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Deadline Looms for Nuke Deal without BDA Solution

Posted April. 09, 2007 07:17,   


As North Korea is still waiting for its funds frozen at the Banco Delta Asia (BDA), a Macau bank, participating countries of the six-party talks are struggling to revive the momentum of the talks.

Under the February 13 agreement reached at the six-party talks, North Korea should complete its first stage of dismantling its nuclear weapons program, including closing down the nuclear facility in Yongbyon, by April 14. Nevertheless, it is unclear whether the talks will go ahead since the North maintains that the issue of its frozen funds be resolved before it takes any actions.

In particular, the U.S. is actively engaged to resolve the issue, suggesting to North Korea a new solution to the dispute over the North’s frozen funds.

Any solution to the transfer from BDA?-

North Korea still claims that all $25 million of its frozen funds should be transferred into an account held by North Korea’s Foreign Trade Bank at the Bank of China (BOC) in Beijing.

However, the BOC maintains that it can’t receive the funds as they were involved in illegal financial activities. For this reason, the U.S. was said to have requested the North first get the legal funds that carry few financial transaction limits and receive the rest of the funds later. It was found out later that the North rejected the offer by the U.S.

Since then, it was discovered that the U.S. has recently suggested a new plan in which it retains the BDA, which was set to be liquidated since it was declared as a primary money-laundering concern, for some time and that it open a new account in the name of North Korea at BDA and send the funds through that account to the North.

Since the North’s new account is to be moved to another financial institution if the BDA is merged with or sold off, the North’s funds would be remitted to a normal bank that is capable of doing business internationally.

A diplomatic source noted, “Regarding the BDA issue, the only procedure left is for the North to choose one of the solutions offered by the U.S.,” and added that though North Korea and the U.S. had yet to reach an agreement, there has been some progress with the issue.

February 13 Agreement deadline not likely to be met-

However, the problem is that even if North Korea follows one of the solutions suggested by the U.S., it seems unlikely that the North will meet the deadline of February 14 to close down its reactor in Yongbyon since it will take time for the North to submit the remittance application form under the name of the owner of frozen funds.

Accordingly, Christopher Hill, Assistant Secretary of State for East Asian and Pacific Affairs, embarked on talks to settle the issue of implementing the February 13 agreement by the deadline, traveling to Korea, China and Japan. Hill was to visit Japan on April 8 and will come to Korea tomorrow.

In addition, Victor Cha, the director of Asian Affairs at the National Security Council (NSC), who visited North Korea with New Mexico governor Bill Richardson on April 8, will come to Korea on April 11, explain the outcome of their visits to the North, and convey the North’s intentions.

A government official said, “Once the BDA issue is resolved, the procedures of closing down, sealing and eventually disabling the Yongbyon reactor under the February 13 Agreement would be on track,” and added that a failure to close down the reactor in Yongbyon by the deadline doesn’t necessarily mean the February 13 agreement has been violated.