North Korea's Kim Jong-un. Photo: Kyodo/Reuters
North Korea's Kim Jong-un. Photo: Kyodo/Reuters

The US has spent the past 25 years trying to concoct a formula that will get North Korea to relinquish its nuclear weapons program, while hoping China would help bring Pyongyang to heel.

With Secretary of State Rex Tillerson’s recent statement that years of negotiations with North Korea have failed, it seems an American military response is no longer unthinkable – and in some quarters is seen as inevitable.

But the US still hasn’t played all its cards, and ought to before rolling the dice with a military strike. First, some stark reminders are in order.

Attack North Korea and America had better be prepared to finish it as there will be no short, clean strike that jolts Kim Jong-un to his senses. Instead, it will be difficult, bloody and unpredictable.

Remember the Kosovo conflict in the mid-1990s? US airpower reportedly destroyed Serbian armor several times over, until 90% of it reappeared and drove out of the province following the cease-fire. North Korea has had decades to dig in.

South Korea’s densely populated capital Seoul is within Pyongyang’s artillery and missile range. Japan will be targeted by the North; and how will nuclear-armed China react to fighting on its border, especially if US ground troops are introduced?

Such a conflict will wreak havoc on the global economy as it will embroil first world economies – South Korea, Japan, and China – that are enmeshed with US and European counterparts.

Try real sanctions

Driving the increasing acceptance of a military option against North Korea is a belief that there is no alternative since sanctions haven’t worked.

This assumes sanctions on North Korea have seriously been tried. They haven’t.

Sanctions against North Korea to date have had two main problems: They were too narrowly focused or at best half-heartedly enforced by China, Pyongyang’s biggest trading partner. And North Korea’s activities to avoid the sanctions have never been seriously targeted.

Pyongyang engages in a range of illicit fund-raising activities, including currency counterfeiting, illegal drug manufacturing and cyber crime to name a few. But it’s the “licit” moneymaking operations around the world that are most astonishing.

North Korea has sent around 100,000 workers overseas to Europe, the Middle East, Russia, China, and Africa to work in logging, mining, garment production, and run Korean restaurants. It’s as if the old Soviet Union was allowed to send Gulag inmates overseas – under strict control – to earn cash for the Kremlin elite.

And North Korean “trade” offices operate openly, or under the thinnest of cover, even in democratic and US-aligned countries such as Singapore, Malaysia, and Taiwan.

It is beyond belief that the flow of luxury and other goods that can only be for Kim and his cronies has continued largely unabated despite so-called strict sanctions on North Korea.

The North Korean regime doesn’t need to earn much. A billion dollars or two goes a long way for a regime that is willing to starve and intern its own people in labor camps — and without the world doing much about it.

What to do?

The North Korean regime ultimately resembles an organised crime gang – and depends on money to survive. So choke it off.

First, revisit the Banco Delta Asia case. In 2005, under the administration of George W Bush, the US Treasury sanctioned Banco Delta Asia in Macau for assisting North Korean money laundering.

The Treasury declared the bank off-limits for US companies and financial institutions. The Macau government then froze US$25 million in North Korean money and Banco Delta Asia severed its ties with the North.

The crackdown greatly worried other financial institutions cooperating with North Korea, some of which cut their ties. It also scared the daylights out of Chinese colluding with the North Koreans.

Yet, the Bush administration later inexplicably revoked the sanctions and returned Pyongyang’s money – apparently in exchange for a North Korean promise to reenter negotiations. Nonetheless, the Banco Delta Asia case shows what is possible when funds are cut off.

Using the Banco Delta Asia model, turn loose the US Treasury Department’s financial intelligence capability and sever North Korea and any financial institution or business dealing with the North from the US dollar network.

Next, seriously attack the North Korean regime’s illicit activities. The US government and its intelligence agencies (with the exception of Treasury) have shown a puzzling indifference to North Korea’s criminal moneymaking operations.

Shut down North Korean Embassies involved in illegal moneymaking. Indeed, why is a regime that is akin to Cambodia under the murderous Khmer Rouge allowed to have embassies in civilised nations?

So attack and shut down all of North Korea’s moneymaking operations, illicit or otherwise, because the money all ends up back in the same place in Pyongyang.

Get real with China

Recognise that after 25 years of hoping against hope, China isn’t going to help out with North Korea – and its supposed help on other global matters is less important than avoiding war on the Korean Peninsula.

Apply real pressure on Chinese companies and financial institutions, even government affiliated ones, dealing with North Korea. Offer China a choice – do business with North Korea or do business with America.

Someday it may be necessary for a US administration to use force against North Korea. The squandered opportunities and ineptitude that led to this point make for depressing reading and have been a bipartisan achievement.

But before going to war, the US Government should at least try real sanctions on North Korea – for the first time.

Grant Newsham is a Senior Research Fellow at the Japan Forum for Strategic Studies and a retired US Marine Colonel

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