I once read a review of the glacial, demanding pace of Robert Bresson’s French films about misery, moral cowardice, and redemption, which described watching them as “taking a whipping when you can see every blow coming”.
That’s how I’m starting to feel about the BDA saga.
Covering it is an exercise in masochism.
I’m sure I’m not alone in this feeling.
Now, to today’s news, starting with an unsubstantiated and apparently incorrect rumor demonstrating that crappy reporting on BDA is not a Western monopoly:
The Macao-based newspaper Aomen Ribao reported Thursday that BDA dispatched a $13 million tranche to several banks in Russia and Italy, and that the transfer would take two to three days. However, the paper did not name any of the foreign banking organizations supposedly participating in the transaction, nor did it specify where the remaining $12 million would go.
A Russian deputy foreign minister was also unable to confirm that the North Korean funds were being transferred to Russia and Italy after being unfrozen by Washington.
"I do not know how reliable that information is," Alexander Losyukov said.
Not very reliable, as a subsequent report, Russian and Italian Banks refuse North Korean Money indicates.
Later on, the Aomen Ribao a.k.a. Macao Daily, retreated and offered a rehash of reporting from AP, the Washington Post, et. al. concerning the bewildering question of What’s Goin’ On? but also offering the interesting nugget I hadn’t seemed elsewhere that SecDef Gates apparently just wants to get this thing over with.
The South Korean media weighs in with a more mainstream version:
U.S. 'to Let American Bank Handle N.Korea's Money'
North Korea’s immediate banking troubles will likely be resolved this week, as chances are high that the U.S. will accept the North’s demand to transfer its assets in Macau to a third country via a U.S. bank. Diplomatic sources on Wednesday said the U.S. is inclined to allow a U.S. bank to play an intermediary role in transferring the recently unfrozen US$25 million. Quoting a U.S. official, AP reported the U.S. Treasury was expected to make a decision by as early as Thursday. The official told the news agency, “The North Koreans want to use an American bank because they think the transaction would help secure their continued access to the global financial system.”
The matter has been delayed because no international bank wanted to touch the money after the Treasury identified some of it as coming from illicit activities.
In Sean McCormack’s press briefing at the State Department, he certainly didn’t rule out the involvement of a US bank.
QUESTION: Thanks. North Korea insisted to have the North Korea funding in BDA be transferred to an American banking institution. Is it agreeable to the United States?
MR. MCCORMACK: They're still working with their bankers and if there's any requirement for an opinion from the Treasury Department as to whether or not this is a transaction that the financial institutions involved would feel comfortable doing, then the Treasury Department will take a look at that and see what it is that they can do.
You can speak to my colleagues over at Treasury as to whether or not they're looking at that or working on anything.
The Treasury Department ain't sayin' nuttin':
But Molly Millerwise, Treasury's spokesperson, denied the report."The U.S. Treasury Department is not aware of any such request from North Korea to use a U.S. bank to transfer funds," she said in an e-mail to Yonhap.
It looks like the South Koreans—who looked like they were going to step up, albeit grudgingly and handle the transaction through their ExIm bank to get the ball rolling—decided to get uninvolved:
Per Yonhap:
Press reports over the weekend said a South Korean bank may serve as an intermediary in delivering US$25 million from Macau to a third country. Some said North Korea initially asked a New York bank to play that role but that was rejected by the U.S.A State Department official, speaking on condition of anonymity, did not flatly reject either of the possibilities.
He said the use of a South Korean bank "could well end up being a solution," but added "at this point, I wouldn't focus too heavily on it." Asked if a New York bank remains an option, he only said there were a "lot of different options people are looking at."
Maybe Seoul developed qualms because the Treasury Department wasn’t prepared to give an unambiguous assurance to a foreign bank that their credit rating wouldn’t get dinged by handling BDA funds.
Maybe only a US bank can receive an ironclad legal waiver from Treasury that completely sanitizes the BDA remittances and lets them vanish into the world financial system.
According to the Russians:
Russian Deputy Foreign Minister Alexander Losyukov, head of the Russian negotiating team at the six-party negotiations with North Korea, said in Beijing that there would be no problem transferring the money if the U.S. guaranteed in writing that no consequences would befall the bank accepting the funds.
Maybe this is just North Korean brinksmanship, trying to squeeze additional concessions out of the United States that it can spin as a return to the international financial system.
But it looks like the problems are genuine.
At least, no banks have stepped up (including any in Japan, which hates the agreement and would love to call a North Korean bluff) and said, Hey, you crazy North Koreans! I’ll take your dirty money!
This is getting pretty tiresome and it seems that somebody should step in and instruct the Treasury Department to stop noodging on this deal.
Am I the only one who’s wondering why our Commander in Chief a.k.a. the Decider a.k.a. the Commander Guy can’t issue an Executive Order instructing the Treasury Department to knock off the BDA funds vendetta so the Six Party show can get on the road?
After all, Patriot Act Section 311 sanctions require a finding that they won’t harm the international financial system.
Surely the boredom and exasperation surrounding this ridiculous transaction rates as sufficiently harmful to pull the plug on the BDA final rule, in part if not in entirety.
Thursday, May 10, 2007
Tuesday, May 08, 2007
A Step Beyond Melamine
More on the China Pet Food Additives Scandal
It’s refreshing that the New York Times is doing some crackerjack investigative reporting.
It’s rather unique that the reporting concerns a scandal in China, rather than America: China’s role as a serial contaminator of feed additives.
And it’s ironic that it’s a story that the Chinese government is probably less than eager to see covered by any media outlet, let alone America’s most authoritative news outlet, the New York Times.
Today’s entry from the Times’ David Barboza, Another Chemical Emerges in Pet Food Case, concerns the possible presence of a second contaminate, cyanuric acid in Chinese feed ingredients.
Barboza reports that cyanuric acid, like melamine, was added to feed ingredients to inexpensively increase their perceived protein content (for more on how protein is measured, see this post).
Scientists are speculating that melamine and cyanuric acid, presumed harmless by themselves, may have combined fatally to damage the kidneys of the pets that consumed food laced with the additives.
China Matters’ humble contribution to this story is the information that a compound of melamine and cyanuric acid, melamine cyanurate or MCA (氰尿酸三聚氰胺), is used in the Chinese plastics industry as an anti-oxidant and flame retardant.
Its primary use seems to be in the production of Nylon 6 and Nylon 66, the two polymers used to manufacture nylon tire cord, the material that adds strength to the carcass of the rubber tire.
Shandong province, where the laced material (not even crappy wheat gluten but, according to Barboza, ordinary wheat flour juiced with additives to make it test like higher quality and more expensive gluten--that's a cheap, nasty trick) was probably produced is, for reasons that escape me, big in tire factories.
And it’s also big in production of MCA. MCA is an inorganic compound apparently produced by facilities involved in China’s coastal salt chemical industry, which has many facilities stretching along the shallow coastal plain from Jiangsu to Shandong to Tianjin.
On a list of MCA producers and suppliers that is probably by no means comprehensive over one third of the enterprises are in Shandong or immediately adjacent.
FYI.
It’s refreshing that the New York Times is doing some crackerjack investigative reporting.
It’s rather unique that the reporting concerns a scandal in China, rather than America: China’s role as a serial contaminator of feed additives.
And it’s ironic that it’s a story that the Chinese government is probably less than eager to see covered by any media outlet, let alone America’s most authoritative news outlet, the New York Times.
Today’s entry from the Times’ David Barboza, Another Chemical Emerges in Pet Food Case, concerns the possible presence of a second contaminate, cyanuric acid in Chinese feed ingredients.
Barboza reports that cyanuric acid, like melamine, was added to feed ingredients to inexpensively increase their perceived protein content (for more on how protein is measured, see this post).
Scientists are speculating that melamine and cyanuric acid, presumed harmless by themselves, may have combined fatally to damage the kidneys of the pets that consumed food laced with the additives.
China Matters’ humble contribution to this story is the information that a compound of melamine and cyanuric acid, melamine cyanurate or MCA (氰尿酸三聚氰胺), is used in the Chinese plastics industry as an anti-oxidant and flame retardant.
Its primary use seems to be in the production of Nylon 6 and Nylon 66, the two polymers used to manufacture nylon tire cord, the material that adds strength to the carcass of the rubber tire.
Shandong province, where the laced material (not even crappy wheat gluten but, according to Barboza, ordinary wheat flour juiced with additives to make it test like higher quality and more expensive gluten--that's a cheap, nasty trick) was probably produced is, for reasons that escape me, big in tire factories.
And it’s also big in production of MCA. MCA is an inorganic compound apparently produced by facilities involved in China’s coastal salt chemical industry, which has many facilities stretching along the shallow coastal plain from Jiangsu to Shandong to Tianjin.
On a list of MCA producers and suppliers that is probably by no means comprehensive over one third of the enterprises are in Shandong or immediately adjacent.
FYI.
Sepia Mutiny added to blogroll
When China Matters got named in that “5 blogs that make me think” thingee, I didn’t do anything, mainly because the China blogs I read were all taken already.
However, I do have a list of non-Chinese blogs that make me think, mainly because they provide an inside look on places and people that I know very little about.
One of them is Sepia Mutiny, a blog for the Indian expat community.
It offers a vision of what a great group blog by Chinese writers and accessible to Western readers would look like—if the Chinese writers were Anglophone, informed, thoughtful, and good natured and not embroiled in the Taiwan vs. PRC, Communism vs. democracy, US vs. China, patriotism vs. human rights, spy vs. spy, troll vs. troll censored, monitored, and paranoid state of incipient flamewar that seems to hang over the China blogosphere like a dark cloud sometimes.
As an example of what I mean, look at the 100+ impassioned but reasoned and reasonably collegial comments taking on the incendiary issue, (I’m paraphrasing here) Was Gandhi an anti-semite...or just a dope?
I’m taking this opportunity to add Sepia Mutiny to my blogroll...
...and link to a eye-popping post about an incident on American Airlines where a vigilante passenger walked up behind a distinguished architect, Seth Stein, put him in a headlock, and rifled his belongings because Stein fitted his personal profile of a terrorist: he was brown (actually rich-guy tanned, not Arab-guy swarthy), had used the bathroom, and was carrying an iPod.
Reactions of other passengers and the airline add up to a feel-good story about how individual human decency flourishes even in an atmosphere of government-fostered paranoia—not!
Read the whole thing, Flying While Brown, even Jewish at Sepia Mutiny.
However, I do have a list of non-Chinese blogs that make me think, mainly because they provide an inside look on places and people that I know very little about.
One of them is Sepia Mutiny, a blog for the Indian expat community.
It offers a vision of what a great group blog by Chinese writers and accessible to Western readers would look like—if the Chinese writers were Anglophone, informed, thoughtful, and good natured and not embroiled in the Taiwan vs. PRC, Communism vs. democracy, US vs. China, patriotism vs. human rights, spy vs. spy, troll vs. troll censored, monitored, and paranoid state of incipient flamewar that seems to hang over the China blogosphere like a dark cloud sometimes.
As an example of what I mean, look at the 100+ impassioned but reasoned and reasonably collegial comments taking on the incendiary issue, (I’m paraphrasing here) Was Gandhi an anti-semite...or just a dope?
I’m taking this opportunity to add Sepia Mutiny to my blogroll...
...and link to a eye-popping post about an incident on American Airlines where a vigilante passenger walked up behind a distinguished architect, Seth Stein, put him in a headlock, and rifled his belongings because Stein fitted his personal profile of a terrorist: he was brown (actually rich-guy tanned, not Arab-guy swarthy), had used the bathroom, and was carrying an iPod.
Reactions of other passengers and the airline add up to a feel-good story about how individual human decency flourishes even in an atmosphere of government-fostered paranoia—not!
Read the whole thing, Flying While Brown, even Jewish at Sepia Mutiny.
Monday, May 07, 2007
If you’re still wondering where South Korea stands on BDA...
...after this morning’s post, here’s confirmation that Seoul is impatient to cut the Gordian knot and resolve the BDA funds issue so it can get on with the business of rapprochement.
Yes, it looks like South Korean expressions of frustration with the US strategy of ostracizing North Korea are becoming ever more explicit.
First, the leak:
A senior South Korean government official on Monday admitted that Seoul is reviewing the option of letting the state-run Export-Import Bank handle North Korea’s funds in a Macau bank.
...
[An unnamed “senior South Korean government official”, maybe the guy who handles the Unification portfolio—ed] hinted the government is prepared to take the flak if the EXIM Bank’s credit rating suffers from handling what the U.S. Treasury says is money from North Korea’s illicit activities. “What’s wrong with considering anything we can do? We can’t sit by and just watch (U.S.-North Korea negotiations) without taking any steps of our own,” he said.
Then the pissy editorial:
All banks around the world must go through a depository bank in New York when it comes to dollar transfers. And the U.S. Treasury Department regulates this process. If that’s the case, then it would only be proper for the U.S. government to handle the matter transparently through an American bank, rather than trying to dump that responsibility on an unwilling country and an unwilling bank.
And finally the news, with some more interesting detail about a meeting attended by just about every key South Korean government official, sending a public message that Seoul doesn’t want to see the BDA farce go on a moment longer:
Thursday’s meeting discussed enabling North Korea to open an account with an overseas branch of EXIM so it can withdraw its funds from BDA and move them to an Italian or Russian bank via the bank. A senior security source said the government proposed the measure since North Korea insists on having the money transferred rather than withdrawing it in cash. According to the source, the U.S. has agreed to Seoul’s suggestion and promised not to take issue with the bank over what would by Washington’s own earlier determination amount to abetting money-laundering.
According to a diplomatic source, North Korea is nearly done combining the money from its 52 accounts in BDA into a single one ready for transfer. The epic issue hit the latest snag when, after the U.S. gave the green light to unfreezing the funds, no bank in the world proved willing to receive the funds. That problem would be resolved if EXIM plays the intermediary role. The U.S. has already reassured countries concerned that the transfer will be an exception from its blanket ban on transactions with BDA. [emphasis added]
So it looks like the United States has finally capitulated 100% and issued the waiver on accepting BDA money that, as I wrote on April 8, Daniel Glaser should have granted during the ten days he spent in Beijing in late March--early April accomplishing, apparently, nothing.
This involves more than seven weeks and counting of wasted time (from March 14, the date that the BDA matter was supposed to be "resolved").
The belated concession makes us look foolish. More disturbingly, it makes our diplomacy look at best unreliable and at worst duplicitous.
Yes, it looks like South Korean expressions of frustration with the US strategy of ostracizing North Korea are becoming ever more explicit.
First, the leak:
A senior South Korean government official on Monday admitted that Seoul is reviewing the option of letting the state-run Export-Import Bank handle North Korea’s funds in a Macau bank.
...
[An unnamed “senior South Korean government official”, maybe the guy who handles the Unification portfolio—ed] hinted the government is prepared to take the flak if the EXIM Bank’s credit rating suffers from handling what the U.S. Treasury says is money from North Korea’s illicit activities. “What’s wrong with considering anything we can do? We can’t sit by and just watch (U.S.-North Korea negotiations) without taking any steps of our own,” he said.
Then the pissy editorial:
All banks around the world must go through a depository bank in New York when it comes to dollar transfers. And the U.S. Treasury Department regulates this process. If that’s the case, then it would only be proper for the U.S. government to handle the matter transparently through an American bank, rather than trying to dump that responsibility on an unwilling country and an unwilling bank.
And finally the news, with some more interesting detail about a meeting attended by just about every key South Korean government official, sending a public message that Seoul doesn’t want to see the BDA farce go on a moment longer:
Thursday’s meeting discussed enabling North Korea to open an account with an overseas branch of EXIM so it can withdraw its funds from BDA and move them to an Italian or Russian bank via the bank. A senior security source said the government proposed the measure since North Korea insists on having the money transferred rather than withdrawing it in cash. According to the source, the U.S. has agreed to Seoul’s suggestion and promised not to take issue with the bank over what would by Washington’s own earlier determination amount to abetting money-laundering.
According to a diplomatic source, North Korea is nearly done combining the money from its 52 accounts in BDA into a single one ready for transfer. The epic issue hit the latest snag when, after the U.S. gave the green light to unfreezing the funds, no bank in the world proved willing to receive the funds. That problem would be resolved if EXIM plays the intermediary role. The U.S. has already reassured countries concerned that the transfer will be an exception from its blanket ban on transactions with BDA. [emphasis added]
So it looks like the United States has finally capitulated 100% and issued the waiver on accepting BDA money that, as I wrote on April 8, Daniel Glaser should have granted during the ten days he spent in Beijing in late March--early April accomplishing, apparently, nothing.
This involves more than seven weeks and counting of wasted time (from March 14, the date that the BDA matter was supposed to be "resolved").
The belated concession makes us look foolish. More disturbingly, it makes our diplomacy look at best unreliable and at worst duplicitous.
This is more like it...
... more plausible, anyway, than North Korea’s reported demand that the BDA money be remitted to a new North Korean account in a New York bank...
From the May 7 Washington Post:
Under South Korea's plan, the Export-Import Bank of Korea will act as an intermediary between BDA and a North Korean bank account at a third country, a high-ranking national security source was quoted as saying by the Chosun Ilbo newspaper.
"The United States has agreed to the government's plan, and I understand it has conveyed the position that it won't raise issues if the Export-Import Bank of Korea mediates the transfer of BDA funds," the source was quoted as saying.
Nothing in the WaPo article about the interesting element that South Korea is once again undercutting the U.S.-led campaign to isolate Pyongyang financially...
But if you’re paying attention, in early April South Korean Red Cross officials boarded a freighter to deliver $400,000 in cash to North Korea.
And USA Today reported on May 5:
South Korea has agreed to send 500 tons of polyester fiber to North Korea next month as an initial shipment of promised goods in exchange for rights to develop mineral resources in the North, officials said.
Is this some old agreement or a new initiative? A little bit of both. According to the article, last year South Korea promised to provide $80 million worth of raw materials for the North Koreans to produce clothes, shoes, and soap.
In the first shipment of the promised raw materials, South Korea will send the fiber in June, the country's Unification Ministry said in a statement issued late Friday after three days of talks with the North.
In any case, the South Koreans displayed no qualms about executing a barter deal that makes a mockery of US attempts to strangle Pyongyang by cutting it off from the international financial system.
I think we can toss Western coverage of South Korean opposition to U.S.-led financial and economic sanctions, Seoul’s concrete efforts to circumvent them, and how this figures in the State Department’s diplomatic calculus, in the “underreported” file...
...underreported, that is, except by Onefreekorea, which fulminates against South Korean appeasement and Chamberlains in the State Department, and labors to spook Seoul with the threat that U.S. bases in South Korea may not be long for this world:
Conservatives watched the ascendancy of the Korean left, its inexhaustible apetite for appeasing North Korea, its general diplomatic incompetence, and its delusional fulminations of America-hate that reached the highest levels of its government. They watched the Korean right fall silent, barely admitting to its support for America or pointing out the benefits that the alliance brings (it stands for nothing and is paying the political price). Overall, South Koreans are as anti-American as many Muslim populations. American conservatives have come to resent this deeply, and on a more detached level, have come to realize that the two countries no longer share enough common goals, interests, or values to support a military commitment as large, expensive, and risky as USFK...
... Conservatives won’t repeat the mistake of leaving men like Chris Hill, Nicholas Burns, George Tenet, and Jack Pritchard with the run of their camp to sabotage them again. Plenty of liberals may be sympathetic to South Korea’s instinct to appease, but they won’t expend political capital to keep more of our troops posted in Korea.
Well, then.
Judging from Onefreekorea’s tone, it looks like the party’s over, at least for the time being, for hardliners on North Korea policy.
It’s another indication that the BDA money will make it to North Korea at long last and the Six Party process will limp forward, with efforts to harass, pressure, and destabilize Pyongyang subordinate to engagement, instead of the other way around.
From the May 7 Washington Post:
Under South Korea's plan, the Export-Import Bank of Korea will act as an intermediary between BDA and a North Korean bank account at a third country, a high-ranking national security source was quoted as saying by the Chosun Ilbo newspaper.
"The United States has agreed to the government's plan, and I understand it has conveyed the position that it won't raise issues if the Export-Import Bank of Korea mediates the transfer of BDA funds," the source was quoted as saying.
Nothing in the WaPo article about the interesting element that South Korea is once again undercutting the U.S.-led campaign to isolate Pyongyang financially...
But if you’re paying attention, in early April South Korean Red Cross officials boarded a freighter to deliver $400,000 in cash to North Korea.
And USA Today reported on May 5:
South Korea has agreed to send 500 tons of polyester fiber to North Korea next month as an initial shipment of promised goods in exchange for rights to develop mineral resources in the North, officials said.
Is this some old agreement or a new initiative? A little bit of both. According to the article, last year South Korea promised to provide $80 million worth of raw materials for the North Koreans to produce clothes, shoes, and soap.
In the first shipment of the promised raw materials, South Korea will send the fiber in June, the country's Unification Ministry said in a statement issued late Friday after three days of talks with the North.
In any case, the South Koreans displayed no qualms about executing a barter deal that makes a mockery of US attempts to strangle Pyongyang by cutting it off from the international financial system.
I think we can toss Western coverage of South Korean opposition to U.S.-led financial and economic sanctions, Seoul’s concrete efforts to circumvent them, and how this figures in the State Department’s diplomatic calculus, in the “underreported” file...
...underreported, that is, except by Onefreekorea, which fulminates against South Korean appeasement and Chamberlains in the State Department, and labors to spook Seoul with the threat that U.S. bases in South Korea may not be long for this world:
Conservatives watched the ascendancy of the Korean left, its inexhaustible apetite for appeasing North Korea, its general diplomatic incompetence, and its delusional fulminations of America-hate that reached the highest levels of its government. They watched the Korean right fall silent, barely admitting to its support for America or pointing out the benefits that the alliance brings (it stands for nothing and is paying the political price). Overall, South Koreans are as anti-American as many Muslim populations. American conservatives have come to resent this deeply, and on a more detached level, have come to realize that the two countries no longer share enough common goals, interests, or values to support a military commitment as large, expensive, and risky as USFK...
... Conservatives won’t repeat the mistake of leaving men like Chris Hill, Nicholas Burns, George Tenet, and Jack Pritchard with the run of their camp to sabotage them again. Plenty of liberals may be sympathetic to South Korea’s instinct to appease, but they won’t expend political capital to keep more of our troops posted in Korea.
Well, then.
Judging from Onefreekorea’s tone, it looks like the party’s over, at least for the time being, for hardliners on North Korea policy.
It’s another indication that the BDA money will make it to North Korea at long last and the Six Party process will limp forward, with efforts to harass, pressure, and destabilize Pyongyang subordinate to engagement, instead of the other way around.
Sunday, May 06, 2007
Now, this is going too far...
According to Reuters Tokyo:
- North Korea has demanded the United States allow it to open an account at a bank in New York and its funds at a Macau bank be transferred there, a Japanese daily reported in Sunday.
Quoting an unspecified source in Washington linked to relations between the United States and North Korea, the Mainichi newspaper said the United States had rejected Pyongyang's demand.
...
"The United States hurt the credibility of North Korea by imposing financial sanctions. The United States must correct this," the source quoted an unnamed North Korean official as saying, according to the Japanese daily.
"We can prove to the international community the funds are clean by transferring them to a bank in the United States."
North Korea was believed to have made the demands when the Bush administration's top Korea expert, Victor Cha, contacted North Korean representatives at the United Nations on April 24, the Mainichi newspaper said.
A couple things here:
First, this looks like an indirect confirmation that the U.S. did back down on its protracted efforts to tie up the North Korean funds in BDA, and agreed to some kind of lump-sum repatriation.
The North Koreans are, as a result, emboldened to take the provocative step of demanding that the lump-sum remittance be made to a bank in the United States.
Second, I can’t imagine that the US will acquiesce to this humiliating demand, since it has spent almost two months insisting that these funds were too dirty for any bank in the world to accept—let alone a US bank.
Also, beyond the amusing spectacle of the Treasury Department sullenly allowing the Norks to open an account in New York, it’s a little premature for the US to openly welcome North Korea back into the world financial community. That’s a concession that should be part of a general strategic rapprochement between Washington and Pyongyang.
President Bush is no friend of the Pyongyang regime, so this episode of overreach by the North Koreans might arouse his deep resentment and poison the well for a broader engagement between the two countries.
Perhaps the North Koreans feel that the possibilities of a “Nixon Goes to China” moment for Kim and Bush is so remote that their iron-assed diplomats will concentrate on wringing as many concessions as they can from the current BDA imbroglio, even if it means antagonizing President Bush.
Maybe the BDA affair will just drag on and on, reflecting the fundamental stalemate in US-North Korean relations.
That’s a dismal, dreary prospect, even for this writer, who has made a specialty of blogging the BDA matter into the ground.
Maybe that’s why Victor Cha decided to go back to Georgetown.
- North Korea has demanded the United States allow it to open an account at a bank in New York and its funds at a Macau bank be transferred there, a Japanese daily reported in Sunday.
Quoting an unspecified source in Washington linked to relations between the United States and North Korea, the Mainichi newspaper said the United States had rejected Pyongyang's demand.
...
"The United States hurt the credibility of North Korea by imposing financial sanctions. The United States must correct this," the source quoted an unnamed North Korean official as saying, according to the Japanese daily.
"We can prove to the international community the funds are clean by transferring them to a bank in the United States."
North Korea was believed to have made the demands when the Bush administration's top Korea expert, Victor Cha, contacted North Korean representatives at the United Nations on April 24, the Mainichi newspaper said.
A couple things here:
First, this looks like an indirect confirmation that the U.S. did back down on its protracted efforts to tie up the North Korean funds in BDA, and agreed to some kind of lump-sum repatriation.
The North Koreans are, as a result, emboldened to take the provocative step of demanding that the lump-sum remittance be made to a bank in the United States.
Second, I can’t imagine that the US will acquiesce to this humiliating demand, since it has spent almost two months insisting that these funds were too dirty for any bank in the world to accept—let alone a US bank.
Also, beyond the amusing spectacle of the Treasury Department sullenly allowing the Norks to open an account in New York, it’s a little premature for the US to openly welcome North Korea back into the world financial community. That’s a concession that should be part of a general strategic rapprochement between Washington and Pyongyang.
President Bush is no friend of the Pyongyang regime, so this episode of overreach by the North Koreans might arouse his deep resentment and poison the well for a broader engagement between the two countries.
Perhaps the North Koreans feel that the possibilities of a “Nixon Goes to China” moment for Kim and Bush is so remote that their iron-assed diplomats will concentrate on wringing as many concessions as they can from the current BDA imbroglio, even if it means antagonizing President Bush.
Maybe the BDA affair will just drag on and on, reflecting the fundamental stalemate in US-North Korean relations.
That’s a dismal, dreary prospect, even for this writer, who has made a specialty of blogging the BDA matter into the ground.
Maybe that’s why Victor Cha decided to go back to Georgetown.
Friday, May 04, 2007
BDA: The Beat Goes On...and On...and Onandonandon
From the May 3 Financial Times:
A senior US official said Pyongyang had encountered several problems in consolidating all its accounts at BDA. In addition to not realising how many accounts it held at the bank, the official said North Korea appeared to be having difficulty getting the necessary signatures to release the funds.
Once Pyongyang had consolidated its accounts, officials said it could withdraw the money from BDA. South Korean and US officials confirmed that North Korea wanted to transfer the money to Italian and Russian bank accounts. (Demetri Sevastopulo in Washington and Anna Fifield in Seoul, N Korea still to recover frozen $25m, Financial Times, May 3, 2007)
So it looks like the lump sum approach is going ahead, no doubt to the chagrin of Bush administration hardliners who hoped to force North Korean account holders to present themselves (if they could or dared) to withdraw their funds in person with a suitcase.
And I’m not surprised that North Korea is “having difficulty getting the necessary signatures to release the funds”.
Especially since one of the signatures they will presumably need is Colin McAskill’s, since his group purchased the Daedong Credit Bank. About $8 million in Daedong’s accounts were frozen when Treasury announced its Patriot Act Section 311 action.
Pushing for a logical resolution to the BDA mess, McAskill had wanted the legitimacy of his accounts confirmed, and acknowledgement that he could move the money without restriction or fear of potential sanctions for whatever bank handled the funds.
From the April 15 International Herald Tribune:
Colin McAskill, a British businessman who represents Daedong Credit Bank in negotiations over its frozen funds, said he would insist on using legitimate banking channels to shift money from the newly freed account. "I am not going to stand in a queue behind other North Koreans with a suitcase and try to move it," McAskill said. "We will move it through the banking system."
Good luck with that, Colin.
The point at issue here seems to be that the United States does not want the BDA settlement to signal a breakdown in U.S. efforts to impose an international financial embargo on North Korea.
Reviewing what the international community had agreed to do concerning North Korea, I reviewed UN Resolution 1718, which sanctioned North Korea’s WMD and proliferation-related activities.
In the process, I came across a classic piece of Boltonianism:
The resolution also provides for a regime of inspections to ensure compliance with its provisions, building on the existing work of the Proliferation Security Initiative.
One thing that jumps out is Bolton’s reference to “building on the existing work of the Proliferation Security Initiative”.
In fact, the UN has repeatedly refused to endorse the PSI, the US-led security operation that could be construed as giving Washington and its allies license to conduct unilateral interdiction activities with UN approval.
Bolton, as I’ve written before with enormous corroborating detail, had been indefatigable in asserting UN support for the PSI when no such support existed, a point that mush-minded supporters of PSI—who apparently misconstrue the PSI as a piece of muscular multi-lateral dogooderism—have stubbornly refused to grasp.
Second entry in the John Bolton “I said it loudly and confidently so you must believe it is true” pantheon is:
This resolution also targets other illicit activities of the regime in Pyongyang, and includes a ban on trade in luxury goods. It targets the way Kim Jong Il finances his weapons of mass destruction programs through criminal activities like money laundering, counterfeiting, and selling of narcotics. It imposes a binding requirement on all member states to take action against those activities and freeze the assets of entities and individuals of the DPRK involved.
Actual references in UNSC Resolution 1718 to targeting Kim Jong Il’s criminal activities as part of the anti-WMD sanctions action:
Zero
Nada
Bupkus
Nothing there about moneylaundering, Supernotes, meth, phony cigarettes, or counterfeit Viagra.
For those of us who care, there are about 200 pages of UN-approved documents here describing the nuclear, ballistic missile, and WMD-related trade with North Korea that the international community had agreed to embargo.
The "illicit activities" enjoined by the UN relate to trade in these particular embargoed items.
UNSCR 1718, that celebrated expression of international unanimity was, of course, not enough for John Bolton.
Just as he did with the PSI statement, Bolton took the back door (or “signing statement” approach), declaring a unilateral interpretation that added new elements to an agreement that has already been negotiated and signed.
Here, his purpose was to establish a spurious link between the UN resolution—designed specifically to sanction North Korea’s WMD efforts—to US efforts to ostracize the North Korean government and economy as a whole from the international financial system.
For the United States, the necessary conceptual link—as David Asher, one of the primary architects of Washington’s anti-Pyongyang effort, defined it —was to regard the North Korean government as an essentially criminal enterprise.
Therefore, any and all international financial activities could be construed as buttressing the essential criminal activities of the North Korean “Soprano state”, including its signature racket—acquisition of a nuclear capability.
This conception certainly made dealing with North Korea easier for the heavy thinkers in the Bush administration—there was no North Korean activity that was licit and unrelated to WMDs, so we could go after everything.
However, it was not an idea that was embodied in the UN resolution, nor was it one that the world at large had endorsed.
Now, the United States has gone overboard in imposing the North Korean financial sanctions.
It is not only trying to force the international community to participate in a unilateral sanctions regime that goes beyond the wording and intent of the UN resolution.
It is attempting to maintain that regime even when it conflicts with the agreements made by its own State Department to denuclearize North Korea under the Six Party Agreement.
It’s come to a point where I think that many countries are getting sick of the US preoccupation with the $25 million in BDA.
More dangerously, it threatens to discredit the pretensions of the Patriot Act Section 311 regime to legitimacy and effectiveness in the eyes of the international community—in fact, making it look like another piece of dangerous, stubbornly and incompetently executed idiocy by the Bush administration--just as we wish to use it as the vehicle for our anti-Iran diplomacy.
A senior US official said Pyongyang had encountered several problems in consolidating all its accounts at BDA. In addition to not realising how many accounts it held at the bank, the official said North Korea appeared to be having difficulty getting the necessary signatures to release the funds.
Once Pyongyang had consolidated its accounts, officials said it could withdraw the money from BDA. South Korean and US officials confirmed that North Korea wanted to transfer the money to Italian and Russian bank accounts. (Demetri Sevastopulo in Washington and Anna Fifield in Seoul, N Korea still to recover frozen $25m, Financial Times, May 3, 2007)
So it looks like the lump sum approach is going ahead, no doubt to the chagrin of Bush administration hardliners who hoped to force North Korean account holders to present themselves (if they could or dared) to withdraw their funds in person with a suitcase.
And I’m not surprised that North Korea is “having difficulty getting the necessary signatures to release the funds”.
Especially since one of the signatures they will presumably need is Colin McAskill’s, since his group purchased the Daedong Credit Bank. About $8 million in Daedong’s accounts were frozen when Treasury announced its Patriot Act Section 311 action.
Pushing for a logical resolution to the BDA mess, McAskill had wanted the legitimacy of his accounts confirmed, and acknowledgement that he could move the money without restriction or fear of potential sanctions for whatever bank handled the funds.
From the April 15 International Herald Tribune:
Colin McAskill, a British businessman who represents Daedong Credit Bank in negotiations over its frozen funds, said he would insist on using legitimate banking channels to shift money from the newly freed account. "I am not going to stand in a queue behind other North Koreans with a suitcase and try to move it," McAskill said. "We will move it through the banking system."
Good luck with that, Colin.
The point at issue here seems to be that the United States does not want the BDA settlement to signal a breakdown in U.S. efforts to impose an international financial embargo on North Korea.
Reviewing what the international community had agreed to do concerning North Korea, I reviewed UN Resolution 1718, which sanctioned North Korea’s WMD and proliferation-related activities.
In the process, I came across a classic piece of Boltonianism:
The resolution also provides for a regime of inspections to ensure compliance with its provisions, building on the existing work of the Proliferation Security Initiative.
One thing that jumps out is Bolton’s reference to “building on the existing work of the Proliferation Security Initiative”.
In fact, the UN has repeatedly refused to endorse the PSI, the US-led security operation that could be construed as giving Washington and its allies license to conduct unilateral interdiction activities with UN approval.
Bolton, as I’ve written before with enormous corroborating detail, had been indefatigable in asserting UN support for the PSI when no such support existed, a point that mush-minded supporters of PSI—who apparently misconstrue the PSI as a piece of muscular multi-lateral dogooderism—have stubbornly refused to grasp.
Second entry in the John Bolton “I said it loudly and confidently so you must believe it is true” pantheon is:
This resolution also targets other illicit activities of the regime in Pyongyang, and includes a ban on trade in luxury goods. It targets the way Kim Jong Il finances his weapons of mass destruction programs through criminal activities like money laundering, counterfeiting, and selling of narcotics. It imposes a binding requirement on all member states to take action against those activities and freeze the assets of entities and individuals of the DPRK involved.
Actual references in UNSC Resolution 1718 to targeting Kim Jong Il’s criminal activities as part of the anti-WMD sanctions action:
Zero
Nada
Bupkus
Nothing there about moneylaundering, Supernotes, meth, phony cigarettes, or counterfeit Viagra.
For those of us who care, there are about 200 pages of UN-approved documents here describing the nuclear, ballistic missile, and WMD-related trade with North Korea that the international community had agreed to embargo.
The "illicit activities" enjoined by the UN relate to trade in these particular embargoed items.
UNSCR 1718, that celebrated expression of international unanimity was, of course, not enough for John Bolton.
Just as he did with the PSI statement, Bolton took the back door (or “signing statement” approach), declaring a unilateral interpretation that added new elements to an agreement that has already been negotiated and signed.
Here, his purpose was to establish a spurious link between the UN resolution—designed specifically to sanction North Korea’s WMD efforts—to US efforts to ostracize the North Korean government and economy as a whole from the international financial system.
For the United States, the necessary conceptual link—as David Asher, one of the primary architects of Washington’s anti-Pyongyang effort, defined it —was to regard the North Korean government as an essentially criminal enterprise.
Therefore, any and all international financial activities could be construed as buttressing the essential criminal activities of the North Korean “Soprano state”, including its signature racket—acquisition of a nuclear capability.
This conception certainly made dealing with North Korea easier for the heavy thinkers in the Bush administration—there was no North Korean activity that was licit and unrelated to WMDs, so we could go after everything.
However, it was not an idea that was embodied in the UN resolution, nor was it one that the world at large had endorsed.
Now, the United States has gone overboard in imposing the North Korean financial sanctions.
It is not only trying to force the international community to participate in a unilateral sanctions regime that goes beyond the wording and intent of the UN resolution.
It is attempting to maintain that regime even when it conflicts with the agreements made by its own State Department to denuclearize North Korea under the Six Party Agreement.
It’s come to a point where I think that many countries are getting sick of the US preoccupation with the $25 million in BDA.
More dangerously, it threatens to discredit the pretensions of the Patriot Act Section 311 regime to legitimacy and effectiveness in the eyes of the international community—in fact, making it look like another piece of dangerous, stubbornly and incompetently executed idiocy by the Bush administration--just as we wish to use it as the vehicle for our anti-Iran diplomacy.
Subscribe to:
Posts (Atom)