1. DPRK DELEGATION IN JAPAN FOR INFORMAL SECURITY TALKS
by Steve Herman, VOA News, Tokyo, 7 April 2006
North Korea's top nuclear negotiator and other high-ranking officials from the communist state have arrived in Japan for a rare visit. They will be attending an academic conference next week that will discuss Northeast Asian security issues, including Pyongyang's nuclear programs. Japanese officials are stressing that the Tokyo gathering is not a formal session for negotiating efforts to end North Korea's nuclear weapons programs.
Among the North Koreans who arrived in Japan Friday is Vice Foreign Minister Kim Kye Gwan, the country's chief negotiator on nuclear issues. He and eight other officials from Pyongyang are in the country for the North East Asia Cooperation Dialogue, sponsored by the University of California at San Diego.
Kim says his visit has nothing to do with the six-nation nuclear talks. He says that the United States knows what it must do to get North Korea back to the negotiations. Pyongyang has said it will not resume the nuclear talks until the United States ends its crackdown on alleged counterfeiting and money laundering by North Korean enterprises.
Japanese Foreign Ministry spokesman Tomohiko Taniguchi says the four-day conference, which begins Sunday, will cover a range of what he calls "very important issues," including nuclear proliferation.
"I hope very much that this is going to create a very good catalyst for the six-party talks to be resumed, and North Korean officials, who will come back to their country again convinced of the vital importance to resume the talks," he said.
U.S. Assistant Secretary of State for East Asian and Pacific Affairs, Christopher Hill, the chief U.S. negotiator to the North Korean nuclear talks will attend the conference. However, U.S. officials say there are no plans for a one-on-one meeting with the North Korean official.
China, South Korea, Japan and Russia are also parties to the six-way talks, and will have officials from the previous nuclear negotiations at the conference. (...)
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2. SIX NATIONS INVOLVED IN TALKS MEET IN JAPAN
by Anthony Faiola, Washington Post, 4 April 2006
Top officials from the six nations engaged in North Korean nuclear disarmament talks will converge in Tokyo next week for a private sector conference, fuelling hopes of sideline meetings here that could help jump start the long-stalled negotiations. US Assistant Secretary of State Christopher Hill, Washington's chief negotiator on the North Korean nuclear issue, is scheduled to arrive in Tokyo on Monday to meet with his counterparts from Japan and South Korea, US officials said. During his three-day visit, Hill will attend a conference of the Northeast Asia Cooperation Dialogue at which top negotiators from the other nations involved in the six-party talks -- China, Russia and North Korea -- also will be present.
It will mark the first time leading delegates from all six nations will be at the same forum since the last round of talks ended in Beijing last November. (...)
Asian and US diplomats said it was too early to tell if any sideline talks with the North Koreans would take place. Michael Boyle, spokesman for the US Embassy in Tokyo, confirmed that representatives from the six nations would be at the conference, but said no meeting between Hill and a visiting North Korean official have been prearranged. "They will be at the same conference," Boyle said. "That's all we can say." (...)
But the possibility of renewed contact between the six parties next week nevertheless represents the brightest prospect yet for renewed dialogue in the effort to dismantle North Korea's nuclear weapons programs. (. . .)
The so-called "track 2" meeting sponsored by the University of California's Institute of Global Conflict and Cooperation is bringing together top officials and academics from across the region. The conference comes at a time when Japan is taking bolder steps of its own to pressure North Korea. Japanese politicians have made progress on a bill threatening sanctions against North Korea if it does not negotiate in good faith on the nuclear issue as well as a bilateral dispute over Japanese citizens abducted by the North Koreans for use in spy training camps during the 1970s and 1980s. On Tuesday, Japan also added 20 North Korean businesses and institutions to an export restriction list aimed at preventing them from obtaining materials and technology that could be applied for military use.
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3. PRC DEFENCE MINISTER HOLDS TALKS IN PYONGYANG
Reuters, 4 April 2006
China said on Tuesday mistrust between North Korea and the United States was the main hurdle to negotiations on the North's nuclear program as the Chinese Defence minister held talks in Pyongyang. China has been urged to persuade North Korea to agree to another round of six-party talks also involving the United States, South Korea, Japan and Russia.
"The cause of the current stalemate is the mistrust between North Korea and the United States and their differences over some specific issues," Chinese Foreign Ministry spokesman Liu Jianchao told a regular news conference. He said all sides should stick to the goal of eventual de-nuclearization of the Korean peninsula.
"China as a major mediator has always been making active and difficult efforts," Liu said. "The progress of the six-party talks is not totally up to Chinese efforts. The key to resolving problems is in the hands of North Korea and the United States."
The six countries agreed in principle in September that the North would dismantle its nuclear programs in exchange for aid and better diplomatic ties. But their latest session in November ended without progress. North Korea has said it would be unthinkable to return to the nuclear talks while Washington is trying to topple its leaders through action against Pyongyang's purported counterfeiting, drug trafficking and money laundering. North Korea has denied involvement in any illegal activities.
Chinese Defence Minister Cao Gangchuan held talks on Tuesday with Vice Marshal of the Korean People's Army, Kim Il Chol, also minister of the People's Armed Forces, at a time when Pyongyang is facing strong pressure to return to the negotiations.
"The talks took place in a comradely and friendly atmosphere," the North's KCNA news agency said. Chinese Foreign Ministry spokesman Liu said he did not know if Cao would meet North Korean leader Kim Jong Il in Pyongyang. The two Koreas are still technically at war after their fratricidal 1950-53 conflict ended in a truce, not a peace pact.
A North Korean official will make a rare visit to Japan later this week to take part in a private forum on security issues and could have talks with negotiators to the six-party nuclear talks, diplomatic sources said on Tuesday. And US chief negotiator Christopher Hill is expected to arrive in Tokyo on Monday for talks with his counterparts from Japan and South Korea, a US embassy spokesman said.
On April 15, Cao is due to lead a delegation of 18 senior military officers to the South for talks on promoting military exchanges between the two countries, South Korea's Defence Ministry said in a statement. Cao will also meet South Korean President Roh Moo-hyun and inspect military units and industrial plants, the ministry said.
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4. SECOND SON LAPEL PINS MAKE APPEARANCE
Associated Press (AP), 5 April 2006
North Korean officials have recently been spotted wearing lapel pins with a picture of leader Kim Jong Il's second son, indicating that he may have become the most likely candidate to succeed his father, a report said Wednesday. There have been no concrete indications from North Korea's regime of who will follow the 64-year-old Kim in power. Kim took over leadership of the communist nation in 1994 after the death of his father, founding President Kim Il Sung.
Yonhap news agency, citing a South Korean intelligence official, said North Korean officials had recently been seen at a North Korean restaurant in Beijing wearing lapel pins with the picture of Kim Jong Il's 25-year-old son, Kim Jong Chol, who has been mentioned in recent media reports as a likely favourite candidate. The official, who wasn't named, called the report "credible" and said it appeared Kim Jong Il was leaning toward naming that son to follow him in power.
There is little publicly known about Kim Jong Chol, except that he studied in Switzerland and is a fan of US professional basketball. North Korean citizens normally wear lapel pins with the image of the late Kim Il Sung, part of the personality cult around him that permeates every aspect of life in the country. Other commonly worn pins depict Kim Jong Il or simply the country's flag.
Jong Chol and another of Kim's younger sons, Jong Un, are believed to have the same mother, Ko Yong Hi, who reportedly died of cancer in 2004. An older son, Kim Jong Nam, is believed to have been an earlier favourite to assume power but is widely believed to have fallen out of favour after embarrassing the government in 2001 by being caught trying to enter Japan on a fake passport, saying he wanted to visit Tokyo Disneyland.
The intelligence official said Jong Nam was recently seen traveling in Europe with a woman who wasn't his wife, and was suspected of being connected with North Korea's alleged spread of counterfeit US currency through a bank in Macau that has been blacklisted by the US government.
"Kim Jong Nam can't return to Macau," the official told Yonhap.
The US-imposed restrictions on that bank and on other North Korean businesses have caused a deadlock in international talks on the North's nuclear program with the North refusing to return to the negotiating table until they are lifted.
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FOCUS: Repercussions of actions against banks
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5. DPRK SANCTIONS: WHAT THE USA COULD DO NEXT
Chosun Ilbo, 13 March 2006
The US looks likely to impose additional sanctions against North Korea after strangling transactions with the Macau-based Banco Delta Asia, which it accuses of being Pyongyang’s primary money laundering concern. White House spokesman Scott McClellan last week said the US will “continue to take measures” to stop the North from engaging in illegal activities. South Korean officials, meanwhile, are not denying a New York Times article that said the Bush administration is pleased with the effect of the financial sanctions and efforts to promote its Proliferation Security Initiative and is thinking of more measures along the same lines.
Experts say the US could move against other banks it suspects of moving North Korea’s gains from a range of criminal activities including currency forgery the US accuses it of conducting. Samsung Economic Research Institute researcher Dong Yong-seung says Washington does not regard sanctions imposed on the Macau bank as punishment. “It is likely the US would start taking measures against many other banks that do business with the North,” he said. That could chiefly target Chinese banks, many of which do business with Pyongyang. Prof. Yoo Ho-yeol of Korea University says it is likely that the US will try to stop countries trading with the North by way of such measures. They could specifically target countries suspected of facilitating North Korea’s trade in drugs and counterfeit tobacco products.
Some South Korean officials believe the US will also intensify its campaign against North Korea’s human rights abuses. “We need to focus on the fact that the Bush administration has recently said the North must implement its human rights commitments more actively,” a researcher with a government agency said. “It could particularly put greater stress on abuse of women and children.” Another researcher said the US may insist on imposing stronger controls on goods from the joint-Korean Kaesong Industrial Complex in the North.
Other strategies could include making things more difficult for North Korea-related projects in international organizations. What effect that would have on efforts to dismantle Pyongyang’s nuclear program and bring the reclusive country back to the six-nation negotiating table remains to be seen.
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6.DPRK ACCUSES USA OF SLANDER
Korean Central News Agency (KCNA), 28 March 2006
The United States on March 16 in a "national security strategy report" designated again the DPRK as an "outpost of tyranny". This is an unpardonable insult, sinister slander and provocation to the dignified DPRK. Minju Joson today observes this in a signed commentary. It says: As soon as it took office, the Bush administration newly adopted its nuclear strategy focused on the DPRK and started posing undisguised threat of nuclear attack against the DPRK.
Under such situation where the US-threatened pre-emptive nuclear attack was impending in actuality, the DPRK had no other option but to make a bold decision to build nuclear armed forces for self-defence. The six-party talks, hailed by countries concerned and other countries as the most suitable way for settling the nuclear issue of the Korean Peninsula, could be provided thanks to the DPRK's initiative step. The adoption of the September 19, 2005, joint statement, too, was attributable to its principled and sincere pursuit and efforts. At the crucial moment when both sides were to move in actuality toward the denuclearization of the Korean Peninsula, the United States took financial sanctions against the DPRK under such unreasonable pretexts as "counterfeit notes" and "money laundry". Meanwhile, it is playing cheap tricks to shift the blame for the deadlocked six-party talks on to the DPRK.
The US calculates that its aims will be attained if it throttles the DPRK, binding it hand and foot. But, it is the DPRK's traditional way of struggle to make head-on breakthrough. The US must be well aware of what it means.
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7.POCKETBOOK POLICING: WASHINGTON PUTS ON PRESSURE
by Christian Caryl with Mark Hosenball in Washington, George Wehrfritz in Taipei, B.J. Lee in Seoul, and Akiko Kashiwagi in Tokyo, Newsweek, 2 April 2006
Swiss businessman and Asian-art collector Jakob Steiger never figured in headlines before last month. But his low profile ended with a bang when the US Treasury announced that it was imposing sanctions against his firm, Kohas AG, for acting as a "technology broker" for the North Korean military. The Bush administration claims that the company, based in the university town of Fribourg, is half-owned by a North Korean firm that was named on a previous US blacklist of entities suspected of involvement in "the proliferation of goods with weapons-related applications."
On its own the action against Kohas might seem like a sideshow in the much larger US effort to eliminate Kim Jong Il's nuclear-weapons program. But in fact, the move is just the latest twist in an intense American offensive against North Korea-one that experts believe is finally beginning to squeeze the regime. Numerous US government agencies, including the FBI, Treasury, State Department and CIA, have been working for three years to curtail Pyongyang's vast network of black-market activities-from the sale of missile technology to heroin trafficking to the manufacture of fake cigarettes and bogus Viagra-and to cut off the financial conduits by which the proceeds are laundered. David Asher, who ran the Bush administration's interagency effort, says that criminal North Korean businesses were targeted as part of "the largest undercover investigation against Asian organized crime in a decade." Washington has raised the possibility of sanctions against financial institutions that deal with Pyongyang, and has arrested or indicted dozens of figures linked to Chinese triads and the Irish Republican Army, among other groups.
Whether this effort to squeeze Kim will persuade him to abandon his nuclear arsenal remains to be seen. But Washington officials believe that this campaign of "targeted sanctions" is proving very effective. "From what we've seen, this has been affecting the North Korean elite in particular," says Peter Beck, a Seoul-based analyst with the International Crisis Group (ICG). Indeed, according to an unclassified US government document obtained by NEWSWEEK, during Kim Jong Il's January trip to China, he reportedly told Chinese President Hu Jintao that "his regime might collapse under the weight of the US crackdown on his financial dealings."
If nothing else, the latest US actions have given Washington a powerful card to play in the negotiations with Pyongyang, known as the Six-Party Talks. In recent years North Korea's two neighbours, China and South Korea, have held most of the leverage in the on-again, off-again negotiations. They insist on engaging the Pyongyang regime (meaning, primarily, propping it up with political favours, aid and investment) rather than confronting it. But the engagement policy has had mixed results, at best.
The US decision to ratchet up the pressure on North Korea's illicit activities was taken shortly after George W. Bush was first elected. Asher, a former banker and State Department official, started leading what became known as the North Korea Illicit Activities Initiative in late 2001, and it immediately conducted a study of the North Korean economy. Investigators found that the country's official revenues couldn't cover a "black hole" of about $500 million-equivalent to half the country's annual exports. Pyongyang was plugging that shortfall in its balance sheet, the experts concluded, through a broad network of criminal business dealings.
In particular, Washington confirmed what had long been suspected in many quarters: Pyongyang was printing and distributing large quantities of high-quality counterfeit US $100 bills, known as supernotes, which are almost impossible to detect without sophisticated equipment. Sources say that the number of fake supernotes in circulation has spiked in recent years. Many have been found in South Korea, China and Taiwan. In August 2005, customs officials in Kaohsiung, Taiwan's southern port city, searched a shipping container of goods in transit from mainland China to Los Angeles. They discovered $2 million in fake greenbacks hidden in seven suitcase-size cardboard boxes. The Taiwanese officials were acting on a tip from the FBI. Altogether, Treasury officials say, the US campaign has confiscated some $48 million in fake $100 bills around the world over the past four years.
But the Americans didn't stop there. On Sept. 15 the Treasury Department issued a blandly worded announcement designating a bank in the Chinese gambling haven of Macau as a "primary money laundering concern" for North Korea. Strictly speaking, the measure didn't amount to sanctions-merely a warning that the bank in question, known as Banco Delta Asia SARL (BDA), was under suspicion. US banks can still do business with BDA, but the threat that they might yet be ordered to cut off dealings with the Macau bank has made them wary. In today's interconnected financial world, an official US move to blacklist a foreign bank would be the kiss of death, since any financial institution doing business in dollars needs to hold accounts in correspondent US banks in order to complete transactions.
Nervous depositors immediately staged a run on BDA, withdrawing nearly 40 percent of its deposits within a week. In a desperate attempt to salvage its reputation, BDA announced it was cutting all ties with Pyongyang and froze nearly 50 accounts linked with North Korean companies and institutions-including nine belonging to presumably high-ranking members of the Pyongyang government. A US official tells NEWSWEEK that at least some of the names on the frozen accounts, both corporate and individual, were not the real names of the assets' owners. The official says there was some reason to believe that those nine accounts handled personal business for Kim Jong Il or members of his immediate circle. (How much money was in the accounts has not been disclosed.) In a recent statement, BDA said that it "will not resume relationships with North Korean or related entities going forward. The bank is implementing new, enhanced anti-money-laundering procedures."
The BDA move clearly stung Pyongyang. Within weeks after BDA froze the accounts, North Korean emissaries began arriving in Macau, demanding that the money in the accounts be released. Macau authorities expelled them. Then, in February, a North Korean spokesman complained that the United States had effectively banned the North "from having normal financial transactions such as remittance of dollars to banks and settlement by credit cards." (Not many ordinary North Koreans, needless to say, use plastic money.) Following the BDA action, other banks around the world have begun to cut ties with North Korea for fear that the United States might retaliate. US Treasury Department Under Secretary Stuart Levy says the targeted sanctions, or threat of sanctions, has put "huge pressure" on the Pyongyang regime. He predicts that as more business people and governments learn about the risks of dealing with North Korea, the US campaign will have a "snowballing ... avalanche effect."
In another measure of the campaign's effectiveness, Pyongyang soon declared that lifting the sanctions would be the precondition for resuming the stalled Six-Party Talks. The ICG's Beck visited Pyongyang not long after the original sanctions were imposed, and says that he immediately noticed a change. "Our minder complained about the financial clampdown more than anything else. He mentioned it several times over several days." Adds Ahn Ye Hong, a North Korea expert at the Bank of Korea in Seoul: "Usually the North Koreans don't admit problems, even if they're starving."
Pyongyang is trying to wriggle its way out of the crisis. In recent weeks the regime has claimed that it, too, has been a "victim" of counterfeiting, and promised to punish any North Korean citizens shown to have been involved. Citing an anonymous government intelligence source, Seoul's Chosun Ilbo newspaper reported recently that Kim Jong Il ordered the execution of anyone manufacturing counterfeit money. In response, the US ambassador to Seoul, Alexander Vershbow, coolly suggested that Washington might be willing to talk if the North Koreans hand over the plates from their illicit supernote printing plant.
Some experts say that the real target of America's new financial crackdown isn't Pyongyang but Beijing, which is Kim Jong Il's most important patron. The American sanctions campaign puts the Chinese "in a very delicate situation," says Lee Dong Bok, a former South Korean intelligence official who is active in a human-rights group called the North Korea Democratization Forum. In February the US targeted a small Hong Kong subsidiary of the Bank of China, for holding what was said to be up to $2.7 million in fake US currency, presumably from North Korea. (A Bank of China spokeswoman in Hong Kong said: "We have no knowledge of any investigation. We've always attached great importance to anti-money-laundering policies.") What's more, US investigators have suspicions that Macau casinos have been used for money laundering in general, and money laundering by North Korea in particular.
China's thriving trade with America would be impossible without good relations with the US financial system. Beijing is desperately trying to build credibility for its shaky banking sector, and therefore wants to avoid the taint of dirty dealings with Pyongyang. Indeed, the Bank of China, for example, is planning an initial public offering later this month, likely to be partially underwritten by US investment bank Goldman Sachs. "This is really about the Bank of China," says one Western financial expert in Tokyo. And the Americans show no sign of letting up. "You can't negotiate on crime," says Levy of the Treasury Department, adding: "We're just starting."
Japan, where Pyongyang reaps an estimated $300 million a year from illicit activities, is starting a crackdown of its own. One Japanese court has eliminated a tax exemption once granted to Pyongyang-related organizations. And financial regulators have been subjecting money transfers to the North to closer scrutiny. But like the Chinese, the Japanese are worried that pushing too hard could result in North Korea's collapse, with all sorts of undesirable knock-on effects for the region. For their part, the Americans say they're just trying to get North Korea back to the negotiating table, and that the sanctions are a way of pressuring them to give up their nukes, rather than to foment regime change. Finding the right balance will be tricky -- but in the meantime, Pyongyang will continue to feel the pinch.
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QUIDNUNC
In this section of CanKor, we invite readers to send questions, answers, or responses. Answers should be under 150 words and may be edited for space.
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WAS IT A MISTAKE FOR EU COUNTRIES AND CANADA TO ESTABLISH DIPLOMATIC RELATIONS WITH THE DPRK IN THE WAKE OF THE INTER-KOREAN SUMMIT OF 2000?
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Despite the setbacks, I believe that the efforts at engagement that extending diplomatic recognition to the DPRK in 2000 underpinned, were the right course of action for Canada and other "Western" countries. It has never been easy to assess the impact of third party approaches. Personally, I always wondered how much wishful thinking I was engaging in when I projected potentially positive influences resulting from the contacts -- albeit still limited -- entailed through humanitarian assistance. I do believe, however, that the principles underlying engagement were sound and that some progress was being made to break down the barriers of firmly entrenched mistrust.
Resolution of the USA/DPRK relationship, however, has always been fundamental to long-term peace on the peninsula. I am therefore sorry that time ran out on the Clinton Administration efforts. The symbolism of Madeleine Albright's visit was in itself amazing. The subsequent initial neglect of the process by the Bush Administration might have been weathered, but the Axis of Evil speech and the invasion of Iraq would have served to confirm to Pyongyang that the longstanding mistrust was not misplaced.
I have not followed the 6 party talks closely, but I have had little confidence that they will lead to significant progress. Nixon, Bush is not. Their real value may lie in the engagement of China (and perhaps Russia and Japan) in the process so that, when the time comes that the USA again gives serious attention to a diplomatic approach, the pattern for more broadly based talks will have been initiated, if not set.
Bethany Armstrong, Canadian Foreign Service Officer (retired)
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WHAT NOW?
What is the DPRK’s most urgent need?
[Answers should be e-mailed to: editor@CanKor.ca]
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