Rice helped unfreeze N Korean funds

A rather surprising direction. International politics is a chessboard setting on the back of a galloping horse.

[quote]Rice helped unfreeze N Korean funds
By Demetri Sevastopulo in Washington and Andrew Yeh in Beijing
Published: March 21 2007 22:13 | Last updated: March 22 2007 07:40

Condoleezza Rice, US secretary of state, orchestrated a significant shift in US policy towards North Korea by persuading the US Treasury to agree to Pyongyang’s demands to release $25m frozen in a Macao bank since 2005.

Current and former officials say Christopher Hill, the chief US negotiator on North Korea, convinced Ms Rice that the US should sacrifice the issue of the frozen funds to push forward the broader goal of implementing last month’s six-party accord on denuclearising the Korean peninsula.

Several people familiar with the debate said Hank Paulson, Treasury secretary, agreed to overrule officials responsible for terrorism financing, who objected to the move, after Beijing warned that a failure to return the North Korean funds would hurt the Sino-US strategic economic dialogue.

North Korea had insisted that the funds – which were frozen in Banco Delta Asia of Macao after the US accused the bank of turning a blind eye to illicit North Korean activities in 2005 – be returned before it would implement the six-party nuclear deal.

The latest round of the six-party talks in Beijing ground to a halt on Thursday, with the North Korean and Russian envoys both leaving for the airport, apparently because Pyongyang refused to continue negotiations until the $25m was physically deposited in an account it holds with the Bank of China.

Washington’s shift in policy signals increasing flexibility by the Bush administration in dealing with what it deems rogue regimes. It also represents the increasing influence of Ms Rice following the recent departure of several hardline administration officials.

One Capitol Hill staffer said the Bush administration may have calculated that North Korea was finally prepared to move on the nuclear issue, so that it made sense to sacrifice the $25m for the possibility of nuclear disarmament.

“Chris Hill may believe North Korea is on the cusp of making a strategic choice [to disarm] and that is the big prize,” said the staffer.

He added that the Treasury shift came after the departure of Bob Joseph, the former state department hardliner on North Korea who “worked hand in glove” in opposing Mr Hill.

But critics say the deal was a victory for Kim Jong-il, the North Korean leader.

”I think the trade-off was a mistake and that the way it was handled only compounded the problem,” said Bruce Klingner, a former senior Central Intelligence Agency intelligence analyst on Korea now at the Heritage Foundation. “The ‘six-party talks progress uber alles’ philosophy is now running roughshod over principles such as adhering to international agreements and punishing those who violate them.”

The latest deal will likely face questions on Capitol Hill. Ed Royce, a California congressman, on Wednesday said: “The February 13 [nuclear disarmament] agreement is a package - with illicit activities included. It’s done that way because this issue reinforces the North Korean commitment to disarm. Retreating in the illicit activities area harms the overall process and odds for success. What type of signal does this send Pyongyang, which cheated on a previous agreement?” (a rather detailed article at link)
ft.com/cms/s/5dbb224a-d7d9-1 … 10621.html[/quote]

I doubt all of the particulars of this deal are known at this time. Interesting to see what develops of this. IMO it will not meant diddily squat to Lil’ Kim and his gang…Just getting what they can while they can get it.