North Korea’s nuclear, biological, and chemical weapons represent a grave threat to the United States and its allies. To convince North Korean leader Kim Jong Un to relinquish these weapons, the Trump administration initiated a “maximum pressure” campaign. This effort imposed significant economic costs on North Korea and incentivized Kim to come to the negotiating table. So far, however, this pressure has been insufficient to persuade him to denuclearize.
It is certainly possible that no level of pressure will persuade Kim to change course. But there is a need to test that proposition. The United States and its partners have not yet implemented a more aggressive and comprehensive maximum pressure campaign that targets Kim’s cost-benefit analysis. Such a campaign likely represents the only way to denuclearize North Korea without resorting to war.1
This monograph proposes that the United States, working with its allies and partners, implement a “Plan B” to drive Kim to relinquish his nuclear, biological, and chemical weapons. Such a campaign must integrate all tools of national power, including diplomacy, military, cyber, sanctions, and information and influence activities.
After setting the scene in the introductory chapter, this study includes a dedicated chapter on each of the five lines of effort that together should constitute a “maximum pressure 2.0” campaign. Each chapter is written by experts at the Foundation for Defense of Democracies and provides background, analysis, and specific recommendations.
In the chapter titled “Aggressive Diplomacy,” Mathew Ha, David Maxwell, and Bradley Bowman warn against falling prey again to the North Korean regime’s longstanding practice of diplomatic deception. The authors note that Pyongyang routinely makes provocations both to advance its nuclear and missile capabilities and to win valuable concessions through negotiations. They also note that Pyongyang has violated every agreement it has reached over the last 20 years. The authors caution against additional presidential-level summits. Instead, they encourage the United States to redouble its efforts to jumpstart substantive working-level dialogues that establish specific timetables for the inspection, dismantlement, and verification of each nuclear and missile facility. In order to build necessary unity with South Korea and Japan while shaming China and Russia for obstructionism, the authors emphasize the importance of a comprehensive public diplomacy campaign that provides America leverage in its standoff with Pyongyang.
In the chapter titled “Military Deterrence and Readiness,” David Maxwell, Bradley Bowman, and Mathew Ha emphasize the importance of South Korea-U.S. military readiness in deterring North Korean aggression, protecting U.S. interests, empowering effective diplomacy, and supporting a maximum pressure campaign. The authors note that the North Korean military threat has not decreased. They also note the assessment of the U.S. Department of Defense’s 2019 Missile Defense Review that North Korea has “neared the time when” it could “threaten the U.S. homeland with missile attack.” The authors propose several specific steps to strengthen allied military readiness, protect U.S. national security interests, and support a maximum pressure 2.0 campaign. In the end, they note, American power is what deters North Korea.
In the chapter titled “The Cyber Element,” Mathew Ha and Annie Fixler note that Pyongyang continues to employ an aggressive cyber campaign to generate revenue and conduct intelligence, surveillance, and reconnaissance. The authors call for a U.S.-led cyber-enabled information and offensive cyber campaign targeting North Korea. They propose specific cyber-related actions against China, Russia, and other countries to persuade them to dismantle North Korea’s cyber network. To help carry out these efforts, the authors call for the creation of a joint South Korea-U.S. cyber task force.
In the chapter titled “U.S. Sanctions Against North Korea,” David Asher and Eric Lorber detail the existing sanctions regime targeting North Korea. The authors describe Pyongyang’s efforts, working with Chinese entities and others, to circumvent these sanctions. The authors propose specific measures to increase the economic pressure on Pyongyang. Examples include revitalizing the North Korea Illicit Activities Initiative, designating the leadership of major Chinese banks that engage in prohibited transactions with North Korea, hardening small banks against North Korean sanctions evasion, and targeting joint ventures. In short, there is more room to squeeze the North Korean regime.
In the chapter titled “Information and Influence Activities,” David Maxwell and Mathew Ha argue that aggressive information and influence activities represent an essential component of a successful maximum pressure 2.0 campaign. The authors believe that external pressure alone is unlikely to persuade Kim to denuclearize. They recommend a number of specific information and influence activities targeting North Korea’s regime elite, second-tier leadership, and general population. These activities would seek to foster Kim’s perception that the security of his rule will continue to deteriorate until he decides to relinquish his nuclear weapons. Even if information and influence activities do not yield the desired outcome, these tools can prove useful in the event of renewed military conflict.
Former President Barack Obama advised then President-elect Donald Trump that North Korea would be his top national security challenge. The outgoing president’s warning was prescient. During President Trump’s first year in office, the Democratic People’s Republic of Korea (DPRK) tested an intercontinental ballistic missile (ICBM) and a thermonuclear weapon.2 It was also a year of saber-rattling rhetoric between North Korean leader Kim Jong Un and Trump. This escalation follows a dangerous pattern that has prevailed for 25 years.3
On June 30, 2017, at a Republic of Korea (ROK)-U.S. summit, Trump and his South Korean counterpart, Moon Jae-in, agreed to pursue complete denuclearization of North Korea and a maximum pressure campaign to bring Pyongyang to the negotiating table. They also agreed that South Korea would take the lead in establishing conditions for peaceful intra-Korean unification.4 In the year that followed, the allies implemented a targeted pressure campaign – to which this monograph will refer as “maximum pressure 1.0” – that included strong UN and U.S. sanctions on key North Korean entities and certain Chinese banks and facilitators. This campaign also included aggressive measures against the North’s global illicit activities, an international diplomatic effort, and increased emphasis on the military deterrence capabilities of the ROK-U.S. alliance. This pressure campaign cannot truly be described as “maximum,” however, since it lacked a holistic approach incorporating diplomatic and military pressure, cyber actions, and information and influence activities.
Conditions appeared to change in 2018, beginning with a seemingly conciliatory New Year’s Day speech by Kim and an invitation from Moon for the North to participate in the upcoming Winter Olympics in South Korea.5 South Korean, North Korean, and American officials soon initiated discussions that culminated in three summits between Moon and Kim and a summit in Singapore between Trump and Kim. These engagements led to the so-called Panmunjom and Pyongyang Declarations, which included tension-reduction and confidence-building measures aimed at reducing the potential for military confrontation along the Demilitarized Zone (DMZ) and in the East and West Seas. Seoul and Pyongyang codified these measures in a Comprehensive Military Agreement (CMA) in September 2018.6
U.S.-North Korean relations seemed to remain on a positive path during the beginning of 2019. A North Korean delegation visited the White House and scheduled a second Trump-Kim summit, which was eventually held in Hanoi in late February.7 However, Kim would not allow his negotiating team to discuss denuclearization, limiting talks to ancillary issues and summit preparations. At the summit, Kim demanded the removal of all sanctions imposed since March 2016, in return for closing North Korea’s Yongbyon nuclear facility – a demand unacceptable to Trump, who walked out of the negotiations.8
Kim’s failure to achieve substantial sanctions relief knocked him off balance. He almost certainly feels pressure from regime elites and the military to elicit additional concessions from the Trump administration. This perhaps explains a subsequent series of actions by Kim designed to enhance his legitimacy at home and coerce the United States into negotiations that would yield sanctions relief.
After Hanoi, the North began rehabilitating its Sohae missile launch facility,9 which Kim had promised at Singapore to dismantle. The DPRK military conducted exercises to demonstrate readiness and test-fired a new anti-tank guided missile system.10 Throughout the summer of 2019, the North tested a number of short-range ballistic missiles and multiple rocket launchers.11 There has been unusual training activity at the Yongbyon nuclear facility12 as well as reports of internal purges of North Korean officials associated with the nuclear negotiations.13 Finally, in an apparent attempt to shift blame for the Hanoi failure and separate Trump from his advisers, Pyongyang has spewed hostile rhetoric at the Trump administration – particularly Secretary of State Mike Pompeo and then-National Security Adviser John Bolton – while refraining from verbal attacks on the president himself.14
North-South military and diplomatic activities, meanwhile, have reached a standstill.15 Despite the easing of security procedures in the Joint Security Area and the destruction of a dozen guard posts, North Korea regularly skips scheduled liaison meetings at Kaesong.16 While Seoul has high hopes for the CMA, Pyongyang has demonstrated a lack of sincerity in implementing even basic confidence-building measures.
While the United States focuses its attention mostly on North Korea’s nuclear and missile capabilities, Pyongyang possesses other significant capabilities that threaten U.S. and allied interests. The Kim regime retains a formidable arsenal of chemical and biological weapons, and its conventional military threat to the South remains substantial.17 Pyongyang has also developed a sophisticated cyber capability to hack banks, steal funds, conduct espionage, and execute influence operations in South Korea.18 In addition, North Korea routinely conducts illicit fundraising activities.19
Finally, the Kim regime is one of the worst human rights abusers in the world. The 2014 UN Commission of Inquiry detailed the regime’s crimes against humanity and recommended Kim Jong Un for referral to the International Criminal Court.20 This was reaffirmed in a 17-page UN General Assembly report in August 2019.21
That same month, a UN Panel of Experts also published a report on DPRK sanctions evasion activities. The 142-page report outlined Pyongyang’s global illicit activities, its extensive use of cyber operations to raise funds, and the methods it employs to evade UN sanctions. The report also provides an extensive list of entities contributing to these efforts.22
In an interview with 38 North, the American member of the UN Panel of Experts highlighted Pyongyang’s cyber operations and its sanctions evasion activities:
In one notable example of the growing sophistication of the attacks, DPRK cyber actors gained access to the infrastructure managing entire ATM networks of a country in order to force 10,000 cash distributions to individuals across more than 20 countries in five hours…23
The UN Panel of Experts report makes clear that maximum pressure 1.0 has not achieved its goals.24 The campaign has not achieved the denuclearization of North Korea. It has also failed to prevent Kim from obtaining the resources necessary for continued development of nuclear weapons and ballistic missiles, for support to his conventional military, and most importantly, for regime survival.
This monograph offers a “Plan B” to drive Kim to relinquish his nuclear, biological, and chemical weapons. It is “maximum pressure 2.0.”25 We delineate five lines of effort: diplomacy, military, cyber, sanctions, and information and influence activities. It builds on and expands the work of the United Nations and the United States from 2017 to 2018.
Any effective approach toward North Korea should be based on two new assumptions. The first recognizes that Kim will give up his nuclear program only when he concludes that the cost to him and his regime is too great – that is, when he believes possession of nuclear weapons threatens his survival. But external pressure alone, although important, will almost certainly fail to create the right cost-benefit ratio. It is the threat from the North Korean people that is most likely to cause Kim to give up his nuclear weapons.26 As former CIA analyst Jung Pak of the Brookings Institution has argued, “Kim fears his people more than he fears the United States. The people are his most proximate threat to the regime.”27 The ROK-U.S. alliance has yet to adopt a strategy with this in mind.
Kim, the DPRK military, and the North Korean elite must be made to recognize that keeping nuclear weapons poses an internal threat to their survival. External threats and actions alone will not suffice, though they are important. In addition, if these actors choose not to relinquish their nuclear, chemical, and biological weapons, a maximum pressure 2.0 campaign should threaten to weaken the regime.
The second new assumption is that Kim will continue to employ a strategy based on subversion of South Korea; coercion and extortion of the international community to gain political and economic concessions; and ultimately the use of force to unify the peninsula under the domination of the North, thereby ensuring the survival of the Kim family regime. A key element of his strategy is to drive a wedge between South Korea and the United States. Kim’s strategy can best be described as a “long con” whereby he extracts as much as possible for the regime while conceding little to nothing and preparing to achieve unification under his control. Kim is pursuing a strategy established long ago by his grandfather and improved by his father.
This assumption requires the United States and South Korea to prepare for the possibility that Kim might refuse to relinquish his weapons of mass destruction (WMD). This assumption is buttressed by a U.S. intelligence estimate maintaining that he is unlikely to denuclearize.28 This cannot be discounted and must be factored into a new strategy.
The proposed Plan B strategy consists of five elements: diplomatic, military, cyber, economic and financial sanctions, and information and influence activities.
The diplomatic component focuses on mobilizing the international community to adopt the maximum pressure 2.0 campaign and enforce domestic and international law to stop the regime’s illicit activities. Employing the U.S.-ROK strategy working group established in November 2018 will help the alliance prevent South Korean backsliding on the pressure campaign.29 While South Korea describes many of its projects in conjunction with the North as economic engagement activities, they are merely conduits for funds that flow directly to the Kim regime.
The military element rests on the military readiness of the ROK-U.S. alliance. Any reduction in the alliance’s combat readiness will reduce Kim’s incentive to negotiate and invite North Korean aggression. Accordingly, the United States and South Korea must engage in robust combined training and other military activities. These should include aggressive maritime intercept operations to combat ship-to-ship transfers that facilitate North Korean sanctions evasion and proliferation. Military training and exercises must be conducted without regard to Pyongyang’s propaganda. No matter how benign, ROK-U.S. military activities will always receive Northern criticism. Moreover, the suspension or cancellation of military activities has never elicited a good faith response from Pyongyang.
A more aggressive U.S. cyber campaign is necessary to combat the damage and illicit revenue generated by the North’s cyber activities. Cyber provides a critical asymmetric capability for the Kim regime. Pyongyang is pursuing new cyber techniques to support its efforts to steal hard and crypto currency and conduct espionage and influence operations. The United States and the international community must counter these threats.
The UN and U.S. sanctions regimes must be expanded and fully enforced, including by targeting non-North Korean entities, banks, and individuals that enable Pyongyang’s sanctions evasion activities. This must include enforcement of UN sanctions on North Korean overseas laborers. Likewise, the United States must intensify its scrutiny of North Korea’s shipping sector through monitoring and surveillance efforts in areas known for illicit ship-to-ship transfers.30 Sanctions must not be used as a bargaining chip. North Korea must comply with all UN and U.S. sanctions – by denuclearizing, terminating its missile programs, ceasing its illicit activities, and ending its human rights abuses – before they are lifted. Sanctions and enforcement must be incorporated into the diplomatic approach and coordinated with information and influence activities.
Robust information and influence activities must also be part of maximum pressure 2.0. The campaign must separate the Kim family regime from the second-tier leadership and general population. Achieving this goal could generate an internal threat that prompts Kim to give up his nuclear weapons. Providing the North Korean people with more outside information, including information related to the regime’s horrific human rights record, would undermine the legitimacy of the Kim regime.
The following five chapters provide a plan policymakers and strategists could implement to protect and advance U.S. interests on the Korean Peninsula. Following his failure at Hanoi, Kim gave an ultimatum to the United States, stating that by the end of 2019, Washington must “adopt a new posture” toward the North if denuclearization negotiations are to continue.31 It is therefore necessary to prepare for what may come next in 2020, while leaving open the possibility that Kim might adopt a less confrontational approach.
Maximum pressure 2.0 rests on a foundation of sustained pressure and military strength. This is necessary even as the United States continues to pursue working level negotiations that give Kim the opportunity to denuclearize. Should he not make the right strategic decision, the United States and its South Korean allies would then have in place the strategy and forces necessary to deter or defeat the North.
The North Korean regime has mastered the art of diplomatic deception. It engages in provocations both to advance its nuclear and missile capabilities and to achieve valuable concessions. The regime calibrates its provocations to ensure they fall below the threshold that would elicit an armed response. Washington and its allies typically respond by offering diplomatic negotiations to address Pyongyang’s activities while avoiding military conflict.32 Once negotiations begin, North Korea avoids specific commitments or offers broad, ill-defined pledges they do not intend to honor.
Over the last 20 years, Pyongyang has violated every agreement it has reached with the international community regarding its nuclear weapons program. As a result, North Korea now possesses approximately 20 to 60 nuclear weapons and a formidable inventory of ballistic missiles capable of targeting South Korea, Japan, Guam, and the United States.33 General Terrence O’Shaughnessy, commander of U.S. Northern Command, testified in April 2019 that North Korea has flight-tested “multiple ICBMs capable of ranging the continental United States.”34
A survey of the diplomatic history between Pyongyang and the United States over the last few decades illustrates this strategy of deceit. After the United States withdrew all tactical nuclear weapons from South Korea as a good-will gesture in 1991, Pyongyang signed the 1992 Joint Declaration of the Denuclearization of the Korean Peninsula.35 In the declaration, North Korea made an open-ended commitment not to “test, manufacture, produce, receive, possess, store, deploy or use nuclear weapons” and not to “possess nuclear reprocessing and uranium enrichment facilities.”36 Despite this pledge, North Korea produced enough plutonium to build two nuclear weapons.37
In the 1994 U.S.-DPRK Agreed Framework, the North agreed to implement the 1992 Joint Declaration and pursue nuclear energy for peaceful purposes. The new agreement required North Korea to freeze and eventually dismantle its graphite-moderated reactors.38 In exchange, an international consortium would provide two light water nuclear reactors, and the United States would provide annual shipments of 500,000 tons of heavy fuel oil. However, North Korea again violated the agreement by pursuing a uranium enrichment program.39
In 2005, the United States and North Korea held the so-called Six Party Talks with South Korea, Japan, China, and Russia. As a result of these talks, the North Koreans signed a joint statement in which they agreed to “abandoning all nuclear weapons and existing nuclear programs and returning, at an early date, to the treaty on the nonproliferation of nuclear weapons and to IAEA safeguards.”40 Once again, North Korea cheated, detonating its first nuclear device in 2006.
In February 2007, North Korea agreed to shut down and dismantle its Yongbyon nuclear facility within 60 days.41 The North Korean government destroyed the cooling tower at this facility in June 2008.42 In response, the United States returned all the funds it had previously seized from Banco Delta Asia (BDA)43 and removed North Korea from the State Sponsors of Terrorism list. Yet by 2008, North Korean restarted its nuclear facilities, expelled inspectors, and pocketed funds from U.S. concessions, refusing to agree to a verification protocol proposed by the United States. In 2010, North Korea revealed a new secret uranium enrichment facility.44
By 2009, the Six Party process was defunct. North Korea engaged in a series of provocations, including a nuclear test in May 2009, the continuation of its uranium enrichment program, and intra-Korean military skirmishes in 2010.45
In 2017, the Trump administration implemented a maximum pressure campaign46 that integrated diplomatic and economic tools of national power.47 In 2018, in stark contrast with his biting rhetoric the previous year, Kim suggested that North Korea might want to participate in the Pyeongchang Olympics. This overture led to the first intra-Korean talks since 2012,48 culminating in an intra-Korean summit held in April and the Trump administration’s agreement to hold a bilateral summit.
Kim and Trump convened historic bilateral summits in Singapore and Hanoi on June 12, 2018,49 and February 27, 2019,50 respectively.51 At Singapore, Kim agreed to work toward the “complete denuclearization of the Korean peninsula” and to destroy a ballistic missile engine test site.52 Yet at the subsequent Hanoi summit, he refused to agree to a roadmap toward a final and fully verified denuclearization, leading Trump to walk away from the negotiations.53
Since Hanoi, Kim has increased his hostile rhetoric in an attempt to coerce the United States into lifting sanctions as a concession to restart talks. To demonstrate its discontent, Pyongyang conducted 12 missile tests: two in May of 2019 and 10 more between August and October of 2019.54 Trump downplayed the severity of these provocations, arguing that they were neither nuclear nor ICBM tests.55
But it is not that simple. So long as the Kim regime seeks to maintain or advance its nuclear weapon and ballistic missile programs, North Korea must conduct periodic tests. These tests help the regime advance its respective programs, and they also serve as important diplomatic signaling tools with which to extract concessions.
In June 2019, after a summit with Moon, Trump met Kim at the DMZ. After a brief hand-shaking ceremony, the two leaders shared a private discussion in the Inter-Korean House of Freedom.56 This meeting fueled expectations of a resurgence in Trump-Kim summitry. Some journalists have even speculated that the United States was seeking to fast-track negotiations by softening its negotiating position to require only a nuclear freeze.57 However, the U.S. government has denied this.
The Trump administration deserves credit for making the North Korean nuclear and missile threats a sustained focus. Maximum pressure 1.0 undeniably squeezed the North Korean regime. Washington successfully encouraged more than 20 countries to curtail or end diplomatic ties with North Korea.58 Meanwhile, Trump’s unorthodox threats against North Korea almost certainly elevated the regime’s sense of insecurity. Simultaneously, the Trump administration imposed economic pressure on the Kim regime through U.S. sanctions and led a powerful multilateral sanctions campaign.59 Breaking with precedent, the administration also continued to impose new sanctions on North Korea even while engaging in diplomacy with Pyongyang.60
However, maximum pressure 1.0 has failed to achieve tangible progress toward the final and fully verifiable dismantlement of North Korea’s nuclear, biological, and chemical weapons programs. Not surprisingly, the absence of a substantive working-level dialogue has played a negative role in the failure of the summits in Singapore and Hanoi. Limiting substantive discussions on denuclearization to the leaders plays directly into North Korea’s hands. It is likely that Kim never intended to denuclearize. The Trump administration should have attempted to test Kim’s intentions at the working level before giving the North Korean despot the diplomatic benefit of a summit with the U.S. president.
Trump’s unpredictability, as well as his personal ambition to reach a grand bargain, may well lead him to make unnecessary – and even dangerous – concessions. Trump’s indefinite suspension of select ROK-U.S. military exercises during the Singapore summit is just one troubling example.
A maximum pressure 2.0 campaign may increase risk and tensions in the short and medium term, but it represents the best hope of denuclearization without war. The success of this campaign will depend on the administration’s ability to establish a shared consensus among key allies and partners on resolving the North Korea threat.
While the Moon administration expresses strong support for North Korea’s final and fully verified denuclearization, Seoul appears to mistakenly believe concessions, rather than pressure, offer the best means of resolving the crisis.61 This could prove challenging for the maximum pressure 2.0 campaign.
History is replete with examples of the South undermining U.S. strategy. Former South Korean President Kim Dae-jung, for example, went as far as illegally paying $100 million to North Korea to hold the intra-Korean summit in 2000.62 In 2002, it became clear that Seoul’s inducement efforts failed when the world learned North Korea was covertly enriching uranium.63 Similarly, Washington’s decision to return North Korea’s frozen BDA assets in 2005 critically undermined U.S. diplomatic leverage over Pyongyang. The BDA freeze had deprived Pyongyang of funds and led other financial institutions to cut ties with North Korea, fearing penalization by the United States.64 Unfreezing these funds forfeited these benefits. In return, Pyongyang conceded nothing.
Maximum pressure 2.0 will succeed only if the United States and its allies, namely South Korea and Japan, are aligned.65 Unfortunately, throughout 2019, Seoul and Tokyo have engaged in an ugly dispute that has undermined their security cooperation. Despite initially impacting only their bilateral trade relations, this conflict culminated in Seoul’s decision in August 2019 not to renew its bilateral military information-sharing agreement with Japan. This decision, if upheld, would not only damage South Korea’s military-to-military cooperation with both Japan and the United States, but also would undercut South Korea’s own national security.66 North Korea, China, and Russia undoubtedly relish this friction, as they seek to drive a wedge between the United States, South Korea, and Japan.67 Washington should seek to address these divisions and encourage unity.
Japan’s priority is the denuclearization of North Korea. But Tokyo also believes that any comprehensive deal must address Pyongyang’s robust missile inventory – including missiles that can target Japan. Tokyo also seeks the return of Japanese citizens abducted by North Korean agents as far back as the 1970s.68
In addition to addressing the concerns of key allies, the United States must undertake an ambitious agenda at the UN Security Council (UNSC) to foster an international consensus for a second maximum pressure campaign. Admittedly, new international sanctions against North Korea will be difficult to attain, as Russia and China would likely use their vetoes at the UNSC. Beijing prioritizes stability on the Korean Peninsula, and the specter of crippling economic sanctions potentially destabilizing the Kim regime or sparking large-scale refugee flows into China evokes Beijing’s concern. Likewise, both China and Russia oppose the strong U.S. military presence in South Korea, and both hope to prevent the emergence of a unified Korea friendly to Washington.69
The United States led an impressive diplomatic effort to implement maximum pressure 1.0. While the campaign likely played a role in bringing Kim to the negotiating table, the negotiations have failed to achieve their objective. Consequently, Washington should lead a new maximum pressure campaign targeting North Korea. A key element of this campaign should be diplomatic and should include the following elements:
ROK national security and U.S. interests in Northeast Asia depend on the military readiness of the ROK-U.S. alliance. A successful outcome on the Korean peninsula is unlikely if the alliance fails to maintain this readiness. The primary mission of the ROK-U.S. Combined Forces Command (CFC) in South Korea is to deter a North Korean attack. If deterrence fails, its mission is to defend the ROK and defeat the North Korean military to set the conditions for resolution of what the 1953 Armistice Agreement calls the “Korean question” – the division of the Korean peninsula.73
General Robert Abrams, the commander of the United Nations Command, CFC, and U.S. Forces Korea, testified in March that diplomatic activity and the September 2018 intra-Korean CMA have led to a “palpable reduction in tension when compared to the recent years of missile launches and nuclear tests.”74 Specifically, the CMA’s main terms included ending all training exercises near the North-South border and the withdrawal of all DMZ guard posts.75 The South and North negotiators intended for the CMA to serve as a trust-building mechanism.76
Although the opposing forces have started to demilitarize the Joint Security Area in Panmunjom pursuant to the CMA, the North Korean conventional military threat has not decreased. “Current modifications in atmospherics … do not represent a substantive change in North Korea’s military posture or readiness,” General Abrams testified. “The North Korean military remains formidable and dangerous, with no discernable differences in the assessed force structure, readiness, or lethality.”77 In fact, the North Korean People’s Army (NKPA) completed its 2018–2019 Winter Training Cycle as scheduled.78
The North Korean military, the fourth largest in the world, remains formidable. It includes some 1.2 million active troops,79 14,000 artillery systems,80 and 2,500 armored vehicles.81 Seventy percent of the NKPA remains forward deployed between the DMZ and Pyongyang, with a large concentration of artillery systems located in the Kaesong Heights, just north of Seoul.82
Pyongyang has also developed a wide array of missiles capable of threatening U.S. forces and allies in the region and even the U.S. homeland.83 North Korea has conducted more than 80 ballistic missile tests since Kim Jong Un took power in 2012.84 In July and November 2017, North Korea launched the Hwasong-14 and Hwasong-15 ICBMs.85 The Department of Defense’s (DOD’s) 2019 Missile Defense Review assessed that North Korea has “neared the time when it could … threaten the U.S. homeland with missile attack.”86
This is particularly concerning in light of the regime’s nuclear program. North Korea has conducted six nuclear weapons tests since 2006, each with an increased yield.87 Experts assess that the regime possesses 20 to 60 nuclear warheads.88 In September 2017, Pyongyang claimed to have tested a thermonuclear weapon.89 It is unclear whether North Korea has successfully developed such a weapon, but if so, it would mark a significant upgrade in Pyongyang’s arsenal.90
North Korea’s nuclear weapons program encompasses various facilities, the most important of which is the Yongbyon Nuclear Scientific Research Center. This facility has multiple reactors, including a 5-megawatt reactor, a light water reactor, and an IRT-2000 reactor. The latter utilizes highly enriched uranium and could enable Pyongyang to boost warhead efficiency and develop smaller and lighter designs. Yongbyon also has facilities that reprocess plutonium and enrich uranium to produce weapons-grade fissile material.91
The only nuclear facility that North Korea has declared is Yongbyon. However, open-source intelligence yielded new information about another facility, in Kangson, which U.S. intelligence claims to be North Korea’s first covert uranium enrichment facility.92 Intelligence sources suspect North Korea has at least one more undeclared nuclear facility.93
North Korea’s ballistic missile program features not only ICBMs but also short-range, medium-range, intermediate-range, and submarine-launched ballistic missiles. These include solid-fuel ballistic missiles, which have a faster reaction and reload times, making them more difficult to detect.94 Pyongyang tested a variant of one such missile, the KN-15 Pukguksong-2 medium-range ballistic missile, in 201795 and again in May, July,96 and August97 of 2019. This is alarming because solid-fuel missiles could enable Pyongyang to overwhelm its adversaries’ missile defense systems, strengthening its first-strike capability.
Pyongyang also possesses a formidable arsenal of chemical and biological weapons. The North maintains an estimated 2,500 to 5,000 tons of chemical munitions, and analysts suspect it possesses a deadly arsenal of biological weapons as well.98 A former Obama administration official called North Korea’s biological weapons “advanced, underestimated, and highly lethal.”99 Pyongyang has a formidable global network that could be used to conduct a chemical and biological attack abroad – including in the United States. The regime may also be developing an electromagnetic pulse capability to target the U.S. electrical grid with nuclear-armed ICBMs.100
Approximately 28,500 U.S. troops are currently based in South Korea.101 From 2018 to 2019, in order to help defray the financial cost of the U.S. military posture, the Trump administration conducted routine burden sharing negotiations. The administration demanded a significant increase in ROK contributions for U.S. “stationing costs.” The two countries eventually reached an agreement, and the ROK assembly approved a $915 million deal.102 Because the agreement covered only one year, however, negotiations are currently ongoing for a new agreement by the end of 2019.103
The 1953 Mutual Defense Treaty (MDT) provides the legal basis for the presence of U.S. military forces in South Korea. The MDT commits both countries to mutual defense against threats in the Asia-Pacific region but notably omits specific mention of the North Korean threat.104 The negotiators sought to ensure the MDT would transcend the Kim regime’s rule. Indeed, even a cessation of North Korean hostilities would not alone determine the future status of U.S. forces on the Korean Peninsula. To change the status of U.S. forces, ROK and U.S. political leaders would need to renegotiate the terms of the MDT.105
The two allies are already considering the future of the alliance’s structure and command. Since 2003, ROK and U.S. forces have undertaken an aggressive transition program to develop independent ROK warfighting capabilities, in preparation for a transition in operational control. The goal of this effort is to give the ROK military the lead defense role. This will eventually culminate with an ROK general officer in command of CFC, supported by a U.S. deputy commander.106 A U.S. general officer will continue to command the UNC. The associated Yongsan Relocation and Land Partnership Plans have led to the consolidation of most U.S. forces south of Seoul in the Camp Humphreys-Osan Air Base area.107 While this consolidation improves logistical support and coordination and reduces costs of multiple bases throughout Korea, it also leaves U.S. forces vulnerable to North Korean missile attacks.108
The Trump administration deserves credit for focusing on the North Korean military threat and taking actions to address it. The cessation of North Korean missile launches and nuclear tests from November 2017 to May 2019 was a notable positive development. However, the regime can easily resume missile launches (as has happened) and even nuclear tests. The suspension of those activities therefore should not be confused with a reduction of the North Korean military threat.
The U.S. military presence helps deter North Korean aggression and prevents a war on the peninsula. Yet Trump seems to think otherwise. In recent months, he has openly mulled a withdrawal of U.S. forces from the Korean Peninsula. This approach suffers from several mistaken assumptions. For instance, Trump apparently considers the U.S. military presence on the Korean peninsula an act of American charity. In reality, this presence helps deter far more costly North Korean aggression. Moreover, Trump does not seem to appreciate that the cost of the U.S. troops on the peninsula is a bargain compared to the cost of war. It is worth remembering that the Korean War (1950–1953) cost 36,000 Americans lives and an estimated $276 billion in today’s dollars.109
It is also worth remembering that South Korea’s contribution to its own defense is not insubstantial. The ROK military is composed of approximately 599,000 troops across its army, navy, and air force.110 The ROK military also operates ROK-U.S. combined information assets, such as satellites, signal, and imagery analysis, which provide early warning and detection capabilities that are essential for U.S. readiness.111
In addition, South Korea hosts key U.S.-operated missile defense assets and operates its own. Specifically, U.S. missile defense systems in the ROK include one Terminal High Altitude Area Defense battery and eight Patriot Advanced Capability-3 batteries. South Korea operates three KDX-III Sejong the Great-class destroyer vessels equipped with the Aegis system. Currently, ROK is developing its Korea Air and Missile Defense multi-platform system to respond to short-range air and missile threats.112
Given the size and success of the South Korean economy, it is certainly appropriate for the administration to press Seoul to pay more of the cost of basing U.S. troops there. However, the manner and timing of such U.S. efforts matter. Initiating a contentious and public dispute with South Korea about burden sharing is shortsighted and counterproductive. Pyongyang, Beijing, and Moscow undoubtedly welcome friction animated by ill-informed populist impulses in the United States and South Korea that could potentially result in the departure of U.S. military forces.
In Singapore, Trump unilaterally announced the suspension of large-scale exercises. He adopted Kim’s rhetoric, calling the exercises “war games” and criticizing them as being provocative and too expensive.113 In the past year, while attempting to maintain military readiness, CFC scaled back numerous exercises and cancelled two major ones, Key Resolve and Foal Eagle.114 This was a mistake. Limiting ROK-U.S. military exercises has not elicited similar North Korean concessions. In fact, unilaterally cancelling or scaling back allied exercises has never resulted in significant, reciprocal, and durable concessions from North Korea.115
In addition to these conventional military concerns, North Korea’s definition of denuclearization of the entire Korean Peninsula is different from that of the United States. The Kim regime’s view is that denuclearization must include an end to the ROK-U.S. alliance, the removal of U.S. troops from the peninsula, and the termination of U.S. extended deterrence and the America nuclear umbrella over South Korea and Japan. These demands are consistent with the Kim regime’s longstanding objective of dividing the ROK-U.S. alliance so that the North can dominate the South.116
After his defection in 1991, Hwang Jong Yop, the highest-ranking defector in North Korean history and the architect of Kim Il Sung’s Juche ideology, was asked why the regime invested so much in its military yet has never executed its plan to unify the peninsula by force. His answer was simple: U.S. forces had deterred Kim Il Sung and Kim Jong Il. It is therefore unsurprising that a key focus for the regime is the departure of U.S. forces from South Korea.117
Since the failure of the Hanoi summit, Kim Jong Un has conducted a series of military and propaganda operations designed to increase his leverage in negotiations and generate internal support from his military and elite. These include the rehabilitation of the Sohae missile launch facility,118 a new anti-tank guided missile system test,119 combat aviation exercises,120 unusual activity at the Yongbyon nuclear facility,121 and multiple tests of a short-range tactical ballistic missiles and multiple rocket launchers in the summer of 2019.122 This indicates that Kim will continue to rely on his military to pursue a diplomatic strategy based on coercion and extortion.123
Ready and capable ROK-U.S. combat power is essential to deter North Korean aggression, defend South Korea, protect U.S. interests, empower effective diplomacy, and support a maximum pressure campaign. There has been no reduction in North Korea’s offensive military capabilities and no discernable change in the regime’s strategy to dominate the peninsula. CFC must be prepared to respond to the full spectrum of North Korean aggression. We recommend the following actions:
North Korea’s cyber operations generate revenue for the regime and play an important role in Pyongyang’s espionage and reconnaissance efforts. North Korea’s cyberattacks against the United States, South Korea, and allied countries continue unabated and are likely to endure, barring a more assertive response. Less than a month after the first intra-Korean summit in April 2017, the ROK government disclosed numerous DPRK intrusions against academic think tanks and financial organizations.126 Even as Kim and Trump were meeting in Hanoi, North Korean hackers were attempting to infiltrate more than a hundred companies in the United States and around the world.127 The U.S. intelligence community concluded in 2019 that North Korea’s government will continue sponsoring cyber operations “to raise funds and to gather intelligence or launch attacks on South Korea and the United States.”128
“Straight up cyber bank theft” accounts for a significant portion of North Korea’s malicious cyber activity, according to John Demers, the U.S. assistant attorney general for national security.129 Experts at the Royal United Services Institute believe these operations and the regime’s use of crypto currencies to evade sanctions are helping to finance North Korea’s nuclear and unconventional weapons program.130
To date, North Korea’s highest-profile cyberattack remains its February 2016 hack of the Bangladeshi central bank, during which the attackers pilfered $81 million. The hackers infiltrated the bank’s network and issued fraudulent requests for the Federal Reserve of New York to transfer funds to accounts the hackers controlled.131 Had the Federal Reserve not grown suspicious, North Korean hackers could have stolen up to $1 billion.
In addition to fraudulent electronic transfers, North Korean hackers have also used cyberattacks to physically empty ATMs of cash to fill regime coffers. Dating back to 2016, North Korean government-supported hackers known as the Lazarus Group (also known as Hidden Cobra) infiltrated banking networks around the world to conduct fraudulent ATM withdrawals.132 On September 13, 2019, the U.S. Treasury Department sanctioned Lazarus Group and two of its subordinate hacking organizations, Blunoroff and Andraiel.133 In two separate incidents, the group initiated simultaneous cash withdrawals in dozens of countries, stealing tens of millions of dollars.134 North Korea likely utilized local networks in those countries to retrieve the cash.
North Korean hackers have also targeted cryptocurrency exchanges.135 Between hacks, mining,136 and scams,137 North Korea has generated hundreds of millions of dollars in foreign currencies and cryptocurrencies.138 In August 2019, a UN Panel of Experts estimated this total to be as high as $2 billion, accumulated over 35 attacks across 17 countries.139 While there are reasons to question this number, there is little doubt that North Korea uses the cyber domain to acquire a significant portion of its funding.140
North Korea also uses cyber operations as part of its reconnaissance and espionage missions. Pyongyang’s primary agency for cyber activity is the Reconnaissance General Bureau (RGB), which is responsible for North Korea’s terrorist, clandestine, and illicit activities.141 In February 2018, the cybersecurity firm FireEye released a report on a North Korean hacker group it calls Advanced Persistent Threat (APT) 37. From 2014 to 2017, the group infiltrated chemical, electronic, manufacturing, aerospace, automotive, and healthcare companies in Japan, Vietnam, and the Middle East for espionage purposes. FireEye concluded that the hackers’ strategic intent was to learn more about South Korea’s government, military, and defense industrial base.142 More recently, FireEye confirmed multiple North Korean APTs targeting South Korean companies, government agencies, and public services. Each group appeared to have a separate mission in support of Pyongyang’s espionage, theft, and disruption goals.143
The Wannacry malware attack offers insights into another element of Pyongyang’s cyber operations: disruption. The Wannacry malware infected more than 200,000 computers in 150 countries, locking up systems until victims paid a ransom.144 Health care services, manufacturing, and critical infrastructure sectors were severely impacted by North Korea’s most destructive ransomware attack to date.145 While fewer than 400 victims paid the ransom and hackers generated only $140,000,146 the total cost of the attack, including damage mitigation and business interruption, may have been as high as $18 billion.147 Wannacry likely aimed not to generate funds but to wreak havoc. Pyongyang is likely assessing how a similar attack synchronized with an escalation on the Korean Peninsula might affect Washington and Seoul’s ability to respond.
North Korea’s cyber capabilities are the newest component of the regime’s asymmetric strategy. Kim Jong Un has reportedly called cyber warfare an “all-purpose sword,” granting Pyongyang the ability to “strike relentlessly.”148 Cyber operations provide North Korea with a less conspicuous way to engage in peacetime provocations and illicit activities.149 Pyongyang’s ongoing malicious cyber activities suggest it will continue its multi-pronged strategy of deception, coercion, and extortion.
The Trump administration has deployed a range of tools to combat the North Korean cyber threat. The Computer Emergency Readiness Team, jointly run by the U.S. Department of Homeland Security (DHS) and the Federal Bureau of Investigation (FBI), has issued numerous technical alerts and malware reports so that targeted industries can mitigate North Korean malware. DHS is also partnering with U.S. Cyber Command (CYBERCOM) to publicly disclose samples of North Korean malware to assist cybersecurity professionals in protecting private industry.150 It is unclear, however, whether these efforts have reduced or prevented North Korean cyberattacks.151
The Trump administration has also relied on sanctions and legal mechanisms. In September 2018, the U.S. Department of Justice (DOJ) issued criminal charges against a North Korean computer programmer, Pak Jin Hyok, for his role in cyberattacks sponsored by Pyongyang.152 The indictment provided detailed evidence attributing these cyberattacks to the DPRK government through Pak and his company.153 In conjunction with the indictment, the Treasury Department sanctioned Pak and his company, Chosun Expo Joint Venture, which Treasury noted was likely a front company for the RGB.154
This joint Treasury and DOJ action was the first cyber-related charge the United States brought against a North Korean since the Obama administration sanctioned the DPRK government for the Sony Pictures attack of 2014.155 This time, the action directly targeted an individual and company for government-sponsored cyberattacks, undercutting the regime’s plausible deniability. More importantly, the joint action demonstrated that Washington can positively identify both the government sponsor and the individual cyber operatives responsible for attacks.
North Korea continues to wage cyberattacks, in part because its hackers receive sanctuary in China. DOJ has confirmed that North Korean companies such as Chosun Expo operate in China.156 Until early last year, RGB operated a command post in Shenyang, China.157 North Korean defectors also report that Pyongyang sends newly trained hackers to China to earn money for the regime.158 Evidence also suggests that these hackers receive additional computer science training at Chinese universities.159 If these hackers have student visas, Beijing is likely aware of their activities. Data pattern analysis also suggests North Korean internet activity emanates from India, Malaysia, New Zealand, Nepal, Kenya, Mozambique, and Indonesia,160 although it is not clear if North Korean personnel are physically operating from these nations or merely routing traffic through their networks.
Unfortunately, the FBI has concluded that public attribution will not deter North Korean hacking.161 Perhaps informed by this assessment, the Obama and Trump administrations have occasionally used offensive cyber capabilities to counter North Korea’s malign activities. During the Obama administration, the United States reportedly initiated cyber and electronic warfare operations against North Korea’s missile program.162
In 2017, CYBERCOM reportedly cut the internet access of RGB hackers as part of operations ordered early in the Trump administration.163 That operation aligns with the Pentagon’s subsequent September 2018 Defense Cyber Strategy and its goal of “defend[ing] forward to disrupt or halt malicious cyber activity at its source.”164 The Trump administration also delegated greater authority over battlefield decisions to U.S. offensive cyber operators.165 Press reporting indicates that CYBERCOM has begun to operate accordingly, but much remains classified.166
Pyongyang maintains the ability to engage in cyber-enabled economic warfare and target the ROK and U.S. economies to indirectly undermine the alliance’s military and strategic capabilities. The world witnessed a test run in 2013 with the DarkSeoul attacks against South Korean banks and media companies.167 While North Korea has yet to unleash large-scale cyber-enabled economic warfare attacks, such tactics align with Pyongyang’s “peacetime provocations” strategy of operating below the threshold of war to achieve political and economic gains that help preserve the Kim family regime.168
Pyongyang’s cyber capabilities would likely also prove useful to the regime if military conflict erupts on the peninsula. The North Korean military’s conventional war plans focus on integrating “strong surprise attacks” and asymmetric capabilities to gain an immediate advantage.169 In a military conflict, Pyongyang would likely launch cyber-attacks against ROK-U.S. command, control, communications, computer, intelligence, surveillance, and reconnaissance nodes. The presence of cyber units within Pyongyang’s General Staff Department highlights the importance the North Korean military places on cyber.
North Korea uses the cyber realm to generate illicit revenue and conduct ISR operations. Even if negotiations make progress, these activities will almost certainly continue. While the Trump administration has taken steps to hold Pyongyang accountable for its malicious cyber operations, Washington must do more to deter and impose costs on the Kim regime.170
The United States has employed economic tools of power in its policy toward North Korea since the Korean War – increasing and relaxing pressure to incentivize Pyongyang to make concessions on its nuclear program and other destabilizing activities. In the early 1990s, the Clinton administration imposed sanctions on certain DPRK government entities in response to North Korean ballistic missile and nuclear activities, but it later lifted a number of key restrictions pursuant to the 1994 Agreed Framework. Likewise, in the mid-2000s, the Bush administration pursued a global initiative targeting North Korean illicit activities and leadership finances. Following subsequent diplomatic progress, the Bush administration unwound several important restrictions, including through the removal of North Korea from the State Sponsors of Terrorism list.
As U.S. sanctions and special measures ebbed and flowed, additional, multilateral sanctions came into effect – principally through UN Security Council Resolutions (UNSCRs), such as UNSCR 1718. While circumstances have varied, this history demonstrates a repeated cycle of North Korean provocations followed by punitive economic measures that are later lifted for ultimately unreliable North Korean commitments.
The most recent round of enhanced economic pressure began during the Obama administration in response to North Korea’s fourth nuclear test, in January 2016.183 The passage of NKSPEA in February 2016, combined with both Executive Order (E.O.) 13722 and UNSCR 2270, marked a major expansion of U.S. and multilateral sanctions.
The Trump administration enhanced this effort by working through the United Nations to successfully secure the passage of four additional UNSCRs with an array of economic and diplomatic actions for all UN member states to enact. These included restrictions or bans on the purchase of North Korean coal, iron, lead, and seafood as well as prohibitions against North Korea’s use of expatriate labor. The Trump administration has also increased pressure by working with Congress to implement additional statutory sanctions and by issuing executive orders to strengthen sanctions that incorporate and expand the UN sanctions framework.
|US Sanctions: Executive Order/Legislation||Key Provisions|
|North Korea Sanctions and Policy Enhancement Act of 2016184 Effective date: February 18, 2016||Mandated the application of sanctions related to North Korea’s proliferation, arms trafficking, money laundering, censorship, luxury goods purchases, cyberattacks, and human rights abuses. It blocked all assets of the DPRK government and its officials.|
|E.O. 13722 – Blocking Property of the Government of North Korea and the Workers’ Party of Korea, and Prohibiting Certain Transactions With Respect to North Korea185 Effective date: March 16, 2016||Prohibits U.S. nationals from exporting or re-exporting goods, services, or technology to North Korea, and prohibits any new investments in North Korea by U.S. persons. It also imposed sanctions against both U.S. and non-U.S. persons dealing in luxury goods, minerals, and certain industries; engaging in human rights abuses; undermining U.S. cybersecurity; or promoting censorship on behalf of the DPRK government.|
|Countering America’s Adversaries Through Sanctions Act186 Effective date: August 2, 2017||Mandated a range of sanctions for purchasing or acquiring from North Korea key precious metals or other natural resources; selling or transferring to North Korea aviation fuel or providing other services; providing insurance or registration services to a vessel owned or controlled by the DPRK government; and maintaining a correspondent account with a North Korean bank. The legislation also limited U.S. assistance to governments purchasing arms or related services from North Korea, and it authorized the administration to prohibit any ships registered with countries that enable the circumvention of UNSCR requirements from landing in the United States. Finally, the legislation imposed sanctions related to North Korea’s use of slave labor.|
|E.O. 13810 – Imposing Additional Sanctions with Respect to North Korea187 Effective date: September 21, 2017||Applied sanctions on key sectors of North Korea’s economy and on aircraft and vessels that have traveled to North Korea. Most importantly, it introduced secondary sanctions on foreign financial institutions that engage in a range of transactions involving North Korea.|
|UN Sanctions: United Nations Security Council Resolutions||Key Provisions|
|UNSCR 2270188 Effective: March 2, 2016||Prohibited the supply of luxury goods to North Korea and the sale or transfer of gold, titanium, vanadium ore, and other materials from North Korea. It also placed limitations on North Korea’s sale of coal and iron, and mandated cargo inspections to and from North Korea. Finally, it froze the assets of entities of the DPRK Government and Worker’s Party of Korea and prohibited the leasing or chartering of vessels and airplanes and the provision of crew services to North Korea.|
|UNSCR 2321189 Effective: November 30, 2016||Placed prohibitions on the purchase or sale of North Korean coal, iron, and iron ore, and imposed an annual limit of $400 million on transactions for North Korean coal. It also prohibited North Korea from exporting copper, nickel, silver, zinc, new helicopters and vessels, or statues. Finally, it placed further limits on North Korean diplomats and on banking by North Korean diplomatic missions and consular posts.|
|UNSCR 2371190 Effective: August 5, 2017||Prohibited or limited North Korean sales or transfers of coal, iron, iron ore, seafood, lead, and lead ore to other countries. It prohibited member states from increasing the total number of work authorizations for North Korean nationals in their jurisdictions unless approved by the Security Council. It also mandated that UN member states prohibit North Koreans from opening new joint ventures, expanding existing joint ventures, or opening other businesses.|
|UNSCR 2375191 Effective: September 11, 2017||Prohibited the supply, sale, or transfer of all condensates and natural gas liquids to North Korea, and banned North Korean exports of textiles such as fabrics and apparel products. It also further limited the sale of refined petroleum and crude oil. Finally, it prohibited member states from authorizing North Korean nationals to work in their jurisdictions unless specifically approved by the Security Council.|
|UNSCR 2397192 Effective: December 22, 2017||Limited North Korea’s imports of refined petroleum to 500,000 barrels over 12 months. It also mandated the return to North Korea by December 2019 of all North Korean nationals working abroad, with some humanitarian exceptions. It authorized member states to seize, inspect, freeze, and impound any vessel in their territorial waters found to be illicitly providing oil to North Korea through ship-to-ship transfers or smuggling North Korean coal or other prohibited commodities. It also banned exports of North Korean food products, machinery, electrical equipment, earth and stones, wood, and vessels and prohibited the export to North Korea of industrial equipment, machinery, transportation vehicles. and industrial metals.|
These measures placed significant economic pressure on North Korea193 – and on its leading trading partner, China. According to an analysis by Sayari Labs of shipment data from China’s General Administration of Customs, from 2013 to 2016, approximately 5,000 Chinese companies conducted an estimated $9 billion worth of trade with North Korea.194
Beijing tightened trade restrictions after the 2017 passage of UNSCR 2371, with China’s General Administration of Customs reporting a decline in Chinese imports of targeted commodities, such as coal and seafood. China’s reported imports of coal from North Korea declined by 30 percent between August and September of 2017, then dropped to zero through the rest of 2017. Similarly, imports of seafood reported by Chinese customs dropped to zero starting in September 2017.195
Nonetheless, China remains North Korea’s most significant trading partner.196 China ceased public reporting of shipment-level trade with North Korea in 2017, making it difficult to determine exact trade volumes. However, last year the Chinese customs claimed an aggregate annual trade volume with North Korea of $2.3 billion – less than in prior years but still greater than that of any other country. The volume of China-DPRK trade is likely underreported given Beijing’s interest in projecting the appearance of compliance with UN regulations and China’s longstanding practice of not reporting data on major trade categories, such as oil.197
China continues to export mining equipment, electronics, chemicals, and other potential dual-use items to North Korea.198 Shipment data from previous years illustrate this trend: In 2017, more than 250 unique Chinese companies traded with North Korea in commodities that appear to be blocked by U.S. and/or UN sanctions, based on the bills of lading.199
North Korea also transships goods through China to the rest of the world. UN Panel of Experts reports in recent years are replete with examples of how Chinese facilitators transship goods to witting or unwitting end users worldwide. In 2017, for example, at least 65 Chinese companies imported goods from North Korea and then exported these goods globally.200 This practice is particularly evident in North Korea’s export of garments that require cheap, high-skilled labor.
In September 2017, pursuant to UNSCR 2375, Chinese authorities directed all DPRK joint ventures in China to close within 120 days.201 According to a 2018 analysis by Sayari Labs, however, at least 250 Chinese companies owned by DPRK entities still appear to be active. The Chinese central corporate registry deleted these companies’ records entirely, a departure from its normal practice of retaining records but marking the company status as “closed.” This suggests that Beijing may be concealing the companies’ continued operation.202
Russia also plays a critical role in North Korea’s circumvention of sanctions, particularly with hard currency derived from expatriate labor. Despite UNSCRs 2375 and 2397, the Russian government continues to provide work authorizations for DPRK laborers. On July 30, 2018, the Russian Ministry of Labor published its annual list of authorizations, with 57 Russian companies authorized to hire a total of 4,103 DPRK laborers for 12-month terms.204
Trade between North Korea and Russia is dominated by Russian oil exports. Oil and related products comprised over 80 percent of the value of Russian exports to North Korea in 2017 and 60 percent in 2018.205 In terms of corporate ties, Sayari Labs has identified at least 18 active Russian companies owned by DPRK companies, including a construction company in Khabarovsk wholly owned by U.S.-sanctioned Korea Rungrado General Trading Corporation. Many more Russian companies have DPRK citizens as shareholders.206
While the maximum pressure 1.0 campaign imposed significant economic costs on North Korea and incentivized Kim to come to the negotiating table, the pressure has been insufficient to persuade him to agree to final, fully verifiable denuclearization.
There are several possible explanations for this, including the possibility that no level of economic pressure will persuade Kim to relinquish North Korea’s nuclear weapons.
The will of the Trump administration is an open question. There has been a discernable decrease in the number of designations since the first summit between Trump and Kim. From June 1, 2018, to June 3, 2019, the administration designated 36 persons (including vessels) for violations of North Korean sanctions, down from 200 such designations from June 2017 through June 2018.207 Likewise, Trump has indicated that he opposes measures that may impact his efforts to negotiate with Kim.208
Meanwhile, North Korea continues to circumvent economic restrictions through sophisticated evasion schemes.209 China represents the primary facilitator of DPRK sanctions evasion. Pursuant to UNSCR 2375, the Chinese government closed numerous DPRK joint ventures in the past year. But active joint ventures still exist between Chinese and DPRK companies, including at least four joint ventures with at least one U.S.- and/or UN-sanctioned shareholder, making them immediate candidates for designation.210 Joint ventures also exist between Russian and DPRK companies, with many domiciled in Russia.211
Similarly, Chinese banks and insurance companies continue to provide banking services to North Korean front and shell companies as well as insurance and reinsurance for vessels involved in illicit transfers.212 For example, in April, the U.S. District Court for the District of Columbia ordered three Chinese banks to comply with federal grand jury subpoenas for records related to North Korea,213 a decision upheld unanimously by a three-judge panel of the D.C. Circuit.214 These rulings likely signal the complicity of Chinese banks in moving North Korean money.
North Korea also continues to violate the UN arms embargo by supplying military equipment and training to foreign customers in Libya, Sudan, and Yemen.215 Meanwhile, North Korean diplomats continue to engage in sanctions evasion. For instance, according to Treasury’s Financial Crimes Enforcement Network, they work with DPRK state-owned enterprises to “use foreign-based front or shell companies and covert representatives based abroad to obfuscate the true originator, beneficiary, and purpose of transactions, enabling millions of dollars of North Korean illicit financial activity to flow through U.S. correspondent accounts.”216
Without continuous enforcement, sanctions can lose their effectiveness as networks adapt, companies rebrand, and sanctioned persons continue to transact freely. Furthermore, inconsistent messaging threatens to undermine U.S. credibility.217
Implementing a maximum pressure 2.0 campaign will require deploying existing but underutilized sanctions mechanisms as well as new ones. This re-invigorated campaign should be implemented alongside continued efforts to push forward with working-level negotiations. Increased pressure should be viewed as a catalyst for effective diplomacy – not as a threat to it. Pyongyang understands this principle; Washington should, too.
Step up maritime interdictions: Recent ROK-U.S. exercises employing the U.S. Coast Guard and ROK and Japanese navies and coast guards demonstrate excellent trilateral capabilities. But exercises alone are insufficient. A maximum pressure campaign worthy of the name requires aggressive sanctions enforcement – which should include aggressive interdiction of North Korea’s illicit maritime activities.
Information and influence activities (IIA) are the means by which governments attempt to influence key populations to support strategic objectives. Despotic regimes use IIA to manipulate their populations to maintain authoritarian control. In contrast, the United States can use IIA to promote U.S. strategic objectives, including by informing oppressed populations and promoting principles related to democratic and human rights.220 Thus, IIA provide a key tool for generating the internal divisions and threats to Kim that could incentivize him to negotiate in good faith and relinquish his nuclear, biological, and chemical weapons.
IIA are a critical and longstanding element of Pyongyang’s efforts to maintain power. The Worker’s Party of Korea’s Propaganda and Agitation Department has aggressively employed IIA to support the Kim family regime for the past seven decades. North Korea’s information strategy is focused on three broad lines of effort: enhancing the reputation of Kim Jong Un and the Kim dynasty among domestic and international target audiences; undermining the legitimacy of the ROK government; and countering U.S. influence in Korea and the region, with an emphasis on dividing the ROK-U.S. alliance.
Despite Pyongyang’s coordinated and persistent effort, North Koreans are increasingly gaining access to outside information. A Center for Strategic and International Studies (CSIS) survey of 36 North Koreans living across several North Korean provinces found that almost 92 percent of them consume foreign media at least once a month. Eighty-three percent assessed that foreign media had a greater impact on their lives than decisions by the North Korean government.221
Despite the limited sample, the survey has several advantages. First, all those queried were living inside North Korea and were not escapees. Moreover, the surveys were conducted in person, meaning “respondents were free to voice critical opinions about their own government unfettered.”222 Relying solely on escapee surveys can distort findings since escapees are usually from border provinces near China and therefore do not necessarily provide a representative sample of the entire North Korean population. The CSIS survey, however, drew opinions from beyond these border areas.223
A key method of distributing foreign media in North Korea is through cross-border traders and smugglers. These individuals provide foreign media stored on various devices, such as DVDs and thumb drives, which are then distributed at private markets that have emerged in recent decades.224 Since the famines of the 1990s, these private markets have become an important component of everyday life for many non-elite North Koreans. Additionally, the proliferation of smart phones (some 6.5 million) is providing people in the North the ability to communicate. These developments offer opportunities for U.S. and ROK IIA.225
On the other hand, the emergence of fifth-generation (5G) telecommunications technology along the Chinese-North Korean border is a potentially dangerous development. The Chinese are using this technology to track and interdict North Korean smuggling operations.226 Although North Korea cannot yet produce its own 5G technology, leaked documents reveal that Chinese telecommunications giant Huawei has helped Pyongyang build wireless networks. The Washington Post reports that the Kim regime’s contact with Huawei began as early as 2006, when former leader Kim Jong Il visited Huawei’s headquarters in Shenzen, after which he oversaw the establishment of North Korea’s wireless provider Koryolink. 227
Experts believe this represents the beginning of North Korea and Huawei’s cooperation.228 While North Korean telecommunications capabilities may not yet be ready for 5G technology, this relationship should raise concerns. Huawei could equip the regime with the technology and infrastructure to surveil anyone in North Korea using a smart phone.
The Kim regime is one of the most oppressive and abusive governments in the world. Freedom House gives North Korea the worst possible rating for freedom, political rights, and civil liberties, summarizing the situation in North Korea this way:
North Korea is a one-party state led by a dynastic totalitarian dictatorship. Surveillance is pervasive, arbitrary arrests and detention are common, and punishments for political offenses are severe. The state maintains a system of camps for political prisoners where torture, forced labor, starvation, and other atrocities take place … human rights violations are still widespread, grave, and systematic.229
In its annual human rights report on North Korea, the State Department echoed these concerns, noting that human rights abuses “continued to be a widespread problem.”230 These egregious human rights violations are part of a deliberate, systematic, and brutal system designed to keep the Kim regime in power.231
Any maximum pressure campaign targeting Kim Jong Un should feature robust IIA focused on human rights. A well-orchestrated campaign would enable the United States and South Korea to highlight and confront Kim’s human rights atrocities while shifting his cost-benefit analysis on denuclearization.
Undertaking such operations in a foreign country is a significant decision that should not be taken lightly. However, the nature of the totalitarian Kim regime and its human rights abuses, as well as the severity of the threat it poses, demonstrate the need for such an approach. In fact, such an approach would be consistent with the best traditions of U.S. foreign policy, simultaneously advancing U.S. interests and honoring American democratic and humanitarian principles.
Kim apparently believes that he can best ensure his survival by retaining his nuclear weapons, oppressing the North Korean people, and refusing to negotiate in good faith. The purpose of an IIA campaign would be to change Kim’s perceptions in each of these areas. The goal will be to persuade him that he can better secure his personal survival by respecting the human rights of the North Korean people and agreeing to relinquish his nuclear weapons in a permanent and verifiable manner. Kim must become convinced that the status quo poses a greater threat than charting a new course through good faith diplomatic negotiations.
An effective IIA campaign should target three North Korean audiences: the regime elite, the second-tier leadership, and the North Korean people. Messaging focused on the regime elite should highlight that denuclearization offers the best hope of survival.
The second-tier leadership is a key target audience. It comprises military and party officials outside of the core regime elite who lack sufficient power to act alone but whose collective action during war, crisis, or regime collapse would influence the outcome of any contingency. In the military, this category includes brigade commanders and assistant commanders, commanders and assistant commanders of specialized units (intelligence, missile, and WMD), and key senior staff controlling logistics and transportation. The military second tier would also include senior General Political Bureau and Military Security Command officers assigned to the aforementioned commands. All told, the military second tier numbers approximately 250 personnel.
In the Korean Workers’ Party, officers serving on party committees at the provincial, city, and county levels have enormous influence on all activity within their individual jurisdictions. Party committee chairmen at those levels carry similar authorities. Combined, these individuals add up to approximately 400 personnel across nine provinces, 145 counties, and key cities throughout the country.
Finally, Ministry of State Security (secret police) and Ministry of People’s Security (national police) leaders in those same geographical districts also have enormous influence within their jurisdictions. They also number approximately 400 personnel.
After accounting for roughly 50 key scientists and project leaders of WMD programs, the second-tier leadership totals approximately 1,100 personnel. Each of these individuals has the potential – in critical contingencies – to resist guidance orders, stop or alter logistical and transportation actions, and neutralize elite-level action officers.232
The IIA campaign targeting this second-tier should focus on providing information and media that sow doubt regarding the regime elite and suggest that life could improve if the regime changed its policies. As renowned North Korea analyst Andrei Lankov has noted, informing North Koreans about “attractive alternatives to their current way of life” represents a key way to pressure the regime to change its behavior.233 In addition, messages to the second-tier leadership should highlight how they could play a positive role in a non-nuclear North Korea or a unified Korea.
IIA focused on the third target audience, the North Korean people, should prioritize foreign media. The widespread dissemination of foreign media has already created fissures between the everyday North Koreans and the regime elite, thereby weakening the government’s propaganda and information blockade.234 As the CSIS survey found, North Koreans who consume foreign media will likely continue seeking this information despite the potential consequences if they are caught.235 Moreover, continually injecting foreign media into North Korea will help break down the regime’s ideological controls while encouraging more independent thinking among everyday North Koreans.
Although the United States possesses IIA capabilities, they have not been deployed in a robust and well-coordinated manner. Voice of America (VOA) and Radio Free Asia pump news into North Korea via radio, television, and the internet. According to one North Korean escapee, VOA broadcasts are transcribed and provided to the regime elite, who represent up to 10 to 15 percent of North Korea’s 24 million population.236 Similarly, the Department of State’s Bureau of Democracy, Human Rights and Labor provides funding to nongovernmental organizations for “fostering the free flow of information into, out of, and within the DPRK.”237 Non-governmental organizations such as the Defense Forum Foundation support private efforts such as Free North Korea Radio.238 Given the relatively closed nature of North Korean society, however, it is difficult to assess how many of these programs are performing.
Moreover, an effective IIA campaign requires close coordination between the U.S. and ROK governments. However, Seoul has often undermined effective IIA tools, an approach rooted in the Moon administration’s belief that concessions lead to “better inter-Korean relations.”239 This belief ignores North Korea’s persistent failure to respond to such concessions with verifiable steps toward denuclearization. Washington therefore should remind Seoul that no prior intra-Korean agreements, such as the April Panmunjom Joint Declaration or the September Pyongyang Declaration, should encumber IIA against North Korea.
Alarmingly, South Korea has cracked down on activities by escapee and refugee organizations. This is particularly problematic because the efforts of such organizations likely represent the most effective IIA. They have been successful in getting information into the North by flying balloons and floating plastic bottles filled with USB drives and other material.240
The United States and South Korea should implement a comprehensive and aggressive IIA campaign in North Korea. The focus should be three-fold: create internal threats against the regime from among the elite, provide the second-tier leadership with alternative paths to survival, and prepare the Korean people for eventual unification under a United Republic of Korea. To do so, we recommend the following steps:
U.S. and ROK national security interests require that Washington and Seoul not permit Kim to drag out the status quo indefinitely. In the short term, if he fails to demonstrate good faith with tangible steps toward relinquishing his nuclear, biological, and chemical weapons, the United States should lead an international campaign to implement a new maximum pressure campaign. Similarly, if Kim resumes ICBM or nuclear testing, the administration should initiate the new campaign.
To be successful, maximum pressure 2.0 should include diplomatic, military, cyber, economic and financial sanctions, and information and influence activities. There will undoubtedly be challenges associated with implementation. And no plan fully survives contact with the adversary. But this campaign offers the best hope of securing American, South Korean, and international interests on the Korean Peninsula without war.