DPRK: What Barack/Hillary Knew and When

Posted on September 4, 2017September 4, 2017 by Denise Simon

Hey China…what gives? France, you have a call holding on line 4.

None of this would have been in Obama’s, Hillary’s or John Kerry’s emails? Hillary did not use ANY official government email platform…just say’n.

John Kerry under the instruction of the Obama White House negotiated the Joint Plan of Action with Iran on the nuclear development program. Purposely many things were overlooked including the nefarious activities between Iran and North Korea.

Imagine the developments are cables since 2009.

Countries that were part of the long negotiations were the P5+1, which included:

France, Germany, and the United Kingdom (the EU3) also offered Iran several proposals to resolve the nuclear issue during negotiations with Iran in 2004 and 2005. China, Russia, and the United States joined the three European countries in 2006 to offer “P5+1” proposals to Iran.

North Korean front companies operate inside China with impunity.

The extent of Chinese companies’ role in enabling North Korea’s evasion of sanctions is detailed deep in the fine print of the still unpublished 105-page report. For instance, North Korea’s Daedong Credit Bank (DCB) and Korea Daesong Bank, both subject to U.S. and U.N. sanctions, continue to operate in the Chinese cities of Dalian, Dandong, and Shenyang in violation of U.N. resolutions. The panel suspects that one of the banks, Daedong, may in fact be majority-owned by Chinese shareholders, citing July 2011 documents indicating the sale of a controlling stake, 60 percent, to a Chinese firm. More here.

So, when it comes to France, what did they know via the MTCR?

Background

Formal discussions on controlling missile proliferation began in 1983 among France, Germany, Italy, the United Kingdom, and the United States. They were later joined by Canada and Japan, and in 1985, an interim agreement to control the proliferation of nuclear-capable ballistic missiles, including dual-use missile items, was reached. A nuclear-capable missile was defined as one capable of delivering at least 500 kilograms (kg) to a range of 300 kilometers (km) or more. The G-7 States formally announced the Missile Technology and Control Regime (MTCR) on 16 April 1987.

Since then, membership has expanded to the present 34 States, the additional members being Argentina, Australia, Austria, Belgium, Brazil, Bulgaria, Czech Republic, Denmark, Finland, Greece, Hungary, Iceland, Ireland, Luxembourg, The Netherlands, New Zealand, Norway, Poland, Portugal, Republic of Korea, Russian Federation, South Africa, Spain, Sweden, Switzerland, Turkey and Ukraine. Some other States, including China, India, Israel, Romania, and Slovakia, have pledged to abide by the MTCR Guidelines.

Regime Goal

The regime goal is to limit the risks of proliferation of weapons of mass destruction (i.e. nuclear, chemical and biological weapons) by controlling the transfers that could make a contribution to delivery systems (other than manned aircraft) for such weapons.

Regime Guidelines

The regime guidelines consist of national control laws and procedures; a two-category common control list; information-sharing on any denied cases to ensure no commercial advantage; no impediment to national space programs; presumption of denial of any transfers in terms of nuclear weapon delivery systems development; and no retransfers without authorization.

Equipment and Technology Annex

Category I items of the Equipment and Technology Annex include complete rocket and unmanned-air-vehicle delivery systems and subsystems. The transfer of Category I items is subject to a strong presumption of denial. The transfer of production technology for Category I items is prohibited.

Category II items include propulsion and propellant components, launch and ground support equipment, as well as the materials for the construction of missiles. The transfer of Category II items is less restricted, but still requires end-use certification or verification where appropriate. More here.

So, to answer the question in the title of this article, here is a WikiLeaks cable providing background:

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MISSILE TECHNOLOGY CONTROL REGIME (MTCR): NORTH KOREA,S MISSILE PROGRAM
Date: 2009 October 6, 13:14 (Tuesday)	Canonical ID: 09STATE103755_a
Original Classification: SECRET	Current Classification: SECRET
In the metadata of the Kissinger Cables this field is called ‘Previous Handling Restrictions’. Cablegate does not originally have this field. We have given it the entry ‘Not Assigned’. Citations for acronyms used are available here.” data-hasqtip=”true” oldtitle=”Handling Restrictions” title=””>Handling Restrictions — Not Assigned —	Character Count: 14817
Executive Order: — Not Assigned —	Locator: TEXT ONLINE
TAGS: BR – Brazil \| ETTC – Trade and Technology Controls \| FR – France \| KSCA – Science Counselors and Attachés \| MNUC – Military and Defense Affairs–Military Nuclear Applications \| MTCRE – Missile Technology Control Regime \| PARM – Political Affairs–Arms Controls and Disarmament \| TSPA – Technology and Science–Space Activities	Concepts: — Not Assigned —
Enclosure: — Not Assigned —	Type: TE – Telegram (cable)
Office Origin: — N/A or Blank — Office Action: — N/A or Blank —	Archive Status: — Not Assigned —
From: Secretary of State	Markings: — Not Assigned —
To: France Paris \| Missile Technology Control Regime

Original cable: Reasons: 1.4 (B), (D), (H). 1. (U)

This is an action request.

Please see paragraph 2. 2. (C) ACTION REQUEST: Department requests Embassy Paris provide the interagency cleared paper “North Korea,s Missile Program” in paragraph 3 below to the French Missile Technology Control Regime (MTCR) Point of Contact (POC) for distribution to all Partners.

Info addressees also may provide to host government officials as appropriate. In delivering paper, posts should indicate that the U.S. is sharing this paper as part of our preparation for the Information Exchange that will be held in conjunction with the MTCR Plenary in Rio, November 9-13, 2009. NOTE: Additional IE papers will be provided via septels. END NOTE.

3. BEGIN TEXT OF PAPER: (SECRET REL MTCR) North Korea’s Missile Program Introduction North Korea continues to make progress in its ballistic missile development efforts. We expect both the new Musudan intermediate-range ballistic missile (IRBM) and the solid-propellant Toksa short-range ballistic missile (SRBM) to be fielded in the coming years, and as demonstrated by North Korea,s April 5th launch of the Taepo Dong 2 (TD-2) space launch vehicle (SLV)/intercontinental ballistic missile (ICBM) in a failed attempt to place a satellite into orbit, the pursuit of longer-range systems remains a DRPK priority. North Korea’s deployed forces include hundreds of Scud and No Dong short and medium-range ballistic missiles (SRBM/MRBM), seven of which it launched in 2009.

North Korea remains one of the world’s leading suppliers of ballistic missiles and technology, and continues to provide assistance to both Iran’s and Syria’s ballistic missile programs. North Korea, since the 1980s, has supplied a variety of customers with ballistic missiles, missile components, and missile-related technology. These sales have included complete Category I missile systems, as well as production technology and expertise.

North Korea has maintained its right to sell ballistic missiles and continues to market its systems to countries in the Middle East while seeking to expand its missile marketing activities worldwide. North Korea this year probably resumed ballistic missile-related cooperation with Yemen, and may have recently reached an agreement with Burma to provide Rangoon with ballistic missile technology.

North Korea has developed most of the necessary capability and infrastructure to produce and assemble its ballistic missiles. However, while North Korea continues to make progress in its missile development efforts, it remains reliant on outside suppliers for a range of missile-related raw materials and components. While most of these materials are for direct application to its missile program, North Korea may procure some items in support of its missile customers.

Program History North Korea’s ballistic missile program started in the early-1980s, when it reverse-engineered Soviet-made 300km-range Scud B SRBMs acquired from Egypt. This Scud B technology went on to form the basis for the DPRK,s Scud B, Scud C, No Dong, Taepo Dong-l (TD-1), and TD-2 systems. In return for the Scud Bs, North Korea assisted Egypt’s efforts to domestically produce Scuds. Building on this success, the DPRK began designing the 500 km- range Scud C in the mid-1980s.

These Scuds have been exported to customers in the Middle East and are deployed in North Korea. Given its 20 years experience working with Scud technology, North Korea is able to design and produce extended-range variants of the Scud, capable of delivering payloads of over 500 kg to ranges up to 1,000 km.

North Korea also used Scud technology to develop the No Dong medium-range ballistic missile (MRBM) that is deployed as part of North Korea’s missile forces. The No Dong has a range of 1,300 km with a 500 kg payload, which could strike all of South Korea and Japan. Scud and No Dong technology also form the basis of North Korea’s TD-1 and TD-2 systems. In 1998, North Korea tested the Taepo Dong-1, which probably utilized a No Dong first stage and Scud second stage. Although launched as an SLV, the TD-1 launch showed that North Korea had successfully developed many of the essential technologies for staged missile systems vital for ICBM development.

The DPRK has also developed the follow-on system for the TD-1, the TD-2. Although a more advanced design than the TD-l, the TD-2 still relies on Scud and No Dong technology, with probably clustered No Dong engines powering the first stage, and either a Scud or No Dong-based second stage. In a two stage configuration, the TD-2 would have a range of over 9,000 km with a substantial weapons payload of approximately 500 kg.

In a three stage configuration, such as that launched in April 2009, the TD-2 could deliver the same sized payload up to 15,000 km, which could reach all of the United States and Europe, although likely with very poor accuracy.

The first stage of the April 2009 launch fell into the Sea of Japan, and the upper stages landed in the Pacific. This demonstrates progress since the 2006 test, which flew only about 40 seconds. Recently, North Korea has developed a new land-mobile IRBM –called the Musudan by the United States.

The Musudan is a single-stage missile and may have a range of up to 4,000 km with a 500 kg payload. The Musudan is derived from the SS-N-6 submarine-launched ballistic missile (SLBM) and represents a substantial advance in North Korea’s liquid propellant technology, as the SS-N-6 had a much more advanced engine and used more energetic propellants — unsymmetrical dimethylhydrazine (UDMH) and nitrogen tetroxide (N204) — than those used in Scud-type missiles. Development of the Musudan with this more advanced propulsion technology allows North Korea to build even longer-range missiles — or shorter range missiles with greater payload capacity — than would be possible using Scud-type technology. As the Scud market nears saturation, North Korea also has started to develop its own solid-propellant missile systems, as evidenced by its development of a new solid propellant SRBM based on the SS-21 SRBM.

This new missile — called the Toksa by the United States — has a range of 120 km with a payload as large as 500 kg. This is a disturbing development since North Korea can apply its experience in producing this missile to other, longer- range, solid propellant missile designs. Solid propellant ballistic missiles are preferred by many countries due to their lesser logistics requirements and shorter launch times, making them more survivable than liquid propellant missiles. North Korea,s advances — in both its liquid and solid propellant programs — have come despite a self-imposed missile launch moratorium, that limited North Korea’s ability to verify new designs or modifications to its missile systems during the 1999-2006 timeframe.

North Korea ended the moratorium with its July 5, 2006 Scud, No Dong, and Taepo Dong-2 launches. Program Activities On April 5, 2009, North Korea — despite UN Security Council Resolution 1718, which requires the suspension of all activities related to its ballistic missile program — conducted the second launch of the TD-2. Although the April 5th TD-2 launch failed to place a satellite in orbit, the launch was much more successful than the first TD-2 launch in 2006, demonstrating that North Korea is making progress in developing technology that can directly contribute to the production of ICBMs. Subsequently, and despite the adoption on June 12, 2009 of UNSCR 1874, which reaffirmed the provisions of UNSCR 1718 related to North Korea,s ballistic missile activities, North Korea tested seven Scud SRBMs and No Dong MRBMs on July 4th.

The April 5th TD-2 launch also demonstrated that North Korea continues to pursue the development of longer-range missile systems and that long range missile development probably remains a priority. North Korea’s next goal may be to develop a mobile ICBM that would be capable of threatening targets around the world, without requiring the lengthy — and potentially vulnerable — launch preparation time required by the TD-2. Technology Supplier The DPRK continues to sell ballistic missile-related technology to countries in the Middle East, while seeking to re-engage with former customers in the region. North Korea is probably also pursuing new markets for its missiles, including in regions such as Southeast Asia and Africa.

North Korea offers a wide-range of ballistic missile services, almost certainly is willing to offer any missile design in its inventory for sale to customers interested in complete systems, and can design missiles to meet specific customer needs. For customers with established missile programs or otherwise lacking interest in complete systems, North Korea provides missile refurbishment and technical expertise, ground support equipment and launchers, and production technology. North Korea can also broker precision machine tools and other missile-related raw materials from third-parties for customers through its extensive procurement network. Iran Iran is one of North Korea’s key missile customers.

Since the late 1980s, the DPRK has exported complete Scud B and Scud C missiles to Iran, as well as their production technology. The Scud and other missile technology acquired from North Korea form the basis for the Iranian Shahab-3, which is based on North Korea’s No Dong. North Korea has probably provided Iran an MRBM variant, called the BM-25, of its Musudan IRBM.

This technology would provide Iran with more advanced missile technology than currently used in its Shahab-series of ballistic missiles and could form the basis for future Iranian missile and SLV designs. North Korea also provided assistance to Iran’s SLV program. On February 2nd, Iran successfully orbited the Omid satellite, using its Safir SLV, the first stage of which was based on the Shahab-3 (No Dong). Pyongyang’s assistance to Iran’s SLV program suggests that North Korea and Iran may also be cooperating on the development of long-range ballistic missiles. Syria Syria is another of North Korea’s key missile customers. North Korea has provided Syria with 500 km-range Scud C missiles and technology as well as technology for a 700 km-range Scud variant, referred to in Syria as the “Scud D.”

The missiles came initially in either partially or completely knocked-down kit form, but were produced in North Korea. Syria has since achieved a domestic production capability, probably with extensive assistance from Pyongyang. North Korea has also provided a range of other missile-related services to Syria, including production technology, ground support equipment, raw material, components, technical assistance, and know-how.

North Korea probably provided assistance to Syria’s development of a maneuvering reentry vehicle (MaRV) for its Scud ballistic missiles. Yemen In December 2002, Yemen received a shipment of Scud missiles, which Sanaa claimed to have bought from North Korea for defensive purposes and pledged would not be retransferred to any third party. North Korea probably resumed ballistic missile cooperation with Yemen in 2009.

Burma The mid-2009 voyage of the North Korean ship, Kang Nam 1, probably was associated with North Korea’s primary arms export entity — suggesting that the cargo was most likely weapons-related. The ship returned to North Korea prior to reaching its destination, which was most likely Burma.

The Kang Nam 1 probably was carrying ballistic missiles or conventional weapons. A November 2008 visit by a senior Burmese official to a North Korean ballistic missile production facility suggests that the two sides probably have been discussing a ballistic missile deal, and that the cargo may have been related to these discussions.

Foreign Assistance North Korea operates a vast network of embassy personnel, front companies, and commercial entities run by ethnic Koreans in other countries to obtain key technologies and materials needed to support both its own and its customers’ missile programs. Members of this network often do not reveal their affiliation with North Korea, or North Korea as the end-user of critical goods; they utilize entities in Europe, China, East Asia, and South Asia to establish reliable routes for the transfer of controlled items. Most foreign procurement by the North Korean missile program includes material North Korea finds too costly or too advanced to manufacture domestically, such as missile component testing equipment, heat-resistant materials for re-entry vehicles, heavy-duty vehicle chassis, missile tracking technologies, precision machine tools, specialty steels and aluminums, ball bearings, precision gyroscopes, solid-propellant precursor chemicals, and liquid-propellant precursors. Although important for its own program, North Korea also uses this network to broker missile-related raw materials for its missile export customers.

Conclusion North Korea will continue to develop missiles with increasing range, payload capacity, and sophistication. In support of these efforts, North Korea will continue to seek critically-needed components from foreign suppliers — most commonly China-based, given their proximity and access to technology that would be beneficial to North Korea,s missile program. In light of its past missile technology acquisition practices, we remain vigilant for any attempts by North Korea to acquire material or technology associated with missile systems other countries — including MTCR Partners — have retired. International pressure against North Korea and its customers have had a significant impact on North Korea,s missile sales.

However, despite such pressure, North Korea continues missile cooperation with its core clients and continues to offer MTCR Category I missile systems, their production technology, and missile maintenance and support services to all interested customers. END TEXT OF PAPER.

4. (U) Please slug any reporting on this or other MTCR issues for ISN/MTR.

A word version of this document will be posted at www.state.sgov.gov/demarche. CLINTON

UK Money-laundering $2.9 Billion Linked to Azerbaijan

Posted on September 4, 2017September 4, 2017 by Denise Simon

May, 2017:

The largest bank in Azerbaijan has halted its foreign debt payments and will start restructuring talks with creditors after a currency crisis in the Caspian Sea nation drove the lender to the brink of collapse.

Under a restructuring plan published on Friday, the International Bank of Azerbaijan said its “designated financial indebtedness” was at $3.3 billion as of April 18. It missed a principal and interest payment on a $100 million subordinated loan on May 10, according to an emailed statement from the government-owned lender on Thursday. More here.

What is the Azerbaijani Laundromat?

A scheme to curry influence, pay lobbyists, apologists and European politicians and to launder cash. The $2.9bn (£2.2bn) operation ran between 2012 and 2014 – meaning that on average $3m was channelled out of Azerbaijan every day. The source of money isn’t always clear, but it comes from companies linked to Azerbaijan’s president, Ilham Aliyev, state ministries and the International Bank of Azerbaijan, the country’s largest bank, which recently filed for bankruptcy protection. The cash was transferred into four offshore-managed UK companies. From there, it was spent in various countries, including Germany, the UK, France, Turkey, Iran and Kazakhstan.

How was it done?

By clever use of the west’s financial system. Danske, Denmark’s largest bank, handled the payments via a small branch office in Estonia. It noticed nothing amiss. The organisers of the scheme exploited Britain’s weakly regulated company system. They registered four firms at Companies House in London. These were Hilux Services, Polux Management, Metastar Invest and LCM Alliance. The first two were incorporated in Glasgow, the third in Birmingham and the fourth in Hertfordshire. The beneficial owner of the firms is a secret. More here.

Photo

UK Companies at the Heart of $2.9 Billion Money-Laundering Circle

UK Companies at the heart of $2.9 billion money-laundering circle

UK failing to end its complicity in global corruption

4^th September 2017, London – A new investigation has shown UK registered companies to be at the centre of laundering $2.9 billion out of Azerbaijan, highlighting that the UK is failing to end its complicity in global corruption. These funds was used to pay-off politicians, purchase luxury goods and act as a slush fund for those close to the Azeri regime using money that appears to have been stolen from the International Bank of Azerbaijan, which is currently restructuring its debt because of funding problems.

The investigation found that four UK registered companies were at the centre of this scheme and essential to its success. These four companies formed a core part of over 16,000 transactions made by the ‘Azerbaijani laundromat’ between 2012 and 2014. Although registered in the UK, previous research by Transparency International UK found that these four companies were ultimately controlled in secretive offshore havens, where the real owners of companies are hidden from public view.

In recent years successive UK governments have made promises to close the loopholes that have left the UK, and its overseas territories, complicit in the laundering of corrupt money around the world. Over two years since the Government first outlined its intention to target corrupt money flowing through the UK, many of the promises have yet to be turned into action.

All four of these companies are either Scottish Limited Partnerships (SLPs) and Limited Liability Partnerships – forms of company that can be controlled by secretive companies based in offshore havens like the British Virgin Islands. Although new rules rushed in earlier this year require SLPs to report who they’re ultimately controlled by, and similar rules apply to LLPs, there are growing concerns that in practice these are not being enforced effectively.

Duncan Hames, Director of Policy Transparency International UK, said:

“Knowing that UK registered companies were at the heart of a scheme that saw $2.9 billion stolen from Azerbaijan underlines just how damaging it is to be complicit in global corruption. These sums of money can be the difference between life and death for people around the world, and to know that they are instead being used to purchase luxury goods, line the pockets of corrupt politicians and improve the image of dictators, is particularly galling.”

“We are increasingly concerned that action on the promises made by successive governments to close the loopholes that make the UK attractive to money laundering, appears to have stalled. We have seen some regulatory change but it has gone from a core government mission to uncoordinated and piecemeal efforts.”

“We’re calling on the UK Government to immediately enforce new laws to end the use of British companies as the getaway vehicle for corrupt individuals and organised criminal gangs. Much more than lip service is needed to fight global corruption. If a success is to be made of Brexit, the UK must uphold the highest standards of commerce and not end-up reducing itself to an offshore centre exposed to the risk of serving corrupt and repressive regimes from across the globe.”

The UK Government is yet to deliver on its promise to introduce greater transparency around anonymous corporate ownership of luxury UK property, a key destination for laundered money, or produce a comprehensive anti-corruption strategy that sets out how it intends to end the UK’s role as a safe haven for corrupt wealth.

Notes:

The four UK companies at the heart of the Azerbaijani laundromat were Hilux Services LP, Polux Management LP, Metastar Invest LLP and LCM Alliance LLP. More details about the offshore companies controlling them are provided in the table below. Hundreds of businesses with similar secretive corporate structures are registered at the same addresses as these four companies.

UK Company Address Controlled by

Hilux Services LP Suite 1105 111 West George Street, Glasgow, G2 1QX Solberg Business Ltd (British Virgin Islands) and Astrocom AG (Seychelles)

Polux Management LP Suite 1098 111 West George Street, Glasgow, G2 1QX Solberg Business Ltd (British Virgin Islands) and Astrocom AG (Seychelles)

Metastar Invest LLP 175 Darkes Lane, Suite B, 2nd Floor, Potters Bar, Hertfordshire, EN6 1BW Advance Developments Limited (Belize) and Corporate Solutions Limited (Belize)

LCM Alliance LLP Cornwall Buildings 45-51 Newhall Street, Office 330, Birmingham, B3 3QR Astrocom AG (Seychelles) and Exponet GMBH (Seychelles)

Location of N Korea Missile Launch over Japan, What we Know

Posted on August 29, 2017August 29, 2017 by Denise Simon

Why no country shot it down?

In part: While the US and Japan have conducted ballistic missile defense exercises and both have Aegis-equipped ships capable of shooting down some ballistic missiles, it would be extremely difficult for the US or Japan to intercept a North Korean intermediate or intercontinental ballistic missile in flight over Japan toward a target such as Guam. The Aegis system is capable of intercepting shorter-range missiles in mid-course with the SM-3 missile, and it also provides “terminal phase” defense with the SM-2 missile closer to the ballistic missile’s target. But it’s uncertain whether either system would be successful against a “pop up” attack with an ICBM.

The SM-3 Block IIA has an operational range of about 1,350 miles. But range isn’t the issue as much as the speed required to intercept. If a North Korean missile were fired to an altitude of over 500 kilometers, success in a shoot-down would depend greatly on how quickly the missile was tracked and the timing of an interceptor launch. Based on the time/distance envelopes for SM-2 and SM-3 missile intercepts calculated from Joan Johnson-Freese (a professor at the Naval War College and a lecturer at Harvard University) and Ralph Savelsberg (an assistant professor at the Netherlands Defence Academy), an Aegis defender would only have a few minutes to get off a shot at an ICBM launch from North Korea. Aegis-equipped destroyers and cruisers would have to be dangerously close to the North Korean coast to get a chance to strike an ICBM in “boost” phase as it rose and could be vulnerable to North Korean submarines if an actual attack were planned. Read more here.

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North Korea has taken steps in recent months to disguise their missile-related activities, including fueling rockets inside structures, outside of aerial view.

There are three basic ways the U.S. gathers most of its foreign intelligence: collecting information from human spies; intercepting electronic communications; and observing what’s happening on the ground, mainly with satellites.

The National Security Agency, which hacks computers and intercepts email, has had some success pulling bits and bytes out of North Korea, former officials say, but North Korea is much less forgiving than most of its targets. That’s because most of the country is not connected to the internet and few people have cellphones. To the extent that the regime communicates electronically, it has made increasing use of encryption, experts say.

“If you look at that satellite picture [of Asia] of the lights at night from the satellite, there is one dark area with no lights on, and that is North Korea,” Coats told Congress. “Their broadband is extremely limited. So using that as an access to collection — we get very limited results.” More here.

N. Korea must be met with stronger action: U.S. experts

WASHINGTON, Aug. 29 (Yonhap) — North Korea must be met with stronger action if it is to be stopped from triggering a catastrophe on the Korean Peninsula, U.S. experts said Tuesday.

The firing of an intermediate-range ballistic missile over Japan earlier in the day was a rare hostile act that increased the chances of a military confrontation in the volatile region.

The United States and South Korea must take decisive action to demonstrate that the regime in Pyongyang will not be allowed to get away with any more provocations, and China, they noted, will have to play a key role in that effort.

KCNA has released photos of the HS-12 launch that overflew Japan

“China has the power to increase the pressure on North Korea and must take steps towards doing so,” said Donald Manzullo, president of the Korea Economic Institute of America. “The longer China continues to refrain from using all of the leverage at its disposal to convince North Korea to return to talks, the more likely North Korea is to miscalculate.”

Beijing is Pyongyang’s only major ally and key benefactor. U.S. President Donald Trump and others have urged China to do more to rein in its wayward neighbor, but Beijing has refused to bear responsibility for the North Korean nuclear problem.

Bruce Bennett, a senior researcher at RAND Corp., said the latest launch could have resulted in part from a lack of action by the U.S. and South Korea against what was seen as a low-intensity provocation Saturday. North Korea launched three short-range ballistic missiles then.

“If the (U.S. and South Korea) fail to act seriously against (Tuesday’s) test, the North may feel that it can commit an even more serious provocation, while the exercises are ongoing, perhaps even another intercontinental ballistic missile test or a nuclear weapon test,” he said in an email.

Bennett was referring to the Ulchi Freedom Guardian military exercise currently under way between South Korea and the U.S. Analysts have said the back-to-back provocations were staged in response to the annual drills, which Pyongyang views as rehearsals for an invasion.

North Korea may also believe it has China’s backing because Beijing recently proposed the allies cancel their drills in exchange for a halt to North Korea’s missile and nuclear testing, he noted.

Robert Manning, a senior fellow at the Atlantic Council, said the U.N. Security Council is likely to adopt tougher sanctions against Pyongyang.

“There may be other steps Trump is considering to take unilaterally, whether cyber or kinetic. The key question is: How far is China prepared to go?” he said in a separate email. “But even if effective, sanctions will take time to have an impact — nine to 12 to 15 months. The danger is that this cycle of tensions rises to the point where the U.S. seeks more immediate results. That could be catastrophic.”

Media preview

The North Korean single stage Hwasong-12 is a liquid fueled IRBM of estimated 4500 km range.

The Hwasong-2 appears to be a stretched improved version of the Hwasong-10 IRBM and appears to be single staged.

The missile was first shown in the 2017 military parade and has conducted its first successful flight after three failures in May 2017 from a site near Kuosong, likely Panghyon Air Base, on a lofted short range trajectory of 787 km range and 2111 km apogee height, which hints to a maximum range of about 4500 km.

For more information regarding the DPRK airfields and what is underground at those airfields across the country, go here.

September Busy for Congress CR and the Debt Limit Increase

Posted on August 28, 2017August 28, 2017 by Denise Simon

Developments in 2017 to learn more go here.

On March 7, 2017, CBO issued estimates that extraordinary measures could suffice to meet federal obligations until sometime in the fall of 2017.¹⁴¹ Such estimates are subject to substantial uncertainty due to changes in economic conditions, federal revenue flows, changes in the amounts and timing of federal payments, and other factors. On March 8, 2017, Treasury Secretary Mnuchin notified Congress that he would invoke authorities to use extraordinary measures after March 15, 2017, to ensure continued payment of federal obligations.¹⁴² On March 16, 2017, Secretary Mnuchin notified congressional leaders that he had indeed exercised those authorities.¹⁴³ The debt limit on that date was reset at $19,809 billion.¹⁴⁴

In testimony before Congress on May 24, 2017, Administration officials urged Congress to raise the debt limit before its summer recess.¹⁴⁵ Office of Management and Budget (OMB) Director Mick Mulvaney stated that the federal receipts were coming in more slowly than projected, which could imply that Treasury’s capacity to meet federal obligations could be exhausted sooner than previously projected.¹⁴⁶ A Goldman Sachs analysis found, however, that some major categories of tax receipts had shown stronger growth.¹⁴⁷

On June 28, 2017, Treasury Secretary Mnuchin sent a letter to Congress stating that extraordinary measures would be used until September 29, 2017.¹⁴⁸ Secretary Mnuchin’s letter did not state that Treasury’s cash reserves or borrowing capacity would be exhausted on that date, but he did describe the need for legislative action by that date as “critical.” Others have estimated that the U.S. Treasury would likely be able to meet federal obligations until sometime in early October 2017.¹⁴⁹ Treasury cash balances and borrowing capacity in mid-September, however, are projected to fall well below levels the U.S. Treasury has considered prudent to maintain operations in the face of significant adverse events.¹⁵⁰

The Constitution grants Congress the power to borrow money on the credit of the United States—one part of its power of the purse—and thus mandates that Congress exercise control over federal debt. Control of debt policy has at times provided Congress with a means of raising concerns regarding fiscal policies. Debates over federal fiscal policy have been especially animated in recent years. The accumulation of federal debt accelerated in the wake of the 2007-2008 financial crisis and subsequent recession. Rising debt levels, along with continued differences in views of fiscal policy, led to a series of contentious debt limit episodes in recent years.

The 2011 debt limit episode was resolved on August 2, 2011, when President Obama signed the Budget Control Act of 2011 (BCA; S. 365; P.L. 112-25). The BCA included provisions aimed at deficit reduction and allowing the debt limit to rise in three stages, the latter two subject to congressional disapproval. Once the BCA was enacted, a presidential certification triggered a $400 billion increase. A second certification led to a $500 billion increase on September 22, 2011, and a third, $1,200 billion increase took place on January 28, 2012.

Federal debt again reached its limit on December 31, 2012. Extraordinary measures were again used to allow payment of government obligations until February 4, 2013, when H.R. 325, which suspended the debt limit until May 19, 2013, was signed into law (P.L. 113-3). On that date, extraordinary measures were reset, which would have lasted until October 17, 2013, according to Treasury estimates issued in late September 2013. On October 16, 2013, enactment of a continuing resolution (H.R. 2775; P.L. 113-46) resolved a funding lapse and suspended the debt limit through February 7, 2014. On February 15, 2014, a measure to suspend the debt limit (S. 540; P.L. 113-83) through March 15, 2015, was enacted. Once that debt limit suspension lapsed after March 15, 2015, the limit was reset at $18.1 trillion. On October 15, 2015, Treasury Secretary Jacob Lew stated that extraordinary measures would be exhausted no later than November 3, 2015, although a relatively small cash reserve would be on hand. Lower tax receipts and higher trust fund inflows, however, reduced Treasury’s headroom more than had been expected. The Bipartisan Budget Act of 2015 (BBA2015; H.R. 1314; P.L. 114-74), which relaxed certain discretionary spending limits, suspended the debt limit through March 15, 2017.

On March 16, 2017, the debt limit was reset at $19,809 billion and Treasury Secretary Steven Mnuchin notified Congress that he had invoked authorities to use extraordinary measures. CBO estimated that those measures could meet federal obligations until sometime in the fall of 2017, although in May 2017, Administration officials said slower than expected growth in revenues could require earlier action. Some independent analysts still expect that the U.S. Treasury could meet federal obligations until sometime in early October 2017. On June 28, 2017, Treasury Secretary Mnuchin notified Congress that extraordinary measures would be used until September 29, 2017, and urged action before that date.

Total federal debt increases when the government sells debt to the public to finance budget deficits, which adds to debt held by the public, or when the federal government issues debt to certain government accounts, such as the Social Security, Medicare, and Transportation trust funds, in exchange for their reported surpluses—which adds to debt held by government accounts; or when new federal loans outpace loan repayments. The sum of debt held by the public and debt held by government accounts is the total federal debt. Surpluses reduce debt held by the public, while deficits raise it. This report will be updated as events warrant.

Chinese Operative(s) Working for N Korea in New York?

Posted on August 23, 2017August 23, 2017 by Denise Simon

Primer:

Yesterday, this site published the FBI related story. If You Don’t Think the FBI is Busy, N Korea Investigation

Still, our State Department and White House appears to think that we can have honest dialogues with China regarding North Korea? Additionally, it was just reported a month ago that Beijing has a major spy network in the United States with up to 25,000 Chinese intelligence officers and 15,000 recruited agents.

Not feeling confident on this, are you? Perhaps some expulsions are in order…

Did Owner of Million-Dollar U.S. Home Help North Korea Evade Sanctions?

GREAT NECK, N.Y. — The five-bedroom house in New York’s Long Island suburbs — listed for nearly $1.3 million — boasts a southern exposure and proximity to a country club.

But here’s what’s more interesting: The seller, a Chinese national named Sun Sidong, has been linked by American security experts to a network of Chinese companies under Treasury sanctions for helping companies and individuals who support North Korea’s nuclear and ballistic missile programs.

According to Chinese corporate filings, Sun is the listed owner of Dandong Dongyuan Industrial Co., which has shared an email address with another Chinese company, Dandong Zhicheng Metallic Material Co., a coal exporter suspected of helping North Korea evade sanctions.

For the NBC video go here.

The coal company and “four related front companies” were targeted by a federal search warrant allowing prosecutors to secretly monitor their financial transactions at eight U.S. banks, seizing any funds stemming from illegal sanctions-busting, according to a May federal court ruling.

The ruling, by U.S. District Judge Beryl Howell of Washington, D.C., said the eight American financial institutions — Bank of America, Wells Fargo, BNY Mellon, Citibank, Deutsche Bank, HSBC, JP Morgan Chase, and Standard Chartered Bank — had already processed upwards of $700 million in prohibited transactions involving North Korea since 2009. The ruling does not allege any wrongdoing by any of the banks.

The Great Neck, N.Y., home purchased by Sun Sidong in December 2016. Google Maps

On Tuesday, the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned Dandong Zhicheng Metallic Material Co. and its primary shareholder in response to “attempted evasion of U.S. sanctions.”

That shareholder, a Chinese businessman named Chi Yupeng, was also named in a civil complaint filed Tuesday by the Justice Department seeking a money laundering penalty against the firm, as well as the seizure of $4 million in funds allegedly laundered for North Korea’s ruling party. The complaint alleges that front companies controlled by Chi Yupeng comprise one of the largest financial facilitators for North Korea.

Chi Yupeng hung up on NBC News several times when asked for comment.

The Justice Department also moved to seize nearly $7 million from a Singapore firm over similar allegations, and Treasury levied sanctions against a number of other Chinese and Russian entities — 16 in total — it accused of helping North Korea evade sanctions.

WATCH: At China-North Korea Border, Business as Usual Despite Sanctions

The government’s investigation was supported by the Center for Advanced Defense Studies (C4ADS), a non-profit U.S. think tank, as part of a new get-tough approach to North Korean sanctions that began in the Obama administration and is accelerating under President Trump, current and former U.S. officials say.

Chi Yupeng is the majority owner of Dandong Zhicheng Metallic Material Co. A civil complaint filed by the Justice Department Tuesday alleges that companies he controls helped North Korea evade sanctions. Bohai University

While it’s widely assumed that North Korea has for years been subjected to punishing international pressure as it defied the world and advanced toward a nuclear missile capability, the sanctions against North Korea have been full of holes, experts say — far less restrictive, for example, than the measures that brought Iran to the nuclear bargaining table.

Sun’s Great Neck house is an example of how the alleged sanction-busting networks can stretch around the globe, even to the luxe suburbs of Long Island. “The fact that you have somebody who’s engaged in trade that is potentially not just sanctioned, but dangerous, and that individual then invests in real estate in the United States reflects that there are holes in the system,” NBC News National Security Analyst Juan Zarate said.

The North Korea sanctions targeted specific military technology, “but what you didn’t see until quite recently are these kind of broader sanctions to go after the North Korean economy as a whole,” said Peter Harrell, who was the deputy assistant secretary for counter threat finance and sanctions in the State Department from 2012 to 2014.

The Friendship Bridge crosses the Yalu River and connects Dandong, China with Sinuiju, North Korea. David Lom / NBC News

Nor was there an aggressive enforcement effort against banks and individuals doing business with Pyongyang. As a result, the North Korean economy has grown steadily over the last decade, analysts say. And while the country as a whole remains extremely poor, the elite live relatively well amid a building boom of gleaming skyscrapers in the capital.

“Until February of 2016, U.N. sanctions against North Korea were strong on paper but poorly enforced, and U.S. sanctions against North Korea were comparatively weak — weaker than our sanctions against Belarus and Zimbabwe,” said Joshua Stanton, a North Korea expert and former Army officer.

Now, that is changing — though it may be too late. North Korea tested a missile that many experts say could strike the U.S. mainland, and American intelligence officials say the country may be months away from being able to mount a nuclear warhead on such a missile.

Still, aided by new sanctions imposed in the past year, the Trump administration is moving to increase economic pressure on North Korea, by targeting the Chinese companies that have for years helped the North fund its military activities.

“Justice is stepping it up by going after the Chinese banks,” said Anthony Ruggiero, a senior fellow at the Foundation for Defense of Democracies, who served as the nonproliferation advisor to the U.S. delegation to the 2005 Six-Party Talks on North Korea.

In June, the U.S. Treasury Department designated China’s Bank of Dandong — based in a city on the North Korean border that serves as a center of trade between the two countries — to be a “primary money laundering concern.” It said the small bank “acts as a conduit for illicit North Korean financial activity.” Two Chinese individuals were also targeted in the government’s action.

Last September, the Justice Department charged Dandong-based businesswoman Ma Xiaohong with evading sanctions and laundering millions of dollars for North Korea. Ma has not made a court appearance and her whereabouts are unclear.

Sen. Cory Gardner, R-Colo., recently introduced a bill that would cut off entities that do business in North Korea, including the top ten Chinese importers of North Korean goods, from using the American financial system.

This photo taken July 5, 2017 shows the Bank of Dandong, a Chinese bank accused of laundering money for North Korea. Kyodo

In August, the U.N. Security Council unanimously passed new sanctions meant to pressure Pyongyang’s export revenue. They crack down on North Korea’s primary exports — including iron, iron ore, coal, lead, lead ore and seafood — and target banks and joint ventures with foreign companies.

C4ADS, which focuses on international security, uses sophisticated software and business records to map links between companies involved with North Korea.

In June, the group published a report — titled “Risky Business” — naming Sun, who owns the Great Neck house, as part of a network that may be exporting technology that could be used in North Korea’s missile program.

Chinese business records cited by C4ADS show Sun owns 97 percent of Dandong Dongyuan Industrial Co. Ltd., a general-purpose trading firm whose businesses include the sale of automobiles, machinery, natural resources, and general household products, the report says. NBC News confirmed that the records show Sun as primary shareholder.

Related: North Korea Already Has a Devastating Weapon: Cyberattacks

Customs records indicate the firm has exported to three countries: North Korea, the Democratic Republic of the Congo, and the United States. From 2013 to 2016, the company sent $28 million worth of material to North Korea, the records show.

For example, Dandong Dongyuan Industrial Co. sent North Korea a shipment of radio navigational aid apparatus valued at nearly $800,000 in June 2016, the C4ADS report said. Experts at the James Martin Center for Nonproliferation Studies concluded that “this category might contain guidance devices for ballistic missiles.”

NBC News reviewed shipment data from Panjiva, which tracks global trade. It shows more than 60 shipments of items by Sun’s company to North Korea that fall into the category of “nuclear reactors, boilers, machinery and mechanical appliances; parts thereof.” This broad category is set by the country of origin, in this case the Chinese government. Experts say dual-use items like these help the Kim regime evade sanctions that are explicitly designed to prevent its nuclear capability.

“The danger with the export of dual-use items is that they appear to be legitimate. These are things that could be used for normal purposes,” Zarate said. “You have parties that are willing to export what are really dangerous items to a regime that has been sanctioned, and trying to use the cloak of legitimate commerce in order to do that.”

Parts for approximately 30,000 rocket-propelled grenades, manufactured in North Korea and seized in Egyptian waters, hidden under 2,300 tons of iron ore. UN Security Council Panel of Experts

C4ADS also links Sun to a ship carrying arms from North Korea to an unknown destination. In August 2016, a cargo vessel flying a Cambodian flag was intercepted by Egyptian authorities entering the Suez Canal with parts for 30,000 rocket-propelled grenades aboard. The grenade parts were hidden under 2,300 tons of iron ore, which is one of the newly banned mineral exports targeted by the U.N.’s recent sanctions program.

According to shipping records reviewed by NBC News, one of Sun Sidong’s companies owned the vessel from April 2012 until August 2014, when ownership was transferred to a company controlled by Sun Sihong, who according to C4ADS is Sun’s sister.

In 2015, Sun registered a New York-based company called Dongyuan Enterprise USA. On March 2, it received a shipment of “used furniture” from Dandong Dongyuan Industrial Co., Sun’s Chinese company. Originally shipped from Dandong, the cargo traveled to the U.S. from Busan, South Korea, according to its bill of lading.

The real estate agent who brokered the sale of the Great Neck home to Sun recalled that the family was expecting furniture to arrive from China.

An assembled rocket-propelled grenade intercepted in the Jie Shun shipment. The ship’s bill of lading misidentified the parts as pieces of an underwater pump. UN Security Council Panel of Exp

Sun, whose U.S. company operates out of a New York City address he does not own, bought the Great Neck property near the country club for $1.1 million in December 2016.

The house is already on the market again. Sun’s U.S. real estate broker told NBC News that’s because Sun “doesn’t want to do business here.”

One lesson of Sun’s activities is that targeting a small number of key actors could put a severe dent in North Korean’s effort to evade sanctions, according to David Johnson, the executive director of C4ADS.

“The networks that perpetrate sanctions evasion for North Korea are limited, centralized, and vulnerable,” Johnson said. “That is, we can touch them, there are very few pressure points, and we can make a major impact.”