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– Amb. Thomas Hajnoczi
Chair, MTCR
May 19, 2021
North Korea, U.S. Talks Inch Forward

Paul Kerr 

Although another session of multilateral talks regarding North Korea’s nuclear weapons program has yet to be scheduled after more than four months, North Korea and the United States appear to have made incremental progress toward convening another such meeting.

The participants in the talks, which also include China, Japan, Russia , and South Korea, began their most recent round of talks in November attempting to build on a September 2005 statement of principles for a negotiated settlement, but the talks stalled.

Despite a flurry of diplomatic efforts to restart the talks, no further meetings have taken place. North Korea has refused to attend, citing its objections to U.S. measures that Pyongyang terms “financial sanctions,” a reference to the Department of the Treasury’s September 2005 designation of the Macau bank Banco Delta Asia as a “money laundering concern.” (See ACT, March 2006.)

Washington asserts that the bank provided financial services to North Korean government agencies and front companies engaged in such illegal activities as trafficking in narcotics and distributing counterfeit U.S. currency. Since the U.S. designation, Banco Delta Asia has frozen the relevant accounts, and other financial institutions have also curtailed their dealings both with the bank and North Korea.

North Korea and the United States have attempted to resolve the standoff. On March 7, officials from the U.S. Treasury Department briefed North Korea’s deputy director-general for North America, Li Gun, as well as other North Korean officials about the U.S. actions taken with respect to Banco Delta Asia. Li told reporters afterward that his delegation proposed several methods for resolving U.S. concerns, South Korea’s semi-official Yonhap News Agency reported. Among them was a suggestion to form a joint U.S.-North Korean consultative committee of experts that would discuss such issues as counterfeiting and money laundering.

Nonetheless, Washington and Pyongyang have continued to accuse each other of obstructing progress toward another session of talks.

The View From Pyongyang

Behind closed doors, North Korean officials are said to acknowledge that some of their citizens have been involved in the illegal activities. But they say that the United States is using the issue as a means to pressure North Korea regarding its nuclear programs rather than to address legitimate law enforcement concerns. Knowledgeable current and former administration officials say that the United States is actually using the actions to achieve both goals. (See ACT, January/February 2006.)

At a March 6 meeting in New York hosted by the National Committee on American Foreign Policy, North Korean officials did not deny that illicit activities had taken place in their country. But they repeated Pyongyang’s previous claim that its government is not involved in such activities. North Korea has said it will punish any guilty individuals, as well as participate in international efforts to stop money laundering.

A March 13 article in the Rodong Sinmun, a newspaper published by North Korea’s ruling Communist Party, described the “financial sanctions” as “obstacles” to the talks’ progress. Pyongyang argues that such measures are part of a “hostile policy” intended to under mine North Korean leader Kim Jong Il’s regime. North Korea says this policy is inconsistent with Washington’s pledge, contained in the September joint statement, to respect Pyongyang’s sovereignty. (See ACT, November 2005.)

Pyongyang also contends that Washington is applying “financial sanctions” in order to extract concessions from Pyongyang during future six-party negotiations. Specifically, North Korea asserts that the United States is trying to force Pyongyang to dismantle its nuclear facilities before receiving any U.S.-provided benefits.

Despite its objections, Pyongyang says it is willing to return to the talks, although whether it is demanding any concessions in return for doing so is unclear.

Li told reporters March 7 that Pyongyang would not return to the talks “in the midst of the continued U.S. pressure,” Yonhap News Agency reported.

North Korean officials were more specific during the private March 6 meeting in New York. A meeting participant told Arms Control Today March 21 that the North Koreans did not demand that the Bush ad ministration end its “financial sanctions” as a condition for returning to the talks. Pyongyang does, however, want the Bush administration to engage in bilateral discussions with them about the matter.

The View From Washington

Washington has not yet issued a formal response to Li’s proposals. But a Department of State official told Arms Control Today March 21 that North Korea’s requests and stated U.S. policy “do not match,” particularly in terms of establishing a consultative committee.

North Korea has repeatedly sought to engage the Bush administration in bilateral negotiations, but the United States has only conducted such discussions on the sidelines of the six-party talks.

However, the administration has recently indicated some flexibility regarding its measures to curb North Korean illicit activities. Although the administration publicly maintains that the matter is unrelated to the nuclear issue, State Department spokesperson Adam Ereli indicated during a March 17 press briefing that issues related to North Korea’s financial system could potentially be discussed in the six-party talks.

In a March 8 hearing before the House International Relations Committee, Assistant Secretary of State for East Asian and Pacific Affairs Christopher Hill argued that North Korea is “stalling” because the regime has not yet committed to working out the details of dismantling their nuclear programs.

Although U.S. officials have said that North Korea should end its illicit activities, the Bush administration has not publicly articulated specific actions that Pyongyang should take to satisfy Washington’s concerns. When asked about the matter during a Feb. 22 interview with JoongAng Ilbo, U.S. Ambassador to South Korea Alexander Vershbow said only that it is “really hard to say what would be sufficient.”

During a March 7 interview with Arms Control Today, Michael Green, until recently President George W. Bush’s National Security Council senior director for Asian affairs, described the Bush administration’s North Korea policy as an “effective harmony of different goals.”

Green, who left government last December, explained that the dual-track policy of countering North Korean illicit activities while also negotiating with Pyongyang synthesizes the views of two camps of administration officials. One has advocated increased pressure on the North Korean regime while the other has supported greater engagement with Pyongyang.

Green indicated that he believes the two tracks are coordinated but somewhat independent. The United States will continue to take action against illegal North Korean activities regardless of the six- party talks’ status, he said. But he added that Washington thinks such measures complement the talks by forcing Pyongyang to turn to legitimate economic activities for revenue. The greater need to engage in legitimate economic activities will increase the probability that the government will make a “strategic decision” to end its nuclear weapons program, he said.

Additionally, “the [Bush] administration believes there is no flexibility or backing off when it comes to enforcing the law,” he said.

Asked whether some administration officials view targeting Pyongyang ’s illicit activities as a tool for regime change, Green replied that some officials believed several years ago that such a strategy represented a viable option. But there is now a “pretty strong consensus” across agencies that the United States should pursue its current two-track strategy, he said.

Green added that Bush administration officials generally believe that the talks are worth pursuing because, at least in the short term, they help dissuade North Korean from taking more aggressive actions, such as testing nuclear weapons. The talks also build cooperation among the relevant parties that, in the event that current talks fail, might translate into future support for increasing pressure on Pyongyang.