DPRK Reaches Deal Over Frozen Funds

Detroit meeting for the Guangju, Korean 25th anniversary tour during 2005. PANW editor Abayomi Azikiwe holding banner on left. (Photo by Workers World Newspaper)
Originally uploaded by Pan-African News Wire Photo File

June 26, 2007

North Korea Receives Funds and Says It Will Shut Down Its Main Nuclear Reactor

By CHOE SANG-HUN
New York Times

SEOUL, South Korea, June 25 — North Korea said Monday that its dispute with the United States over $25 million frozen in a bank in Macao had been resolved, and that it would begin to carry out its much-delayed promise to shut down its main nuclear plant.

The first test of the North Korean commitment to stop and seal its main nuclear reactor in Yongbyon, south of Pyongyang, the capital, and an adjacent fuel-reprocessing plant, will come when officials from the International Atomic Energy Agency begin five days of negotiations on Tuesday in North Korea.

The agency, the United Nations’ nuclear monitoring arm, and North Korean officials will discuss a timetable for shutting down the reactor and technical details of monitoring and verification. Ever since the first suspicion of a North Korean nuclear weapons program surfaced in the early 1990s, the agency and North Korea have bickered over how much access the agency should have to nuclear facilities and data in the isolated country.

“As the funds that had been frozen at Macao’s Banco Delta Asia have been transferred as we demanded, the troublesome issue of the frozen funds is finally resolved,” the official North Korean KCNA press agency quoted a Foreign Ministry spokesman as saying. “We too will start implementing the Feb. 13 agreement on the principle of action for action.”

In the agreement reached in February with the United States and four other countries, North Korea promised to close the Yongbyon nuclear plant, which, according to American intelligence estimates, has produced enough plutonium for as many as a half dozen bombs.

To ensure that North Korea keeps its promise, the United States made several concessions. It agreed to release the $25 million in North Korean funds, even though the United States Treasury had blacklisted the bank in Macao as a main conduit of money-laundering for North Korea. It also made a point of transferring the money to other North Korean accounts because the North wanted the United States to treat it as part of the international banking system.

Then, Christopher R. Hill, the main American negotiator with North Korea on the issue, went to Pyongyang last week in part to show that the Bush administration, which once called North Korea part of an “axis of evil,” was treating it like a serious negotiating partner.

The United States had promised to release the money by mid-March and in return North Korea promised to shut down the reactor by mid-April. But the process took longer than expected because few banks wanted to touch the money.

Finally, Dalkombank, of Russia, agreed to act as an intermediary. It said Monday that the money had been transferred to the Foreign Trade Bank of North Korea.

North Korea said it would use the released money “for improving the standard of people’s living and humanitarian purposes,” as the United States demanded. But neither North Korea nor the United States elaborated on how to check whether the promise would be kept.