Showing posts with label Department 39. Show all posts
Showing posts with label Department 39. Show all posts

Wednesday, March 12, 2014

FINAL UN REPORT ON N. KOREA SANCTION VIOLATIONS

This is a very comprehensive report detailing everything from the north's nuclear and missile program to its illicit activities and how it gets around sanctions.

If I were planning a comprehensive global campaign against north Korea's global illicit activities network, this document would contribute to the targeting process (my apologies to the UN who would probably not be pleased to read that).



Summary 
 There have been no signs that the Democratic People’s Republic of Korea 
intends to respond to the Security Council’s calls to abandon its nuclear, ballistic 
missile and other weapons of mass destruction programmes. On the contrary, it is 
persisting with its arms trade and other prohibited activities in defiance of Security 
Council resolutions, while activities related to its nuclear and ballistic missile 
programmes continue. 

 At the present time, the Panel does not see new measures as necessary in order 
to further slow the prohibited programmes of the Democratic People’s Republic of 
Korea, to dissuade it from engaging in proliferation activities or to halt its trade in 
arms and related materiel. Rather, the Panel believes that Member States already 
have at their disposal adequate tools. 

 The example of Panama with the Chong Chon Gang shows that determined 
action can thwart prohibited activities on the basis of existing measures. 
Nonetheless, the Panel strongly believes that overall implementation of existing 
sanctions should be significantly improved. In the present and prior reports to the 
Security Council, the Panel has made recommendations to help address identified 
shortcomings. 

The Democratic People’s Republic of Korea presents a stiff challenge to 
Member States. It is experienced in actions it takes to evade sanctions. From the 
incidents analysed in the period under review, the Panel has found that it makes 
increasing use of multiple and tiered circumvention techniques. Access to the Chong 
Chon Gang provided the Panel with an unrivalled insight into some of the ways used 
to circumvent sanctions. This incident is also a reminder to Member States that, 
besides trade in arms and related materiel, the Democratic People’s Republic of 
Korea is forbidden to provide services or assistance on the manufacture, maintenance 
or use of arms. 

 Other incidents show that the Democratic People’s Republic of Korea remains 
dependent on foreign procurement for certain items, especially some that figure in 
nuclear and ballistic missile programmes. In particular, it lacks sufficient domestic 
precision machine tool manufacturing capability and it purchases off-the-shelf items 
for its ballistic missile-related programmes. The Panel also assesses that it will likely 
seek out foreign suppliers for components it will need to fabricate fuel rods for its 
reactors. 

 A study commissioned by the Panel provided valuable insights into its overseas 
commercial presence, part of which is utilized to find alternative and willing 
suppliers and acquire technology and products it needs for prohibited programmes. 
The study also shows that individuals and entities operating abroad, particularly 
those it identified as working in the shipping industry, could be viewed as belonging 
to interconnected networks, useful in the conduct of legitimate and illicit trade. 

Tuesday, August 27, 2013

N. Korea tried to export gas masks to Syria: media

Should be no surprise here.  But I wonder if actions like these are affecting the north's decision making calculus regarding Kaesong, Family Reunions, and Kumgangsan.  If the regime is not able to get hard currency through its weapons proliferation and military equipment sales, then perhaps that is contributing to the charm offensive with the ROK.  I think we should keep in mind that the effects of an aggressive international campaign against the regime's Department or Office 39 could be far reaching on a number of levels in both the short and long term.
V/R
Dave

N. Korea tried to export gas masks to Syria: media

Description:  Syrian rebel tries on a gas mask seized from a Syrian army factory on July 18, 2013
.
North Korea tried to export gas masks to Syria but they were seized in Turkey along with arms and ammunition, a Japanese daily said Tuesday, as the US threatened action over an alleged chemical weapons attack.
A Libyan-registered vessel, identified as Al En Ti Sar, left North Korea for Syria earlier this year with the consignment, the Sankei Shimbun said, quoting unnamed sources from the US military, Japanese and South Korean intelligence.
The US military, which obtained the information, was tracking the ship in coordination with other countries, the daily -- which is known for its North Korea coverage -- said in a detailed report.
The vessel sailed through Dardanelles in Turkey on April 3 and was searched shortly after by Turkish authorities, who had been tipped off by the US.
Turkish officials seized 1,400 rifles and pistols and some 30,000 bullets as well as gas masks apparently for chemical protection, the daily said.
Description: orth Korean gas masks enroute to Syria

US authorities believe that the ship was intending to unload its cargo in Turkey and send it overland to President Bashar al-Assad's regime, the Sankei said.
(Continued at the link below)

Thursday, May 2, 2013

The Mirage of Peace in the DMZ A trip to the Korean border makes regime change in Pyongyang seem like the only effective option.


A few key points:
Mr. Kerry's lack of imagination bodes well for Pyongyang's goal of perfecting its nuclear and missile capabilities, and bodes ill for the security of northeast Asia. There can no longer be any realistic hope that the North will denuclearize. 

Moreover, China has refused to isolate the regime despite Washington's repeated pleas for joint action. Yes, some Americans with close ties to China now say that they've never seen Beijing so frustrated with Pyongyang. But there is no indication that new leader Xi Jinping is considering serious sanctions against the North or independent economic and political pressure. 

Committed to a failed negotiation strategy, the U.S. government has all but assured the Kim regime of its safety so long as it doesn't attack the South or Japan. That means negotiations are doomed from the beginning. 

The Obama administration's willingness to return to talks under the "right" conditions plays perfectly into this North Korean strategy of undermining collective resolve. The longer Washington sticks to a failed policy, the more confident Pyongyang grows in its survival. It will figure out a way to proliferate WMDs, likely with Beijing looking the other way.

But in this sentence lies a potential key:

The longer Washington sticks to a failed policy, the more confident Pyongyang grows in its survival.

If one wanted to truly undermine the regime and play three dimensional chess a combination of the status quo negotiating strategy with Pyongyang confident in its survival with a comprehensive psychological operations/ influence campaign targeting the second tier leadership and the population and global intelligence and law enforcement operations against Department 39 could simultaneously cause dissent and discord internally,  prepare for a post-regime Korea , prevent proliferation of WMD (before and after collapse) and set the peninsula on a path to unification.   The supposed "failed strategy" is one key element to this because as long as the regime is confident of its survival it remains one of the best ways to prevent a deliberate attack (but not a provocation) by the north.  But the question is can we and the Alliance operate on multiple levels orchestrating the instruments of national power to achieve the ultimate end state per the 2009 Joint Vision?
V/R
Dave
The Mirage of Peace in the DMZ
A trip to the Korean border makes regime change in Pyongyang seem like the only effective option.

To understand how North Korea policy has become a diplomatic no-man's land—empty, hopeless and likely to stay that way, if recent pronouncements by U.S. Secretary of State John Kerry are any indication—it helps to visit the physical no-man's land of the Demilitarized Zone (DMZ).

The DMZ is not entirely devoid of life, of course, at least on its margins. Approaching from Seoul, only 50 kilometers from the armistice line, a single barbed-wire fence gives way to thicket of guard towers and other fortifications. Busloads of tourists give the scene a surreal commercial streak, while apartment blocks lend a domestic touch here and there.

At heart, however, the DMZ remains a place of limbo, frozen in time by the armistice of 1953. The four kilometers on either side of the border are crisscrossed only by small animals, and the absence of any human activity creates a false sense of calm.

That stillness reflects the diplomatic stasis of the defunct Six-Party Talks, and the inability of Washington to devise a new approach that could change North Korea's behavior. If anything, by focusing on denuclearization and encouraging greater Chinese pressure on Pyongyang—two strategies that have never worked—Mr. Kerry seems to have adopted an approach expressly designed to maintain the status quo.

Above all, Mr. Kerry seeks a return to fruitless disarmament talks. In his first trip to Tokyo last month, he told reporters, "Our choice is to negotiate, our choice is to move to the table and find a way for the region to have peace." He reiterated such sentiments throughout his Asia trip.

Mr. Kerry's lack of imagination bodes well for Pyongyang's goal of perfecting its nuclear and missile capabilities, and bodes ill for the security of northeast Asia. There can no longer be any realistic hope that the North will denuclearize.

South Korean soldiers patrol along a military fence near the DMZ.

Looking across the DMZ border from a high vantage point, one sees the desolate North Korean landscape and brutish buildings lying just outside the now-shuttered Kaesong Industrial Complex. The bleakness is a reminder that the Kim regime's strength is solely military, and that the nuclear trump card is the regime's lifeline.

Moreover, China has refused to isolate the regime despite Washington's repeated pleas for joint action. Yes, some Americans with close ties to China now say that they've never seen Beijing so frustrated with Pyongyang. But there is no indication that new leader Xi Jinping is considering serious sanctions against the North or independent economic and political pressure.

Instead, China seems to be betting that Washington's future of defense cuts will lead to a reduced American presence in Asia. President Obama's repeated invocation of the U.S.'s so-called strategic "pivot" to Asia may worry Beijing over the short term, but the Chinese believe the budgetary fundamentals are in their favor. And so they see no incentive to deal with the Americans over North Korea.

All of this leads to the question of what to do. Perhaps unexpectedly, a trip to the DMZ makes regime change in the North seem like the only thing that will alter Korea's destiny. Figuring out strategies to get rid of, or at least seriously undermine, the Kim family regime is something both the Bush and Obama administrations have studiously avoided talking about.

Committed to a failed negotiation strategy, the U.S. government has all but assured the Kim regime of its safety so long as it doesn't attack the South or Japan. That means negotiations are doomed from the beginning.
(Continued at the link below)

Wednesday, March 20, 2013

N.Korean Diplomats 'Sell Millions of Dollars Worth of Drugs'


I wonder if any of  the resources we allocate for the war on drugs, any of the Joint Interagency Task Forces out there that focus on drugs, ever looks at this threat?

But we do not pay sufficient attention to the network of illicit north Korean activities around the world.  Targeting this network could provide multiple benefits:  pressure on the regime, loss of support of elite, intelligence about the how the network and regime operate, potential recruits for future operations in post conflict, post collapse, prevention of proliferation both now and after convict or collapse.  Department 39 and its network need to be addressed in a holistic manner with a long term focus and on a global scale.
V/R
Dave

N.Korean Diplomats 'Sell Millions of Dollars Worth of Drugs'
North Korea sent a large amount of illegal drugs to its embassy in an East European country last December and ordered diplomats there to sell it for cash by early April, a diplomatic source here claims.

"South Korean intelligence obtained the information from a North Korean agent who defected recently," the source said. "Similar orders were delivered to other North Korean embassies."

North Korea has ordered each diplomat to raise US$300,000 to prove their loyalty and mark the birthday of nation founder Kim Il-sung on April 15.

Each North Korean diplomatic mission overseas is required to send back around $100,000 to the North each year, the agent-turned-defector allegedly said. They used to complain that new leader Kim Jong-un is too demanding.

Each North Korean diplomat is estimated to have been given up to 20 kg of drugs, so the North Korean embassy in the East European country may seek to sell around 200 kg.

Under the guidance of Room 39, a secretive agency that managed the private coffers of former North Korean leader Kim Jong-il, the North has been producing various types of illegal drugs and selling them abroad. South Korean authorities estimate North Korea's annual output of illicit drugs amount to 3,000 kg that translate into revenues of between $100 million and $200 million.
(Continued at the link below)

Friday, March 15, 2013

How N.Korean Diplomats Launder Counterfeit Money


I cannot emphasize enough that we need a global campaign to go after these illicit activities.  Nations should not be allowing north Korean diplomats to violate the diplomatic protocols and local and international laws.
V/R
Dave

How N.Korean Diplomats Launder Counterfeit Money
One of the main duties of North Korean diplomats is to change counterfeit money into real money and send it back, according to a former North Korean diplomat who defected to South Korea in 2011.

He said one North Korean embassy in Eastern Europe generated US$30 million by exchanging counterfeit notes a year.

North Korea manufactures so-called supernotes or high-quality counterfeit $100 bills and hands them to embassies for laundering. "The supernotes are delivered at a certain time each year by ship or plane," he said. "An agent working at the embassy goes to a safe house and brings a box full of them."

When the bills arrive, embassy staff bundle them up into $10,000 units. They then travel to major cities in their host country to exchange it. Sometimes they are caught, but the North carefully studies the different types of punishment in different countries and gives the information to diplomats, the defector added.

Diplomats are taught not to exchange too much money at once. After the fakes are exchanged into the host country's currency, the money is exchanged again into real U.S. dollars. And diplomats do not stay long in the cities where they exchange the money. "You can get caught if you stay more than a week in one particular area," the defector said. Diplomats also frequently use casinos to launder their money.
(Continued at the link below)

Friday, February 15, 2013

North Korea uses cash couriers, false names to outwit sanctions


Thanks to our good friend Kim Kwang-jin for this. I happened to try to make some people understand this this past week but I am not sure people really understand the nature of this operation and the importance of Department 39 to the Regime and the opportunities we can exploit by going after this network.  This network is key to preventing proliferation when the regime collapse and can be exploited to develop intelligence and then provide the potential to influence 2d tier leaders in the north.

This illustrates why Stephan Bradner has long been right to call the Kim Family Regime a "mafia like crime family."

But rather than sanctions, we should be working with countries around the world to attack this network because it is violating sovereignty of nations wherever it is operating.  Attacking and controlling this network (coercing and co-opting members for future exploitation) can strangle the regime.  This is the "pressure point" that good cut off the circulation or nerve system of the regime and cause it to collapse.

Everyone who has an interest in north Korea should keep this article below.
V/R
Dave

North Korea uses cash couriers, false names to outwit sanctions

8:32pm EST

SEOUL/UNITED NATIONS (Reuters) - Kim Kwang-jin says that when he worked for North Korea's state insurance company in Singapore in 2003, he stuffed $20 million into two suitcases one day and sent it to Pyongyang as a special gift for then leader Kim Jong-il.

He received a medal for that, Kim Kwang-jin said.

North Korea, sanctioned by the United States since the 1950s and later by the United Nations after its nuclear tests, has been shuffling money for decades from illicit drugs, arms and financial scams and is now more expert at hiding it to fund its weapons programs and its leaders' opulent lifestyles.

"There is tremendous difficulty identifying bank accounts," said a South Korean government source who is directly involved in yet another sanctions push in the U.N. Security Council after the North conducted a third nuclear test this week.

A source who has access to the top levels of government in both North Korea and China, its only major ally, told Reuters that Pyongyang was not afraid of sanctions and was considering two more nuclear tests and a rocket launch this year.

"It is confident agricultural and economic reforms will boost grain harvests this year, reducing its food reliance on China," said the source.

With limited trade and natural resources, Pyongyang's revenues are heavily reliant on money-making scams ranging from fake $100 bills to arms sales and drugs money, according to reports by the U.S. government. Some diplomats and officials call it "The Soprano State" after the U.S. television series.
In 2005, $25 million of the regime's cash was frozen at Macau-based Banco Delta Asia, which was designated a "primary money laundering concern" by the U.S. Treasury.

That case stands as practically the only public success in seizing funds from the isolated country that is now led by 30-year-old Kim Jong-un, the third of the Kim dynasty to rule.

The $25 million was released after protracted negotiations led by Kim Kye-gwan, the North's long-standing negotiator with the United States, and U.S. envoy Christopher Hill, officials present at the talks said.

Pyongyang has learned from that episode and buried its funds even deeper, said the South Korean official, who spoke on condition of anonymity.

"The bank accounts are split up a lot," the official said, meaning the money is divided into small amounts so that a freeze on one account would not greatly affect the total.

The official has tried to identify North Korean funds for years and was involved in previous sanctions pushes, although he said that identifying accounts and transactions was near impossible because of the use of fake names.

THE INSURANCE SCAM

Kim Kwang-jin, now living as a defector in South Korea, said the $20 million sent to Kim Jong-il in 2003 came from insurance scams by Pyongyang's Korea National Insurance Corp (KNIC), which exaggerated claims from re-insurers and underwriters for events such as weather damage, ship and aircraft losses.

When contacted by Reuters by telephone and email, KNIC was not immediately available for comment.

Kim Kwang-jin said the money from the scams he participated in was funneled into what he termed North Korea's "royal court fund" - money for Kim Jong-il and his inner circle.

"Kim Jong-il sent a letter of thanks to the people in my company (KNIC). And some of us received presents like DVD players and blankets. I later got a medal too," said the 46-year-old.

Unlike oil-exporting Iran, which is heavily sanctioned by the United States and United Nations as well as others, North Korea's puny $50 billion economy produces few goods other than minerals and seafood sold to China. Its trade with China was put by Beijing at $5.7 billion in 2011.
(Continued at the link below)

Wednesday, January 16, 2013

US in 'Intense Deliberations' about N. Korean Sanctions


I recall something about punishment being necessarily applied when the infraction occurs to be effective.  At least that is how I thought we were supposed to handle children who act out.  If we get any more sanctions it will likely be too little too late.  If we really wanted to punish the regime, we would make a concerted effort to enlist every country in which Department 39 is operating to shut down their operations and prevent the flow of luxury goods and hard currency back to the regime.  That would have a devastating effect on the regime and although it would not change the nature of the regime, it might force the regime to modify its behavior at least for a period of time (and it would likely have longer term 2d and 3d order effects on the regime).
V/R
Dave

US in 'Intense Deliberations' about N. Korean Sanctions



VOA News
January 16, 2013
A senior U.S. diplomat says Washington is pushing hard for tough international sanctions against North Korea following its successful long-range rocket launch last month.

Wednesday, Assistant Secretary of State Kurt Campbell told reporters in Seoul that he anticipates formal steps by the United Nations Security Council in the immediate future.

"We are in the midst of really rather intense deliberations in New York in the Security Council led by our Ambassador Rice," he said. "We are in very close consultation with the South Korean government about those deliberations. I think we have their understanding about the way forward and I think you will see more developments in the days ahead."

Campbell, the top American envoy to Asia, also warned North Korea against taking any more "provocative" steps, amid speculation that Pyongyang is preparing to conduct a nuclear test.

"We are very clear in our position that provocative steps are to be discouraged," he said. "We are closely working with the key players, including South Korea, at the U.N. with respect to our diplomacy after the missile test late last year."

Recent satellite images show increased activity at a North Korea nuclear test site, raising fears it may follow up its December rocket launch with a nuclear test, as it did in 2006 and 2009.
(Continued at the link below)


NKorea seeks to reopen embassy in Australia, which calls it a chance to discuss human rights


Continuing evidence of Image First Politics (though I also think the regime would like to get department 39 into Australia under diplomatic cover to conduct its illegal trafficking operations in order to provide another source of hard currency and luxury goods for the elite – but I think the Australian security services will have something to say about that and it will be interesting to see how such operations play out).
V/R
Dave

NKorea seeks to reopen embassy in Australia, which calls it a chance to discuss human rights
By Associated Press, Updated: Wednesday, January 16, 2:20 AM

SYDNEY — Australia’s government says North Korea is seeking to reopen its embassy in the nation’s capital.
Foreign Minister Bob Carr said Wednesday that he has welcomed the request by Pyongyang. Carr told Australian Broadcasting Corp. it would give Australia the opportunity to express its concerns about what it views as North Korea’s “catastrophic position on human rights.”

North Korea closed its embassy in Canberra in 2008, citing financial reasons.
(Continued at the link below)

Wednesday, January 9, 2013

Don't Engage Kim Jong Un -- Bankrupt Him: It's time to play hardball with North Korea's new leader.


The Banco Delta Asia operation was a good one.  Excerpt:
There is a precedent for this: In September 2005, Treasury declared the Macau-based Banco Delta Asia a "primary concern" for North Korean money laundering, and a haven for drug dealing and counterfeiting proceeds. Treasury's action only directly affected $25 million in deposits, but its indirect effects were far greater, causing a run on Banco Delta and damming one of North Korea's main streams of illicit revenue. 
The North Koreans sought new banks elsewhere, but Treasury followed them. Senior Treasury officials visited banks throughout Asia, warned their officers of the risks of doing business with North Korea, and stated that it was "almost impossible to distinguish between the North's legitimate and illegitimate dealings." Multiple banks quickly cut their ties with the North. Stephen Haggard and Marcus Noland, economists who study North Korea, estimated that Treasury sanctions and Japan'scrackdown on remittances to North Korea badly hurt Pyongyang's capacity to launder the proceeds of its illicit activities, which accounted for approximately half of the North's income in the 1990s and still made up a significant share of Pyongyang's total earnings in 2005. As a result, the regime was forced to sell off some of its gold reserves. By January 2006, Kim Jong Il was so desperate that he reportedly told Chinese President Hu Jintao that he feared that the sanctions would cause his regime to collapse.
In principle I agree with Joshua and if we wanted to really strangle north Korea we would go after Department 39 operatives around the world to cut off the supply of illicit trade and the flow of hard currency and luxury goods back to the regime to keep the elite happy.  But I think it will e hard for us to replicate the Banco Delta Asia operation for the very reason highlighted in the last sentence above. We could cause the collapse of the regime but this time China is unlikely to cooperate (as it had to tacitly in 2005) because of the Chinese policy of "Three no's" - no war, no nukes and no collapse.  China will not support regime collapse and going after the north's finances is too dangerous for China.
V/R
Dave

It's time to play hardball with North Korea's new leader.
BY JOSHUA STANTON, SUNG-YOON LEE | JANUARY 9, 2013

Barack Obama and Sen. John McCain clearly agree on one thing: Bill Richardson and Eric Schmidt should not have visited Pyongyang this week. A State Department spokeswoman said last week that the timing, coming just four weeks after a rocket launch that violated three U.N. Security Council Resolutions, was not helpful. McCain tweeted that Richardson and Schmidt were "useful idiots." Richardson is among the staunchest advocates of appeasing North Korea after billions of dollars in U.S. and South Korean aid have bought little more than attacks, provocations, threats, and broken promises to disarm.

This could be the Hermit Kingdom's year of living provocatively. North Korea's dynastic ruler, Kim Jong Un, who turned 29 (or possibly 30) on Jan. 8, is very likely to act aggressively toward his neighbors in 2013 to burnish his leadership credentials at home and to deal with the new South Korean president-elect, Park Geun Hye, from a position of strength. New administrations in Washington, Beijing, Tokyo, Seoul, and Moscow will seek to avoid foreign crises as they consolidate their power domestically, creating a less confrontational and moreappeasement-prone neighborhood in 2013.
The provocations have already begun. North Korea's rocket launch in December was calculated to intimidate the U.S. and South Korean governments: The rocket was theoretically capable of reaching the United States, and North Korea carried out the test on Dec. 12, seven days before South Korea's presidential election. Pyongyang's announcements that it might postpone the test due to technical difficulties in the days leading up to the launch appear to have caught Obama's Asia team off guard.

So far, the Obama administration's response to the North Korean test has been to return to the United Nations to ask for more Security Council sanctions, but the test already violated three Security Council resolutions that China won't enforce. Despite prior U.N. condemnations, North Korea followed its 2006 and 2009 missile tests with nuclear tests three and two months later, respectively. Beijing's new leadership will likely keep funding the Kim regime and letting it smugglemissile parts and sanctioned luxury goods through Chinese ports. (China claims to "resolutely"oppose North Korea's nuclear programs, but probably sees its behavior as useful in keeping the United States distracted and Korea divided, while it pursues territorial ambitions elsewhere in the Pacific.) If the pattern holds, North Korea's next nuclear test could occur around the time of the late Kim Jong Il's Feb. 16 birthday, or president-elect Park's Feb. 25 inauguration.
(Continued at the link below)

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