The Wall Street Journal - The Next Step on North Korea
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June 21, 2017.
New sanctions against China’s traders and financiers might work.
The horrific death of Otto Warmbier, a 22-year-old student held in a North Korean prison for 17 months, highlights the brutal nature of the rogue regime and underscores the urgency of stopping its nuclear ambitions. The next step should be to sanction the Chinese financiers and traders who sustain Kim Jong Un.
President Trump built up expectations of Chinese help after his April summit with President Xi Jinping. That was a long shot given China’s failure to rein in its ally in the past. But it made sense diplomatically, putting Mr. Xi on notice that tougher U.S. action would follow if he failed to deliver. But on Tuesday Mr. Trump tweeted, “While I greatly appreciate the efforts of President Xi & China to help with North Korea, it has not worked out. At least I know China tried!”
As the Journal reported last week, the Administration asked Beijing to crack down on some 10 Chinese companies and individuals that trade with North Korea. If China refuses, the U.S. is prepared to act unilaterally by the end of the summer. The U.S. should now move with dispatch to use tougher sanctions to deprive those on the list from access to the international financial system.
Skeptics are right that United Nations sanctions have done little to stop North Korea, but the sanctions that drove Iran to the negotiating table were far tougher. And a new report from the Washington research group C4ADS suggests that the North’s trading network is highly vulnerable to the new sanctions.
The report dispels the misconception that North Korea obtains materials and technology for its weapons through an invisible network that can’t be stopped by sanctions. It says the same small number of Chinese individuals and companies that dominate legal trade with the North also supply it with “dual use” goods to build nukes and missiles. As sanctions have tightened, this network has grown smaller and more consolidated. That’s because there are only a few individuals who have the skills and connections within China and North Korea to continue trade under these circumstances. Pyongyang will find it hard to replace them.
The U.S. stumbled across this North Korean vulnerability in September 2005 when the U.S. Treasury named Macau’s Banco Delta Asia a “primary concern” for North Korean money laundering. The bank was forced to freeze $25 million in North Korean assets, but the knock-on effects were huge. Trade that depended on the bank ground to a halt, and other banks cut their business with North Korea.
In a tragic miscalculation, the Bush Administration released the frozen funds two years later in return for North Korea returning to disarmament talks, which went nowhere. North Korea moved most of its trading network to China, and the Obama Administration let the North Korea problem grow as it focused on other priorities.
North Korea is now a few years away from fielding an intercontinental missile, and U.S. options are dwindling. A pre-emptive military strike is the last resort because the Kim regime could kill millions with conventional and nuclear weapons. But now that Beijing has been given the chance to help and either refused or failed, the U.S. and its allies have to use every sanction and other tool available to prevent the Kim regime from doing to millions what it did to Otto Warmbier.
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