Tag Archive | "kim jong-nam"

Target of New North Korea Sanctions Bill: Finances

By Phil Eskeland

(“That’s Where the Money Is.”[1])

Last week, the House of Representatives and the Senate overwhelming passed and sent to President Trump’s desk a new sanctions bill for his expected signature. The bill originally focused on Russia and Iran when it was first adopted by the Senate, but was expanded after bipartisan, bicameral negotiations to include sanctions provisions against North Korea as well.  With all the talk in Washington about the inability of different sides to work together, few issues unite more U.S. public policymakers on both sides of the political spectrum than getting tougher on North Korea.  Last May, the House of Representatives passed the Korea Interdiction and Modernization of Sanctions Act (H.R. 1644) by another overwhelming bipartisan vote of 419 to 1.  Essentially, this new sanctions bill – Countering America’s Adversaries through Sanctions Act (H.R. 3364) – takes almost every word from the House-passed North Korea sanctions bill to include it as part of Title III.

Much of the attention to this legislation has been directed at the first title of the bill affecting Russia.  The debate has primarily focused Congressional limitations on the flexibility given to the Executive Branch to implement the bill.  In the past, most sanctions-related legislation grants the President some discretion to waive or delay the imposition of sanctions, because the U.S. government may need flexibility in diplomacy and cannot wait for Congress to pass a bill to amend or end sanctions.  If there was any constraints on the Executive Branch, it was usually done when there was divided government (i.e., the Republican Congress passed the Helms-Burton Act in 1996, when Democrat President Bill Clinton was in office, that placed into statutory law many of the presidential Executive Orders affecting U.S. trade with Cuba, and thus cannot be unilaterally lifted or altered by the President without the consent of Congress).  It is interesting to observe a Republican Congress reasserting itself as a co-equal branch of government by imposing a series of constraints on the ability of a Republican president to unilaterally waive part of the sanctions against Russia.

However, any additional Congressional limitations on the President’s ability to waive or delay the imposition of these new sanctions do not affect the provisions of the bill dealing with North Korea, despite a last-minute effort by some Senate Republicans.  Nonetheless, the primary purpose of Title III of H.R. 3364 is to close loopholes and target new areas to deprive the North Korean regime of the money it needs to operate.  The fundamental philosophy behind the effort is to “cut off the Kim Jong Un regime’s access to hard cash” and “to restrict North Korea’s ability to engage in illicit trade.”

How does this bill accomplish these goals?  First, the legislation mandates sanctions against foreign persons who engage in five activities that have been identified as major revenue-generating activities for the North Korean regime – high-value metals or minerals, such as gold and “rare earths;” military-use fuel; vessel services; insurance for these vessels; and correspondent accounts, which are used in foreign currency exchanges to convert U.S. dollars into North Korean won.

Second, H.R. 3364 increases the discretionary authority of the U.S. government to impose sanctions on persons who engage in one or more of 11 different activities that generate revenue for North Korea, including those who import North Korean coal, iron, or iron ore above the limits set by the United Nations (U.N.) Security Council resolutions; who buys textiles or fishing rights from North Korea; who transfers bulk cash or precious metals or gemstones to North Korea; who facilitates the on-line commercial activities of North Korea, such as on-line gambling; who purchases agricultural products from North Korea; and who are engaged in the use of overseas North Korean laborers.

Third, there is a provision closing one loophole in the international financial system that would prohibit North Korea’s use of indirect correspondent accounts.  These accounts temporarily use U.S. dollars when converting one foreign currency into another, such as North Korean won.  The aim of this provision is to further cut off North Korea from the U.S. financial system and restrict the ability of the DPRK to conduct business with other nations.

Fourth, the legislation curtails certain types of foreign aid to countries that buy or sell North Korea military equipment in the effort to dry up another source of revenue to the regime.  Nations will have a choice: buy North Korean conventional weapons or receive U.S. foreign aid to help their people.

Fifth, H.R. 3364 augments sanctions that target revenue generated from North Korea overseas laborers who work under inhumane conditions.  It would ban the importation into the U.S. of any product made by these laborers.  The bill would also sanction foreign individuals who employ North Korean laborers.

The legislation also ensures that humanitarian aid destined for North Korea is not affected by heightened U.S. sanctions.  However, H.R. 3364 did not retain a provision in the original House version that contained an exemption for planning family reunification meetings with relatives in North Korea, including those from the Korean-American community meaning that family reunions will still be subject to sanctions.  In addition, the bill contains a reward for informants who report violations of financial sanctions on North Korea, in the hopes of increasing the government’s ability to enforce these sanctions.  Finally, it requires a report from the Administration within 90 days after the bill becomes law on the efficacy of putting North Korea back on the State Sponsors of Terrorism list. The debate over reinstating North Korea on the list was revitalized in light of the assassination of King Jong Nam, the exiled half-brother of the ruling leader of North Korea, at the Kuala Lumpur international airport in Malaysia using the VX nerve agent, a banned chemical weapon.

H.R. 3364 should not be seen as an end-goal, but as part of a continuing process of ratcheting up pressure on North Korea to denuclearize.  As this bill is implemented, North Korea will find new ways to evade sanctions.  Further legislation or action by other nations and the U.N. Security Council may be required to further clamp down on these loopholes.  However, the question remains unresolved if heightened sanctions from both the U.S. and the international community will produce the desired outcome – a nuclear-free Korean Peninsula – particularly before North Korea acquires the ability to launch a nuclear warhead on top of an intercontinental ballistic missile (ICBM) capable of reaching the mainland of the United States.   Sanctions are only as strong as its weakest link.  Thus, North Korea’s main trading partner, China, needs to do much more if it is to live up to its rhetoric that “they will strive for the complete, verifiable and irreversible denuclearization of the Korean Peninsula.”

Phil Eskeland is Executive Director for Operations and Policy at the Korea Economic Institute of America. The views expressed here are his own.

Image from Shawn Clover’s photostream on flickr Creative Commons.      
[1] Response by bank robber Willie Sutton to the question as to why he robbed banks, January 20, 1951, edition of the Saturday Evening Post, “Someday, They’ll Get Slick Willie Sutton.”

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Kim Jong-nam’s Views on the DPRK – a KEI Q&A with Yoji Gomi

By Chad 0Carroll

Kim Jong-nam made headlines last week with reports suggesting he was not comfortable with the third generation succession to his brother, Kim Jong-un.  It wasn’t the first time Kim Jong-nam’s name made the news, with previous reports showing his desire for reform, his unhappiness with DPRK military first policy, and even his prediction that the country would collapse soon after a transfer to brother Jong-un.  This time though, the latest spate of stories connected to Kim Jong-nam’s outspoken views relate to his conversations with Tokyo based journalist, Yoji Gomi.

As the most public of Kim Jong-il’s sons, Jong-nam has long been regarded by the mainstream press as the careless playboy who enraged his father through an attempted visit to Japan’s Disneyland with forged documents in the early 2000s.  But a new book by Yoji Gomi suggests that while a heavy drinker, much of the initial speculation on Jong-nam’s character and predicament may actually be incorrect.  Basing the book on an exchange of over 150 emails, Yoji Gomi paints the picture of a “well-read,” “intelligent,” “sensible” and in some respects “ordinary” individual, deeply concerned with his home country.  And if what Kim Jong-nam said was true, then his exile might not have been quite to the extent that some had assumed, with him speaking to his father by phone regularly before his death.

While Kim Jong-nam has long made a habit of speaking to media, until the publication of Yoji Gomi’s book it had appeared that most of his conversations had been through chance meetings with foreign correspondents at airports and other public locations.  Few would have suspected that he would be in such regular contact with the press as it seems he was with Mr. Gomi.  As such, his conversations raise lots of interesting questions for Korea watchers, some of which we managed put to Mr. Gomi in a recent interview.

1. How did you happen to meet Kim Jong-nam and why was he so trusting in a stranger like yourself at first?
I happened to meet him at Beijing airport. We have exchanged more than 150 emails since meeting. We met two times last year and I persuaded him to take an interview with me – and he basically agreed with my plan. I suppose he wants to appeal to the public that the DPRK should make economic reforms as soon as possible.

2. Did Kim Jong-nam offer any insight into the practical way he hopes the regime could make reforms without upsetting the internal balance of power too much?
He believed that the Chinese way is the best for the DPRK. It is possible to invite capitalism while maintaining socialism. For him, the most important thing is to protect foreign investors, including those from South Korea.

3. Why do you think Kim Jong-nam has been so vocal with media, when traditionally the Kim family has been very averse to speaking with foreign media?
Good question. The motivation for contacting media, including myself, is to protect himself. When he feels that his life is in danger, he tries to get in touch with media and expose the secrets of the DPRK.

4. Do you think Kim Jong-nam has much concern for his own personal safety? He claims to be protected by China, but as we know, North Korea has the capacity to make people go missing overseas quite easily.
Yes, he is concerned about his safety. My source said that he has been protected by someone in Macao.

5. How does Kim Jong-nam feel about the forthcoming book you are publishing? Was he on board with its publication?
He is not happy with my book. So has stopped sending me emails.

6. Has Kim Jong-nam ever expressed much regarding unification to you? If so, what was his position on this?
He never referred to unification. But he does hope for economic development of North Korea.

7. What is Kim Jong-nam’s estimation of the current South Korean government led by President Lee Myung Bak?
The relationship between South and North Korea will be difficult for a whole because neither government recognizes each other, he said.

8. Has Kim Jong-nam expressed any thoughts about what a North Korea would look like not ruled by one of the Kim family? Or at least, one not ruled by his brother.
He opposed the power succession to his brother. But he did not elaborate on who is suitable to be the next leader.

9. In a WSJ report with you, Kim Jong-nam said that he spoke regularly to his father by telephone, despite media reports that he was “cut off” from Pyongyang. Did he ever reveal much about the type of conversations he had?
He said he and his father talked about the nuclear issue and power succession by phone. But he never elaborated on the details of their conversation.

10. While reports have indicated that Kim Jong-nam doesn’t know his brother Jong-un, has Jong-nam ever revealed any personality details about his younger brother to you that he picked up from other family members? If so, what were these?
Kim Jong-nam said noting about his brother, as he has never met Jong-un.

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