Slave to the Blog (STTB): Sanctions Roundup

September 13, 2013 7:00 AM

The U.S. is in love with sanctions. We are continually trying to figure out whether they make any sense given that the record is so mixed (our sanctions post can be found here). Here, we catch up on a few things that have caught our eye in recent weeks.

The importance—and difficulty—of coordinating sanctions efforts was on full display this week as Europe and the US moved in opposite directions on Iran. The EU’s General Court (just below the European Court of Justice) ruled that sanctions against a number of designated entities imposed from 2008-2011 had to be thrown out because there was insufficient evidence that the companies in question were actually involved in proliferation activities (NYT coverage here). The US, meanwhile, was adding new Iranian persons and entities to its mind-numbing list on grounds that they were helping Iran circumvent the oil sanctions. (The .pdf of all new designated persons and entities added in 2013 alone—across all sanctioned countries--runs to 157 three-columned pages of fine print).  Is the imposition of these sanctions on auto-pilot? Should we be pushing the pause button to see if Rouhani is open to serious talks? We don't notice these sanctions, but the targets do.

On North Korea, Japan has recently added a number of new entities to its sanctions on North Korea. The sanctions are targeted at the Party, but include the Korea Daesong Bank and the Reconnaissance General Bureau, which we doubt holds much liquid cash in Japan.

We were reminded by a post on the SIPRI website on North Korea by Hugh Griffiths and Lawrence Dermody that the targeted sanctions debate which gave rise to these "smart sanction" efforts is now over a decade old. One important strand of early discussion was the so-called Stockholm Process; Uppsala Univeristy maintains a website that has links to the early discussions on targeted sanctions advanced by the Swedes and Swiss.  One motive of the proposals: to avoid charges that sanctions only have adverse effects on already-suffering populations.

Griffiths and Dermody underline that the forensics have still not been mastered:

“The key point of departure to improve the targeting of sanctions—but an area that remains underexplored—is the nexus between transportation and proliferation financing. The shipping documentation that accompanies an illicit cargo may provide clear indications of the identity of logistics actors that were knowingly complicit in the process. From these beginnings, detailed fieldwork and forensic financial analysis may be able to identify the fiduciaries, bank accounts and related financial transactions, together with the silent partners, engaged in this systematic but clandestine trade.”

Over at NKNews, Chad O’Carroll has a must-read piece on the difficulty of tracking airline traffic into and out of North Korea that shows why the Griffiths/Dermody injunction is so tough to implement. The main point of the article is that the tracking of charter flights is much less perfect than we assume. According to the UN Panel of Experts report in June (which we covered here), Air Koryo cargo planes have been spotted about 75 times at foreign airports outside of the North Korean airlines’ scheduled flight activity; this number is almost certainly below the level of such traffic. Carroll draws a second important distinction: between tracking and tracing. North Korean aircraft flying over controlled airspace must secure permission and are tracked by national aviation authorities. But try getting that information out of national authorities. The Panel reported that of 58 requests to national aviation authorities on North Korean aircrafts, only two responded. The problem: control of airspace is frequently under the control of the military. It is not just China that is uncooperative; according to Carroll, the South Korean military is afraid to share information that may reveal its intelligence capabilities. Private tracking efforts cannot capture aircraft that do carry requisite responders. A very solid piece of reporting; hats off.

Finally, Andrea Stricker has a short, neat study at the Institute for Science and International Security on a curious Taiwan case that is highly revealing about these proliferation networks. In May, a U.S. Department of Justice’s attorney in Illinois announced the arrest of a Taiwanese father and son pair (the Tsais, the father in Estonia, the son in Illinois) for conspiring to send machine tools to Taiwan. The arrest was technically for violation of controls that had been placed on the father for a history of cooperation with the Korea Mining Development Trading Corporation, a company sanctioned under UNSC 1718 in 2009. The piece shows how the pair developed front companies, but ultimately relied on weak export controls at the company level; anyone who looked would have immediately known that Tsai Sr. was designated. But is some small machine tool company in Illinois going to do this kind of due diligence? These sanctions may have little strategic effect, but may have some defensive use in limiting North Korean capabilities. But this is a cat-and-mouse game and the leaky sieve is not the US but—shall we say—more proximate parties. Again, hats off to Stricker.

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