Washington – Despite delays in shutting down a North Korean nuclear facility at the center of an agreement reached in the Six-Party Talks, lead U.S. envoy Christopher Hill believes the February 13 plan still can be implemented as planned.

“We continue to believe that the best way to achieve denuclearization is to move step-by-step,” Hill, the assistant secretary of state for East Asian and Pacific affairs, said May 4 at Johns Hopkins University’s School for Advanced International Studies in Washington.

On February 13, diplomats from China, Japan, North Korea, Russia, South Korea and the United States announced a breakthrough in the talks when North Korea agreed to shut down and seal its main nuclear reactor at Yongbyon within 60 days as well as allow international verification and provide a list of all of its nuclear programs to the other Six-Party Talks participants. During the same period, the other members were to have provided North Korea an initial shipment of 50,000 tons of heavy fuel oil (HFO) as emergency energy assistance.

The agreement was hailed as a major first step in implementing the multilateral forum’s September 2005 Statement of Principles aimed at stabilizing the Korean Peninsula.  However, North Korea demanded the release of more than $25 million in funds frozen at Banco Delta Asia (BDA), a Macau-based bank, before it would continue participating in the Six-Party Talks.

The U.S. Treasury Department had designated BDA as a financial institution of "prime money laundering concern" in September 2005 and issued a final rule March 14 barring U.S. financial institutions from dealing with BDA. The Macau Monetary Authority froze North Korean funds while investigating whether the bank had facilitated or engaged in illegal financial activities on North Korea's behalf, including money laundering and circulation of counterfeit U.S. currency, but unblocked the funds April 10. (See related article.)

Although the accounts have been unfrozen, U.S. financial institutions remain barred from doing business with BDA, making other foreign banks reluctant to accept the newly released North Korean funds, according to Hill. 

“We have been working actively with various partners to see what can be done to resolve this matter and to have these North Korean funds available,” Hill said, but he noted that Pyongyang’s problems stem from its pursuit of nuclear weapons and said North Korea should have proceeded with implementation of the February 13 agreement.

“I think that if you are engaged in making weapons of mass destruction, you shouldn’t be surprised that your bank accounts get a little added scrutiny,” not just from the United States, but the international community, Hill said.

Despite the delay, Hill said, North Korea has signaled it will move forward once the BDA issue is resolved, and other participants in the Six-Party Talks have indicated that they are willing to accelerate their efforts to make up for lost time.

As a result, it still might be possible to shut down and disable North Korea’s nuclear reactor at Yongbyon and verifiably secure its estimated 50 to 60 kilograms of plutonium on schedule by the end of 2007.

In addition, Hill said, Six-Party Talks participants might be able finally to verify the status of another alleged component of North Korea’s covert nuclear weapons program: its research into highly enriched uranium.

“We know as a fact that there were certain purchases made and we have to understand what that was all about; how far did they get; if they did not produce it, what did they do with it; if they did produce it, where is it," Hill said.

As they move beyond efforts to end the threat of nuclear weapons on the Korean Peninsula, Hill said that the region may be able to build upon the Six-Party Talks to create a new multilateral diplomatic forum to resolve regional disputes and strengthen security in northeast Asia, a factor he said North Korea should consider as it moves forward.

“With denuclearization, everything is going to be possible for them,” he said.

For more information, see The U.S. and the Korean Peninsula.