BDA Funds: Free At Last?

There’s been a flurry of rumor and activity on the BDA front, with indications that the fat lady, if not ready to sing, is at least clearing her throat.

Rumors are circulating that the $25 million in unfrozen but heretofore unremittable funds in Banco Delta Asia will be remitted to Russia...Italy...Singapore...Vietnam...and/or Mongolia.

I also read a rumor that a South Korea’s Asset Management Corporation (whose normal brief is buyouts/bailouts of busted South Korean enterprises) would take over BDA, with the assumption, I suppose, that the North Korean funds would be reborn on a higher, purer plane together with a reorganized and resurrected BDA.

There are rumors that the funds from the 52 accounts released separately according to account-holder.

The report I found most interesting (NHK via Phoenix TV), is that the funds will be remitted in a lump sum to the (North) Korean Foreign Trade Bank.

The element that interests me is not the proposition that the Norks are possibly getting their dirty money back.

What I find interesting is the idea of “lump sum”.

I’m sure Colin McAskill finds the idea interesting—and appalling—as well.

After all, McAskill bought a controlling interest in Daedong Credit Bank, which apparently had $8 million of rather licit funds frozen in BDA. He hoped his accounts would receive a clean bill of health and be returned directly to his bank. If the NHK report is true, he’ll just have to talk to Kim Jung Il about his money.

I found the “lump sum” report interesting and plausible because it dovetails with one of David Asher’s preoccupations.

David Asher is the hardliner, now at the Heritage Foundation, who claims to have conceived and designed the BDA Patriot Act Section 311 investigation as part of his operation at the U.S. State Department to financially isolate North Korea.

In his testimony before a House subcommittee on April 18 (which I blogged about here), Asher played up a particular consequence of the Patriot Act sanction against BDA and his much wider effort to ostracize North Korea from the international financial community.

Asher talked about how he had labored to get banks throughout the world to freeze accounts and transactions and refuse to remit moneys on behalf of North Korean account holders.

Asher demurely gloated concerning how discomfited the North Koreans would be to have to present themselves personally in order to claim their funds.

And that got me to thinking about America’s baffling obsession with tying up the North Korean money in BDA even after we had promised they could get it back—and we had a denuclearization deal hanging in the balance.

And it occurs to me that perhaps the U.S. Treasury Department was insisting to Macau and anybody else that received money from the North Korean accounts inside BDA would have to require that the account holders claim the money from the bank in person—thereby getting beyond the nominees, aliases, and shell companies to find out whose money it really was.

The big fish would be Kim Jung Il, who undoubtedly had some of his private coin tied up in BDA.

Perhaps the hardliners were looking forward to Dear Leader shuffling into BDA’s ornate headquarters to furtively empty his personal accounts...

...only to be told he couldn’t have the money until he came back with a certificate of permission from the U.S. Treasury Department and two forms of picture ID!

BWWWWWWWWAAAAAAAAAAHAHAHAHA!

Just kidding.

But I think the U.S. might have been hoping to score some points with the international financial community by zeroing in on what unsavory characters showed up to claim their funds—and how much money was left behind by miscreants unwilling or unable to show their faces.

Just a thought.

But, if the money is going back to North Korea in a lump sum, the glorious prospect of a serial perp walk through the doors of BDA by the North Korea’s shadowy elite will have to be abandoned.

I had also speculated that America’s campaign against Macau was to deny that territory to Kim Jung Il and his government and companies as a venue for foreign exchange transactions that were a priori illicit according to America’s reading of North Korea as a criminal state.

However, these same transactions would be considered licit—if not especially commendable—if North Korea was granted the benefit of the doubt as a legitimate sovereign state, as South Korea is apparently ready to do.

Significant elements of South Korea’s checkbook diplomacy with the North were conducted through Macau, most notably the colossal US $500 million payoff that paved the way for the 2000 North-South peace summit.

But if the United States was determined to deny the Koreas the use of Macau as a facilitator of checkbook diplomacy, it looks as though the South Koreans came up with a creative alternative: suitcase diplomacy.

From Joong Ang Daily via NKeconwatch:

South Korea hand-delivered $400,000 in cash to North Korea yesterday [April 7, 2007] for Pyongyang’s purchase of video communication equipment. The North will spend the money to buy computers and display screens to reunite families separated for more than a half century by the demilitarized zones through video conference calls.

Two South Korean Red Cross officials boarded a cargo ship in Incheon for Nampo of North Korea Thursday morning. They carried a suitcase containing 40 bundles of one hundred, $100-dollar bills. The ship arrived in North Korea yesterday morning.
...

“It is sad that the North Koreans do not have a proper bank account that we can wire money to,” a Roh administration official said. “It shows the unfortunate reality of North Korea as an outsider of the international community.” (Lee Young-jong and Ser Myo-ja, Cash delivered to North Korea for video reunions, Joong Ang Daily, April 7, 2007)

Maybe the world lost its appetite for vigilante financial justice American style and decided it wanted to let North Korea get the $25 million and give diplomacy a chance.

In order to see where the international united front against North Korea crumbled, it may not be necessary to look much further than South Korea.