Comment=
ary
When the agreement ‘Initial A=
ctions
for the Implementation of the Joint Statement’ was signed in Beijing on 13 Feb=
ruary,
there was one strong possibility, and two near certainties. It was very probable that the agre=
ement
would not get far, and if that happened, it would be virtually certainly
because of the Unite=
d States,
and just as certainly it would be blamed by most of the media on the DPRK. =
And
so it has come to pass.
The success of the agreement was un=
likely
from the start. There was the
underlying ambivalence of the US
towards peaceful coexistence towards the DPRK, for reasons of emotion and
domestic politics as well as strategic imperatives. The DPRK, for its part,=
is
very suspicious and wary of the US
but had every reason to want the agreement implemented, at least up to that
stage when it had to do something irreversible. There were, in addition, two issues
which could trigger a collapse of the process. The major one was the question of =
the
alleged DPRK heavy enriched uranium [HEU] weapons programme. This had been the ostensible cause =
of the
Bush administration’s tearing up of the Agreed Framework signed by Clinton. There we=
re indications
that the State Department was back-tracking on the allegations, especially =
the
statements by Christopher Hill and Joseph DeTrani expressing ‘doubts
about how much progress the uranium enrichment program has actually made=
217;
(NY Times 1 March 2007). Although HEU had not been specifically mentioned in
either the latest agreement., or the Joint Statement of 19 September 2005 i=
tself
(reportedly at Chinese insistence) it was clear that the administration was=
not
able to let the issue drop, though some might privately regret that it had =
been
raised in the first place. It=
was
also clear that the issue was inherently liable to derail the peace
process. The DPRK denied that=
it
had an HEU programme, but because of the nature of the technology, it would
never be able to prove that.
The second issue was the Banco Delt=
a Asia
(BDA) affair and ‘financial sanctions’ and it is this which see=
ms to
have brought things to a halt. At the time of writing Pyongyang is still deliberating whether
sanctions have been lifted and has accordingly refused to shut down the
Yongbyon reactor. Resolution =
of the
BDA issue was always going to be problematical because even if the
administration thoroughly lifted its action against BDA the consequences we=
re
less predictable. The interna=
tional
banking system is based on expectations of opportunity and risk, and
confidence, once lost, is difficult to restore. However, we did not get that far.<=
span
style=3D'mso-spacerun:yes'> The action against the BDA was only
partially lifted, and the far smaller part at that. How and why this came about, the r=
easons
for instigating the action in the first place and the degree to which all t=
his
is a reflection of infighting within the administration and ‘unintend=
ed consequences’
rather than some considered strategy is a curious mixture of ‘known
knowns’ and ‘known unknowns’, as Mr Rumsfeld once put it.=
No
doubt there are a few ‘unknown unknowns’ out there as well, per=
haps
for history to discover.
The action against the BDA formally
commenced on 15 September 2005 when the US Treasury designated the bank as a
‘primary money laundering concern’ under Section 311 of the USA
Patriot Act. This curious sec=
tion
allows Treasury to impose restrictions on foreign banks or countries without
producing evidence. By imposi=
ng US law =
on
foreign entities it embodies a claim to extraterritoriality which has the
Chinese, in particular, very concerned.&nb=
sp;
The timing was seen by many as a deliberate attempt to scuttle the S=
ix
Party Talks and, intentionally or not, it kept the Joint Statement of that
month suspended until the real reopening of the talks in February 2007.
The Treasury’s press statemen=
t makes
interesting reading because it mixes the indisputably legitimate with
allegations of illegality in the same charge sheet. The BDA has provided financial ser=
vices
to DPRK companies for over 20 years and handles the bulk of the DPRK’s
precious metal sales we are told, as if there were something wrong with tha=
t.
This is combined with the accusation ‘that senior officials in Banco
Delta Asia are working with DPRK officials to accept large deposits of cash,
including counterfeit U.S. currency, and agreeing to place that currency in=
to
circulation’. It is difficult to see why a bank accepting large amoun=
ts
of cash is considered improper, but counterfeit currency is another matter =
and
if the US had good rea=
son to
think this, and some evidence, it should have been reported to the authorit=
ies
in Macau. This is not the route they too=
k.
The designation of the bank caused =
a run
and the Macanese authorities were forced to step in and take over the bank,
freezing $25 million in
DPRK-related accounts.
The authorities commissioned an aud=
it of
the bank by the giant US accounting firm Ernst & Young. Ernst & Young, which reported =
its
findings on 16 December 2005, concluded that ‘the bank did n=
ot
introduce counterfeit U.S.
currency notes into circulati=
on
over the relevant period’. Despite this, US Treasury still cl=
aims,
without producing evidence, that the bank helped the DPRK ‘launder
hundreds of millions of dollars’. It is inconceivable that, in the
circumstances, Ernst & Young would be less than rigorous in their audit,
and hundreds of millions passing through a small bank would be difficult to
overlook. Moreover, it is unc=
lear
why there was only $25 million in the accounts if so much money had been
sloshing through.
The BDA action not merely froze the=
DPRK
accounts but had a knock-on effect, which delighted Treasury, causing banks=
to
dissociate themselves from DPRK for fear of running foul of Section 311. The
DPRK boycotted the Six Party Talks and said it would not return until finan=
cial
sanctions were lifted.
For a variety of reasons, as discus=
sed in
our last issue, Washington
appeared to backtrack in late 2006 and in the course of essentially bilater=
al
negotiations between Christopher Hill and Kim Kye-gwan it was agreed that t=
he
BDA issue would be ‘resolved’. Exactly what was agreed has not =
been
made public; according to the US
press it was the subject of a ‘side agreement’ that stipulated =
that
the matter would be settled within 30 days of the agreement of 13
February. The main provisions=
of
that agreement, mainly the shutting down of the Yongbyon reactor in exchange
for initial supplies of oil, were to come into effect ‘in parallel=
217;
within 60 days. It is clear that for Pyongyang
resolution meant not just getting its money returned, but the restoration of
its linkage with the international banking system. There seems little reaso=
n to
suppose that Hill was not made quite aware of that.
Following the February agreement th=
ere was
a curiously semi-public battle between State and Treasury over the frozen
accounts. Although Secretary =
Rice
said that she was working amicably with Treasury Secretary Paulson, there w=
ere reports
that State officials were compla=
ining
that Treasury was sabotaging the Agreement by refusing to unfreeze all the
funds. Apparently Treasury was defeated on this, and was compelled to relea=
se
all the funds but, in a Parthian shot, blocked the BDA from the US bank=
ing system
ensuring that, in effect, the sanctions were not lifted. No banks were will=
ing
to accept the funds for transfer, or to deal with BDA. At one stage in the
State/Treasury battle there was a scheme to transfer all the $25 million,
irrespective of ownership, to a DPRK account at the Bank of China, ‘t=
o be
used for humanitarian purposes’. The British joint venture Daedong Cr=
edit
Bank threatened legal action if it lost its $7 million account. We had the strange irony of the US government
stealing money from a British bank to give it to the North Korean governmen=
t.
The accounts at the BDA were unfroz=
en on 10
April, just a few days before the 60 day deadline but nearly a month later =
than
it had promised. Pyongyang responded by announcing that =
a ‘DPRK
financial institution concerned will confirm soon whether the measure is
valid.’ It reiterated t=
hat it
‘remains unchanged in its will to implement the Feb. 13 agreement and
will also move when the lifting of the sanction is proved to be a reality.&=
#8217;
The media generally blames the DPRK for ‘missing the deadline’.=
The US is claiming that it has do=
ne all
that was required of it under the Agreement, but it seems unlikely that the
DPRK will concur.
The business raised worrying questi=
ons
about the conduct of US
foreign policy. Did Hill know=
that
the charges against BDA were false?
Did he agree to lift the sanctions thinking he could, but was outfla=
nked
by Treasury, or was he more devious than that? Is there a coherent foreign
policy, or are we seeing the result of conflicting domestic interests? If t=
here
is a considered policy, what is really behind it? One of the architects of =
the
sanctions offensive, David Asher, has admitted that they chose BDA because =
it
was small and vulnerable but the real target was the Bank of China. “=
It's
about Macao, Macao<=
/st1:State>'s
government, China, the
Chinese government and their complicity and their accommodative behavior to=
ward
North Korea's
illegal activities, proliferation activities and leadership financial
activities."(International Herald Tribune 11 April 2007). Is it really=
all
about the fear of Ch=
ina’s
rise, and an attempt to weaken the Chinese financial system with the
unsubstantiated allegations about the DPRK just a smokescreen?
China has already expressed ‘=
deep
regret’ over the Treasury’s blacklisting of BDA, and the releas=
e of
the Ernst & Young audit to the US press on 16 April by the Macanese
authorities may be an indication that Beijing is increasingly concerned at =
US actions.
Meanwhile, US sanctions, financial =
and
material, impose a dreadful burden on the people of North Korea. The World Food
Programme reports that millions are going hungry. Although there are positi=
ve
signs – trade between the two Koreas<=
/st1:country-region>
is up 40% in the first quarter of 2007- that situation is not likely to imp=
rove
until the US
allows the DPRK to participate in the global economy.
DPRK to Move Only When Lif=
ting of
Financial Sanction Proved to Be Reality
Pyongyang, April 13 (KCNA) -- A spokesman for the DPRK Foreign Ministry
Friday gave the following answer to a question put by KCNA as regards the <=
st1:country-region
w:st=3D"on">U.S. and Macao
administrative authorities' announcement of the de-freezing of the fund of =
the
DPRK:
The DPRK took note of the announcem=
ent made
by the U.S. Department of Treasury and the Macao
administrative authorities on April 10 that they took a measure of de-freez=
ing
the fund of the DPRK deposited in Banco Delta Asia in Macao.
A DPRK financial institution concer=
ned will
confirm soon whether the measure is valid.
The DPRK remains unchanged in its w=
ill to
implement the Feb. 13 agreement and will also move when the lifting of the
sanction is proved to be a reality.
Money laundering allegatio=
ns by U.S.
false, report says
By Kevin =
G. Hall
WASHINGTON - The U.S. Treasury Department's charges that a small bank in=
Macau
knowingly laundered counterfeit U.S.
currency for North K=
orea
have no basis in fact, according to a confidential audit ordered by the
government of the Chinese enclave.
The audit, obtained by McClatchy
Newspapers, also suggests that the Treasury overstated claims that North Korea
laundered "hundreds of millions" of dollars in ill-gotten gains
through Banco Delta Asia.
On the basis of its allegations, the
Treasury Department in September 2005 blacklisted the family-controlled ban=
k,
which went into government receivership, and effectively froze $25 million =
in
accounts linked to N=
orth
Korea. Last month, Treasury issued a fin=
al
ruling that prevented the bank from having any transactions with the U.S. ba=
nking
system and, in effect, the global financial system. ..//..
The dispute over the Macau bank acc=
ounts
led the Pyongyang<=
/st1:City>
government to walk out of six-nation talks on dismantling its nuclear weapo=
ns
program. North Korea=
agreed on Feb. 13 to dismantle its nuclear weapons program if the funds were
unfrozen. The Bush administration agreed, but regime leaders apparently hav=
en't
received all of the funds, and this past weekend, North Korea failed to begin
dismantling its nuclear reactor as promised.
Now the release of the bank audit b=
y the
giant Ernst & Young accounting firm raises broader questions, among them
the credibility of the Bush administration's charges against North Korea and
the Macau bank.
The allegation that North Korea was counterfeiting U.S. cu=
rrency
was at the center of the U.S. Treasury's concerns when it first threatened =
to
blacklist the bank in 2005. It said then that "sources show that senior
officials at Banco Delta Asia are working with (North Korea) officials to acc=
ept
large deposits of cash, including counterfeit currency, and agreeing to pla=
ce
that currency in circulation."
Last August, President Bush made a =
similar
allegation. Asked why he continued to focus on alleged money laundering ins=
tead
of nuclear arms reduction, he told reporters: "Well, counterfeiting U.=
S.
dollars is an issue that every president ought to be concerned about. And w=
hen
you catch people counterfeiting your money, you need to do something about
it."
But the audit showed that the bank,=
a
primary conduit for North Korea's
financial dealings with the rest of the world, played no obvious role in
laundering counterfeit U.S.
currency.
"From our investigations it is
apparent that ... the Bank did not introduce counterfeit U.S. currency notes into circulation,"=
; the
Ernst & Young audit said, noting that large cash deposits from North Korea were routinely screened for
counterfeits by the Hong Kong branch of an unidentified bank with U.S.
operations.
Moreover, the audit confirmed that =
the only
time Banco Delta knowingly handled counterfeit U.S. notes was in 1994 when i=
ts
inspectors discovered 100 counterfeit $100 bills and turned over the money =
to
local authorities. The $10,000 was far from the $15 million in counterfeit =
U.S. currency that the Bush administration=
said North Korea was
manufacturing annually.
The Treasury said front companies f=
or North Korea were suspected of laundering
"hundreds of millions of dollars in cash" through the bank, the
proceeds of illicit trade in counterfeit U.S. currency, smuggled cigar=
ettes
and narcotics.
But the audit found no evidence tha=
t this
was true…//..
China regrets=
US move
on Macao bank
By Qin Ji=
ze and Zhu
Ping
Chi=
na deeply regrets the US
decision to prohibit American financial institutions from dealing with a Ma=
cao
bank, which has been accused of laundering money for the Democratic People's
Republic of Korea (DPRK).
"We deeply regret the United States' insistance on using American
domestic law to apply a ruling on Banco Delta Asia
(BDA)," Foreign Ministry spokesman Qin Gang said in a regular press
briefing yesterday.
The central government and the Macao
Special Administrative Region have repeatedly expressed their concerns over=
the
issue to the US,
he said.
Chi=
na expects the US
to take action that would help the Six-Party Talks to progress and maintain=
the
financial and social stability of Macao.
"We believe both should be taken into full consideration," Qin sa=
id.
The US Treasury Department finalize=
d its
rule against BDA yesterday, barring the bank from accessing the US fina=
ncial
market directly or indirectly.
Stuart Levey, the department's Under
Secretary for Terrorism and Financial Intelligence, said the regulatory act=
ion
was targeted at BDA as an institution, not Macao as a jurisdiction…//=
..
Trail Led to Macao as Focu=
s of
North Korean Corruption
By Donald=
Greenlees
and David Lague
HONG KONG, April 12 — For Ame=
rican
law enforcement agencies the smuggling investigations were among their most
elaborate, producing dozens of arrests and hard evidence that Chinese crimi=
nal
gangs had smuggled counterfeit United States currency, cigarettes and drugs
made in North Korea into the United States.
The investigations, concluded 20 mo=
nths
ago, also produced a money trail that led to the Chinese gambling enclave o=
f Macao, where American investigators concluded that
criminals linked to =
North
Korea were laundering their earnings.
This effort produced the hard evide=
nce for
the United States to p=
lace
financial sanctions against Banco Delta Asia, a small, family-owned bank in=
Macao, near Hong Kong.
But those sanctions became a major sticking point in international efforts =
to
dismantle North Kore=
a’s
nuclear weapons program.
The investigations “were just
incontrovertible proof of the role of Macao
banks, Macao gangsters, North Koreans in=
Macao,” said David Asher, an outspoken critic=
of North Korea who
at the time of the investigation was one of the most senior State Department
officials dealing with the country. ..//..
Yet Banco Delta Asia had never been=
the
main offender in Macao.
“The fact is that Banco Delta was an easy target in the sense that it=
was
not so large that its failure would bring down the financial system,”
said Mr. Asher, who is now a senior associate fellow with the Asian Studies
Center of the Herit=
age
Foundation.
“Banco Delta may be a sacrifi=
cial
lamb in some people’s minds, but it is not about Banco Delta,” =
he
said. “It’s about Macao, Macao’s government, China, the
Chinese government and their complicity and their accommodative behavior to=
ward
North Korea’s illegal activities, proliferation activities and leader=
ship
financial activities.”
What is North Korea
seeking in the six-party stalemate?
The six-party talks came to an abru=
pt halt
in Beijing on Thursday as North Korea
boycotted negotiations until its US$25 million frozen at a Macau bank to be
transferred to its account. The U.S.
had agreed to unfreeze the money on March 19, and insisted that the delay w=
as merely
due to issues of a bureaucratic nature.
However, Pyongyang may be trying to use the curr=
ent
situation as an opportunity to get a guarantee from the international commu=
nity
for normal financial status down the road.
Chun Young-woo, South Korea’s=
top
negotiator to the nuclear talks, said, "The North didn’t want to=
get
the money back in cash, nor have the money transferred to an account at its
banks in North Korea, but to one at a foreign bank [Bank of China]." T=
hese
comments could be interpreted as North Korea seeking not only =
the
funds in question but a general return to normalized relations within the
international financial community, as it has requested the funds be transfe=
rred
into a foreign bank.
Though the U.S.
announcement that it would unfreeze the North Korean funds - which had been
held at Macau-based Banco Delta Asia since September 2005 - represents the
resolution of a major rift between the U.S.=
and North Korea, Pyongyang is stil=
l not
able to gain access to most international financial institutions because it=
is
still "blacklisted."
The Bank of China, which said it was
willing to handle the $25 million and was accepted by both North Korea and =
the
U.S., refused to place the money in an already existing North Korean account
there, instead agreeing only to transfer the money to a third bank that has=
not
yet been decided upon. The Bank of China, which is already listed on the
Shanghai and Hong Kong stock markets as of last year and plans to list on t=
he
New York Stock Exchange, is reportedly worried about the potential
disadvantages it would face in the international financial community if it
accepted the money into one of its accounts.
For North Korea, just being guara=
nteed
its money back may not be enough to ensure it that it will quickly be welco=
med
again as a member of the international financial community. The countries p=
arty
to the talks could not have surmised that the U.S.-led sanctions, which were
announced in September 2005, would lead to the North being so strongly shun=
ned
by the international financial community. Given the situation, it would com=
e as
no surprise if the North, through insisting upon a foreign bank as the
destination of its fund, is placing less emphasis on whether it can get its
money back than on whether all of its financial capabilities return to norm=
al
in the international sphere.
If the North does in fact demand a =
return
to full status in the international financial community, the current stalem=
ate
would escalate into something that would be a tall order to tackle. ..//..<=
/span>
China Ends N=
orth Korea
Talks Amid Delay in Return of Funds
By David =
Lague
BEIJING, March 22 — Talks her=
e aimed
at dismantling North Korea’s nuclear weapons program were halted by C=
hina
late Thursday after they stalled over the failure to release from a Macao b=
ank
up to $25 million that North Korea had demanded be returned before it conti=
nued
negotiations. ..//..
Accounts controlled by about 50 Nor=
th
Korean banks, trading companies and people were frozen in Banco Delta Asia =
with
$7 million in the account of Daedong Credit Bank, the North’s only
foreign-managed bank.
After an 18-month investigation, th=
e United
States Treasury Department on March 14 banned American banks from dealing w=
ith
Banco Delta Asia, effectively isolating it from the American financial syst=
em.
The Treasury Department’s action has angered North Korea and become a
major sticking point in nuclear disarmament efforts…//..
However, banking analysts said it w=
as
unlikely that all account holders would agree to have their money transferr=
ed
to an account they could not control in the Bank of China. They also questi=
oned
whether the Chinese bank would be comfortable accepting money without quest=
ion
from a bank that the United
States had accused of crimes.
Daedong has said it can prove that =
the
sources of the money frozen in its account are legitimate and has been lobb=
ying
officials in Macao and Washington to have the money released.=
Colin
McAskill, a British businessman who is buying the bank, was unavailable for
comment.
Soon after the United
States moved against the bank in September 2005, North Korea
boycotted the six-nation talks with protests reported by its state-controll=
ed
news media. It consented to return to the talks only when the United States
agreed late last year to hold separate negotiations on Banco Delta Asia.
The United
States announced Monday that the frozen money would be
returned to the North via the Bank of China after North Korea pledged that the =
money
would be used for humanitarian purposes and education.
Owner of Maca=
u bank
denies illegal dealings with N. Korea
By Tim Jo=
hnson and
Kevin G. Hall
BEIJING - The owner of the bank at =
the
center of a dispute that's threatening to derail nuclear talks with North K=
orea
has denied the U.S. Treasury Department's allegations that his bank handled
counterfeit American currency and laundered illicit earnings for the isolat=
ed
communist regime in Pyongyang.
In a four-page statement delivered =
to
McClatchy Newspapers on Tuesday, Stanley Au, the founder of Banco Delta Asi=
a in
Macau, said U.S. officials had provided "no evidence or proof" th=
at
account holders had links to North Korean groups that dealt in bogus dollar=
s,
counterfeit cigarettes or narcotics.
Au said that when Washington
accused his bank in September 2005, none of the bank's clients was on any
international "black list" for unlawful activity, and he denied t=
he
American charges that North
Korea funneled bogus bills through his b=
ank.
The Treasury leveled those charges =
under an
obscure provision of the USA Patriot Act that now threatens to backfire aga=
inst
the Bush administration's efforts to dismantle North Korea's nuclear program=
and
to combat terrorism, counterfeiting, drug trafficking and human rights abus=
es.
Section 311 of the Patriot Act allo=
ws the
Treasury to lock any foreign bank out of the U.S. financial system without
allowing the bank to defend itself or even to see the evidence against it. =
..//..
The Bank of China and other banks, =
however,
have refused to accept money that the United
States has declared tainted, fearing they could be
targeted under the same Patriot Act provision, and <=
st1:country-region
w:st=3D"on">North Korea says it won't pro=
ceed
with the nuclear accord until the money is in hand.
China
demands assurances that the Treasury won't target its financial sector if it
takes North Korean money..//..
Bankers around the world express gr=
owing
unease about the Patriot Act's global reach, its presumption of guilt and i=
ts
lack of due process.
"They do not like the unilater=
al
nature of our sanctions ... so when we suddenly waive those sanctions, as in
the case in North Korea, it
causes us ... credibility problems," said Bruce Zagaris, a lawyer base=
d in
Washington, D.C., who specializes in complex
international tax and finance enforcement issues. ..//..
"We have certainly voiced conc=
erns
about the extraterritoriality of the Patriot Act," said Florence Ranso=
n, a
spokeswoman for the European Banking Federation in <=
st1:City
w:st=3D"on">Brussels, Belgium,
which represents almost 5,000 banks in 29 countries. ..//..
North
Korea's $25 Million and Ban=
co
Delta Asia
Another abuse under the U.S. Patriot Act
by Ronda =
Hauben
A little known provision in the U.S.
Patriot Act (2001) has been used by the Bush administration against North Korea to
freeze $25 million dollars of its funds and to deny it access to the
international banking system and to hard currency. Actions under this provi=
sion
of the Patriot Act effectively stymied progress in disarmament talks between
the U.S., North Korea, South
Korea, China,
Russia and Japan f=
or over
18 months. North Kor=
ea
says that only when the seized $25 million and access to the international
banking system are restored is it willing to continue negotiations under the
six-party-agreement concerning security and denuclearization of the Korean
peninsula.
The little known provision of the P=
atriot
Act 2001 is Section 311. It is also known as the "International Money
Laundering Abatement and Financial Anti-Terrorism Act of 2001."=
The original purpose was allegedly =
related
to the prevention, detection and prosecution of money laundering connected =
to
the financing of terrorism. The law has rarely been used for its original
purpose. Instead it has been used by the Bush administration as a means of
unchecked political power against financial institutions like the Banco Del=
ta
Asia. This case has an impact on those nations or institutions who used the
bank, like North Kor=
ea…//..
Section 311 has been called by its
supporters "a diplomatic sledgehammer that gets results" and by i=
ts
critics a provision that denies the accused "due process and presumes
guilt."
This provision gives the U.S. Treas=
ury the
ability to use an Executive Branch administrative procedure rather than a l=
egal
proceeding as a way to accuse a financial institution that is part of anoth=
er
nation's regulatory system of wrong doing, and then to find them guilty. Un=
der
this provision of the Patriot Act, the accused is denied knowledge of the
evidence against them and is denied the right to speak in their own defense=
…//..
Invoking Section 311 against the BDA
effectively sabotaged the implementation of the six-party-agreement of
September 2005 for 18 months as BDA did not have a process to challenge the
Treasury Department action, nor did those whose accounts at the bank had be=
en
frozen, like North K=
orea.
It was only after No=
rth
Korea conducted a missile test in July 2=
006
and the test of a nuclear device in October 2006, that the Bush administrat=
ion
was willing to agree to negotiations over the Treasury action…//..
The critical difference that has be=
en
overlooked, however, is that a requirement of the Feb. 13 agreement was that
the U.S.
restore the funds that were frozen by the actions of the U.S. Treasury
Department. Also Nor=
th Korea's
access to the international financial system was to be restored.
These requirements caused "int=
ense
friction" in Washington between officials in the State Department and
"officials in the Treasury Department and in the Office of Vice Presid=
ent
Dick Cheney who were said to favor maintaining maximum pressure" on No=
rth
Korea..//..
Cleaning Up t=
he 20th
Century
By Jim Yardley
FOR more than three years, the grin=
ding,
often exasperating negotiations over North Korea’s nuclear w=
eapons
program have been about taking the bomb away from Kim Jong-il. As if that w=
ere
not complicated enough, the agenda is now becoming more ambitious. One new =
goal
could be loosely described as cleaning up the 20th century…//..
The process might accomplish far mo=
re than
denuclearization — a formal peace treaty ending the Korean War could =
be
one dramatic possibility. Or it could just as easily collapse under the wei=
ght
of so many moveable pieces and kill a nuclear deal, too.
“This process, not unlike a v=
ideo
game, gets more and more difficult as you go into more and more levels,R=
21;
Christopher R. Hill, the assistant secretary of state for East Asian and
Pacific affairs and chief American envoy, said earlier this month in New York.=
History can be omnipresent or repre=
ssed in
northeast Asia, but nearly everyone agre=
es it
is festering and unresolved…//.. North Korea is a bit like the=
crazy
uncle whose refusal to stay locked and quiet in the region’s attic has
forced everyone to the same table, with historic baggage and contemporary
rivalries in tow. The North’s demands for economic and energy aid nea=
rly
derailed the last round of talks, and now negotiations are being separated =
into
working groups to tackle decades-old issues like normalizing relations betw=
een
North Korea and both Japan and the United States. Discussions over a peace
treaty to end the Korean War will be held in a “separate forum”
that has yet to be named.
“These are the precise issues=
that North Korea really wants to address,”=
; said
Bates Gill, a China
specialist at the Center for Strategic and International Studies in Washington. R=
20;They
want a peace treaty. They want a normal relationship with the United
States.”..//..
For Pyongyang talks are a way to make frien=
ds
Getting off =
Washington’s terror list is the
North’s priority in talks.
By Brian =
Lee
Establishing diplomatic relations w=
ith Washington is at the heart of Pyongyang’s wish list in current =
talks
over its nuclear program. Bitterly estranged since the Korean War, for the =
two
countries normalization of relations is again in the air, but it is going to
take a lot of talking. ..//..
For Pyongyang=
,
gaining diplomatic recognition in Washington
is seen as a way of addressing its economic collapse, according to a South
Korean government official. “It makes sense,” said the official.
“You get diplomatic recognition, sanctions are lifted and business wi=
ll
follow.”
Falling short of that goal at the e=
nd of
the Clinton
administration, the North is now eager to capitalize on the latest opportun=
ity.
But in order to gain diplomatic sta=
tus,
Pyongyang first needs to get off Washington’s list of countries
designated as state sponsors of terrorism, a status that currently restricts
trade and has led to layers of economic sanctions that Pyongyang views as p=
roof
of Washington’s hostility.
Being designated a state sponsor of
terrorism subjects the country to various sections of three laws: the Export
Administration Act, the Arms Export Control Act and the Foreign Assistance =
Act.
Under the laws, U.S.=
foreign assistance is restricted, defense materiel cannot be sold, and expo=
rts
of dual use items are banned. Financial restrictions mean the United States automatically opposes loans =
by the
World Bank and other international financial institutions to North Korea. ..//..
No Quick Removal From U.S. Te=
rror
List for N.Korea
Nor=
th Korea will not be easily removed from the U.S. list of states that spon=
sor
terrorism. U.S. State Department spokesman Tom Casey said that taking North Korea off
the terrorism blacklist is a process that will require a lot of time and
careful reviews. He also made it clear that the process to normalize diplom=
atic
ties between the U.S. =
and North Korea can move forward only when the=
North
takes steps to make the K=
orean
Peninsula nuclear-f=
ree. ..//..
The six-nation agreement reached in=
Beijing on Feb. 13 requires the U.S. to start the process to =
remove
the North from the terror list in the initial 60-day stage.
N.K. drug company urges ai=
d donors
to 'buy local'
By Chris =
Gelken
"Its not just about making mon=
ey, at
least not from our perspective as a producer," declared Felix Abt,
president of the Pyongyang-based pharmaceutical company PyongSu Pharma.
"The profit margins are very small. It is more about supplying a neces=
sary
and quality product at a price people can afford."
Abt was in Seoul earlier this week meeting with So=
uth
Korean pharmaceutical companies and aid organizations. On the table was a
unique opportunity that would allow them to expand their existing humanitar=
ian
work, while at the same time helping to lay a solid foundation for the futu=
re
of the pharmaceutical sector in North
Korea.
"One of the main purposes of m=
y visit
here is to meet with the people who donate drugs and medicines to North Korea, or
their agents who are based here," Abt told The Korea Herald. The
"frontier-businessman" believes substantial savings could be real=
ized
if the donor had the drugs produced locally, in North Korea, rather than purc=
hasing
them here in the South or overseas and then having them shipped in. ..//..<=
/span>
PyongSu recently underwent an inter=
national
inspection and has been approved as a producer that meets the highest stand=
ards
of pharmaceutical producers worldwide.
The company was launched in the sum=
mer of
2004 in a joint venture between the Ministry of Public Health and a group of
foreign investors. By the end of 2006, PyongSu was producing a range of
medications including painkillers and antibiotics among others.
The company's mission was to reach =
and
maintain production quality and service standards comparable to any
pharmaceutical producer elsewhere in the world.
"We are making a direct contri=
bution
to the improvement of the local pharmaceutical sector," Abt said,
"through training, education, and our sharing of knowledge with medical
professionals and staff at all levels throughout the DPRK." ..//..
Abt said PyongSu has its finger on =
the
pulse of the medical sector in the DPRK, and is in a unique position to ser=
ve
humanitarian and aid organizations by producing drugs on their behalf and
distributing them, "to those who are in need of them."
The Massacre =
at No Gun
Ri: Army Letter reveals U.S.
intent
By Charle=
s J.
Hanley and Martha Mendoza (Associated Press)
Six years after declaring the U.S. killing of Korean War refugees at No =
Gun Ri
was "not deliberate," the Army has acknowledged it found but did =
not
divulge that a high-level document said the U.S.
military had a policy of shooting approaching civilians in South Korea.
The document, a letter from the U.S. ambassador in South
Korea to the State Department in Washington,
is dated the day in 1950 when U.S.
troops began the No Gun Ri shootings, in which survivors say hundreds, most=
ly
women and children, were killed.
Exclusion of the embassy letter fro=
m the
Army's 2001 investigative report is the most significant among numerous omi=
ssions
of documents and testimony pointing to a policy of firing on refugee groups
— undisclosed evidence uncovered by Associated Press archival research
and Freedom of Information Act requests.
South Korean petitioners say hundre=
ds more
refugees died later in 1950 as a result of the U.S. practice. The Seoul
government is investigating one such large-scale killing, of refugees stran=
ded
on a beach, newly confirmed via U.S.
archives.
No Gun Ri survivors, who call the A=
rmy's
2001 investigation a "whitewash," are demanding a reopened
investigation, compensation and a U.S. apology…//..
But Muccio's message to Assistant S=
ecretary
of State Dean Rusk states unambiguously that "decisions made" at a
high-level U.S.-South Korean meeting in Taegu,
South Korea, on
July 25, 1950, included a policy to shoot approaching refugees. The reason:
American commanders feared that disguised North Korean enemy troops were
infiltrating their lines via refugee groups.
"If refugees do appear from no=
rth of
US lines they will receive warning shots, and if they then persist in advan=
cing
they will be shot," the ambassador told Rusk, cautioning that these
shootings might cause "repercussions in the United States." Delibera=
tely
attacking noncombatants is a war crime…//..
The killings remained hidden from h=
istory
until an AP report in 1999 cited a dozen ex-soldiers who corroborated the
Korean survivors' accounts, prompting the Pentagon to open its inquiry after
years of dismissing the allegations.
The Army veterans' estimates of dea=
d ranged
from under 100 to "hundreds." Korean survivors say they believe a=
bout
400 were killed. Korean authorities have certified the identities of at lea=
st
163 dead or missing.
No Gun Ri, where no evidence emerge=
d of
enemy infiltrators, was not the only such incident. As 1950 wore on, U.S.
commanders repeatedly ordered refugees shot, according to declassified
documents obtained by the AP…//..
North-South t=
rade jumps
The Inter-Korean Trade Volume durin=
g the
First Quarter Increased by 40 percent.
Vice-Minister Shin said the inter-K=
orean
trade volume during the first quarter recorded
260.94 million dollars, rose by 40p=
ercent
than the same period of the previous year.
He also said this increasing trend =
would be
maintained during the second quarter thanks to the recovery of the inter-Ko=
rean
relations. The increase would be affected by the rise of domestic demand for
North Korean steel and mineral products, increase in the number of enterpri=
ses
operated in Gaeseong [Kaesong Industrial Complex], and public and private a=
id
toward the North, he said.
Call for New Zealand to declare Peace =
with
the DPRK
At its April meeting the Wellington Presbytery of the Presbyterian
Church of Aotearoa New Zealand unanimous=
ly
resolved to call on the NZ Government to enter into a Peace Agreement with =
the
DPRK, and to invite other denominations to support the resolution.
Members expressed shock when they learnt that 60 years after the
cessation of hostilities NZ was still supporting a Ceasefire Agreement as
declared by the Korean Armistice Agreement.
Letter
NZ-DPRK=
Peace
Treaty proposal
NZ-DPRK Society Aid and Development Appeal=
Donations are =
being
sought to cover the cost of a Farm Truck for the Haksan NZ Friendship Farm;=
and
a three month teaching assignment in Pyongyang by
Christchurch Primary school teacher Tim Kearns.=
Both
projects are part of a continuing support relationship between citizens
of New Zealand an=
d North Korea.
In the near fu=
ture
it is hoped that two Korean women will be sponsored to come to New Zealand for
three months for English training and professional development.<=
/span>
If you wish to contribute financial=
ly, or
otherwise, or would like some more information, please contact Stuart Vogel=
at s.vogel@xtra.co.nz...
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