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Why Does the U.S. Hesitate to Enforce Its Laws?


This is the first in a 2 part series looking at the North Korea Sanctions Enforcement Act of 2014 (H.R. 1771). Second piece in the series is available here.

By Bruce Klingner

Former Assistant Secretary of State Kurt Campbell recently observed that North Korea was not the most heavily sanctioned country in the world as so often depicted by pundits. While still at the State Department, Campbell realized that “Burma had much more in the way of sanctions” than North Korea and correctly, if belatedly, concluded that “Clearly we have not been successful at putting substantial pressure on North Korea [and] it would be possible for us to put more financial pressure on North Korea.”

He is absolutely right about this.  And he’s not alone among Obama Administration officials acknowledging that there is far more it could do.   In 2009, the State Department’s sanctions czar commented that the administration was considering additional measures against North Korea. U.S. Six Party Talks negotiator Glynn Davies said in 2013, “I think that there are always more sanctions we could put in place if needed.”  President Barack Obama promised in 2013 a “significant, serious enforcement of sanctions” and a year later that the U.S. would consider “further sanctions that have even more bite.” A U.S. official said recently that Washington was considering a “list of blood curdling sanctions.”

The obvious question is why the Administration has not followed through.

Washington has targeted a mere 62 North Korean entities, primarily for illicit activities and weapons of mass destruction. By comparison, the United States has imposed more comprehensive sanctions against the Balkans (231 entities), Burma (164), Cuba (397), Iran (several hundred), and Zimbabwe (161).

The U.S. has targeted Zimbabwe, Congo, and Burma for human rights violations yet has not taken action against North Korea seven months after the UN Commission of Inquiry accused Pyongyang of human rights violations so egregious as to qualify as crimes against humanity. Nor has Washington designated North Korea as a primary money-laundering concern as it did Iran and Burma.

By contrast, the U.S., EU, and UN have imposed far more pervasive and compelling measures against Iran, yet it is Pyongyang, not Tehran, that has withdrawn from the Non-Proliferation Treaty, tested nuclear weapons, and repeatedly threatened nuclear attacks on the United States and its allies.

Unilateral US actions against Iran, combined with diplomatic pressure, led other nations to impose their own financial and regulatory measures against Tehran. Collectively, the international sanctions have isolated Iran from the international banking system, targeted critical Iranian economic sectors, and forced countries to restrict purchases of Iranian oil and gas, Tehran’s largest export.

Just as strong measures induced Iran back to the negotiating table, more robust measures are needed to leverage North Korea. The United States should use its action against Iran as a model for imposing the same severity of targeted financial measures against North Korea.

Targeted financial measures are directed against entities that violate U.S. laws by exploiting their need to access the global financial network. Even the most isolated regime is vulnerable given the centrality of the U.S. financial system. The U.S. dollar is the global currency of choice for international trade, and the requirement that any dollar-denominated transaction anywhere in the world must go through a U.S. Treasury Department-regulated bank give Treasury the power to exclude North Korea and its third country enablers from the U.S. financial system.

Compared with trade sanctions, targeted financial measures are precision guided munitions against violators, rather than economic carpet bombing against a population. For banks, wire services, and insurance companies, there are catastrophic risks to facilitating – even unknowingly — illicit transactions. The British bank HSBC was fined $1.9 billion for money-laundering and sanctions violations, including financial dealings with Iran. French bank BNP Paribas agreed to pay an $8.97 billion fine for processing banned transactions with Sudan, Iran and Cuba.

Tougher measures against North Korea were effective when applied in the past, such as the Treasury Department 2005 designation of the Macau-based Banco Delta Asia (BDA) as a money laundering concern. In conjunction with other sub rosa U.S. actions, “two dozen financial institutions voluntarily cut back or terminated their business with North Korea, including institutions in China, Japan, Vietnam, Mongolia, and Singapore.”

A North Korean negotiator admitted to a senior White House official, “you finally found a way to hurt us.” Obama Administration officials retroactively commented that the BDA initiative was “very effective” and it was “a mistake” for the Bush Administration to have rescinded it. The Obama administration now “hopes to recreate the financial pressure that North Korea endured back in 2005.”

Yet by subsequently pursuing a policy of timid incrementalism of pulling our legal punches but always promising to be tougher “the next time,” Washington squandered the opportunity to more effectively impede progress on North Korea’s nuclear and missile programs and coerce compliance with U.N. resolutions.

The U.S. Congress lost confidence in the Obama Administration’s half-hearted enforcement of U.S. laws and regulations against Pyongyang and the House of Representatives passed the North Korea Sanctions Enforcement Act in part to spur the Obama Administration out of its torpor. Rather than waiting for another North Korean provocation or violation to incrementally enforce U.S. law, the proposed legislation would apply the power of the U.S. financial system against North Korean proliferation, arms trafficking, money laundering, censorship, and human rights violations.

The Act allows the administration to find and block the offshore proceeds of Kim Jong-un’s kleptocracy and applies U.S. law to third-party enablers which help North Korea finance and facilitate these illegal acts. It would demand a fundamental change in North Korea’s resistance to transparency, and progress on issues important to our regional partners, before the sanctions could be relaxed or lifted.

Similarly, the Senate also showed its impatience with President Obama’s strategic patience policy through its Intelligence Authorization Act which would require the administration to “describe the actions the United States is taking to support implementation of the recommendations of the United Nations Commission of Inquiry on Human Rights” in North Korea.

Neither sanctions nor diplomacy alone is a panacea, both are essential and mutually supporting elements of a comprehensive integrated strategy utilizing all the instruments of national power. The U.S. has strong tools,  it has just lacked the resolve to use them. Why, then, should the United States hesitate to impose the same legal measures against North Korea that it has already used with success against other countries for far less egregious violations of U.S. and international law?

Bruce Klingner is a senior research fellow for Northeast Asia at The Heritage Foundation. He previously served 20 years in the U.S. Intelligence Community, including as CIA’s Deputy Division Chief for Korea. The views expressed here are the author’s alone.

Photo from Stefan Krasowski’s photostream on flickr Creative Commons.

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5 Responses to “Why Does the U.S. Hesitate to Enforce Its Laws?”

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  1. […] Institute, Klinger, a former CIA analyst and scholar at the Heritage Foundation, hammers home the weakness of our North Korea sanctions and their […]

  2. […] Compared with trade sanctions, targeted financial measures are precision guided munitions against violators, rather than economic carpet bombing against a population. For banks, wire services, and insurance companies, there are catastrophic risks to facilitating – even unknowingly — illicit transactions. [Korea Economic Institute] […]

  3. […] This is the second in a 2 part series looking at the North Korea Sanctions Enforcement Act of 2014 (H.R. 1771). The first piece is available here. […]

  4. […] the KEI blog, Bruce Klingner asks why the Obama administration has not exploited the sanctions powers it […]

  5. […] the KEI blog, Bruce Klingner asks why the Obama administration has not exploited the sanctions powers it […]


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