Accounts open - reactor closes

North Korea demands frozen money back

Yesterday, the sixth round of six-party talks on the Korean nuclear issue began in Beijing with the participation of the two Koreas, China, the United States, Russia and Japan. None of the participants expressed optimism. At the end of the first day of work, the head of the North Korean delegation, Kim Kye-gwan ( pictured ), expressed fears that the consultations “could reach a dead end”, since the “very fragile” agreements reached “remain dangerous aspects that could worsen the situation to the extreme.”

“The presence of difficulties” was also acknowledged by the head of the Chinese delegation, Wu Dawei. And his Russian colleague Alexander Losyukov shared with the press his doubts about whether it would be possible to implement the results of the previous round on time. Christopher Hill compared negotiations to a car: “When it works, it runs smoothly. But when it breaks, it stops and begins to rust.”

In February, participants in the six-party talks managed to reach an important agreement - the DPRK, in exchange for energy assistance and normalization of relations with the United States and Japan, agreed to shut down the nuclear reactor in Yongbyon within 60 days and accept IAEA inspectors. However, Pyongyang made this deal conditional on the preliminary release of $25 million in its accounts at Delta Asia Bank in Macau, China. The amount is not that large, but for North Korea it is a matter of principle. Back in September 2005, the United States accused the DPRK of laundering illegal funds through this bank and distributing counterfeit $100 bills, and insisted on seizing the accounts. In response, Pyongyang suspended participation in the six-party talks for more than a year.

The head of the US delegation, Christopher Hill, said yesterday that Macau authorities have been notified of the US decision to return North Korea's money "as soon as possible". Pyongyang does not yet consider the “problem of frozen accounts resolved,” although this is exactly what Daniel Glaser, the US Assistant Under Secretary of the Treasury for Countering the Financing of Terrorism and Financial Crimes, said yesterday. He called Delta Asia Bank guilty of actions that undermine the global financial system. US financial institutions are prohibited from dealing with this bank, which dooms it to bankruptcy. North Korean money will be transferred to the Bank of China into the accounts of the Vneshtorgbank of the DPRK and used, as Mr. Glazer clarified, “exclusively for the benefit of the people of North Korea, in particular for humanitarian and educational purposes.”

The head of the North Korean delegation, Kim Kye-gwan, promised the negotiating partners to proceed from the principle of “action for action.” According to him, the reactor in Yenben will be frozen “as soon as the decision on the bank is published.” The admission of IAEA inspectors will be made “as bank holdings are unfrozen until they are completely unblocked” - as was promised last week to IAEA Director General Muhammad ElBaradei, who visited the DPRK.

At the same time, Kim advised his Japanese counterpart Kenichiro Sasae to ensure that the DPRK “does not doubt Japan’s will to fulfill its obligations, otherwise Japan may lose the right to participate in negotiations.” This means that Pyongyang and Tokyo have not yet resolved the dispute caused by Japan's refusal to help North Korea until it clarifies the issue of Japanese abducted by North Korean intelligence services in the 1970s and 1980s. Pyongyang considers this issue closed.

The head of the Center for Korean Studies at the Institute of Far Eastern Studies of the Russian Academy of Sciences, Alexander Zhebin, assesses the prospects for the Beijing negotiations very reservedly. In a conversation with Vremya Novostei, he noted that “the resumption of the dialogue between the DPRK and the IAEA and some progress in Pyongyang’s relations with the United States can be considered a success.” But the decision with the Delta Asia Bank “is unlikely to completely satisfy the North Koreans who made the necessary payments through this bank,” because when the United States “dictates to the DPRK how to spend its own funds, it creates a dangerous precedent for the entire international monetary and financial system " Mr. Zhebin also noted that Japan “is trying to slow down the normalization of relations between the DPRK and the United States by asking the United States not to remove the DPRK from the list of countries sponsoring international terrorism,” although the episodes of the kidnapping of the Japanese date back to the long-past period of the Cold War.

Alexander SAMOKHOTKIN