A Reply to Kim's Cyberterrorism

At the Wall Street Journal, "Financial sanctions squeezed the North before and could again":

President Obama vowed in his press conference Friday that the United States “will respond proportionally” to the cyberattack on Sony Pictures, “in a place and time and manner that we choose.” Since the FBI has now concluded the attack was orchestrated by North Korea, a forceful response is essential to deterring future attacks by the world’s rogues. Allow us to offer some suggestions as to what a “proportional” response might be.

As we noted Friday, one good place to start would be for the U.S. government to pay Sony Pictures for the rights to “The Interview” and release the movie for free into the public domain. The comedy, about an assassination attempt on Kim Jong Un, could then be seen by the world and translated into Korean, loaded on USB sticks, and floated into North Korea by balloons.

That would teach Pyongyang a useful lesson in the value the free world attaches to free speech. But the corpulent Korean despot also needs to learn a lesson about the costs of hacking and cyberterrorism, which caused Sony to cancel the movie’s scheduled Christmas release.

The easy place to start would be to once again place North Korea on the list of state sponsors of terrorism—a list from which the Bush Administration unwisely removed it in 2008 in exchange for the late Kim Jong Il ’s fake promises of denuclearization. Putting the North back on the list would be an act of diplomatic hygiene, though it would probably not do much to hurt the Kim regime.

A tougher move would be to reprise the Treasury Department’s 2007 sanctions on Banco Delta Asia, a Macau-based bank that the U.S. accused of being a major money-launderer for Pyongyang. The Kim family is heavily dependent on drug dealing, contraband cigarettes, counterfeit dollars, arms smuggling and other illicit activity for its hard currency earnings, which it then uses as bribes to keep the North’s elite in line. The bank denies the allegations.

The sanctions froze Banco Delta Asia out of conducting dollar-denominated transactions, though their broader effect was to dissuade other banks from doing business with Pyongyang for fear of being similarly sanctioned. It was, by all accounts, the toughest blow the Kim family had ever sustained. “They were not able to pay for gyroscopes for their missile program,” Rep. Ed Royce, the Chairman of the House Foreign Affairs Committee, told us Friday. “Their missile line just shut down. The dictator couldn’t pay his generals.”

The Kim regime squealed. In one of their worst diplomatic moves, then-Secretary of State Condoleezza Rice and President Bush ultimately relented, and it was back to North Korean business as usual. But at least the sanctions demonstrated how vulnerable the Kims were to having their personal finances squeezed. It can be done again...