North Korean standards. Not a week goes by without news of North Korea violating U.N. sanctions by...

Propaganda/Subversion

April 1, 2016

European Union publishes new N. Korea sanctions regulation to implement UNSCR 2270

I’ve previously written about the importance of Europe’s role in enforcing U.N. sanctions against North Korea. On March 5th, the EU designated 16 people and 12 entities under its existing North Korea sanctions program. Yesterday, it finally announced the publication of a new “restrictive measures” regulation to implement UNSCR 2270. Based on the summary, the new regulation follows last month’s Security Council resolution right down the line. The measures extend, inter alia, export and import prohibitions to any item (except food or medicine)...

"United" Nations/Europe/Sanctions

March 31, 2016

In Pyongyang, the ghost of Goebbels haunts the Associated Press

Why won’t the Associated Press release the Memoranda of Understanding it signed with the North Korean regime in 2011, in exchange for permission to set up a bureau in Pyongyang? What is it hiding? Plenty of possibilities come to mind, including the signature block. Imagine the AP’s embarrassment if it turned out that, to save time, someone had just pulled an old MOU out of a filing cabinet, crossed out “Josef Goebbels,” and written “Kim Jong-un” underneath it. Practically speaking,...

AP Watch

March 29, 2016

N. Korea’s restaurants, rumored to be involved in money laundering, are closing down.

North Korea’s overseas restaurants are not a significant percentage of its GNP,* but they are an important source of hard currency for Kim Jong-un. As early as 2008, one writer estimated that each restaurant remitted between $100,000 and $300,000 to Pyongyang each year. As of February of this year, there were 130 of them earning $100 million annually. Since then, the South Korean government has told its citizens to stop patronizing the restaurants, and business has fallen dramatically: On some...

Money Laundering/Sanctions

March 28, 2016

Daily NK: China not taking North Korean coal shipments

Last week, I posted about the conflicting reports about China’s compliance with the new sanctions on North Korea. Just after I posted that, I noticed that the Daily NK had also added a report of its own, suggesting that amid a regime mobilization to expand coal production, coal exports were being refused by Chinese ports. “Recently, we’ve seen a full ban on our [North Korean] ships at the Port of Yingkou in Liaoning Province, where coal trade had been most...

China & Korea/Sanctions

March 24, 2016

China’s reaction to North Korea shipping sanctions shows strain, confusion

Two weeks ago, I surveyed the evidence of China’s compliance with new U.N. sanctions and found “mixed, yet hopeful signs.” One area in which the signs has seemed especially hopeful was the enforcement of shipping sanctions. The Philippines had already seized one designated ship, the Sierra Leone-flagged M/V Jin Teng, and detained another, the non-designated, North Korean-crewed, Tuvalu-flagged tanker M/V Theresa Begonia. There was also some evidence that Chinese ports were complying, but we’ll get to that later. Under the...

China/Diplomacy/Sanctions

March 23, 2016

North Korean diplomats behaving badly

If you’re a North Korean diplomat, a good general rule is that all publicity is bad publicity. Over the last two weeks, North Koreans, most of them diplomats or former diplomats, have attracted much publicity of the kind they couldn’t have wanted. The Chinese government reports that “a North Korean consular official” killed two Chinese citizens while driving home drunk in Dandong last month. The North Korean diplomat was on his way home from an “event celebrating North Korea’s launch...

Diplomacy/Money Laundering/NK Crime/Sanctions

March 21, 2016

China & Russia alarmed about secondary sanctions, because sanctions never work.

After years of extensive, flagrant, and well-documented violations of U.N. sanctions against North Korea, China is finally reaping the consequences. Americans don’t agree on much anymore, but Beijing’s cheating has achieved a political impossibility — it has united 418 representatives, 96 senators, The New York Times, The Washington Post, and the mainstream of North Korea watchers in support of secondary sanctions on the (mostly Chinese) banks and businesses that are propping up Kim Jong-un financially. That policy is now expressed in law, and the...

China/Diplomacy/Russia/Sanctions

March 18, 2016

Designation of N. Korea’s propaganda agency could mean trouble for AP Pyongyang

Yesterday, a reader — he can identify himself if he chooses to do so — asked me an excellent question that had not occurred to me: what are the implications for the Associated Press’s Pyongyang Bureau of the Treasury Department’s designation of North Korea’s Propaganda and Agitation Department for censorship? From Treasury’s Wednesday press release: OFAC has designated the Workers’ Party of Korea, Propaganda and Agitation Department (the “Propaganda and Agitation Department”) as an agency, instrumentality, or controlled entity of the...

AP Watch/Censorship/Sanctions

March 17, 2016

Obama blocks N. Korean assets, bans labor exports, sanctions ships and banks.

Just this morning, I was writing about reports that President Obama would sign a new North Korea sanctions executive order. The Executive Order the President signed this afternoon takes several important steps toward implementing the North Korea Sanctions and Policy Enhancement Act, and to a lesser extent, U.N. Security Council Resolution 2270. Full implementation will require years of aggressive investigation and designation of targets, but this is a good start. The text of the E.O. itself is strong, exceeding in several...

Anju Links

March 16, 2016

U.S. will announce new North Korea sanctions as early as this week.

At this event at the Heritage Foundation yesterday, I emphasized that U.S. and U.N. sanctions are mutually complementary, and that for the U.N. sanctions to work, the U.S. must show its determination to back them with the new authorities in H.R. 757, and by harnessing the power of the dollar. The signs I’m seeing this week all suggest that the Obama Administration finally gets this. On Monday, President Obama said “that effective enforcement of sanctions on North Korea is one of the key tasks...

"United" Nations/Diplomacy/Money Laundering/Sanctions/U.S. Law

March 16, 2016

President Park demands end to North Korea’s “tyranny”

Park Geun-hye has a long and distinguished history of saying next to nothing about human rights in North Korea, so these remarks are another welcome step in the right direction: “I will sternly and strongly deal with North Korea … until North Korea embarks on the path toward denuclearization and ends the tyranny of oppressing the human rights of North Korean people and pushing them to starvation,” Park said in an annual meeting with South Korea’s top envoys around. A...

Human Rights/North-South

March 15, 2016

So far, sanctions are cutting off Pyongyang’s cash while sparing North Korea’s poor.

A month after the President signed the North Korea Sanctions and Policy Enhancement Act and two weeks after the U.N. Security Council approved Resolution 2270, enough information has emerged from North Korea to allow for a preliminary assessment of how the sanctions are affecting those they are meant to target, and those they are meant to spare. Sanctions have begun to hit their intended targets. The Daily NK reports that the donju, the well-connected traders who help finance Pyongyang’s priorities through trade with...

Border Control/Capitalism/Class Warfare/Famine & Food Aid/Sanctions

March 15, 2016

HSBC freezes “at least” $87M in assets of North Korea-linked Chinese tycoon

You all remember Sam Pa, right? He’s the Chinese ex-spy with a history of dubious business dealings in Africa, for which he was eventually sanctioned by the Treasury Department. Pa’s 88 Queensway group also had dealings with Korea Daesong General Trading Corporation, a financial arm of North Korea’s Bureau 39, for which he was not designated. Today, this happened: HSBC has frozen more than $87m in accounts linked to a Chinese tycoon behind several multibillion-dollar deals in Africa, while it investigates allegations of...

China & Korea/Money Laundering

March 14, 2016

Namibia’s prohibited arms deal with N. Korea triggers mandatory sanctions under U.S. law.

Namibia is a beautiful desert country with a turbulent history. Some years ago, when I worked in South Africa, I flew from Johannesburg to Cape Town, took a bus across the border to Keetnamshoop, and hitch-hiked to the isolated town of Lüderitz, which sits where the barren dunes of the Namib Desert spill into the cold waters of the Atlantic Ocean. Lüderitz was established by German colonists in the 19th Century; today, many of their descendants still live in the...

"United" Nations/Africa/Sanctions

March 11, 2016

Park Geun-hye finds her inner Thatcher

This week, the South Korean government imposed bilateral sanctions on North Korea, banning from its harbors ships that have been to North Korea in the last 180 days, cancelling a joint logistics project with Russia to export coal through Rajin, and designating “30 companies with links to the North’s nuclear and missile programs …, 38 North Korean nationals and two foreigners.” The targets include “Leonard Lai, president of Singapore-based Senat Shipping” (see this post) and “the Taiwanese president of Royal Team...

Kaesong/Korean Politics/North-South/Sunshine