U.S. sanctions bill seeks to deny North Korea access to cash



The U.S. House of Representatives isn’t waiting for confirmation of North Korea’s claim to have tested a hydrogen bomb before voting on legislation that expands sanctions on Pyongyang and seeks to deny it the hard currency that lawmakers say it needs for its weapons programs.

The legislation, which has broad bipartisan support and could be on the House floor as early as Tuesday, languished for nearly a year until North Korea announced Wednesday that it had conducted a fourth nuclear test — this one of a thermonuclear device with huge destructive power.

The announcement was greeted with doubt that North Korea had actually set off a hydrogen bomb, which would represent a significant and unexpected advance for the reclusive country’s limited nuclear arsenal. Although confirming or refuting the claim could take weeks or longer, lawmakers are pushing ahead now.

The bill’s author, Foreign Affairs Committee Chairman Ed Royce, a Republican, on Friday described the Obama’s administration’s policy on North Korea as one of “strategic patience” that has failed to curb development of nuclear weapons and long-range missiles to deliver them.

“This is the approach that will work, because you need consequences,” Royce said of the legislation during remarks at the American Enterprise Institute, a Washington think tank.

But former State Department officials said any new sanctions won’t have real bite unless China is persuaded to make a fundamental shift in policy toward its wayward ally.

Royce’s committee approved the bill unanimously in February 2015. A key part of the legislation uses an approach that Royce said left North Korea cash-strapped a decade ago. When the Treasury Department learned there were several banks distributing counterfeit $100 bills for North Korea, it forced them to pick between continuing to do business with Pyongyang or being cut out of the U.S. and international banking systems. “They all made the decision against banking suicide, and all decided they would freeze the accounts for North Korea,” Royce said.

Without access to hard currency, North Korea couldn’t buy parts and supplies for its weapons programs, Royce said. Nor was there enough money to pay its army or police.

“That is not a good position for a dictator to be in,” he said.

Despite the impact, Royce said the sanctions were later reversed by the State Department under the “false hope” of getting North Korea to engage in serious negotiations about dismantling its nuclear weapons program.

Royce’s legislation would make “blocking sanctions” mandatory rather than discretionary as currently permitted. The sanctions are mandated against any country, business or individual that materially contributes to North Korea’s nuclear and ballistic missile development, exports luxury goods into North Korea or engages with Pyongyang in money laundering, the manufacture of counterfeit goods or narcotics trafficking, according to the legislation.

“We will put that bill on the president’s desk with strong bipartisan support,” Royce said. “I’m hoping that the strength of the vote behind it changes their calculus with respect to how to deal with North Korea.”

Joseph DeThomas, a former senior State Department official who advised on Iran and North Korea sanctions policy until February 2013, said the Obama administration would find it hard to resist pressure for tougher U.S. restrictions on the North, but new sanctions wouldn’t force change in Pyongyang unless China is convinced of the strategic danger of North Korea having nuclear weapons that could threaten America.

“The word from Congress is pretty strong on this right now,” DeThomas said Thursday at the U.S.-Korea Institute at John Hopkins’ School of Advanced International Studies in Washington.

“Feel-good sanctions” in Washington may have much less practical impact on North Korea unless the Chinese are prepared to “play ball,” added Richard Nephew, another former top State Department official who coordinated sanctions policy during the Obama administration. He also spoke at the U.S.-Korea Institute on Thursday.