North Korea is again in the midst of a serious food crisis, yet as its people starve, Pyongyang has dedicated scarce resources to missile tests, submarine development and importing bacchanalian luxuries for the pinnacle caste.
Distributing aid in North Korea is fraught with moral hazard, as the Kim regime and corrupt officials have in the past siphoned and misappropriated international assistance. North Korea’s history of repudiating agreements also leaves little scope for progress on human rights and denuclearization — particularly when Pyongyang can find ways to bypass Western sanctions.
Joshua Stanton is an attorney in Washington D.C. and runs One Free Korea, where he has published analysis and policy advocacy on North Korea since 2004. He has advised Congress on North Korean policy, including helping the House Foreign Affairs Committee draft bills that would become U.S. sanctions laws, such as the North Korea Sanctions and Policy Enhancement Act. He recently authored “The Root of All Evil: Money, Rice, Crime & Law in North Korea,” in which he proposes closing Pyongyang’s financial backdoor and using the wealth the regime has pilfered from its own people to fund human rights efforts in the country.
Below is a condensed and edited version of our conversation.
Matthew Kendrick: Could you briefly outline your idea to use an escrow mechanism to enforce transparency and accountability in providing aid to North Korea?
Joshua Stanton: The sources of funding would come from fines, penalties and forfeitures on illegitimate North Korean economic transactions and their facilitators, which all together could conceivably hit 10-digit figures.
Historically, we’re talking about potentially colossal amounts of money settled in these kinds of cases. The record example was a 2014 fine against the French state-controlled bank BNP Paribas, which came to a total of $11 billion in fines, penalties and forfeitures paid to the U.S. government and the state of New York.
The Obama administration really forced Iran back to the bargaining table by cutting Iran off from the financial system. And it did that by forcing banks in Europe, primarily, to stop dealing with Iran. This plan uses a similar concept to close out North Korean access via China.
North Korea is not a poor country. It’s a rich country, full of poor people who are exploited. And the resources of the country belong to the people of North Korea. They don’t belong to Kim Jong Un and the corrupt actors around the world who facilitate what he does. And above all, as long as China has de facto immunity from our laws, and North Korean money is flowing through their financial system, Western sanctions will not work.
MK: I was surprised to learn in your latest report that the sanctions scheme surrounding, for example, Myanmar is much more extensive than that around North Korea. And you make a compelling case that the “maximum pressure” strategy never really came into effect after former Commerce Secretary Steven Mnuchin declined to press for oversight of transactions with Chinese banks. What do you say to folks who criticize hardline sanctions and argue that these measures hurt ordinary North Koreans much more than the Kim regime?
JS: The argument is deceptive. Those who make it have likely never read the sanctions or if they have, they never mention the exemptions for food, medicine and many other products. There is a sliver of truth that the exemption process could be made more efficient, but it recently has been. The Treasury Department and the U.N. have both recently issued guidance to speed things up and I think they could go a step further and whitelist certain products; household goods and things like that which are not ordinarily controlled for export purposes.
MK: But do the sanctions put the Kim regime in a position where it must accept food aid with the transparency and accountability provisions that you outline?
JS: Not the way we’re doing things now. Sanctions are dissipating at a half-life of about a year, because Pyongyang is very good at setting up front companies and shell companies, and the Chinese and the Russians are less cooperative than ever in enforcement efforts. They have their own separate disputes with Washington and also have nothing to fear from looking the other way, so they have no incentive to cooperate.
That means that Kim Jong Un has the option of using the money he has for his priorities and squeezing everyone else. So if we were to instead put the money routed through foreign banks into escrow, he would not have money for his priorities. If historical patterns continue to hold up, when he’s under pressure, he would be more receptive to negotiations.
MK: Speaking of Russia, you’ve surely seen the reports of a proposed food-for-weapons deal with Pyongyang. How would such a deal affect U.S. interests? Can Moscow provide enough food for Kim to feed the elites that sustain his regime?
JS: When Russia and China just pour food straight into regime channels, the regime can distribute that food as unequally as it did during the Great Famine. It undercuts the leverage of the World Food Program to negotiate monitoring protocols and to get food aid workers back into the country. There have been no food aid workers in North Korea to speak of for three years now, and that’s not because of U.S. sanctions. That’s because of Kim’s policy.
What Kim Jong Un is really doing is using his starving people as human shields so that he and Putin together can kill innocent Ukrainians.
MK: South Korean President Yoon Suk-yeol and Japanese Prime Minister Fumio Kishida have been trying to forge closer ties lately. Our data shows it’s going better for Kishida than Yoon from a domestic perspective, and they’re still among the most unpopular leaders that we track anywhere. Other sources emphasize China’s role in precipitating that rapprochement very heavily; where does North Korea factor in?
JS: North Korea is the reason why South Korea and Japan have common interests in the first place.
The problem is that you cannot effectively defend either country without the other. If South Korea comes under North Korean control, it’s instantly a nuclear power with a population nearly equal to Japan’s, and it has a territorial dispute with Japan.
On the other hand, if Japan and South Korea divide, South Korea loses the majority of the air bases and naval bases that would be the logistical and firepower support in the event of a war with North Korea.
MK: As a data journalist covering foreign affairs, the question of whether public opinion matters on a given issue arises all the time. And despite very unfavorable views of North Korea in the United States, Japan and South Korea, politicians rarely strike on North Korea as a vote-getting platform. Why is it worth spending scarce political capital in Washington, Seoul, or Tokyo to hold Pyongyang accountable, particularly given the war in Ukraine and the other concerns geopolitically right now?
JS: First, a North Korean life matters as much as a Ukrainian life or any other.
Second, I think we do not understand what North Korea wants and what North Korea is capable of. Anyone who has even casually studied North Korea’s ideology and propaganda understands that they have never given up on the goal of reunifying Korea under their own rule.
North Korea, using its nuclear weapon as its hammer, extracted a lot of significant concessions from South Korea. They are going to be in a position to assert nuclear hegemony over South Korea and if they can succeed in continuing to wedge the alliance between the U.S. and South Korea, they will be able to dictate the terms on which the countries partially reunify. They have no interest in occupying South Korea. They can milk South Korea for subsidies, they can control its defense policies, its political policies and its diplomatic policies without sending one North Korean soldier into South Korea.
And if South Korea comes under North Korean control, what will that mean as far as Japan? What will it mean as far as China’s power in the region? It upsets the entire economic and security order of one of the most important regions in the world.
You can follow Stanton on Twitter at @freekorea_us and read more from him at One Free Korea
