North Korea claimed last week it had tested a hydrogen bomb
U.S. needs to impose tough financial sanctions to change behavior, authors say
Editor’s Note: Sung-Yoon Lee is Kim Koo-Korea Foundation Professor of Korean Studies and assistant professor at Tufts University’s Fletcher School of Law and Diplomacy. Joshua Stanton blogs at www.freekorea.us. He has advised the House Foreign Affairs Committee on the drafting of the North Korea Sanctions Enforcement Act. The views expressed are their own.
North Korea’s nuclear test last week follows a well-worn pattern that spans over a quarter century: Resort to periodic provocations, wait out the flurry of condemnations, then launch a peace offensive and call for talks so that its main adversary, the United States, takes heed and responds with concessionary diplomacy. Repeat. All the while as Pyongyang advances its nuclear and missile technology.
This simple strategy has confounded regional powers and driven them to give North Korea billions of dollars in return for Pyongyang’s repeated pledges of denuclearization. The record of the past quarter-century of nuclear diplomacy vis-à-vis Pyongyang is distinguished by blame, denial, and fantasy masquerading as policy.
The only way to change this equation is to persuade Pyongyang that its regime preservation is dependent on reform and disarmament.
Washington may achieve this with a two-pronged strategy targeting Pyongyang’s systemic vulnerabilities: First, block the Kim Jong Un regime’s offshore hard currency reserves and income with financial sanctions, including secondary sanctions against its foreign enablers. This would significantly diminish, if not altogether deny, Kim the means to pay his military, security forces and elites that repress the North Korean public.
Second, delegitimize Kim’s rule in the eyes of his people and the world by engaging them through broadcasting and other information operations directed at the North Korean people, reinforced by a sustained diplomatic campaign to demand accountability for the regime’s crimes against humanity.
The Kim regime likely calculates that the decades-old cycle of provocations-negotiations-extorting concessions will work yet again against democratically elected leaders nearing the end of their terms. South Korean President Park Geun-Hye and U.S. President Barack Obama will leave office, respectively, in two years and one year.
Such tactics proved lucrative during the Clinton and George W. Bush administrations, when the U.S. appeased Pyongyang with some $1.3 billion in effectively unconditional aid. Instead, we must show Pyongyang that time is not on its side.
Pyongyang’s first long-range missile test on August 31, 1998, led to the Clinton administration’s reengagement of the North, and a gift of about $200 million worth of food aid for the empty privilege of inspecting an empty cave suspected of storing weapons materiel.
Its nuclear test in 2006 pushed President Bush, who was distracted by the war in Iraq, to ultimately lift targeted financial sanctions on Pyongyang, return to nuclear talks, turn a blind eye to the North’s assistance in the construction of a nuclear reactor in Syria, resume food aid and remove North Korea from the list of state sponsors of terrorism.
Today, China will yet again make token gestures like signing on to U.N. Security Council resolutions while repeatedly violating those resolutions and actually increasing trade with Pyongyang. Through each of Pyongyang’s previous nuclear and long-range missile tests, U.S. policymakers have harbored the illusion that Beijing’s patience with Pyongyang must have finally run out.
But all Beijing has done so far is demonstrate a disingenuous pattern of diplomatic ambidexterity. China will not solve the North Korea problem for the United States until China sees the Kim regime as a financial liability, a threat to its own security or a threat to stability along its own border.
The 2014 landmark report by a U.N. commission of inquiry into human rights in North Korea, by revealing the Kim regime’s complete disregard for human life, shows the world why it should care about any of this.
A regime that systematically brutalizes its own people, deliberately starves its population and remains unaccountable to its people or the norms of civilization will feel little moral restraint about making war on its neighbors or arming terrorists.
The United States must cease to defer to Beijing to rein in the Kim regime, and employ its own vast financial authorities to do so itself. While it is true that China, as North Korea’s main trading partner, holds great influence, it is also true that the U.S. Treasury Department has the power to regulate and block the vast majority of international transactions that are denominated in dollars.
Recent U.N. reports confirm that North Korea continues to rely on the dollar, and its access to the dollar system, to move its streams of hard currency, much of it derived from proliferation and illicit activities, in and out of its vast offshore deposits. This gives the United States a particularly important role in the enforcement of the U.N. resolutions.
It is often said that sanctions against North Korea have failed to achieve their objectives. What is seldom said is that this failure is the result of the failure of the United States to make full use of its financial power.
After North Korea’s cyberattack and cyberterrorist threat against the United States last year, President Obama called North Korea “the most isolated, the most sanctioned, the most cut-off nation on Earth.” A review of the sanctions the administration has applied to Pyongyang, however, suggests otherwise.
The Treasury Department has blocked the assets of Sudanese officials for human rights violations, of Iranian entities for censorship, of the leaders of Belarus and Zimbabwe for undermining democratic processes or institutions, and of Russian officials and financiers for aggression against a neighboring country. It has blocked the assets of officials in Burundi for human rights abuses.
But it has applied none of these sanctions to North Korea, a state whose human rights violations, according to the U.N. report, do not have “any parallel in the contemporary world.” It has imposed comprehensive anti-money laundering restrictions on Iran and Myanmar, but not North Korea, the only state in the world known to counterfeit U.S. currency.
Nothing like the sweeping, comprehensive, and devastating financial sanctions that brought Iran back to the bargaining table have been applied to Pyongyang’s rulers, and their billions of dollars in offshore assets. In 2005, financial sanctions proved devastating to then-leader Kim Jong Il, the current leader’s father
Until Washington applies sufficient financial pressure to threaten the survival of the regime in Pyongyang, it will lack sufficient leverage for diplomacy to work. The United States must sustain that pressure until Pyongyang’s denuclearization is verified and its vast gulags are shut down.
The North Korea Sanctions Enforcement Act, which this Tuesday passed the U.S. House of Representatives overwhelmingly, would codify this strategy and require the administration to keep this pressure in place until it verifies North Korea’s disarmament and humanitarian reforms.
Pyongyang’s latest provocation should not be treated as just the latest in a series of flagrant violations of multiple U.N. Security Council resolutions. It should compel a sense of urgency to end North Korea’s march toward nuclear breakout, its threat to the global non-proliferation regime and its systematic and widespread crimes against its own people. It demands, for once, a policy worthy of the name.