[OUTLOOK]Coaxing Pyongyang to talkNorth Korea test-fired two short-range missiles into the East Sea (Sea of Japan) on March 8. The timing of the firing coincided with the visit by Lee Gun, the head of the North American Affairs Bureau of North Korea’s Foreign Ministry, to New York to be “briefed” on U.S. intelligence about alleged North Korean counterfeiting and money laundering activities. Those activities led to the imposition of sanctions on Macau-based North Korean companies and Banco Delta Asia, a Macau bank.
Although Washington expected to hear North Korea’s resolve to cooperate in ending counterfeiting and money laundering, Mr. Lee is said to have claimed that the North itself is a victim rather than a perpetrator of counterfeiting. He went even further to suggest setting up a “cooperative committee” through which Pyongyang could exchange information on illegal financial transactions with Washington. Was the missile firing a North Korean way of saying it had no intention of succumbing to U.S. pressure to admit to counterfeiting and to yield to financial sanctions?
There was an immediate reaction from Washington. North Korea succeeded in getting the attention of the U.S. military on its improved missile capability. Gen. Burwell Bell, the commander of the U.S. Forces in Korea, was in Washington to attend a hearing at the House Armed Services Committee. He evaluated highly the improved capability of the North Korean missiles. He told the hearing that the missiles were “a quantum leap forward from the kind of missiles that they have produced in the past.” He explained that the missiles were boosted by solid fuel, rather than liquid fuel, providing greater reliability, mobility and precision. However, other branches of the U.S. government, other than the military, which is eager to get Congressional approval for funds for an upgraded missile defense system, are not interested in the North’s military showing off.
Senior officials of the administration, especially the Treasury Department, are more impressed by the effectiveness of the sanctions they imposed on a Macau bank six months ago. They believe the action has really struck a nerve because banks around the world have stopped dealing with the Macau bank and the North Korean leadership pleads for lifting of the sanctions. Now they say that further law enforcement actions are planned.
According to the South China Morning Post in Hong Kong, the U.S. government has uncovered three bank accounts that are related to North Korea’s counterfeiting and smuggling activities. According to the paper, Washington will confiscate $2.67 million deposited at Jiyou Bank, a Hong Kong subsidiary of the Bank of China, through legal procedures. As there is another bank in Singapore that is suspected by the Treasury of being involved in money laundering for North Korea, it is highly likely that further exposures will follow.
It was the financial sanctions that forced North Korea to send Mr. Lee to New York, ostensibly to hear a “briefing” on the background of the U.S. actions but actually to get North Korea’s money unfrozen. A North Korean government spokesman was quoted by the Central News Agency of North Korea early this month urging Washington to lift financial sanctions on its trading companies and allow them to resume normal banking transactions. It complained that the sanctions forced North Korea to deal largely in cash even in international financial transactions.
When the North accepted the U.S. proposal to send an official to New York to be “briefed” on the U.S. findings on the North’s illicit activities, therefore, there was a good reason for Washington and others in the six-party talks to believe that the North would come back to the talks soon and cooperate with Washington to conclude the counterfeiting issue smoothly. Alexander Vershbow, the U.S. ambassador to South Korea, has even categorically said that what Washington wanted was Pyongyang to provide evidence that plates used to print the $100 “supernotes” had been destroyed. It is disappointing, therefore, that Mr. Lee told reporters after the meeting that the North would not return to the six-party talks because of continued U.S. pressure on it.
It is unfortunate that his words sound like they convey the same message as the North’s missile firing: Pyongyang has no intention of succumbing to U.S. pressure to admit to counterfeiting and to yield to financial sanctions.
If we put ourselves in the North’s shoes, things get clearer. After admitting counterfeiting U.S. dollars and pleading for the lifting of financial sanctions, it would be difficult for North Korea to be an equal dialogue partner in the six-party talks. The talks would be turned into a tribunal where the terms of surrender of North Korea are decided.
Washington’s new “squeeze strategy” of using both pressure and negotiation together sounds ideal, but pressure often does not leave room for negotiations. In order to settle the North Korean nuclear issue through dialogue, Washington should refrain from pushing Pyongyang too hard, demanding that it admit its involvement in counterfeiting on the government level. North Korea has started to feel the painful effects of the U.S. financial sanctions. It is desirable to induce the North back to the negotiating table of the six-party talks, instead of provoking it with a demand to confess its criminal records.
* The writer is the editorial page editor of the JoongAng Daily.
by Park Sung-soo