The U.S. Administration is painstakingly searching for ways to solve North Korea’s $25mn caught in BDA, but is finding it difficult to make the first step.
This kind of situation was unfathomable even in March when the U.S. Treasury denounced BDA to be of “primary money laundering concern.” At the time, the U.S. entrusted Macau authorities to take care of the situation and believed that North Korea’s frozen funds would soon be released.
However, circumstances went from bad to worse and the bank to receive North Korea’s funds is still unknown. While the U.S. State Department went to great lengths to persuade the Treasury in permitting remittances through the nation’s 4th largest bank, Wachovia Bank, the case was only met with further difficulties under Section 311 of the U.S. Patriot Act.
Now, analysts argue that the only way to resolve the BDA issue is by withdrawing the sanctions initially placed on BDA. However, it will not be easy to withdraw the sanctions after a long 18 months of investigations resulting in evidence to show that illegal acts had occurred regarding money-laundering and companies tied to the development of weapons of mass destruction,
Removal of sanctions only possible with “change to BDA board of directors”
Last March, the Treasury’s spokesperson Molly Millerwise suggested in an interview with the press that the sanctions could be removed, if responsible directors led BDA.
Then on May 30th, Assistant Secretary Christopher Hill visited China and met with China’s Foreign Minister Wu Dawei. At this meeting, Secretary Hill argued that delaying the remittances would only support the illegal acts of BDA and the irresponsible acts made by the board of directors, and requested that a change in directors be made. China does not seem to have made any responses regarding this request.
The reason behind China’s idleness lies under the influences of Stanley Ou on the Chinese People’s Political Consultative Conference. Mr. Ou is BDA’s chairman. While the U.S. government requests that the chairman be removed, Mr. Ou is undoubtedly trying hard to hold onto his position.
On the other hand, Gary Samore, Vice President of the Council on Foreign Relations suggested in an interview with Radio Free Asia on the 2nd that the U.S. Treasury may temporarily remove the sanctions against BDA as long as it promised not to engage in any further illegal acts. Nevertheless, the Bush Administration does not seem to have begun any investigations to implement this proposal as yet.
Secretary Hill now wary of the delayed BDA issue encouraged North Korea to act honestly, indicating that the issue could be eased with North Korea disabling its nukes and permitting the IAEA to inspect the facilities. However, it seems that North Korea has blatantly declined this offer.
On the 31st, North Korea’s Deputy Ambassador to the U.N. Kim Myong Gil said “The BDA issue must be resolved first,” making it clear that North Korea had no intentions to make the first move.
As the BDA issue continues to drag on, some argue that it is time for the U.S. Administration to re-examine its policy. In April, President Bush met with Prime Minister Abe at Camp David, a mountain retreat near Washington where he professed his failure in understanding the whole situation. One Japanese media reported, “The U.S. screwed it up.”
Skeptical concerns over the possibility of North Korea abolishing its nukes through the six party talks
On the 30th, U.S. Ambassador to South Korea, Alexander Vershbow said that the normalization of U.S.-North Korea relations and peace on the Korean Peninsula could only be achieved through “complete, verifiable and irreversible dismantlement (CVID).” On receiving criticisms that the U.S. had changed its policy on North Korea, Ambassador Vershbow re-drew the policy of CVID stating that the U.S. did not want to spur North Korea.
As a result, if the Yongbyun nuclear facility is not disabled with the continuing BDA issue and North Korea persists in solving the BDA issue first, there is a greater possibility that the U.S. will turn its foreign policy from the February 13 Agreement to an aggressive one.
Nicholas Eberstadt, a researcher at the American Enterprise Institute said that the Proliferation Security Initiative (PSI) which was drafted to block illegal transfers and return BDA’s funds had only made the situation more complicated and criticized that North Korea had humiliated the U.S. Administration in forcing it to change its North Korea policy.
A senior research fellow at the Heritage Foundation, John Tkacik asserted that the U.S. needed to adjourn the six party talks immediately and find a solution.
However, for the time being, the U.S. Administration seems to placing most of its efforts in finding both an answer to the BDA issue as well as focusing on foreign relations through the February 13 Agreement. However, if China continues to discard the requests made by the U.S. and North Korea firmly stand its ground, the U.S. Administration will have little choice but to draw yet another card in addition to the 6 Party Talks.