[imText1]The issue of North Korea’s funds in BDA is becoming more and more entangled. While it was accepted as a practical issue in the past, members of the Feb 13 Agreement are showing signs of anxiousness, unable to hide their impatience against North Korea’s strategic greed.
For a while, North Korea said it would act upon the preliminary measures after seeing the result of the BDA issue. At present, analysts say that U.S. measures have not met the expectations of North Korea.
A letter by Lee Je Sun, North Korea’s director of atomic affairs to the director general of the IAEA on the 20th stated, “Our promise to act upon the Feb 13 Agreement remains unchanged. However, the problem is that the frozen accounts have still not been completely settled and as a result we cannot take any action.”
Mr. Lee also revealed, “Presently, we are holding positive negotiations to solve the issue between our banks and BDA” suggesting that participating members were going head to head in search of a resolution.
On 10th April, the U.S. Department of State announced that negotiations had been finalized between China, Macau and North Korea with an agreement that all North Korea’s funds frozen by Macau banks would be released. The U.S. made it clear that it had completed its part and hence it was now North Korea’s turn to take action.
However, in the midst of transferring the funds, North Korea realized that it could not utilize the funds in normal foreign transactions and is consequently is making new demands.
On the same day, the Chosun Shinbo of Chongryon (General Association of North Korean Residents in Japan) insisted that “The preliminary measures would have already been completed if the resolution had been based on ensuring the normalization of Chosun’s bank transactions with the international financial system.”
Rather than collecting the frozen accounts caught in BDA, North Korea has been proposing other matters. Though their underlying notion has yet to be clarified, the Chosun Shinbo has clearly suggested that the crucial component of North Korea’s requests is the normalization of foreign financial transactions.
For the normalization of North Korea’s financial transactions to be complete, the U.S. must first finalize its investigations into BDA and North Korea’s funds must be given the safety stamp of approval. Also, concerns over counterfeit currency regarding BDA must be made clear. However, as this issue is also connected to U.S. law, analysts speculate that the possibility of normalizing North Korea’s financial transactions is in reality, low.
At the present time, the only way for the preliminary measures to materialize is for the U.S. and North Korea to have discussions regarding the transfer of BDA funds. The two countries will have to investigate proposals where the U.S. guarantees a provisional bank from a third country to transfer the funds and in the case North Korea disables its nukes, the U.S. will need to clearly state the measures which support the normalization of North Korea’s international financial transactions.
It seems that North Korea’s strategy is to prolong time and refuse using its hidden card while trying to gain maximum compromise from the opposing party. In other words, it’s a statement to say that this deal is not something they will be losing on. Furthermore, North Korea is in a strong position as the U.S. political decisions will continue regardless of whether China suffers damages. The situation seems to be moving towards protracting the BDA issue long-term.
If the issue of North Korea’s frozen accounts and BDA is delayed long-term and heeds implementation of the preliminary measures, the Feb 13 Agreement will be greatly scarred from the beginning. Further, it is possible that strong anti-North Korea forces based on the Feb 13 Agreement will arise also.
Already in the U.S., there are fears that the current administration will not be able to deliver its promises regarding North Korea’s nuclear armaments by its proposed date, 2008.
