Hit Kim Jong-un Where It Hurts: His Foreign Bank Accounts

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Written by Ki Suh Jung

As North Korea continues to develop its nuclear weapons program, most recently launching a ballistic missile on September 15, which flew over northern Japan, political debate rages on how to rein in the rogue state. Previously suggested options include a tit-for-tat deal, military strikes, and increased economic sanctions, all of which have flaws and require coordinated efforts by multiple nations. With the importance of a successful nuclear weapons program to North Korea’s survival and high casualty predictions for a Second Korean War, the most effective method is sanctions targeting North Korean leader Kim Jong-un’s personal financial accounts.

Both Russia and China have for some time been pressing the “double freeze,” a freeze on North Korean nuclear and missile programs in exchange for the suspension of US and South Korean joint military exercises. The United States has always opposed this idea because the joint military exercises are defensive in nature and not a prelude to invasion. Even if Washington were to change its mind and agree to tone down the scope of the exercise, Pyongyang would likely not keep its end of the deal, assuming it implements a freeze in the first place. Having witnessed the downfall of Saddam Hussein and Muammar Gaddafi, Kim knows that possessing nuclear weapons that can reach his adversaries is the surest guarantor of his regime’s survival. The United States can promise peace on a nuclear-weapons-free Korean peninsula, but North Korea would much rather put its faith in its nuclear deterrent than in America’s words.

North Korea claims that it can mount miniaturized nuclear warheads on its missiles. The Hwasong-14, North Korea’s furthest-reaching intercontinental ballistic missile (ICBM), could theoretically reach the continental United States, but the missile in its current state is unreliable and likely requires several more years of development before it can accurately hit its intended target up to 10,400 km away. On the other hand, North Korea’s intermediate-range and theater ballistic missiles, which have shorter ranges than the ICBM, are considered operational. To protect its nuclear weapons assets, North Korea distributed its nuclear facilities throughout the country in fortified sites and developed the capability to launch missiles from mobile transporter-erector-launchers. This makes it practically impossible to conduct surgical strikes with the goal of destroying all North Korean nuclear weapons assets. Kim, on the other hand, only needs one successful nuclear attack on South Korea or Japan to cause a global catastrophe.

There is also the risk that North Korea would not retaliate proportionally to any military attack by the United States. If Washington decided to demonstrate its ability to hit targets in North Korea by firing Tomahawk missiles at a known ballistic missile launch site, much like it did in Syria on April 7, Kim could certainly misunderstand the one-off strike as a US attempt to destroy his country and initiate an all-out conflict against South Korea. North Korea has amassed hundreds of artillery batteries along the demilitarized zone that could kill thousands of people in Seoul in the opening hours of a war.

A viable option to pressure Kim into negotiations is to locate and shut down overseas bank accounts holding his slush funds. A 2008 Congressional Research Service report stated that Pyongyang may generate anywhere from $500 million to $1 billion in profit annually from various illicit activities such as hacking banks, selling weapons, and dealing drugs. The profits allow Kim and the North Korean leadership to live in luxury even as his people suffer in abject poverty and help pay for the country’s nuclear and missile programs. Kim has always lived in comfort and believes that nuclear weapons are a necessity for his country’s survival. Taking away that comfort and dramatically slowing his weapons programs could be the solution to escalating tensions in the region.

However, freezing Kim’s overseas personal assets is admittedly easier said than done. So far, the United States has sanctioned 26 North Korean individuals, but there may be more than 200 North Korean accounts that are linked to weapons of mass destruction, drugs, and counterfeit money. They are believed to exist in various countries including Austria, China, Lichtenstein, Luxembourg, Russia, Singapore, and Switzerland, and the governments of those countries would have to agree to shut down or freeze the bank accounts. We are already familiar with United Nations-imposed sanctions limited effectiveness due to China or Russia reneging on the resolution; for this measure to be successful, all countries in which Kim has foreign bank accounts must take a concerted approach to maximize pressure on the North Korean regime.

Only once in North Korea’s history has it agreed to freeze its nuclear program, as part of the 1994 Agreed Framework. However, progress on meeting the objectives was slow and at an unknown point, North Korea secretly resumed developing nuclear weapons, which culminated in the country’s first nuclear test in 2006. North Korea’s nuclear weapons program has progressed so much now that it can no longer be coaxed into giving it up. The only way to effectively shut it down is to go after Kim’s personal funds that are paying for his luxury and nuclear weapons program. That itself is a mountain of a task, but perhaps the most viable option given the escalating circumstances.

About the author: Ki Suh Jung is YPFP’s Asia-Pacific Fellow and an officer in the US Navy, currently deployed in the Pacific. Ki Suh earned his BA in Economics and Government from Dartmouth College. The opinions in this essay are his own and do not reflect those of his employer.

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