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Russia to Be Mediator in BDA Matter

Posted June. 16, 2007 04:57,   


Russia, not China, has emerged as a main player in the Banco Delta Asia controversy despite the initial expectations that it would remain on the sidelines in this matter.

Different stances taken by China and Russia in the process of transferring the 25 million dollars formerly frozen in the BDA to North Korea, with the latter volunteering to be a mediator, are drawing attention in diplomatic circles in Washington.

The solution to the BDA issue that prevailed over the past three months emerged when Russia volunteered to help reach a breakthrough during a U.S.-Russia ministerial meeting at the Berlin G-8 Summit.

On June 14, a source of information in Washington said, “The U.S. feels grateful about the resolution of Russia that provided a ‘way out of the clouds.’” Russia offered the services of its central bank and the Far East Commercial Bank to aid the flow of the money through Macao to New York to Moscow to the Far East region of Russia, and finally to Pyongyang. It proved the suspicion that the U.S. would undermine the credit of the Far East Commercial Bank after its involvement.

In the process, Russia cleared itself of criticisms on its near-zero role it has played in the six-party talks. Another source said, “Based on its past experience of deploying diplomacy during the Cold War when it was an empire, Russia expressed its consent or dissent on the right occasions about the policy of the U.S. at the six-party talks.” It also played the role as a mediator voluntarily, saying that it “will do what can be done to overcome the situation that has been spinning for months around the transfer of money from BDA.”

Up to now, Russia has been facing the assessment that it did not have a clear role in the six-party talks despite its participation with the aim to recover its influence in the Far East that it lost at the end of the Cold War.

Some came up with theories on the reason for the expansion of the Russian role in relation to North Korea, pointing to the fact that North Korea gave more specific explanations to Russia than China right before the October 9 nuclear test last year.

Meanwhile, many assess that China, the host nation of the six-party talks, failed to live up to its reputation. A high official of the Ministry of Foreign Affairs and Trade said on June 15, “China refused to cooperate in solving the BDA matter, being unable to rid itself of its distrust of the U.S.” Since the U.S. classified the BDA as a money laundering institute in 2005, China has made attempts to obtain control over the BDA using the pretext of ‘domestic law provisions.’”

“Beijing felt it was not right that the U.S. should leave the matter to China to solve after compounding the problem by providing North Korea with imperfect agreements,” said the official.

The U.S. State Department and the Treasury Department had come up with a number of proposals to solve the BDA problem over the past 3 months, such as transferring the money through the Bank of China, the resignation of Chairman Stanley Au of BDA, and the corporate liquidation of BDA, but China did not respond to such proposals, saying that, “Financial decisions in Macao are made independently from Beijing.”