- The Washington Times - Monday, September 24, 2018

It’s known as the “Hermit Kingdom,” the world’s most isolated country, run by a crazed, totalitarian dynasty.

But North Korea maintains embassies in nearly 50 nations — including Algeria and Zimbabwe — and could emerge swiftly as a normalized global power if nuclear talks with South Korea and the United States play out the right way. And that’s a problem.

The North’s embassies have long been used not for traditional diplomacy but for illicit activities, including blackmail, cybercrime and drug trafficking. U.S. analysts warn that it’s a pipe dream to think they can be transformed quickly into aboveboard, traditional diplomatic outposts.

With a second summit between President Trump and North Korean leader Kim Jong-un appearing likely, observers are sharply divided over whether Pyongyang could reinvent itself on the world stage if Mr. Kim gives up his nuclear weapons in exchange for an end to U.S.-led economic sanctions and international recognition as a sovereign state.

“The idea that a reduction of sanctions will suddenly inspire the regime to use its network of diplomatic posts to engage in legitimate activities is just a false premise,” said David Maxwell, a retired Army Special Forces colonel and a North Korea analyst at the Foundation for Defense of Democracies.

Although much of the U.S. foreign policy establishment shares Mr. Maxwell’s skepticism, some argue that the moment is ripe for outside-the-box thinking on North Korea — particularly with regard to Pyongyang’s links to the rest of the world.

“Policymakers from Congress to the executive in Washington, as well as people in the American think tank community, have operated for years under the assumption that North Korea was totally isolated and that the North Korean government’s collapse was imminent,” said Keith Luse of the National Committee on North Korea, a nongovernmental group that has advocated for diplomacy with Pyongyang since 2004.

“This kind of thinking has caused repeated U.S. administrations to punt the task of developing any real, comprehensive, long-term policy for dealing with the North Korean government,” said Mr. Luse, who was a longtime East Asia policy adviser to Richard G. Lugar, an Indiana Republican and former chairman of the Senate Foreign Relations Committee.

As Mr. Trump’s push for a breakthrough with Mr. Kim mounted this year, Mr. Luse’s team at the National Committee on North Korea was tracking how the regime has managed for years to preserve international connections even as Washington and the United Nations sought to isolate Pyongyang with sanctions.

“By our count, North Korea has 47 embassies worldwide, as well as a handful of consulates [and] trade missions,” Mr. Luse told The Washington Times.

Although relations may be strained in many countries, he said, the “diplomatic footprint could expand quickly if the current nuclear talks succeed.”

“There are indications that Kim Jong-un understands this, and that it factors into his calculus,” said Mr. Luse. “While the big uncertainty remains over the extent to which he will truly be willing to verifiably abandon his nuclear weapons and programs in exchange for sanctions relief, there’s little question Mr. Kim wants his legacy to be that of a leader who grew North Korea’s connectivity to the world, especially economically.”

North Korea’s economic emergence, he said, will depend heavily on help from the International Monetary Fund and the World Bank, “as well as to establish normal trade relations with much of the world.”

Putting the IMF and World Bank in the same sentence as North Korea might sound like blasphemy, but Mr. Luse is not alone. Others agree that anything is possible if Mr. Kim is serious about abandoning his nuclear programs.

“To me, it doesn’t matter whether North Korea has 10 or 20 or more embassies,” said Frank Aum, an Obama-era Pentagon adviser on North Korea who now is with the U.S. Institute of Peace. “If North Korea decides to denuclearize, then the story can change very quickly. Once they have an improved relationship with the U.S. and a relief from economic sanctions, it’s a game-changer. It changes everything.”

Or does it?

Mr. Maxwell said North Korea’s web of suspicious activities enabled through its embassies around the world are “just too valuable” for the Kim regime. “Hundreds of millions, if not billions, of dollars in illicitly raised finances are currently being drawn in through these embassies, where North Korean officials use their diplomatic status as cover for illicit action,” he said.

‘Illicit operations’

The Kim regime’s embassy activities are run through the Central Committee Bureau 39, known in U.S. intelligence circles simply as “Office Number 39.”

American sources say the secretive bureau is estimated to bring in at least $500 million a year from activities such as counterfeiting and distributing $100 bills, drug trafficking, and manufacturing and moving fake high-end pharmaceuticals such as Viagra.

One of the more well-documented schemes involved the export of North Korean laborers to make money for Mr. Kim’s ruling Workers’ Party. North Korean defectors have revealed how Pyongyang cuts deals with other nations to host the workers, whose overseas salaries are claimed by the regime’s diplomats posted in those nations. The scheme is believed to have fed the regime’s coffers for years.

Greg Scarlatoiu, who heads the Washington-based Committee for Human Rights in North Korea, told Congress in 2015 that more than 50,000 North Korean laborers were working in 16 nations, “earning the Kim regime between $150 million and $230 million per year.”

Some 40,000 of the laborers are reported to be in Russia and China, both of which border North Korea, but Mr. Scarlatoiu told lawmakers that as many as 7,800 were scattered in Middle East nations such as Kuwait, the United Arab Emirates and Qatar and thousands more were working in nearly a dozen other nations, including Angola, Nigeria, Poland and Myanmar.

The overseas worker program is only the tip of the iceberg, according more current data compiled by former Defense Intelligence Agency officer Bruce Bechtol, who said a wider range of programs — including drug-smuggling through diplomats — have been tied to Office Number 39.

“One of the key resources that North Korea uses to distribute its illegal drugs is its diplomatic corps,” Mr. Bechtol wrote in an article published this year in Cornell Law School’s International Law Journal.

“As diplomats work within North Korea’s illicit system, they naturally come under the control of Office Number 39,” he wrote, adding that “South Korean governmental sources estimate North Korea’s annual illegal drug sales to overseas amount up to $200 million.”

“While North Korea has, over the years, made drug sales based on traditional opium-based drugs (largely heroin), the biggest moneymaker and the largest sales item for several years is now methamphetamines, sometimes known as ‘Ice,’” Mr. Bechtol wrote. “North Korean operatives are now known to be dealing with drug distribution organizations in Southeast Asia including Thailand … [and] operate on a large scale in China.”

Local hosts have complained that the North Korean embassies are engaged in illicit revenue-generating activities. In Europe, governments say Pyongyang is illegally subletting parts of its embassy complex to local businesses, the BBC reported last year. In Islamabad, Pakistan, thieves broke into the residence of a North Korean diplomat to target a large hoard of beer, wine and other illegal alcohol products that could fetch high prices on the local black market.

There are indications that North Korean diplomats have on occasion eyed the much greater payout that might come from geopolitical blackmail.

In 1999, a top North Korean diplomat allegedly told Israeli officials that Pyongyang would halt its missile technology sales to Iran and other enemies of Israel if the Jewish state handed over $1 billion in cash. A July article in The Wall Street Journal highlighted the incident and how the Israelis ultimately refused. In the years since, the article said, North Korea supplied conventional and ballistic weapons and nuclear technology to countries such as Iran and Syria.

Hope for reform?

Mr. Aum of the Institute of Peace acknowledged that North Korean embassies have “secondary or tertiary roles” that involve illegal operations, but he argued in an interview that the “primary function” of Pyongyang’s international outposts “has always been diplomatic.”

“And that can be ramped up relatively quickly once there are better relations with the U.S.,” he said. “These embassies serve a diplomatic function in addition to all these illicit activities. If you have North Korean workers in a country, then you need to provide diplomatic and consular services, such as protection of those North Korean citizens.”

The notion that serious North Korean diplomatic reform might be possible is tantalizing in intelligence circles, where officials are aware that Pyongyang’s foreign operatives — particularly those doing business with U.S. adversaries — could be turned into invaluable sources for American spies if relations are ever fully normalized with Washington.

The National Committee on North Korea website outlining North Korean diplomatic relations offers a country-by-country breakdown that includes sections on nations such as Iran, noting that Tehran and Pyongyang “forged a close relationship following Iran’s 1979 Revolution” and have “a history of cooperating on missile technology.”

But the site also takes stock of Pyongyang’s relations with U.S. partners, from France and India to Sweden, which “functions as Protective Power for the United States, Canada, and Australia in North Korea.”

“What we’re putting together with our research is a picture of the extent of North Korea’s actual diplomatic relationships with the global community — strong connections that have been there a long time, and that in some cases have stayed resilient even as North Korea has faced increasing pressure over its nuclear program,” said Mr. Luse of the National Committee on North Korea.

“For Kim to be successful in integrating North Korea into the global community, he’s going to have to overcome the current sanctions burden that defines his country’s relationship with Washington,” the organization’s executive director said. “But he is making moves in the direction of wanting to be accepted by the global community, and the actual physical diplomatic framework is already in place for that — in some parts of the world at least.”

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