Washington Reacts to Freed North Korean Funds

“On the surface, they welcome the news, but in reality they may feel pressed.”

That is what a Washington source said when describing the Bush administration’s feelings after North Korea’s $25 million held in the BDA was freed on April 11.

The U.S. took a risky path by returning North Korea’s illegal money to achieve a bigger goal of dismantling North Korea’s nuclear programs. Now, North Korea’s implementation of opening the Yongbyon nuclear facility to IAEA inspectors and disclosing their nuclear programs and weapons will determine the next U.S. move and its future strategies.

U.S. State Department spokesman Sean McCormack said at a press briefing on April 10, “The ball is now in North Korea’s court. We will wait and see how the implementation goes until April 14 (the time limit of sixty days for the February 13 agreement).”

In Washington, short-term optimism and fundamental criticisms of the agreement are mixed.

Sources well aware of nuclear negotiations with the North said, “It has been a rocky path, but things will go smoothly for one to three months until the North receives 50,000 tons of heavy oil.”

But there is also strong discontent over releasing all the funds since the money was obtained by WMD transactions and counterfeiting.

The criticism is three pronged. The U.S. itself violated U.N. Security Council Resolution 1718 and set a bad example that could negatively affect negotiations with Iran and other countries with nuclear ambitions. In addition, America’s request that the funds be used for humanitarian or educational purposes is highly likely to be ignored. The Washington Post recently reported, “The method used was reaching an agreement for the sake of agreement, which President Bush has despised.”

McCormack gave a long explanation acknowledging the criticism. He said, “Freeing North Korea’s funds frozen in the BDA was part of denuclearizing the Korean peninsular and in compliance with the international financial rules, but the Security Council resolution on sanctions on the North remains available as important leverage.”

The Bush administration is counting on North Korea’s willingness to implement its duty, such as inviting IAEA inspectors to the North a day after receiving money back, even though the initial deadline was not kept.

Some in Washington worry that negotiations may proceed in favor of the North.

A diplomatic source said, “As Christopher Hill said, the implementation agreement for the first 60-day period was broken, but The Korean and the U.S. governments will provide an excuse for the North to appease critical voices.”

He expressed his worries, saying, “The North might fully utilize the current situation which requires immediate diplomatic achievements.”

srkim@donga.com