Donald P. Gregg, former ambassador to South Korea
“I think showing you have a sense of humor is a real door-opener. A willingness to be self-deprecating is often helpful. And remember that sometimes it’s a question of not saying too much — not falling all over yourself. Being low-key is good. And remember: staring over your shoulder or looking beyond the person you’re talking to as if to see who else is there — that’s a killer.”

Still, it probably doesn’t drive them away as fast as an awkward segue into a zany conspiracy theory.

It’s been a tough week for the dignity of the diplomatic corps.

The Hawaiian Good Luck Sign

I’ve periodically reviewed the public court records regarding each of these cases. My most recent review of the docket of Massie v. Democratic People’s Republic of Korea today indicates that Richard Streeter, who represents the Pueblo plaintiffs, is now poring through a trove of information turned over by the Treasury Department’s Office of Foreign Assets Control, or OFAC, about North Korean assets within American jurisdiction. This information is largely a matter of speculation to those of us whose access is limited to open-source information. Here, OFAC claims that public disclosure would be prohibited by the Trade Secrets Act. But as it has done in similar previous cases, OFAC agreed to share information about blocked North Korean assets with Streeter, subject to a protective order. Here’s some text from OFAC’s unopposed motion for that protective order:

OFAC has agreed to provide plaintiffs with certain information responsive to the subpoena, pursuant to the terms of the attached proposed protective order.1 Without a protective order, the release of this information might violate the Trade Secrets Act (“TSA”), 18 U.S.C. § 1905, which imposes criminal penalties for the disclosure of information falling within its terms without appropriate authorization of law. Thus, while OFAC does not waive any right, privilege, or immunity to which it may be entitled with respect to any further response, it respectfully requests that, in light of the prohibitions of the Trade Secrets Act, the Court authorize its disclosure of information responsive to plaintiffs’ subpoena via the attached proposed protective order.2

OFAC explains why the information must remain protected from public disclosure:

Here, the information OFAC is willing to disclose was provided to it pursuant to 31 C.F.R. § 501.603, which requires financial institutions and other holders of blocked property to file reports with OFAC within ten business days of 4 Case 1:06-cv-00749-HHK Document 16 Filed 10/05/09 Page 4 of 6 the blocking of the property, as well as annually. The requirement is “mandatory,” see id., and “[r]eports filed are regarded as privileged and confidential.” Id. subsection (a). In the absence of a protective order, disclosure of information submitted to OFAC under § 501.603 would adversely affect OFAC’s administration of its programs relating to terrorist financing and economic sanctions, which depends in large part on OFAC’s ability to maintain the confidentiality of the information submitted to it.

This implies, but doesn’t necessarily mean, that there are assets within OFAC’s reach to satisfy the judgment. Note also that according to public court records, Streeter filed a writ of garnishment, presumably for something. This does not mean, however, that whatever assets there may be are subject to attachment. In fact, OFAC has carefully reserved its position on whether any blocked assets are subject to attachment under the Foreign Sovereign Immunities Act. One hopes that the government of this country will not frustrate the pursuit of justice by those who suffered so much to defend that same country. With Treasury now revitalizing its own hunt for North Korean assets to block, the various plaintiffs with claims against North Korea may have access to more attachable assets.

While this is an interesting glimpse at Streeter’s strategy, we’ll have to wait and see whether he manages to collect any of Kim Jong Il’s yacht money. Meanwhile, this is one more complication and disincentive for anyone contemplating new business transactions with Kim Jong Il’s regime.

Related: The Calderon-Cardona plaintiffs, who recently won that massive $378 million judgment against North Korea, filed a similar protective order, as agreed with OFAC, just last week. The court has also permitted them to register their judgment in other jurisdictions, noting cryptically that although the protective order prevents them from disclosing where the North Korean assets are, they aren’t within the District of Puerto Rico.

Meanwhile, the family of the Rev. Kim Dong Shik has also won a default against North Korea. Even so, the Foreign Sovereign Immunities Act requires a plaintiff to prove the liability of the defendant to the court’s satisfaction. No hearing date has been set, but it looks like it could happen this month.

Lee’s first real test stuck shortly after his inauguration — a mass protest movement founded on urban legends, and spread by state-owned broadcasters who were willing to lie for sensational appeal. Lee survived this. Later, he steered South Korea relatively unscathed through an international economic crisis that ought to have hurt a country with such inflated real estate values far worse than it did.

Lee has also stood firm in the face of plenty of extortion from North Korea. Breaking from the course of his predecessors, Lee refused to go on expanding — and even curtailed — South Korean subsidies to a regime that nonetheless felt entitled to murder, kidnap, and detain South Korean citizens, and which refused to take seriously its commitments to dismantle its nuclear programs. When North Korea responded with the most brazen act of war since its attempted hit on Park Chung-Hee in 1968, Lee might have caved (as Roh Moo Hyun and Kim Dae Jung assuredly would have) or let himself be provoked into a military conflict. He did neither. Instead, knowing the exceptionally gullible brand of “skepticism” that prevails within South Korea’s political left, Lee skillfully borrowed global legitimacy by convening an international board of experts to investigate the sinking of the Cheonan, exhausted his options in the U.N., and used the incident to repair his damaged alliance with a liberal American president whom many initially expected would be an uneasy ally. Lee hasn’t always responded as I’d have responded, but Lee has shown a canny sense of just how far his voters will let him go, and that’s certainly a sense I admit to lacking. I seldom claim the ability to make sense of how South Koreans will react to anything.

I approve, mostly, of the way Lee has handled North Korea, but I am of two minds about his success at influencing President Obama. The extent of Seoul’s influence in Washington dismays me, because I perceive such an excess of “clientitis” in our government. Why else do liberal South Korean presidents get the policies they want from conservative American presidents, and conservative South Korean presidents get the policies they want from liberal American presidents? I admit that this bothered me more when I didn’t like the way the influence moved us. I believe it pushed us to act against America’s own interests when Roh Moo Hyun was president. That caused me to weigh the other side of the ledger of risks and rewards, and question the value of the alliance as a means of securing America’s interests in the region. I still question it today, but now, I wish Lee well and want our government to find other, less risky ways of supporting his security objectives. And what better way to end our military presence in South Korea than to extinguish the very need for it?

That’s why I welcome Lee Myung Bak’s most grandiose and expensive undertaking yet:

President Lee Myung-bak’s proposal that South Koreans consider a unification tax aims to start what officials say is an overdue national conversation about the country’s future relationship with North Korea, the minister responsible for dealing with the North said.

“The government wants to make unification a public issue, make people have discussions over it and build consensus around it,” Hyun In-taek, minister of unification, said in an interview Thursday. [Wall Street Journal, Evan Ramstad]

Predictably, the idea of imposing a new tax caused some discomfort among conservatives, too, and Lee had to explain that there are no immediate plans for a specific tax — yet — only an acknowledgment that reunification is likely to be sudden and costly, and that the money to pay for it will have to come from somewhere.

Below the subscriber wall, Ramstad also notes so far, what Lee has done to begin this national conversation consists of launching some “surveys, workshops, and media events” among opinion-makers and intellectuals in government, academia, and business. One particular focus is on determining just what reunification is likely to cost, which is a calculation that must take place in a factual vacuum.

Naturally, this debate has horrified anyone who knows that there are probably gold stars on his dossier somewhere in the archives of the Reconnaissance Bureau in Pyongyang. Just as naturally, Lee’s people insist that they aren’t trying to encourage regime collapse (Who, us? Perish the thought!). At the same time, they say that the want the kind of unification that includes “denuclearization,” “economic cooperation, and most impossibly, as long as the Kim Dynasty holds power, “a political community where the freedom and dignity of Korean people are upheld.” Who could possibly disagree with these perfectly commendable objectives? Or so you might ask if you don’t follow Korean politics.

Whatever you believe Lee’s true intentions to be, and whatever you may think about the merits of those intentions, South Korea needs to have this conversation now. I’ll add that defectors from North Korea need to have a prominent role in it. Recent events have discredited the idea of gradual unification, and not because of anything that Lee could have done differently. The last thing North Korea wants now is an opening of its society — and least of all, unification — under any terms. The North must know that it is no longer capable of absorbing the South’s population, industry, prosperity, ideas, or its belief in gods not sanctioned by the state. Its ideal outcome for South Korea now is to finlandize it and extort regime-sustaining cash from it, just like it did throughout the decade before Lee came to power.

The North Korean system must change, yet it seems determined not to. Will the death of Kim Jong Il be the catalyst for North Korea perestroika? Perhaps at the margins, but North Korea will still be in the hands of people who know that isolation and repression are all that stand between them and the fate of the Ceaucescus. As they see it, perestroika exactly didn’t lead to an optimal outcome. And now that I think about it, Gorbachev and even Putin probably feel the same way.

For all of the hopeless idealism of his (non-)reunification policy, Kim Dae Jung was right about one thing. The Koreas can’t reunify overnight. The absorption must be gradual to give a provisional government time to bring North Korea’s public health crisis under control, repair its infrastructure, reorganize the security services, restore order, secure its WMD facilities, and ameliorate its most immediate environmental catastrophes. It will have to relax migration controls across the DMZ, and even within North Korea, gradually. And all of this must happen without inviting Chinese intervention, which could re-draw the DMZ and ignite a larger regional war (which is why I would offer a withdrawal of U.S. ground forces from all of Korea and no U.S. forces north of the DMZ after reunification — period — in exchange for a Chinese commitment of non-intervention). As you’ve probably inferred by now, what I’m speaking of here is a controlled and phased reunification under a provisional government under South Korean direction, and after a dramatic event in North Korea, such as a coup. What, you thought Jang Song-Thaek was just going to agree to this? Of course you didn’t.

Even so, it is right for us to remain open to unmistakable signs of genuine reform in the North under future leaders, no matter how doubtful it may be that anyone who holds national influence within the current system will allow the system to change faster than the movement of history will eventually demand. When those demands come due, South Korea must be ready — financially, politically, diplomatically, and psychologically. And if Lee accomplishes what he is setting out to do, he will deserve to be remembered as one of the greatest men in his nation’s history, a liberator and a unifier.

Victor Cha says that “[m]any journalists in Washington and Seoul have dubbed the trip a failure at worst or a non-event at best, given Carter’s inability to take the diplomatic initiative of his own as he had done in 1994 in the first nuclear crisis.” I would brand the trip as successful for that very reason, and wonder if the journalists in question have been sequestered in solitary confinement since 1993 or simply lack any capacity to draw inferences or learn from the repetition of past events. Try not to think that the fourth branch of our government is composed of people like this. You need your rest. I only wish they possessed the capacity to see, as Sung Yoon Lee does, how predictable the North Koreans’ playbook really is, even if the precise provocations, inducements, and deceptions may not be.

Because Carter has been so quiet, Donald Gregg offers this bizarre and rambling manifesto, which the New York Times deemed fit to print, and which comes down even to the left of John Feffer in its flirtation with 3/26 conspiracy theories:

Given the difficult agenda he inherited when he came into office, President Barack Obama did not give high priority to dealing with North Korea, whose leaders were seen as obscure and irascible.

“Obscure” wouldn’t be the word I choose for people who do this to other people and their children, but if you’re making a conscious effort to desensitize your readers to the implications of evil this profound and irreconcilable, adjectives are as good a tool of distortion as any other. And though there’s no question that Obama inherited a difficult situation with North Korea, so did his predecessor. And we all know how uncompromising he was with the North Koreans, don’t we?

For example, a suggestion last year that the White House invite Kim Jong-un, Kim Jong-il’s youngest son and probable successor, to the United States was not seriously considered.

The only thing I can really say to that suggestion is that I’d like to know the precise address where Gregg scores his weed.

Instead, President Obama formed a strong relationship with South Korean President Lee Myung-bak, whom he saw as the dynamic leader of a strong American ally, and was content to let Seoul set the pace in terms of dealing with Pyongyang.

Imagine that! For some strange reason — possibly the fact that one of them has a significant gross domestic product, a functioning economy, a representative government, and facilities that still inexplicably host 29,500 U.S. military personnel — President Obama played favorites between North Korea and South Korea. President Obama’s foreign policy no longer frightens me much. For many of the same reasons Gregg finds it so disappointing, it’s far better than his predecessor’s. I’m only frightened when I try to conceive the expectations of men like Gregg when they voted for Obama (or so I presume, and it’s not a long limb I’m out on there). You’re about to see what I mean by this:

One problem, however, is that not everybody agrees that the Cheonan was sunk by North Korea. Pyongyang has consistently denied responsibility, and both China and Russia opposed a U.N. Security Council resolution laying blame on North Korea.

In June, Russia sent a team of naval experts to look over the evidence upon which the South Korea based its accusations. Though the Russian report has not been made public, detailed reports in South Korean newspapers said the Russians concluded that the ship’s sinking was more likely due to a mine than to a torpedo. They also concluded that the ship had run aground prior to the explosion and apparently had become entangled in a fishnet, which could have dredged up a mine that then blew the ship up.

I won’t repeat all of the reasons why this elaborate and unlikely theory is completely lacking in any scientific basis, other than to wonder why, in recent decades, we’ve seen no similar occurrence with the many boats in that area that actually use fishing nets. The pictures alone refute it.

Oh, and did I mention that Donald Gregg is the former U.S. Ambassador to Korea? Yes, I mean South Korea. This man was appointed by the President of the United States, confirmed by the Senate, and embraced by the brain trust of our foreign policy establishment. I seem to recall that he was even with the CIA. He is, in other words, the pairing of an extraordinary resume with a mediocre mind.

Putting further pressure on Pyongyang also only strengthens its dependence on China. The increasing frequency of Kim Jong-il’s trips to China, and the quality of the reception he receives, are clear indications of this trend.

Or, clear indications that China is using Kim Jong Il to create security problems for the United States and advance its own hegemonic interests, and that it’s time for us to make North Korea China’s problem, too.

American pressures are also likely to instill a mistrust and hostility toward the United States in the mind of Kim Jong-un, who is in his mid-20s and about whom little is known.

Because for all we know, nothing else in Kim Jong Eun’s background could possibly have exposed him to the idea that Americans are irascible, predatory, subhuman beings.

The disputed interpretations of the sinking of the Cheonan remain central to any effort to reverse course and to get on track toward dealing effectively with North Korea on critical issues such as the denuclearization of the Korean Peninsula.

Admittedly, the idea that the most appropriate response to a premeditated attack by a rogue state on a traditional ally, or even on our own selves, is to simply deny it does certainly does open up bold new approaches to the art of conflict resolution. For that matter, why should South Korea have a military at all if it’s just waiting to experience mysterious accidents, none of which are truly capable of objective explanation and thus subject to “disputed explanations,” and each of which is a potential obstacle to us “reversing course” and forking over whatever the attacker besieged and desperate interlocutor demands as a precondition to the next negotiation?

And yet something gnaws at me, suggesting that all of this will not end as quickly and cleanly as Gregg imagines. There is also this part of me that supposes that if North Korea shelled Seoul, Donald Gregg would pick his way through the rubble, find a takkoji stand that had somehow escaped destruction, and then write an op-ed declaring that it was a goodwill gesture and — that exhausted cliche — an olive branch.

In the end, it’s proof enough who saw and seized opportunity in Aijalon Gomes’s stroll across the Yalu. I hope no one else will think of doing anything like this again.

In addition to the new order, Treasury also imposed new sanctions against several North Korean entities under the existing Executive Order 13382. Below the fold, I’ve pasted the text of the Executive Order, President Obama’s letter forwarding the EO to the Speaker of the House, two Treasury press releases, and some remarks by OFK favorite Stuart Levey, all of which I’ve archived here to aid your research and mine.

My initial reaction is that the new EO gets it just right. It’s narrowly targeted at North Korea’s illicit activities, but it’s also broad enough to cover the main ones — arms and drug trafficking, money laundering, currency and pharmaceutical counterfeiting, and the squandering of its resources on luxury goods while North Korean children starve in the streets. This is a tough-yet-refined version of the Plan B I’ve been advocating since its earliest draft in 2006.

Here is the key language:

All property and interests in property that are in the United States, that hereafter come within the United States, or that are or hereafter come within the possession or control of any United States person, including any overseas branch, of the following persons are blocked and may not be transferred, paid, exported, withdrawn, or otherwise dealt in:

(i) the persons listed in the Annex to this order; and

(ii) any person determined by the Secretary of the Treasury, in consultation with the Secretary of State:

The EO then goes on to describe a wide range of activities, assistance, and financial activities that could support North Korea’s illicit activities, including the assets of any entity held by a U.S. person, or within U.S. jurisdiction. This means that if a Chinese entity is involved in helping a blacklisted North Korean entity acquire missile components, Treasury could freeze the Chinese entity’s tainted assets based in the U.S., assets of its U.S. subsidiaries, its assets in U.S. banks, or potentially, the entity’s foreign bank’s correspondent accounts in U.S. banks. This is all we could ask, and — if applied vigorously — it will be enough to force international businesses to choose between the use of the global financial system and their business ties with North Korea. Yes, North Korea could try to conceal, blur, obfuscate, and obscure which companies are connected to its illicit activities, but Treasury’s answer to this is that its effect will be to spread suspicion to all North Korean entities, even those that claim to be legit. This could be a severe blow to North Korea’s ability to comingle illicit and legitimate finance (the essence of money laundering) and will terrify investors and cause capital flight from the Palace Economy just as the Kim Dynasty is trying to engineer a smooth succession.

For Senator Sam Brownback, it is also a rightful claim to an important legacy when he leaves the Senate to become, almost assuredly, the next Governor of Kansas. In recent months, as North Korea’s behavior changed thinking in the Obama Administration, Brownback effectively lobbied State for tougher economic sanctions, and skillfully parlayed the stayed threat of nomination holds to build friendships with State Department officials with whom he found common ground. In the absence of strong conservative thinkers on the Senate Foreign Relations Committee, Brownback filled the void, seized the opportunity to build relationships in the Treasury Department, and encouraged it to press for tougher enforcement. The question now turns to the Administration’s determination to use this tool aggressively, and follow the money to the very ash heap of the Kim Dynasty if necessary.

Who is targeted? A lot of entities that were already on Treasury’s list of specially designated nationals, but also, two key additions: Bureau 39 of the Korean Workers’ Party, and the notorious Reconnaissance Bureau, the prime suspect in the recent attempt to assassinate Hwang Jang Yop. Also sanctioned was a North Korean state enterprise responsible for making and exporting submarines and torpedoes.

For the moment, senior State Department people like Robert Einhorn seem determined to use financial pressure to force a fundamental change in North Korea’s behavior, and talk of re-engaging with North Korea all seems very theoretical and conditional. I don’t think anything short of a coup will actually cause that fundamental change, and the real test will come when State and the Administration come to grips with this. For now, this is all we could have hoped for from this Administration.

Letter from the President — Blocking Property of Certain Persons with Respect to North Korea

TEXT OF A LETTER FROM THE PRESIDENT TO THE SPEAKER OF THE HOUSE OF REPRESENTATIVES AND THE PRESIDENT OF THE SENATE

August 30, 2010

Dear Madam Speaker: (Dear Mr. President:)

Pursuant to the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.) (IEEPA), I hereby report that I have issued an Executive Order (the “order”) that expands the scope of the national emergency declared in Executive Order 13466 of June 26, 2008, and takes additional steps with respect to that national emergency.

In 2008, the United States terminated the exercise of certain authorities under the Trading With the Enemy Act (TWEA) with respect to North Korea, and also declared a national emergency pursuant to IEEPA to deal with the unusual and extraordinary threat to the national security and foreign policy of the United States posed by the existence and risk of the proliferation of weapons-usable fissile material on the Korean Peninsula. Executive Order 13466 continued certain restrictions on North Korea and North Korean nationals that had been in place under TWEA.

I have determined that the Government of North Korea’s continued provocative actions, such as its unprovoked attack on and sinking of the Republic of Korea Navy ship Cheonan in March 2010, which resulted in the deaths of 46 sailors; its announced test of a nuclear device and missile launches in 2009; its violations of United Nations Security Council Resolution (UNSCR) 1718 of October 14, 2006, and UNSCR 1874 of June 12, 2009, including the procurement of luxury goods; and the illicit and deceptive economic activities through which it obtains financial and other support, including money laundering, the counterfeiting of goods and currency, bulk cash smuggling, and narcotics trafficking, destabilize the Korean peninsula and imperil U.S. Armed Forces, allies, and trading partners in the region, and warrant the imposition of additional sanctions.

The United Nations Security Council, in Resolutions 1718 and 1874, requires Member States to take certain measures to prevent, among other activities, the transfer of most arms and related materiel to or from North Korea and the transfer of luxury goods to North Korea. The United States has implemented those two UNSCRs, and the order strengthens that implementation.

The order is not targeted at the people of North Korea, nor at those who provide legitimate humanitarian relief to those people, but rather is aimed at specific activities of the Government of North Korea and others undertaken in defiance of UNSCRs 1718 and 1874. The order targets the international network that supports the Government of North Korea through arms sales and illicit economic activities, including money laundering, the counterfeiting of goods and currency, bulk cash smuggling, and narcotics trafficking.

The order leaves in place all existing sanctions imposed under Executive Order 13466, and blocks the property and interests in property of persons listed in the Annex to the order. The order also provides criteria for designations of persons determined by the Secretary of the Treasury, in consultation with the Secretary of State:

• to have, directly or indirectly, imported, exported, or reexported to, into, or from North Korea any arms or related materiel;

• to have, directly or indirectly, provided training, advice, or other services or assistance, or engaged in financial transactions, related to the manufacture, maintenance, or use of any arms or related materiel to be imported, exported, or reexported to, into, or from North Korea, or following their importation, exportation, or reexportation to, into, or from North Korea;

• to have, directly or indirectly, imported, exported, or reexported luxury goods to or into North Korea;

• to have, directly or indirectly, engaged in money laundering, the counterfeiting of goods or currency, bulk cash smuggling, narcotics trafficking, or other illicit economic activity that involves or supports the Government of North Korea or any senior official thereof;

• to have materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, the activities described in sections l(a)(ii)(A)-(D) of the order or any person whose property and interests in property are blocked pursuant to the order;

• to be owned or controlled by, or to have acted or purported to act for or on behalf of, directly or indirectly, any person whose property and interests in property are blocked pursuant to the order; or

• to have attempted to engage in any of the activities described in sections l(a)(ii)(A)-(F) of the order.

I have delegated to the Secretary of the Treasury the authority, in consultation with the Secretary of State, to take such actions, including the promulgation of rules and regulations, and to employ all powers granted to the President by IEEPA and the United Nations Participation Act, as may be necessary

to carry out the purposes of the order. I have also delegated to the Secretary of the Treasury, in consultation with the Secretary of State, the authority to determine that circumstances no longer warrant the blocking of the property and interests in property of a person listed in the Annex to the order, and to take necessary action to give effect to that determination.

The order was effective at 12:01 p.m., eastern daylight time on August 30, 2010. All executive agencies of the United States Government are directed to take all appropriate measures within their authority to carry out the provisions of the order.

I am enclosing a copy of the Executive Order I have issued.

BARACK OBAMA

==================================

Executive Order from the President — Blocking Property of Certain Persons with Respect to North Korea

EXECUTIVE ORDER

BLOCKING PROPERTY OF CERTAIN PERSONS WITH RESPECT TO NORTH KOREA

By the authority vested in me as President by the Constitution and the laws of the United States of America, including the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.) (IEEPA), the National Emergencies Act (50 U.S.C. 1601 et seq.), section 5 of the United Nations Participation Act of 1945 (22 U.S.C. 287c) (UNPA), and section 301 of title 3, United States Code; in view of United Nations Security Council Resolution (UNSCR) 1718 of October 14, 2006, and UNSCR 1874 of June 12, 2009; and to take additional steps with respect to the situation in North Korea,

I, BARACK OBAMA, President of the United States of America, hereby expand the scope of the national emergency declared in Executive Order 13466 of June 26, 2008, finding that the continued actions and policies of the Government of North Korea, manifested most recently by its unprovoked attack that resulted in the sinking of the Republic of Korea Navy ship Cheonan and the deaths of 46 sailors in March 2010; its announced test of a nuclear device and its missile launches in 2009; its actions in violation of UNSCRs 1718 and 1874, including the procurement of luxury goods; and its illicit and deceptive activities in international markets through which it obtains financial and other support, including money laundering, the counterfeiting of goods and currency, bulk cash smuggling, and narcotics trafficking, destabilize the Korean peninsula and imperil U.S. Armed Forces, allies, and trading partners in the region, and thereby constitute an unusual and extraordinary threat to the national security, foreign policy, and economy of the United States.

I hereby order:

Section 1. (a) All property and interests in property that are in the United States, that hereafter come within the United States, or that are or hereafter come within the possession or control of any United States person, including any overseas branch, of the following persons are blocked and may not be transferred, paid, exported, withdrawn, or otherwise dealt in:

(i) the persons listed in the Annex to this order; and

(ii) any person determined by the Secretary of the Treasury, in consultation with the Secretary of State:

(A) to have, directly or indirectly, imported, exported, or reexported to, into, or from North Korea any arms or related materiel;

(B) to have, directly or indirectly, provided training, advice, or other services or assistance, or engaged in financial transactions, related to the manufacture, maintenance, or use of any arms or related materiel to be imported, exported, or reexported to, into, or from North Korea, or following their importation, exportation, or reexportation to, into, or from North Korea;

(C) to have, directly or indirectly, imported, exported, or reexported luxury goods to or into North Korea;

(D) to have, directly or indirectly, engaged in money laundering, the counterfeiting of goods or currency, bulk cash smuggling, narcotics trafficking, or other illicit economic activity that involves or supports the Government of North Korea or any senior official thereof;

(E) to have materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, the activities described in subsections (a)(ii)(A)-(D) of this section or any person whose property and interests in property are blocked pursuant to this order;

(F) to be owned or controlled by, or to have acted or purported to act for or on behalf of, directly or indirectly, any person whose property and interests in property are blocked pursuant to this order; or

(G) to have attempted to engage in any of the activities described in subsections (a)(ii)(A)-(F) of this section.

(b) I hereby determine that, to the extent section 203(b)(2) of IEEPA (50 U.S.C. 1702(b)(2)) may apply, the making of donations of the types of articles specified in such section by, to, or for the benefit of any person whose property and interests in property are blocked pursuant to this order would seriously impair my ability to deal with the national emergency declared in Executive Order 13466 and expanded in scope in this order, and I hereby prohibit such donations as provided by subsection (a) of this section.

(c) The prohibitions in subsection (a) of this section include, but are not limited to:

(i) the making of any contribution or provision of funds, goods, or services by, to, or for the benefit of any person whose property and interests in property are blocked pursuant to this order; and

(ii) the receipt of any contribution or provision of funds, goods, or services from any such person.

(d) The prohibitions in subsection (a) of this section apply except to the extent provided by statutes, or in regulations, orders, directives, or licenses that may be issued pursuant to this order, and notwithstanding any contract entered into or any license or permit granted prior to the effective date of this order.

Sec. 2. (a) Any transaction by a United States person or within the United States that evades or avoids, has the purpose of evading or avoiding, causes a violation of, or attempts to violate any of the prohibitions set forth in this order is prohibited.

(b) Any conspiracy formed to violate any of the prohibitions set forth in this order is prohibited.

Sec. 3. The provisions of Executive Order 13466 remain in effect, and this order does not affect any action taken pursuant to that order.

Sec. 4. For the purposes of this order:

(a) the term “person” means an individual or entity;

(b) the term “entity” means a partnership, association, trust, joint venture, corporation, group, subgroup, or other organization;

(c) the term “United States person” means any United States citizen, permanent resident alien, entity organized under the laws of the United States or any jurisdiction within the United States (including foreign branches), or any person in the United States;

(d) the term “North Korea” includes the territory of the Democratic People’s Republic of Korea and the Government of North Korea;

(e) the term “Government of North Korea” means the Government of the Democratic People’s Republic of Korea, its agencies, instrumentalities, and controlled entities; and

(f) the term “luxury goods” includes those items listed in 15 C.F.R. 746.4(b)(l) and Supplement No. 1 to part 746 and similar items.

Sec. 5. For those persons whose property and interests in property are blocked pursuant to this order who might have a constitutional presence in the United States, I find that because of the ability to transfer funds or other assets instantaneously, prior notice to such persons of measures to be taken pursuant to this order would render these measures ineffectual. I therefore determine that for these measures to be effective in addressing the national emergency declared in Executive Order 13466 and expanded in scope in this order, there need be no prior notice of a listing or determination made pursuant to section 1(a) of this order.

Sec. 6. The Secretary of the Treasury, in consultation with the Secretary of State, is hereby authorized to take such actions, including the promulgation of rules and regulations, and to employ all powers granted to the President by IEEPA and the UNPA, as may be necessary to carry out the purposes of this order. The Secretary of the Treasury may redelegate any of these functions to other officers and agencies of the United States Government consistent with applicable law. All agencies of the United States Government are hereby directed to take all appropriate measures within their authority to carry out the provisions of this order.

Sec. 7. The Secretary of the Treasury, in consultation with the Secretary of State, is hereby authorized to determine that circumstances no longer warrant the blocking of the property and interests in property of a person listed in the Annex to this order, and to take necessary action to give effect to that determination.

Sec. 8. This order is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, agents, or any other person.

Sec. 9. This order is effective at 12:01 p.m., eastern daylight time on August 30, 2010.

BARACK OBAMA

THE WHITE HOUSE,
August 30, 2010.

===================================

August 30, 2010
TG-839

Fact Sheet: New Executive Order Targeting Proliferation and Other Illicit Activities Related to North Korea

Today President Obama issued an Executive Order freezing the assets of certain persons with respect to the Democratic People’s Republic of Korea (North Korea). This new Order expands the scope of the national emergency declared in Executive Order 13466 of June 26, 2008 and takes additional steps to address that national emergency. In the new Executive Order, the President finds that certain actions and policies of the Government of North Korea constitute an unusual and extraordinary threat to the national security, foreign policy, and economy of the United States.

The Order targets the government of North Korea’s continued involvement in a wide range of proliferation and other illicit activities in defiance of UN Security Council Resolutions (UNSCRs) 1718 and 1874 and other illicit activities in defiance of international norms. The Order directs the Secretary of the Treasury, in consultation with the Secretary of State, to target for sanctions individuals and entities facilitating North Korean trafficking in arms and related materiel; procurement of luxury goods; and engagement in illicit economic activities, such as money laundering, the counterfeiting of goods and currency, bulk cash smuggling and narcotics trafficking. This new Executive Order supplements existing U.S. sanctions targeting proliferators of weapons of mass destruction (WMD) and those who support them, under which North Korean entities and individuals have been designated to date.

President Obama also identified the following entities and individual for sanctions by listing them on the Annex to the Order:

· The Reconnaissance General Bureau (RGB), North Korea’s premiere intelligence organization involved in North Korea’s conventional arms trade;

· RGB commander Lieutenant General Kim Yong Chol;

· Green Pine Associated Corporation, a North Korean conventional arms dealer subordinated to the control of the RGB; and

· Office 39 of the Korean Workers’ Party, which provides critical support to North Korean leadership in part through engaging in illicit economic activities and managing the leadership’s slush funds.

The U.S. government has longstanding concerns regarding North Korea’s involvement in a range of illicit activities conducted through government agencies and associated front companies. North Korea’s nuclear and missile proliferation activity and other illicit conduct violate UN Security Council Resolutions 1718 and 1874, and these activities and their other illicit conduct violate international norms and destabilize the Korean Peninsula and the entire region. In signing this Order, President Obama has frozen the property and interests in property of the three entities and one individual listed on the Annex. This Order provides the United States with new tools to disrupt illicit economic activity conducted by North Korea.

* Arms proliferation: North Korea has long been engaged in the sale of conventional arms to countries in the Middle East, Southeast Asia, and Africa. Since the 2009 adoption of UNSCR 1874, which bans all arms transfers from North Korea, authorities in Asia, Africa, and the Middle East have seized North Korean shipments suspected of carrying prohibited arms and related materiel.

* Narcotics trafficking: During the past three decades, North Korean citizens, diplomats and government officials have engaged in narcotics trafficking. Officials in Turkey, Egypt, Taiwan and Japan have linked North Korean officials to narcotics possession, distribution and smuggling.

* Counterfeiting currency: The United States continues to investigate North Korea’s manufacture and distribution of the highly deceptive counterfeit of the U.S. $100 and $50 bills, also known as the “supernote.” The United States Secret Service has made definitive connections between the supernote and the government of North Korea. Since its first detection in 1989, the Secret Service has seized approximately $63 million of supernotes globally.

* Procurement of luxury goods: UNSCR 1718 requires Member States to prohibit the direct or indirect supply, sale of transfer to North Korea of luxury goods, which North Korean leadership uses to secure the loyalty of elites and the military. In July 2009, Italian authorities prevented the sale of luxury yachts worth more than $15 million to an Austrian company because they were ultimately destined for North Korea.

* Deceptive financial practices: North Korea continues to engage in deceptive financial practices to disguise the true nature of its transactions, using government agencies and front companies to engage in WMD and missile proliferation-related and other illicit activities and to evade detection by financial institutions around the world. All of the conduct above is facilitated by the deceptive financial practices North Korea engages in to disguise the true nature of its transactions.

President Obama identified the following entities and individual for sanctions by listing them on the Annex to the Order:

The Reconnaissance General Bureau (RGB)

The Reconnaissance General Bureau is North Korea’s premiere intelligence organization, created in early 2009 by the merger of existing intelligence organizations from the Korean Workers’ Party, the Operations Department and Office 35, and the Reconnaissance Bureau of the Korean People’s Army. RGB trades in conventional arms and controls the North Korean conventional arms firm Green Pine Associated Corporation (Green Pine), which was also identified for sanctions by the President today for exporting arms or related materiel from North Korea.

The RGB is commanded by General Kim Yong Chol, who was also identified for sanctions today.

Green Pine Associated Corporation (Green Pine)

The conventional arms firm Green Pine Associated Corporation was subordinated to the control of the RGB in 2009 and has been identified for sanctions by the President for exporting arms or related material from North Korea. Green Pine specializes in the production of maritime military craft and armaments, such as submarines, military boats and missiles systems, and has exported torpedoes and technical assistance to Iranian defense-related firms.

Green Pine is responsible for approximately half of the arms and related materiel exported by North Korea and has taken over many of the activities of the Korea Mining Development Trading Corporation (KOMID), which is listed in the Annex to Executive Order 13382 of June 2005. KOMID was also designated by the UNSCR 1718 Committee to be subject to the provisions of paragraph 8(d) of UNSCR 1718.

Office 39 of the Korean Workers’ Party (Office 39)

Office 39 of the Korean Workers’ Party engages in illicit economic activity to support the North Korean government. It has branches throughout the nation that raise and manage funds and is responsible for earning foreign currency for North Korea’s Korean Workers’ Party senior leadership through illicit activities such as narcotics trafficking.

Office 39 controls a number of entities inside North Korea and abroad through which it conducts numerous illicit activities including the production, smuggling, and distribution of narcotics. Office 39 has also been involved in the attempted procurement and transfer to North Korea of luxury goods.

· Office 39 produced methamphetamine in Sangwon, South Pyongan Province and was also involved in the distribution of methamphetamine to small-scale North Korean smugglers for distribution through China and South Korea. Office 39 also operates poppy farms in North Hamkyo’ng Province and North Pyongan Province and produces opium and heroin in Hamhu’ng and Nachin.

· In 2009, Office 39 was involved in the failed attempt to purchase and export to North Korea — through China — two Italian-made luxury yachts worth more than $15 million. Halted by Italian authorities, the attempted export of the yachts destined for Kim Jong-il was in violation of United Nations sanctions against North Korea under UNSCR 1718, which specifically require Member States to prevent the supply, sale, or transfer of luxury goods to North Korea.

Office 39 previously used Banco Delta Asia to launder illicit proceeds. Banco Delta Asia was identified by the Treasury Department in September 2005 as a “primary money laundering concern” under Section 311 of the USA PATRIOT Act because it represented an unacceptable risk of money laundering and other financial crimes.

Identifying Information:

Entity: Reconnaissance General Bureau

AKA: Chongch’al Ch’ongguk

AKA: RGB

AKA: KPA Unit 586

Location: Hyongjesan-Guyok, Pyongyang, North Korea

Alt. Location: Nungrado, Pyongyang, North Korea

Individual: Kim Yong Chol

AKA: Kim Yong-Chol

AKA: Kim Young-Chol

AKA: Kim Young-Cheol

AKA: Kim Young-Chul

Location: Pyongan-Pukto, North Korea

DOB: circa 1947

Alt. DOB: circa 1946

Entity: Green Pine Associated Corporation

AKA: Chongsong Yonhap

AKA: Ch’o'ngsong Yo’nhap

Location: c/o Reconnaissance General Bureau Headquarters,

Hyongjesan-Guyok, Pyongyang, North Korea

Alt. Location: Nungrado, Pyongyang, North Korea

Entity: Office 39

AKA: Office #39

AKA: Office No. 39

AKA: Bureau 39

AKA: Central Committee

AKA: Bureau 39

AKA: Third Floor Division 39

Address: Second KWP Government Building (Korean – CH’O'NGSA),

Chungso’ng, Urban Town (Korean — DONG),

Chung Ward, P’yongyang, North Korea

Address: Chung-Guyok (Central District), Sosong Street,

Kyongrim-Dong, Pyongyang, North Korea

Address: Changgwang Street, Pyongyang, North Korea

###

===================================

August 30, 2010
TG-840

United States Designates North Korean Entities and Individuals for Activities Related to North Korea’s Weapons of Mass Destruction Program

WASHINGTON – In joint actions, the U.S. Departments of Treasury and State today announced the designations of five North Korean entities and three individuals under Executive Order (E.O.) 13382 for supporting North Korea’s Weapons of Mass Destruction (WMD) program. Executive Order 13382 is an authority aimed at freezing the assets of WMD proliferators and their supporters thereby isolating them from the U.S. financial and commercial systems.

Also today, President Obama signed an Executive Order that directs the Secretary of the Treasury, in consultation with the Secretary of State, to target for sanctions individuals and entities facilitating North Korean trafficking in arms and related materiel; procurement of luxury goods; and engagement in illicit activities, including money laundering, the counterfeiting of goods and currency, bulk cash smuggling and narcotics trafficking. The new Executive Order supplements E.O 13382, under which North Korean entities have been designated to date, and is consistent with measures required in UNSCRs 1718 and 1874.

Korea Taesong Trading Company and Korea Heungjin Trading Company

Pyongyang-based entities the Korea Taesong Trading Company and Korea Heungjin Trading Company, are used by the Korea Mining Development Trading Corporation (KOMID) for trading purposes. Korea Taesong Trading Company has acted on behalf of KOMID in dealings with Syria, and Korea Heungjin Trading Company acts as the procurement arm of KOMID. Korea Heungjin Trading Company is also suspected to have been involved in supplying missile-related goods to Iran’s Shahid Hemmat Industrial Group.

KOMID is Pyongyang’s premier arms dealer and main exporter of goods and equipment related to ballistic missiles and conventional weapons, with offices located in multiple countries around the world with the primary goal of facilitating weapons sales and seeking new customers for its weapons. It was listed in the Annex to E.O. 13382 of June 2005 and has been sanctioned by the United States repeatedly over the last 10 years for trading in missile technology. KOMID was also designated by the UNSCR 1718 Committee to be subject to the asset freeze provisions of UNSCR 1718.

Korea Taesong Trading Company was previously sanctioned by the U.S. Department of State in 2008 under the Iran, North Korea, and Syria Nonproliferation Act (INKSNA). INKSNA provides for the imposition of measures on entities or individuals for the transfer to or acquisition from Iran, Syria, or North Korea of equipment or technology controlled under multilateral export control lists or otherwise having the potential to make a material contribution to the proliferation of WMD or cruise or ballistic missile systems.

Second Economic Committee, Munitions Industry Department and Second Academy of Natural Sciences

The Munitions Industry Department and Second Economic Committee are involved in key aspects of North Korea’s missile program. The Munitions Industry Department is responsible for overseeing the development of North Korea’s ballistic missiles, including the Taepo Dong-2.

The Second Economic Committee is responsible for overseeing the production of North Korea’s ballistic missiles. The Second Economic Committee also directs the activities of KOMID.

The Second Academy of Natural Sciences is a national-level organization responsible for research and development of North Korea’s advanced weapons systems, including missiles and probably nuclear weapons. The Second Academy of Natural Sciences uses a number of subordinate organizations to obtain technology, equipment, and information from overseas, including Tangun Trading Corporation, for use in North Korea’s missile and probably nuclear weapons programs.

Tangun Trading Corporation is subordinate to the Second Academy of Natural Sciences and is primarily responsible for the procurement of commodities and technologies to support North Korea’s defense research and development programs and procurement, including materials that are controlled under the Missile Technology Control Regime (MTCR) or the Australia Group. Tangun Trading Corporation was designated by the Department of State pursuant to E.O. 13382 in September 2009. Tangun Trading Corporation was also designated by the UNSCR 1718 Committee to be subject to the asset freeze provisions of UNSCR 1718.

Ri Je-son and Ri Hong-sop

Ri Je-son and Ri Hong-sop act for or on behalf of the General Bureau of Atomic Energy (GBAE), which is responsible for North Korea’s nuclear program and manages operations at the Yongbyon Nuclear Research Center. GBAE was designated by the United Nations in July 2009 for its involvement in North Korea’s nuclear program and subsequently sanctioned by the Department of State under E.O. 13382 in September 2009.

Ri Je-son is the Director of GBAE and is responsible for facilitating several nuclear endeavors including GBAE’s management of Yongbyon Nuclear Research Center and Namchongang Trading Corporation.

Ri Hong-sop is a councilor for GBAE. He is also the former Director of Yongbyon Nuclear Research Center. In that capacity he oversaw the three core facilities that the DPRK used to produce of weapons-grade plutonium: the Fuel Fabrication Facility, the 5MWe Experimental Reactor, and the Radiological Laboratory (Reprocessing Plant).

Ri Je-son and Ri Hong-sop were also designated by the UNSCR 1718 Committee to be subject to the asset freeze and travel ban provisions of UNSCR 1718.

Yun Ho-lin

Yun Ho-jin acts for or on behalf of Namchongang Trading Corporation (NCG), a North Korean trading company subordinate to GBAE. NCG has been involved in the procurement of Japanese- origin vacuum pumps that were identified at a North Korean nuclear facility, as well as nuclear-related procurement associated with a German individual. NCG was designated by the State Department pursuant to E.O. 13382 in June 2009.

Yun Ho-jin has acted on behalf of NCG in various capacities since the 1980s. As a senior official at NCG, he oversaw the import of items needed for North Korea’s uranium enrichment program.

Through an NCG office in China, Yun Ho-jin was also involved in purchases of sensitive material linked to the construction of a nuclear reactor in Syria.

Yun Ho-jin was also designated by the UNSCR 1718 Committee to be subject to the asset freeze and travel ban provisions of UNSCR 1718.

Identifying Information:

Entity: Korea Taesong Trading Company

Location: Pyongyang, North Korea

Entity: Korea Heungjin Trading Company

AKA: Hunjin Trading Co.

Location: Pyongyang, North Korea

Entity: Second Economic Committee

Location: Kangdong, North Korea

Entity: Munitions Industry Department

AKA: Military Supplies Industry Department

Location: Pyongyang, North Korea

Entity: Second Academy of Natural Sciences

AKA: 2nd Academy of Natural Sciences

AKA: Che 2 Chayon Kwahak-Won

AKA: Academy of Natural Sciences

AKA: Chayon Kwahak-Won

AKA: National Defense Academy

AKA: Kukpang Kwahak-Won

AKA: Second Academy of Natural Sciences Research Institute SANSRI

Location: Pyongyang, North Korea

Individual: Ri Je-Son

AKA: Ri Che-Son

DOB: 1938

Individual: Ri Hong-Sop

DOB: 1940

Individual: Yun Ho-jin

AKA: Yun Ho-chin

###

===================================

August 30, 2010
TG-841

Under Secretary Stuart Levey Remarks on New Executive Order on North Korea

As Delivered

President Obama today signed an Executive Order establishing a new sanctions program that targets a wide range of illicit activities undertaken by the Government of North Korea. The Order gives the U.S. government new authorities to go after the arms sales, luxury goods procurement, money laundering, counterfeiting of currency and other illicit financial activities that enrich the highest echelons of the North Korean government while the North Korean people suffer.

The world by now is well aware of the North Korean government’s record of illicit activity and its belligerent behavior. Today the President decided that North Korea’s continued provocative actions, such as its unprovoked attack on the South Korean naval ship Cheonan in March of this year, which resulted in the ship’s sinking and the deaths of 46 sailors; its test of a nuclear device and its missile launches in 2009; its violations of UN Security Council Resolutions 1718 and 1874; and its illicit and deceptive practices in international markets justify additional sanctions.

The destructive course that the North Korean government is charting is facilitated by a lifeline of cash generated through a range of illicit activities. North Korea’s government helps maintain its authority by placating privileged elites with money and perks, such as luxury goods like jewelry, luxury cars, and yachts. Not only do these transactions contravene UNSCR 1718, they are unconscionable in light of the fact that many of North Korea’s people live in dire poverty. The North Korean government receives millions of dollars every year from arms sales also outlawed by UN Security Council Resolutions. North Korea has been caught several times making these illicit arms sales, including to Iran and Syria. The North Korean government also benefits from illicit activities, such as drug trafficking, counterfeiting U.S. currency, and selling counterfeit cigarettes. All of this activity makes up a crucial portion of the North Korean government’s revenues.

These activities are carried out by a global financial network that generates this income and procures the luxury goods for the government of North Korea. That network is addressed directly by the President’s actions today. The President has identified for sanctions a key piece of this network, Office 39, a secretive branch of the North Korean government that manages slush funds and raises money for the leadership, including by trafficking drugs.

Also targeted for sanctions today by the President are key elements of North Korea’s infrastructure for importing and exporting conventional arms: Green Pine Associated Corporation, and its parent, the Reconnaissance General Bureau, and the Bureau’s commander, Lt. Gen. Kim Yong Chol. Green Pine is responsible for approximately half of the arms and related materiel North Korea exports, and has taken over many of the activities of another North Korean entity, KOMID, which was sanctioned by the U.S. for its involvement in proliferation-related activities in 2005 and listed for sanctions by the United Nations in 2009.

These measures are not directed at the people of North Korea, who, as Secretary Clinton has said, have suffered too long due to the misguided priorities of their government. Instead, the financial measures the President took today, as well as additional actions we will take in the weeks and months to come, are aimed at disrupting North Korea’s efforts to engage in illicit activities and its ability to surreptitiously move its money by deceiving banks and smuggling cash worldwide.

The activities we are targeting in this new sanctions program are violations of UN Security Council Resolutions or other international norms. By naming the individuals and entities involved in these activities, we will be excluding them from any access to the US financial system and, at the same time, we will be assisting responsible businesses and financial institutions around the world that are trying to protect themselves from illicit North Korean activities. We will continue to take such actions and also to share relevant information with the private sector and regulators around the world. As we have seen when we have taken similar actions in the past, financial measures such as these that focus on illicit conduct are highly effective in garnering the support of the private sector, which is already quite wary of North Korean-related business and the reputational and other risks it poses.

We are also announcing actions today under already-existing authorities to further target North Korea’s proliferation activities. The State Department and Treasury Department have identified five entities and three individuals for sanctions under Executive Order 13382, our proliferation Executive Order. These entities include two trading firms - Korea Taesong Trading Co. and Korea Heunjin Trading Co. - that act on behalf of North Korean arms dealer KOMID in deals involving Iran and Syria.

Special Advisor for Nonproliferation and Arms Control, Bob Einhorn, is here as well, and he will make some comments and explain in further detail, if he wishes, the actions taken by the State Department today.

The overall effect of the actions we are taking and the new program announcing by the President today is that North Korea’s illicit activities will face even greater scrutiny by banks and firms worldwide. North Korea’s leadership must choose the path it wishes to take: whether it will end its isolation by living up to its international obligations and responsibilities or pursue a path that will subject it to ever-increasing pressure.

###

Why is this news? You know, it may just be the fact that I hate peace, but I really don’t get why the fact that John Feffer still advocates “constructive engagement” with North Korea is any more newsworthy than the fact that Tommy Chong still smokes dope.

Agreed Framework III Watch: Please, God, not again.

So amid all the groundless speculation about why Kim Jong Il took Mini-Me to China last week — aside from his desire to snub Jimmy Carter — let me just add one more theory that I’ve seen too little discussion about. My own groundless speculation is that while there certainly must be some succession grooming in the works, Kim Jong Il is also enlisting the help of his enabler, Hu Jintao, to evade U.N. and Treasury sanctions, and I predict he’ll get it unless Treasury knocks off a Chinese bank or mining company to get across the point that we’re not going to tolerate that.

The No.39 Department, which is responsible for the management of Kim Jong Il’s private funds, holds the bank account with the British Virgin Islands branch of FirstCaribbean International Bank (FCIB), a prominent bank in the Caribbean region.

According to an expert source familiar with China and North Korea, the No. 39 Department’s secret overseas account exists under the name “Hana Holdings”. It is apparently held with the Road Town branch of the bank, which is based in Barbados and has branches in 17 countries.

Explaining the importance to North Korea of the No.39 Department account, the source told Daily NK, “Due to recent UN Security Council sanctions, the No. 39 Department is experiencing considerable difficulties with its overseas financial trade. Currently, excluding Chinese banks, their only active overseas account is that held with FirstCaribbean International Bank.”

Also, he added, “The only bank through which the No. 39 Department can make overseas transfers is FirstCaribbean International Bank in the British Virgin Islands, since their other secret bank accounts are all blocked.”

As usual, there’s a Chinese connection. One of the Daily NK’s sources, Ken Kato, is a DC-based accountant and activist for the release of Japanese abductees I’ve met and corresponded with in the past. This would be a case of North Korea’s malice reaping severe and unintended consequences. Separately, the Daily NK reports that Bureau 39 has fallen on hard times.

One of the most inviolable rules any civil servant, contractor, or employee must respect is that confidential or classified information must never leave the office. That’s why you’ve never seen me talk about my work, and you seldom even see me allude to it. There are exceptions, recognized by law, for revealing abuse of authority or a violation of law by colleagues, but the appropriate vehicle for those reports is to report that information to the Inspector General, not Fox News or Wikileaks.

I already regret making the comparison to Robert Kim, because I only draw it because of Stephen Kim’s ancestry, which shouldn’t matter. But among South Korea’s favorite methods for exerting its extensive influence over U.S. policy toward the Koreas is to leak reports that favor its policy goals. I emphasize that I have no particular reason to believe that Stephen Kim was working for South Korea, but Kim’s case does illustrate the danger that foreign governments will use leaks to corrupt U.S. government employees for their own purposes (and in case you’re wondering, I hold precisely the same view of Jonathan Pollard, who deserves to die in prison). Ultimately, this legitimizes suspicions of dual loyalties against loyal and honest American citizens who may bring badly needed linguistic and cultural understanding to the federal service. That means that leaks of this kind are toxic for good policymaking, for the civil service, and for society as a whole, and that the Obama Administration gets my full support for this prosecution.

But rather than speculating about the unknowable, I ask why North Korea is invited to international sporting events at all, and why liberals who rightly pressed to sanction South Africa and opposed constructive engagement, now advocate that precise thing in the case of North Korea, whose human rights record is far worse than South Africa’s.

I can’t resist making one more observation, and it is this: who else has noticed that the ex-”human rights president,” one who was so concerned about Park Chong Hee’s authoritarianism that he almost pulled U.S. forces out of Korea, never quite summons the principle to call for the closure of North Korea’s peace forests? Or that Carter’s ostentatious and smug brand of religious faith never translates into a call to end North Korea’s persecution of Christians?

Succession Watch: North Korea is now said to be producing millions of portraits, badges, and other icons portraying Kim Jong Eun’s royal visage. And since fuel obviously isn’t needed for flood relief or bringing in the harvest, they’re gassing up the tanks for a colossal military parade. You can read a good summary of succession developments and speculation here, at the Wall Street Journal.

Good question: “What is Facebook without friends?” Also on this topic, I believe it’s obligatory of me to point out that at one point, North Korea’s Facebook page listed itself as male-seeking-male.

North Korean pilots still live better than the wretches who surround them, but the North’s economic collapse has damaged their material privileges, too.

Our friends, the ChiComs, Part I: “North Korea smuggled state-of-the-art measuring equipment used in long-range rockets and missile launchers from China in April. Citing an unnamed source, a Seoul-based daily said a Chinese company forged documents to illegally export the machinery to North Korea, an activity banned under UN Security Council Resolution 1874.”

Our friends, the ChiComs, Part II: “China is keeping up its barrage of words directed at the U.S., this time with a fiery editorial written by a general in the country’s state-run military newspaper, which calls for the country to be prepared to respond if it is attacked by the U.S. ‘If someone does not harm me, I won’t harm him,’ said Maj. Gen. Luo Yuan in Thursday’s Liberation Army Daily. ‘If someone harms me, I must harm him.’” By this unassailable logic, the Chinese entities that fund Kim Jong Il and Ahmedinejad and enable their terrorism and proliferation are long overdue to have their assets blocked.

“Our land and people in the North are armed with weaponry far more powerful than nuclear weapons - solid unity, self-containment, and revolutionary optimism fuelled by the Juche ideology,” Han said.

Cozying up to North Korean leader Kim Jong-il, he said, “I genuinely respect, love and desire to obey you.” He also attacked the findings of a multinational investigation on the sinking of the Cheonan, calling it the “pinnacle of Lee Myung-bak’s pack of lies.” He blamed President Lee for sending the sailors to their deaths. [Joongang Ilbo]

Han Song Ryol is a fascist, not a liberal. Aijalon Gomes is a liberal. Even “Reverend” is difficult to allow. Han worships Kim Jong Il, but if that qualifies Han as a cleric, then you must allow that Juche is a religion, in the same sense that the Peoples’ Temple and Al Qaeda’s brand of Wahhabism are religions. The evidence that Han worships a higher God is far less clear.

Han Song Ryol is a charlatan, a traitor, and a fool. But this does not justify the South Korean government’s ham-handed decision to arrest and make a martyr of him. Indeed, I take issue with the Joongang Ilbo’s editorialists mixing these two issues:

What’s more disheartening is that there are people who applaud Han’s stunt. Some 150 members of a local branch of the progressive Democratic Labor Party held a ceremony to welcome the pastor back home. Some civilian activist groups based in North Jeolla Province also protested against his arrest. These groups should declare what side they’re on. What part of Han’s actions do they approve of? Are they followers of the North Korean regime, too?

If you hold a ceremony to welcome Han Song Ryol back home, you’re either a paid-up member of the Fifth Column or willfully ignorant of facts that would make any reasonable thinker want to dissociate himself from Han. Not that this should surprise us in the case of the Democratic Labor Party, whose North Korean influence was so brazen that it resulted in criminal convictions during the Roh Administration and split the party itself.

I’m also cynical enough to suspect that in practice, the same probably also applies to those who bothered to protest Han’s arrest publicly, though I also protest the fact of Han’s arrest for his words, and I can’t remember the first or last time anyone accused me of being a follower of the North Korean regime. The South Korean government’s prosecution of repellent ideas has only glorified those ideas (and in due course, we’ll also learn that North Korea’s suppression of dissent was less successful than we tend to estimate).

Far better for South Korea to have simply denied Han reentry into South Korea. It would more than suffice as Han’s punishment to let him live by what he preaches, and he could hardly complain about spending the rest of his life in a place he mischaracterizes as a paradise. Wouldn’t life in North Korea be punishment enough for any fool? Certainly it would be a fascinating thought experiment. I suspect it would be just a matter of time before Han would misspeak, be reported by a neighbor, and vanish into a Peace Forest one night. When that time comes, who in the Democratic Labor Party do you suppose will stand up for his right to free speech then?

My greater fear, however, is that Carter’s visit will facilitate the extension of some more tangible, regime-sustaining ransom. So it was with Bill Clinton. While he played tough and let William Perry hint darkly about air strikes, he ultimately allowed Carter to broker the Agreed Framework that irrevocably made North Korea a nuclear power. I have no cause to believe that Obama is playing us, but I have cause to be suspicious. Even paranoid people have real enemies, after all.

I’d like to hear those who supported the methods of Robert Park and Aijalon Gomes (as opposed to their intentions) tell me why Park and Gomes have done more good than harm.

The traitor talked about “unification tax,” sheer nonsense, at a time when the situation prevailing in Korea is so tense that a war may break out any moment. This is no more than sophism let loose by an idiot who knows nothing about reunification, insensitive to what is happening in the world and ignorant of the inter-Korean relations, a profiteer who knows nothing but money and a political imbecile.

How can you not like unification? It’s like puppies, Christmas, and peace.

Kim Jong Il Death Watch: Open News thinks the embalming process has already started, metaphorically speaking. Meanwhile, Jong Eun’s grooming continues.

I’m surprised this took so long: “On July 6th, a high level source in North Korea stated that the country’s overseas agents are propagating that the US. had been behind the explosion of the South Korean ship ‘Cheonan’.” One advantage of making the Cheonan Incident America’s fault would be that instead of pretty much forgetting about those 46 lost sailors, South Koreans would remember — even fetishize — them for decades.

The United States and its allies should also impose sanctions that target Chinese companies and financial institutions that facilitate or fund Pyongyang’s illegal activities. Moreover, any Chinese entity circumventing sanctions on North Korea should find it exceedingly difficult to do business elsewhere. Thanks to its not-so-paranoid fear of domestic instability, the Chinese leadership is very sensitive to the economic consequences of its actions. [Michael Mazza, The American]

_____________________

To stop his acts of killing, we have to make him hurt. For example, after the sinking of the Cheonan, Seoul could have closed down the Kaesong industrial zone, which is just north of the Demilitarized Zone that separates the two Koreas. There, about 120 South Korean businesses employ around 44,000 North Korean workers. That, by itself, would deprive Kim of a substantial source of funding because Pyongyang skims a large portion of the wages.

Similarly, we can cut off North Korea’s access to the international financial system. The Bush administration did just that in September 2005 when it declared Banco Delta Asia, a bank Kim used in Macau, to be a “primary money laundering concern.” As such, no financial institution would do business with it. And as a result, North Korea, for two years, had to use its diplomats to ferry cash in bulging suitcases around the world. And, lo and behold, Kim Jong Il did not start a war even though the U.S. Treasury Department crippled his government. [Gordon Chang]

_____________________

American diplomats have met with Aijalon Gomes and asked North Korea to release him for health reasons. I can conceive of no reason but ransom for North Korea to imprison Gomes for seven months, and I’m struck by the absurdity of a world in which a malingering airline bomber walks free while a peaceful human rights petitioner is imprisoned unjustly … with hardly a peep from the Human Rights Industry.

North Korea shows off its new toys: A new tank, apparently an upgraded T-62, and a surveillance UAV. Not seen: an inexpensive, reliable, mass-produced tractor to replace all those oxen still used to plow the fields.

Don Kirk writes about the legacy of Kim Dae Jung and Sunshine after the Cheonan Incident.

The Pentagon reports on China’s military buildup.

“We know the Iraqis don’t have nuclear weapons,” Hill said. “It’s a good thing. Probably Iraq is easier because at the end of the day what can you say about North Korea? You really can’t ask them to reform because asking them to reform is asking them to be destroyed. So what will be the future there? Whereas, in Iraq, I can see the future.” [Yonhap]

And by “reform,” he might as well mean “disarmament.” Indeed, it’s pretty evident he did mean disarmament, if you recount Hill’s oily salesmanship of Agreed Framework II even as the North Koreans steadily reneged on it. Hill’s belated concession that he “can’t see” North Korea’s future is really a concession that he has no vision of a North Korea that ceases to brutalize its people, attack its neighbors, and arm terrorists. But this is the vision that Hill was ostensibly charged with realizing, and it’s the vision he aggressively sold to President Bush in accumulating his power to give away so much in his negotiations with North Korea.

Of course, Hill is absolutely correct when he says that North Korea doesn’t dare to reform … or disarm. I don’t fault him for perceiving the truth. I fault him for concealing it from everyone from President Bush down to his adoring media harem who were largely too stupid to grasp that on their own. Was Hill’s perception of North Korea’s interests that much more acute than his perception of America’s interests, or did Hill simply conclude that appeasing North Korea’s interests aligned more closely with his own than advancing America’s interests? I’ll leave that question to others. What’s evident to me is that for Chris Hill, having a deal — any deal — was the object that eclipsed all others. Stated differently, Chris Hill’s diplomacy certainly seemed to be all about Chris Hill’s ambition. I’ve met plenty of people who would say the same in private, but Senator Sam Brownback was the only person with the spine to act on it.

Despite the lack of any competent reporting on why Hill left Baghdad barely a year after a difficult confirmation, I can’t bring myself to believe that someone this ambitious would be retiring to an academic job in the outer provinces if he’d been seen as an effective ambassador in Iraq. In the end, the best service Hill gave to his country was to demonstrate the futility and dishonesty of everything he advocated.

Just don’t say I didn’t warn you.

[Yonhap photo]

China may seem an unlikely destination for a defector who must have known that he’d be repatriated and killed if caught, but Yonhap, quoting South Korean government sources, claims that the pilot was actually headed for Russia — also an unlikely destination — and lost his way. Why not South Korea or Japan? Because the North Korean air force undoubtedly keeps a very tight hold on the supply of fuel to discourage pilots from entertaining such ideas, and witness accounts published by the AP are consistent with this theory:

A witness said the plane plowed into an apple orchard, killing its pilot on impact. South Korean media said the plane, believed to be a fighter jet, appeared to have run out of fuel and might have been piloted by a defector.

China’s official Xinhua News Agency said the aircraft crashed Tuesday afternoon in Lagu, a village in Liaoning province about 150 kilometers (90 miles) from the North Korean border. It cited government officials as saying the plane “might be” North Korean, and said the pilot died.

The report said China was communicating with North Korea about the matter.

A man who lives in Ersonggou village, about five kilometers (three miles) from the crash site, said he and many other local residents saw the plane flying low over the area before it crashed into an apple orchard.

“The engine was making a very strange noise and it was flying in a very weird way, with it’s head up and rear down,” said the man, who would give only his surname, Ning. “It looked like a piece of scrap iron flying in the sky.”

CNN adds that the plane destroyed a house, but didn’t hurt anyone on the ground.

As of this morning, AFP was still reporting that the aircraft was a helicopter.

You can see satellite images of most of North Korea’s military airfields here. Press reports have mentioned a North Korea airfield at Sinuiju as a likely place of origin, but I’ve never seen anything but Il-28 bombers on that field. The air base at Kaechon seems a more likely source. Speculate on your own what this says about morale in the North Korean military.

Update: Yonhap reports that South Korean radar saw the plane taking off from Sinuiju after all.