January 23, 2007 - To what extent did the U.S. and North Korea agree on the issue of North Korea’s frozen accounts with the Macau-based Banco Delta Asia? What does the word “agreement” used by North Korean top nuclear envoy Kim Kye-gwan mean exactly?

The U.S. froze 50 North Korean accounts worth US$24 million with the bank, saying they were used for illegal activities like money laundering.

The North Korean vice foreign minister expressed satisfaction with the results of a meeting with his U.S. counterpart Christopher Hill in Berlin, where they apparently found a way to resolve the BDA issue or at least break through the deadlock.

The matter has been the main sticking point in international efforts to settle the North Korean nuclear crisis for about a year. South Korean government officials who were briefed by Hill on the result of the Berlin meeting have been keeping mum about details.

◆ Did the North agree to punish the guilty?

It is possible that the U.S. agreed to try to settle the BDA issue because the North promised to punish those responsible for counterfeiting U.S. dollar bills and money laundering and prevent similar incidents.

A South Korean government official drew attention to the fact that Victor Cha, the director of Asian Affairs at the U.S. National Security Council, participated in the Berlin meeting.

The NSC is seen as a mediator between the Treasury and State Department, with the former stressing the need for tough law enforcement while the latter puts the emphasis on diplomacy. Pundits speculate that Cha proposed a solution that satisfies the North. A diplomatic source said the U.S. could ease financial sanctions if the North holds the guilty accountable but does not publicly admit the crimes.

◆ Washington may unfreeze ‘legitimate’ accounts

The international press quotes U.S. officials as saying Washington could distinguish between legal and illegal accounts to resolve the BDA problem. At first, Treasury Department officials ruled out making the distinction, saying it was impossible to tell them apart.
However, some now say the Treasury has eased its position. Some analysts say the Bush administration, mired in Iraq, wants to make progress over North Korea even at the cost of unfreezing some of the North’s accounts with BDA.

◆ BDA linked to six-party nuke talks?

Vice Foreign Minister Kim said he and his U.S. counterpart agreed in the Berlin meeting that the U.S. cannot “evade” the BDA issue. At face value, Kim’s remarks can be taken as a pledge of the two sides to make joint efforts to resolve the problem, rather than meaning that they reached agreement.

The North has likely concluded that it would be better to meet the U.S. halfway than dig in its heels, as the U.S. has said that the illegal accounts were frozen as part of law enforcement. A South Korean government official raised the possibility that Kim may have exaggerated the results of the Berlin meeting to make a bilateral deal on the BDA issue a fait accompli.

englishnews@chosun.com

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