Apr 19, 2008

MARCH

North Korea Relents to International Pressure

North Korea during the month relented to international outcry against the nuclear test held in 2006 by agreeing to close down the main nuclear reactor and gradually undertake the process of disarming atomic weapons in exchange for $ 400 million of oil, fuel and economic and humanitarian aid. The results were a success for the ongoing six nation party talks between North Korea and the United States, Japan, South Korea, China and Russia. The first tranche of aid is to be delivered within 60 days of shutting down of the nuclear plant and a further 950,000 tons of fuel once it reverses nuclear capability.

Bilateral talks are also expected to begin between Pyongyang and the United States. The measures include detailed steps to provide a list of nuclear programs including inventory of stockpiles, disablement of nuclear facilities and reactors. Five working groups are to be set up to normalize relations with Pyongyang. The denuclearization group will be headed by China while economic cooperation will be led by South Korea. While the measure is a significant initiative in non proliferation, there are many questions left unanswered. Most of these relate to credibility of the agreement with the regime in Pyongyang. There is a need to follow up the deal for disabling nuclear facilities in North Korea. These include issues such as dismantling of nuclear weapons program, the actual weapons processing facilities and finally the stack of nuclear weapons. China is reportedly acting as a guarantor keeping in view an enlarged role in regional affairs and attempts to undermine influence of the United States and Japan. The tipping point came when China cut off military aid to North Korea and also assisted in cracking down on issues which hurt the North Korean leader personally by freezing Macao based bank accounts.

(SAST MARCH 2007)

FEBRUARY

North Korea ’s Second Test?

Fears were being expressed of a likely second strike by North Korea after increased activity was noticed at the suspected nuclear test site. North Korea reportedly threatened to conduct a second nuclear test in case the United States did not withdraw the order freezing $ 24 million assets of the country held in Macau’s Banco Delta Asia as per reports in www.defencetalk.com. The assets have been frozen due to allegations of money laundering. The U.S. Department of the Treasury web site states that Banco Delta Asia SARL is a "primary money laundering concern" under Section 311 of the USA PATRIOT Act because it represents an unacceptable risk of money laundering and other financial crimes.” It goes on to add that "Banco Delta Asia has been a willing pawn for the North Korean government to engage in corrupt financial activities through Macau, a region that needs significant improvement in its money laundering controls." Though the sanctions were imposed in 2005, this is now being used as a bargaining chip by Pyongyang. News reports indicate that the eldest son of North Korean supremo, Kim is in Macau. Talks on denuclearization of North Korea remain bogged down as Pyongyang is refusing to cooperate till the financial restrictions are lifted.

(SAST FEBRUARY 2007)