North Korea Wants Return $25 Milllion Frozen Under Patriot Act

Six Party Talks to Denuclearize Korean Peninsula

The six party agreement reached on February 13, 2007 with North Korea the United States, South Korea, China, Japan and Russia has been compared to the shifting of the teutonic plates under East Asia. Considered a milestone in what has been otherwise a stormy relationship between North Korea and the U.S., the agreement puts into concrete terms the principles that had been agreed to in September 2005 by the same six nations.

The February 13 agreement sets up a series of deadlines and procedures to provide for the denuclearization of the Korean peninsula, the elimination of North Korean nuclear weapon capacity and infrastructure, the provision of energy to North Korea and for the normalization of relations among the six nations.

Progress in the talks between the parties, however, has been accompanied by hostile or provocative actions directed at North Korea primarily by the U.S. government. In 2003, "U.S. News and World Report" revealed that the Pentagon had a draft plan for war against the North Korea known as Operations Plan 5030. It called for a variety of hostile actions including surveillance flights close to North Korean air space, and various military exercises. Also included were various tactical operations, which the reporters doing the story, Auster and Whitelaw, observed were not traditionally part of war plans. These tactical operations included "disrupting financial networks and sowing disinformation." Though the war plan was criticized as "dangerously provocative", similar tactics appear to have been adopted as part of U.S. policy toward North Korea.

One such example occurred immediately after the September 2005 agreement was signed. The U.S. Treasury Department brought a Section 311 action under the U.S. Patriot Act (2001) against a bank which North Korea used, thereby freezing the funds in North Korea's accounts in the Macao-based Banco Delta Asia Bank (DAB). This had the effect of cutting off of North Korea's access to its funds ($25 million) in the bank, and also cutting off North Korea's access to the international financial system. No proof was reported in the press for the allegations brought against the bank.

The effect of the Treasury Department action against the BDA was to create a hostile environment which put off further action on the talks for over 18 months. In response, North Korea ended its moratorium on missile testing in July 2006 and tested a nuclear device in October 2006. One of the requirements of the February 13 2007 agreement by the North Koreans is that its funds be returned and access to the international banking system be restored.

An earlier agreement, the 1994 Agreed Framework, between the U.S. and North Korea, was ended in 2002 when the U.S. accused North Korea of having a secret uranium enrichment program, therefore giving the U.S. government an excuse to break the 1994 agreement that had remained from the Clinton Presidency. This accusation was recently exposed as based on unreliable intelligence data (Nordkoreas Atomwaffenprogramm auch ein Phantom der US-Geheimdienste?).

The February 2007 agreement sets up five working groups. They are

The working group on normalizing diplomatic relations between the U.S. and the DPRK was the first working group to meet. The delegations were headed by U.S. Assistant Secretary of State Christopher Hill and North Korean Vice Minister of Foreign Affairs Kim Kye-gwan. They met in New York City on March 5 and 6 for eight hours of talks. Among the particular issues they focused on were how to remove North Korea from the "state sponsors of terrorism" list and from the list under the Trading with the Enemy Act.

At these meeting in New York, Hill reported that he spoke with Kim about how to go to the next phase of the agreement. They also discussed North Korea's prior experience with negotiations with the U.S. Hill told reporters that the discussions went very well and were constructive.

While in N.Y. Kim is reported to have met with Henry Kissinger, Madeleine Albright and several others who had been part of prior efforts by North Korea to establish relations or agreements with the U.S.

The working group meeting on normalizing diplomatic relations between North Korea and Japan took place in Hanoi on March 7 and 8. The meetings broke down over Japan's precondition that North Korea provide further information about abductees. North Korea claims it has provided all the information it has in a previous negotiating session. An advantage of the working group format, however, is that the talks can continue even if one particular working group does not make progress.

The remaining three working groups had their first meetings in Beijing. The working group on Economy and Energy Cooperation was held on March 15, the group on Peace and Security in Northeast Asia met on March 16 and the working group on Denuclearization of the Korean Peninsula met on March 17.

In addition, the February 13 agreement sets up the basis for a separate forum of all the six parties for "negotiating a permanent peace regime on the Korean peninsula" as an ongoing Northeast Asian Security forum. These working group meetings set the basis for meetings of the six-parties on Monday March 19 - Wednesday, March 21. The planned six-party meetings did not occur on March 19-21, however, because the U.S. government had not restored the $25 million of North Korean funds that had been frozen under the Section 311 Patriot Act procedure. Instead the talks were deadlocked as North Korea waited for the $25 million to be returned into its bank account.

The February 13, 2007 agreement calls for certain activities to be accomplished in 30 days and others in 60 days. In 30 days, the U.S. Treasury was to restore the funds frozen in the BDA bank account. In 60 days North Korea is to shut down and disable its nuclear facility in Yongbyon, and to resume inspections by the International Atomic Energy Agency (IAEA). In exchange North Korea is to receive 50,000 tons of heavy fuel oil. Also North Korea is expected to take concrete action toward abandoning all its nuclear materials and allowing verification. In return North Korea is to be provided with another 950,000 tons of oil or other forms of aid of equivalent value.

Commenting on the dispute between Japan and North Korea, Gerald Curtis, a Professor at Columbia University, explained that Japan's positions at the talks has led to Japan being sidelined as it is hard to elicit sympathy on the abduction issue that Japan is raising when Japan is denying that the Japanese government kidnapped and impressed into prostitution thousands of Korean "comfort women" used by the Japanese army during WWII.

The groundwork for the February 13 agreement was set in talks between Hill and Kim which took place in Berlin in January 2007. Just when a successful negotiation was announced between them, however, articles appeared in the Wall Street Journal and Fox News alleging the "ïmproper channeling of funds" by North Korea under the United Nation's Development Programme (UNDP). The response of Secretary General Ban Ki-moon to the unsupported press allegations was to order an audit of all North Korean UNDP related programs. Similarly, just as the successful negotiation in New York was being announced, the UNDP announced that it was suspending its development programs in North Korea.

Despite these obstacles, progress in negotiations is a sign of the desire for such an agreement by those on the Korean peninsula. There is the hope that at long last it will be possible to have a treaty ending the Korean war, to replace the armistice. Describing the February 13 agreement, Gavan McCormack writes the "agreement may only be a first step, but its implications are enormous."