Posted March. 16, 2007 07:06,
Following the transfer of authority to handle North Koreas $24 million in the Macau-based Banco Delta Asia (BDA), North Korea and the U.S. are waging a war of nerves on whether to unfreeze all of the Norths money or only part of it.
When Kim Myong Gil, deputy chief of the North Korean mission to the United Nations, who was visiting Beijing on Tuesday, was asked whether he believes all the Norths money held in the BDA will be unfrozen, Kim replied, As far as I know, we have reached an agreement on the issue (with the U.S.). Kim had been quoted as saying, If the entire sum is not unfrozen, we will only partially implement the February 13 agreements.
However, the most likely scenario will be that $8 million to $11 million, which has been verified to be irrelevant to illegal transactions, will be unfrozen first, according to Washington diplomats.
Treasury Undersecretary Stuart Levey said, The authority has been transferred to Macau, on Wednesday, while announcing punitive measures against the BDA under the Section 311 of the Patriot Act; including a ban on making transactions with U.S. businesses. However, as Macau is an administrative region of China and the chairman of Chinese People`s Political Consultative Conference is the CEO of the BDA, China is likely to make a decision on the issue in close consultation with the U.S. as it is a crucial agenda to determine the fate of the six-party talks.
China is worried about the criticism from the international financial market that might claim that Macau has unfrozen the funds that have been used to purchase weapons of mass destruction without principle.
However, there is little possibility of Pyongyangs negotiation team withdrawing their demand for unfreezing all of the North`s money in the BDA. Thus, some experts predict that the North will not give up their demands at the six-party talks, slated for March 19.
Meanwhile, others have pointed out that the North may demand gradual unfreezing of all accounts over a certain period of time, on the premise of stopping all illegal activities.
The announcement of the U.S. Treasury Department, signifies that North Korea has returned to the international financial system, to an extent. The communist regime has been banned from the international financial system for the past one and a half years. However, the North is unlikely to be able to access the financial markets of Japan, Singapore, Hong Kong and Switzerland, as they were involved in counterfeiting money and illegal activities that were carried out with the help of the financial market.
However, one source in Washington said, The access to the financial institutions of China and Russia, which are relatively less influenced by the U.S., will become easy for North Korea. Since transactions between the North and two countries are significantly large, you may say, a half return (to the international financial market) will be likely made by North Korea.