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Published:April 13th, 2007 05:04 EST
$25 Million in North Korean Funds Unblocked

$25 Million in North Korean Funds Unblocked

By SOP newswire

Washington -- With the announcement by Macanese authorities April 10 that North Korean funds frozen at Banco Delta Asia (BDA) have been unblocked, the United States and most other members of the Six-Party Talks consider the issue of the frozen accounts “resolved.”

State Department spokesman Sean McCormack told reporters the same day that the Macanese authorities had settled on a mechanism to unblock the BDA funds.

“[W]e shall see what the North Koreans do in reaction to this,” he said.  North Korea has delayed fulfilling its part of the February 13 agreement with the other members of the Six-Party Talks -- South Korea, China, Russia, Japan, and the United States -- until the resolution of the BDA issue.

Press reports quoted Macau Monetary Authority spokeswoman Wendy Au April 10 as confirming that the North Korean funds had been unblocked.

“The account holders or authorized parties can go to the bank and withdraw or deal with their deposits,” Au told Kyodo News.

The U.S. Treasury Department had designated BDA as a financial institution of "prime money laundering concern" in September 2005 and issued a final rule March 14 barring U.S. financial institutions from dealing with the Macau-based bank.  The Macau Monetary Authority froze $25 million worth of North Korean funds while investigating whether BDA had facilitated or engaged in illegal financial activities on North Korea's behalf, including money laundering and circulation of counterfeit U.S. currency.  (See related article.)

“In our view, this solution [reached in Macau] conforms with international banking regulations as well as the February 13th agreement," McCormack said.

The February 13 agreement calls on North Korea to shut down its main nuclear reactor complex at Yongbyon and allow international inspectors to verify the process as a first step toward disclosing and dismantling its entire nuclear infrastructure.  In exchange, North Korea will receive international economic, humanitarian and energy assistance.  (See related article.) 

The North Koreans have agreed that the BDA funds “would be used to the benefit of the North Korean people and for humanitarian purposes,” the spokesman said, adding that the other parties would be looking to Pyongyang to make good on those assurances.

“An essential element of the Six-Party Talks succeeding is the parties acting in good faith and abiding by their commitments,” McCormack said, but he acknowledged the difficulty of monitoring North Korea’s use of the funds.

REFOCUSING ON NUCLEAR SECURITY

McCormack said the United States hopes the resolution of the BDA issue will cause the Six-Party Talks participants to return to the “core subject” of the talks, “the denuclearization of the Korean Peninsula.”  To this end, Assistant Secretary of State for East Asian and Pacific Affairs Christopher Hill, the lead U.S. envoy in the Six-Party Talks, is currently in the region for consultations with officials in Tokyo, Seoul and Beijing.  Hill also will discuss plans for upcoming meetings involving all members of the Six-Party Talks, as well as the timeline for the next phase of the February 13th agreement.  (See related article.)

“We still believe all the parties to the talks including the North Koreans should make every effort to meet the obligations under the 60-day deadline of the February 13th agreement,” McCormack said, adding that an assessment will be forthcoming once the deadline is reached April 14.

In remarks before meeting with South Korean officials in Seoul April 10, Hill said the resolution of the BDA dispute has been “a very difficult issue to deal with,” and that the United States has “worked very hard” in achieving an outcome.

“[C]ertainly, every day that we have to work on this banking issue is a day that we haven’t worked on denuclearization, and we’re coming up very close to the 60-day period,” he said.

“Obviously, as we get closer and closer to the 60 days, and we haven’t fulfilled all our tasks, one has to be concerned. But, once again, I think we have to be a little patient and see how we do in the next day or two,” Hill said.

The assistant secretary also said North Korea can expect its external banking accounts to remain under international scrutiny “as long as the DPRK [Democratic People's Republic of Korea, the formal name for North Korea] is engaged in nuclear weapons production.”

By Stephen Kaufman
USINFO Staff Writer