Dead­line Passes for N. Korea

U.S. Of­fi­cials Sug­gest That Lapse Need Not De­rail Nu­clear Deal

The Washington Post Sunday - - World News - By Joohee Cho

SEOUL, April 14 — A dead­line for North Korea to shut down its nu­clear re­ac­tor passed Satur­day with no known com­pli­ance ac­tion by the com­mu­nist state, which has said it must first col­lect $25 mil­lion in frozen as­sets.

U.S. of­fi­cials lamented the missed dead­line, but treated it as some­thing that need not de­rail the land­mark nu­clear agree­ment reached Feb. 13 af­ter al­most four years of ne­go­ti­a­tions.

U.S. As­sis­tant Sec­re­tary of State Christo­pher R. Hill, in Bei­jing for con­sul­ta­tions, told re­porters there that the dis­ar­ma­ment deal at present doesn’t have “a lot of mo­men­tum.” Later, he called on the North Kore­ans to “get mov­ing on their is­sues.”

In Wash­ing­ton, a se­nior State De­part­ment of­fi­cial, brief­ing re­porters on con­di­tion of anonymity, said that the ad­min­is­tra­tion’s pa­tience was not in­fi­nite but that “it is prob­a­bly pru­dent to give this thing a few more days.” The of­fi­cial de­clined to put an ar­bi­trary “time scale” on U.S. pa­tience but said North Korean of­fi­cials needed to call in U.N. nu­clear in­spec­tors to ar­range for su­per­vi­sion of the shut­down “pretty quickly here.”

By Satur­day’s bank clos­ing time, North Korean of­fi­cials had not with­drawn the money held at Banco Delta Asia in Ma­cau, a Chi­nese ter­ri­tory.

The lack of ac­tion in the last hours be­fore the dead­line is not sur­pris­ing, said an­a­lysts, who pre­dict- ed that North Korea would take the first steps in com­ing weeks af­ter it gets the money and that the process would likely re­main on track.

“It’s like grap­pling in a wrestling match,” said Ryoo Kihl Jae, pro­fes­sor of North Korean stud­ies at Kyung­nam Univer­sity in Seoul. “They’re pur­posely keep­ing pas­sive sim­ply to grab an up­per stance in the long and wind­ing road ahead.”

The South Korean news me­dia re­ported Satur­day that North Korean of­fi­cials in Ma­cau are pre­par­ing to with­draw the funds in cash.

As a pre­con­di­tion to shut­ting its plu­to­ni­um­based re­ac­tor at Yong­byon and re­open­ing the site to in­ter­na­tional in­spec­tors, North Korea de­manded the re­turn of $25 mil­lion that was frozen 18 months ago af­ter the U.S. Trea­sury black­listed the tiny, fam­i­ly­owned bank for al­legedly fa­cil­i­tat­ing money-laun­der­ing and coun­ter­feit­ing $100 bills by North Korea.

U.S. of­fi­cials have also claimed that some of the ac­counts were used to fa­cil­i­tate the lux­u­ri­ous life­styles of Kim Jong Il, leader of the world’s new­est de­clared nu­clear power, and other top North Korean of­fi­cials. Un­der terms of the agree­ment reached in Fe­bru­ary in six-party talks, the United States agreed to settle the money is­sue within 30 days. Last month, U.S. of­fi­cials an­nounced they had ap­proved the trans­fer of the funds into a North Korean ac­count at the Bank of China in Bei­jing “to be used for ed­u­ca­tion and hu­man­i­tar­ian pur­poses.”

U.S. of­fi­cials as­serted that this set­tled the is­sue, but North Korea ob­jected and re­fused to carry out its obli­ga­tions in the deal un­til it had the money in hand. The trans­fer was then de­layed for weeks when the Bank of China re­fused to fa­cil­i­tate the trans­fer. About $7 mil­lion of the as­sets be­long to the largely for­eign-owned Dae­dong Credit Bank, which had threat­ened le­gal ac­tion to stop the trans­fer.

The bank, which op­er­ates in Py­ongyang, says its funds are the le­git­i­mate as­sets of for­eign busi­nesses op­er­at­ing in North Korea.

Ma­cau fi­nan­cial au­thor­i­ties fi­nally an­nounced Wed­nes­day — with U.S. Trea­sury De­part­ment en­dorse­ment — that the money was free for with­drawal or trans­fer. That left just three days for the North Kore­ans to col­lect the funds and meet their dead­line obli­ga­tions by tak­ing ac­tion to shut down the re­ac­tor.

U.S. of­fi­cials, ac­knowl­edg­ing that that was not re­al­is­tic, ex­pressed hope that North Korea would make a pos­i­tive ges­ture of com­pli­ance by at least invit­ing in­spec­tors from the In­ter­na­tional Atomic En­ergy Agency back to Py­ongyang. They were ex­pelled in 2002.

But North Korea replied on Fri­day that it would take ac­tion when the so­lu­tion to the Ma­cau bank is­sue has “proved to be a re­al­ity.”

“This is just a be­gin­ning. They want tan­gi­ble re­sults be­cause from their point of view there could be an­other form of sanc­tions next time, aimed at de­moc­ra­ti­za­tion or hu­man­i­tar­ian is­sues,” said Lho Ky­ong Soo, pro­fes­sor of in­ter­na­tional pol­i­tics at Seoul Na­tional Univer­sity. The North Kore­ans are “test­ing the wa­ters,” he said. Staff writer Glenn Kessler in Wash­ing­ton con­trib­uted to this re­port.

U.S. ne­go­tia­tor Hill urged North Kore­ans to move “on their is­sues.”

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