Sung-Yoon Lee is an assistant professor of Korean studies at Tufts University’s Fletcher School of Law and Diplomacy. Joshua Stanton blogs at One Free Korea.
North Korea’s nuclear test Tuesday has the makings of an epochal event — unless Washington and Seoul shape up and deal Kim Jong Eun’s regime a substantial, although nonmilitary, blow.
Pyongyang’s blast, two months after its first successful intercontinental ballistic missile test in five tries since 1998, and the regime’s demonstrated progress in long-range missile technology are propelling the totalitarian nation toward bona fide nuclear capability. With that comes the capability to provoke its neighbors with impunity and to extort funds, fuel, political legitimacy and even concessions in U.S. and South Korean military forces and readiness. Another nuclear test, especially of a uranium bomb, would mark a turning point.
The Obama administration and South Korean President-elect Park Geun-hye must accept that policies of intermittent dialogue and status quo maintenance have failed. For too long, Washington and Seoul have been possessed by a blurry paradigm of “appeasement or war,” effectively depriving themselves of a credible, nonmilitary deterrent if Pyongyang were to continue its external threats and internal repression.
Washington and Seoul should target Pyongyang’s greatest points of vulnerability: the Kim regime’s overdependence on its “palace economy,” and its systematic oppression of its people through a vast network of gulags and an omnipresent secret police force.
An international network of shadowy officials, banks and front companies sustains the North’s ruling clan, military and internal security forces — even though the North’s national economy collapsed nearly 20 years ago with the loss of Soviet subsidies — and it enables the regime’s dependence on nuclear blackmail and illicit earnings. The regime’s overdependence on such financial dealings makes it particularly vulnerable to U.S. tools designed to counter international money-laundering. Washington has long had the wherewithal to enforce financial regulatory measures against North Korea’s illicit activities and proliferation of weapons of mass destruction; it has lacked the political will to do so. U.S. officials should immediately strengthen sanctions against North Korean banks, businesses and individuals that illegally finance Pyongyang or help the regime commingle and conceal its black-market income within “legitimate” trade. To this end, the Treasury Department should designate the North Korean government a “primary money-laundering concern” under Section 311 of the Patriot Act.
This would allow the Treasury to require U.S. banks to take precautionary measures against all foreign entities and governments linked to the sanctioned target. Being blocked from accessing the U.S. financial system would be a strong deterrent against abetting Pyongyang’s illicit activities. President Obama could also press allied governments to apply corresponding measures to third-country banks, businesses and nationals that engage Pyongyang in international financial transactions. Such actions would isolate Pyongyang from the international financial system and sever several of the regime’s main streams of revenue. At the same time, the United States should state clearly that it will provide humanitarian aid to the North Korean people if it can ensure that the aid reaches the needy.