With Friends Like These...

A typical pattern in enacting sanctions against North Korea is for sponsors in the US House of Representatives to introduce legislation which passes out of committee or is even approved by the full House but goes nowhere in the Senate. But the die has been cast, and when the next North Korean provocation rolls around, the legislative template has been set. That is essentially how the North Korea Sanctions and Policy Enforcement Act (NKSPEA) was passed last year. This year Representative Ed Royce, chair of the House Foreign Affairs Committee, introduced strengthened legislation in the form of the Korean Interdiction and Modernization of Sanctions (KIMS) Act. The bill passed the House 419-1 in May, the lone holdout being a gentleman from Kentucky in a foil hat.

(OK, I made up the part about the foil hat. But Rep. Thomas Massie’s (R-KY) biggest prior claim to fame was defending Bashar Al-Assad against allegations that Assad used chemical weapons against his own people. One wonders.)

The KIMS Act has now been inserted into a Russian sanctions proposal that forms the Russia, Iran and North Korea Sanctions Act (RINKSA). The inclusion of the North Korea sanctions will cause a delay in the Senate, but most of the focus has been on the White House stance in regard to Russia sanctions, and the Congress’s attempt to limit Executive branch discretion in implementation. With the White House now indicating that it will acquiesce and President Trump will sign the legislation, the stage has been set to get tougher sanctions on North Korea before the August Congressional recess.

(Though if the Trump Administration has taught us anything, it is nothing is actually over until it is over.)

Substantively, the new legislation expands sanctions, particularly secondary sanctions, and targets the organized export of North Korean labor. Steph Haggard and Daniel Wertz each summarized the content of the KIMS Act back in the spring, and Josh Stanton is his usual informative self on the mechanics of actually getting legislation through the Congress. 

The latest round of North Korea sanctions hitched a ride on the Russia sanctions bill and the next round of sanctions has already been teed up.

Josh’s blog post also alerted me to an interesting development of which I was unaware.  Senators Chris Van Hollen (D-MD) and Pat Toomey (R-PA) have introduced in the Senate the Banking Restrictions Involving North Korea (BRINK) Act of 2017. (Do these guys have people on their staffs who sit around coming up with the acronyms, like the Hollywood joke writers they hire for their annual roasts?). According to Josh (who actually reads the legislation—I’m more like a real-life Senator who expresses opinions on things he hasn’t actually read), a key innovation of the Van Hollen-Toomey bill is the introduction of the concept of “North Korea covered property” which would pretty much cover the sale of any good, service, or financial transaction from which the North Korean government would benefit.

(Unlike a real-life Senator, my casually informed opinions do not actually matter.)

The legislation creates a system of secondary sanctions in the financial sector to be placed on entities that facilitate North Korean transactions in a wide variety of circumstances. Today these measures would primarily affect Chinese financial institutions, though Pyongyang’s sanctions evasion networks are spreading into other jurisdictions, increasing the likelihood of actions against non-Chinese entities if the legislation were enacted. It creates severe criminal penalties, including asset seizure, for people in the US engaged in sanctions evasion. This provision could be used against Chinese or other third-country co-conspirators resident or owning property in the US. It creates a variety of penalties such as export restrictions and denial of aid for countries which continue to host or do business with sanctioned North Korean entities like KOMID or the General Reconnaissance Bureau. These provisions could be particularly relevant for some African and SE Asian countries. The legislation contains a variety of other provisions which can be reviewed in greater depth if passage appears imminent. But one provision may well attract public attention, at least in South Korea: a call for Seoul not to re-open the Kaesong Industrial Complex until North Korea completely, verifiably, and irreversibly dismantles its weapons of mass destruction programs. Before running for office, Van Hollen was a Capitol Hill staffer with a specialty in nuclear disarmament.

The sanctions can be suspended if North Korea makes progress toward disarmament and accounting for American MIAs, and can be lifted when North Korea completes that disarmament and the accounting for MIAs.

In short, the latest round of North Korea sanctions hitched a ride on the Russia sanctions bill and the next round of sanctions has already been teed up.