US sanctions North Korea in 1st official retaliation over Sony hacking

By JOSH LEDERMAN

January 3, 2015

HONOLULU — The United States says its new round of sanctions against North Korea is just the opening salvo in its response to an unprecedented cyberattack on Sony. Yet there may be little else the U.S. can do to further isolate a country that already has few friends in the world.

Even the latest sanctions, handed down by President Barack Obama in an executive order, may not sting quite as badly as U.S. would have hoped. After all, North Korea is already under a strict sanctions regime imposed by the U.S. over the North's nuclear program.

The new round of sanctions unveiled Friday hit three organizations closely tied to the North's defense apparatus, plus 10 individuals who work for those groups or for North Korea's government directly. Any assets they have in the U.S. will be frozen, and they'll be barred from using the U.S. financial system.

But all three groups were already on the U.S. sanctions list, and officials couldn't say whether any of the 10 individuals even have assets in the U.S. to freeze.

Still, American officials portrayed the move as a swift and decisive response to North Korean behavior they said had gone far over the line. Never before has the U.S. imposed sanctions on another nation in direct retaliation for a cyberattack on an American company.

"The order is not targeted at the people of North Korea, but rather is aimed at the government of North Korea and its activities that threaten the United States and others," Obama wrote in a letter to House and Senate leaders.

North Korea has denied involvement in the cyberattack, which led to the disclosure of tens of thousands of confidential Sony emails and business files, then escalated to threats of terrorist attacks against movie theaters. Many cybersecurity experts have said it's entirely possible that hackers or even Sony insiders could be the culprits, not North Korea, and questioned how the FBI can point the finger so conclusively.

Senior U.S. officials, who briefed reporters on condition of anonymity, repeated their assertion that North Korea was responsible and said independent experts don't have access to the same classified information as the FBI.

With this round of sanctions, the U.S. also put North Korea on notice that payback need not be limited to those who perpetrated the attack.

The 10 North Koreans singled out for sanctions didn't necessarily have anything to do with the attack on Sony, senior U.S. officials said. Anyone who works for or helps North Korea's government is now fair game, said the officials — especially North Korea's defense sector and spying operations.

Yet prominent lawmakers were already calling for an ever harsher stance. Republican Sen. Bob Corker, who is set to chair the Senate Foreign Relations Committee this year, said it was time to concede the U.S. policy on North Korea isn't working.

Added Republican House Foreign Affairs Committee Chairman Ed Royce: "We need to go further to sanction those financial institutions in Asia and beyond that are supporting the brutal and dangerous North Korean regime."

Obama has said the U.S. is considering whether to put North Korea back on its list of state sponsors of terrorism. Beyond that, it's unclear what additional penalties the U.S. has in its arsenal. There is no appetite for a military intervention. The U.S. has said that some elements of its response may not be seen publicly, however.

The sanctions target the country's primary intelligence agency, a state-owned arms dealer that exports missile and weapons technology, and the Korea Tangun Trading Corp., which supports defense research. The individuals sanctioned include North Koreans representing the country's interests in Iran, Russia and Syria.

There was no immediate response from North Korea. Sony declined to comment.

While denying any role in a cyberattack, North Korea has expressed fury over the Sony comedy flick "The Interview," which depicts a fictional assassination plot against North Korean leader Kim Jong Un. Sony initially called off the film's release after movie theaters decided not to show the film. After Obama criticized that decision, Sony decided to release the film in a limited number of theaters and online.

The White House called the sanctions "the first aspect of our response" to the Sony attack, a declaration that raised fresh questions about who was behind a nearly 10-hour shutdown of North Korean websites last week. The shutdown prompted a blunt response from North Korea's powerful National Defense Commission, which blamed the U.S. and hurled racial slurs at Obama, calling him a reckless "monkey in a tropical forest."