Posted on 03/26/2007 7:12:50 PM PDT by TigerLikesRooster
BDA: Hill’s Tactical Miscalculation
By Tong Kim
It is now clear what the confusion was all about in Beijing last week, concerning the technicalities involved in transferring the freed North Korean funds of $25 million from the Banco Delta Asia (BDA) in Macau to an account held by North Korea in the Bank of China (BOC) in Beijing, or transferring them through BOC to a bank account in a third country.
No party in the talks seemed to have expected the money transfer issue would hold up the serious talks of nuclear dismantlement. No diplomat at the talks seemed to have studied beforehand the international banking requirements for ``remittance business’’ and the legal ramifications and concerns for an international bank to accept ``illegal funds.’’
All U.S. banks operating under U.S. laws including the Patriot Act are on notice to cut off transactions with any foreign bank that is involved in money laundering or terrorist financing.
Nobody explained why the North Koreans did not want or could not transfer the funds to their Trade Bank in Pyongyang or why they wanted the money transferred to BOC.
A testimony to the confusion and unpreparedness was found in the words of South Korean chief delegate to the talks, Chun Yung Woo, ``Absurd and preposterous things are happening, but nobody really knows why these things are happening.’’
Now Washington is sending back deputy assistant secretary of treasury Daniel Glaser, who watches terrorist financing and financial crimes, to explain to the reluctant BOC officials that their bank will not be punished after it receives the ``dirty money’’ from BDA.
Glaser was in Beijing only a week earlier to announce the conclusion of an 18 month investigation of North Korean illicit financial activities – including money laundering and counterfeiting – and a U.S. decision to unfreeze the DPRK related funds from BDA a couple of hours before the convening of the multilateral talks last Monday (March 19th).
Despite the U.S. treasury department’s barring all American banks from doing business with BDA and its condition that the released DPRK funds could only be used for educational and humanitarian purposes, assistant secretary of State Christopher Hill, who joined Glaser at the hurriedly staged announcement, appeared confident that the BDA issue would no longer be an impediment to the nuclear talks. It took him only a few hours to find that he was wrong afterwards.
Washington could have told Glaser to stay in Beijing and do what he is now going back there to do. This action could have saved at least a few days to a week to complete the transfer and to bring the parties back together sooner than possible under the present circumstances.
It does not surprise me that the North Koreans refused to discuss the substantive issues of how to implement the 2.13 agreement and what steps to take for disablement in the next phase. Under different circumstances, the defiant North Korea had walked out of meetings before, even when they had less understandable justification to do so.
From the beginning, the North Koreans said they would not move until the issue of financial sanctions is fully resolved. However, what they did not make clear before was that they wanted to ``see the money’’ deposited in their own account. Apparently the U.S. negotiating team had erroneously assumed ``U.S. assurances’’ for releasing the frozen DPRK funds, backed up by a policy pronouncement _ which was not exactly seen as an exoneration of North Korea from the U.S. charges of financial crimes _ would suffice to meet North Korea’s needs. This assumption quickly proved wrong.
Amid last week’s confusion, the frustrated U.S. chief negotiator said, ``The day I am able to explain to you North Korean thinking is probably the day I’ve been in this process too long.’’ About the same time the South Korean foreign minister said North Korea is ``an unpredictable group that gives us a headache.’’ The common sentiments reflected in these two statements are the incomprehensiveness and unacceptability of North Korean behavior.
Well, unacceptability is one thing, but if it is about incomprehensiveness, here is something to consider. Having a few bilateral meetings, a few occasions for social dinners and drinks or even going to a Broadway show is hardly enough to understand the reasons for North Korean behavior.
Those of us who had engaged the North Koreans for many years still found it hard at times to figure out the true motivation of what often appeared to be unreasonable or offensive behavior. But they always acted on their own reasoning and logic, either as a tactical move for what to pursue next or as a matter of ``principle’’ reflecting their unique thinking. Their logic is typical: ``You did or did not do that, so we do this.’’
There is plenty of blame to go around for the unproductive conclusion of the last round. Some of the blame goes to the United States, some to North Korea, some even to China _ for failing to persuade BOK to accept the risky DPRK related funds. The rest of the six parties were actually irrelevant to the complicated problem, and there was little that they could do, except wait in vain, wasting their valuable time.
My uneasy hunch is that the DPRK leadership, beyond the level of vice minister Kim Kye Gwan, was not fully satisfied by the final BDA outcome. It might be going through an internal debate over how far and how fast it should proceed with the negotiation process. It is also possible that the DPRK, now possessing nuclear weapons, may even think that they can drag out the process to squeeze the maximum political and economic benefits, believing that the Bush administration badly wants to strike a deal to meet its political agenda.
Washington is hoping to resume the talks in a week or two, once the money transfer is completed. The U.S. disposition of the BDA issue _ a verdict of conviction but no immediate punishment against the DPRK _ was perhaps the best creative compromise possible from the legal and political perspectives of Washington. That compromise probably was made possible by Hill’s negotiations within the administration, as Don Oberdorfer, chairman of the U.S.-Korea Institute at SAIS wrote in last week’s Newsweek Korea about the U.S. envoy’s internal efforts.
The North Koreans should heed the rekindled criticisms among the opponents of the Bush administration’s new approach to the DPRK since their refusal to participate in the talks last week. They should remind themselves that they won a rare opportunity to engage the United States after waiting 6 long years. They should also remember that the United States still has other options to resort to, if it is convinced, as events may prove right or wrong, that there is no way to reach a fair negotiated settlement.
Lessons from last week: for the United States, it does not pay to push the process too fast. As a principle in negotiation, it will be more difficult to get a desired result, if you are seen as badly wanting a settlement. It should not act on assumptions until validated by unmistakable communication.
Critics of the administration’s BDA disposition are quick to point out no negotiation can succeed without pressure on the opposing party. Some of them warn that the United States should not use up all its bargaining chips at this stage. Some may even argue that negotiation must be conducted from a position of strength if it is to succeed. But I think the United States has plenty of leverage, including its capability and strength to pressure the DPRK, and the DPRK knows it.
The DPRK learned from its experience last week first what it takes to transfer funds from one bank to another in the international financial community. The real ownership of the released funds may belong to the government of the DPRK, but since the funds were deposited in 50 accounts under different names of entities and individuals some of whom are dead, the BDA required applications for each account, not a single, master application for all the accounts as the DPRK presented at first. More importantly, the DPRK must have learned it will be extremely difficult to have access to banking benefits if it engages in illicit financial activities in the future.
As long as the DPRK wants normalized relations with the United States and a stronger economy, its leadership should seriously cooperate with other parties to steadily move towards the common goal of denuclearization. What’s your take?
Tong Kim is former senior interpreter at the U.S. State Department and now a research professor at Korea University and a visiting scholar at Johns Hopkins School of Advanced International Studies (SAIS).
Bingo.
My uneasy hunch is that the DPRK leadership, beyond the level of vice minister Kim Kye Gwan, was not fully satisfied by the final BDA outcome. It might be going through an internal debate over how far and how fast it should proceed with the negotiation process. It is also possible that the DPRK, now possessing nuclear weapons, may even think that they can drag out the process to squeeze the maximum political and economic benefits, believing that the Bush administration badly wants to strike a deal to meet its political agenda.
I agree that N. Korea is in driver's seat now.
Ping!
Where on earth does everyone think this money is going to end up? Feeding hungry N. Koreans?
I got question Tiger are US envoys looking other way with North Korea and their banks
Because, a REPUBLICAN ADMINISTRATION has done a complete about face, and is giving away the shop, lock, stock and barrel.
Democrats ignore it because it is what they would do anyway were they back in power (and they did under Madeline Albright). And Republicans ignore it because, well, it is a Republican Administration doing it, despite it being unwise and patently immoral.
There is no critical mass in our favor against propping up the DPRK regimer further and keeping it alive, such as President Bush, Condi Rice, Chris Hill and others have embarked upon, in contradiction to the sensible strategy that occupied the Administration's earlier years.
We can only continue to watch in amazement at these incredibly FOOLISH missteps, one after another.
There is a danger of allowing convenient loopholes for N. Korea if the country continues to be unyielding. That will create the effect of "looking the other way" while providing plausible political cover for U.S. admin.
We can only continue to watch in amazement at these incredibly FOOLISH missteps, one after another.
I am also surprised that the collapse of their position is nearly total, when it comes to N. Korea.
It is a serious misjudgment that we can treat N. Korea as another Soviet Union and apply the same strategy.
Basically, they gave up $25 million dollars in order to get the negotiation going, not in return for any real concessions from N. Korea.
It, at this rate, will likely turn out to be one of his biggest foreign policy failures--after eight years in office the North would have gone to a precariously untouched position regarding their possession of nuclear weapons and missile delivery technology--the Democrats cannot ALL be to blame for that.
Yeah dangerous is they look other way in future adminisation LIKE Say Hillary Clinton adminisation I don't know NOTHING
They are criminals! Any randomly selected group of San Quentin inmates would understand the North Koreans perfectly.
They wouldn't be doing this if Bolton was still around
I question your title about ignorant diplomats being in over their heads or singling out Chris Hill as being responsible. The buck stops at the WH. I am sure the NSC played a major role in this decision and Bush approved it. To say otherwise ignores how the foreign policy of this country is formulated and implemented.
Chris Hill is probably nothing more than a foot soldier carrying out his orders. The responsibility for these travesties and this unacceptable diplomatic and security situation lies within the Oval Office, sorry to say.
Lots of old time foreign policy establishment (aka appeasers) elites also have their thumbs in the pie at this time, IMHO.
It is more than just Chris Hill. Condi Rice also figure prominently in this incident. It is she who insisted that all NK money in BDA must be freed, without checking others with financial ramifications. Chris Hill was ignorant because he was not told. He was not told because his superiors at Foggy Bottom ran over other departments involved in anti-terrorism acitivities.
It is also Condi and other foreign service establishment who caused the flip-flop of WH. These diplomat community are collectively responsible for this fiasco. Chris Hill may share the similar view, but as you said, it is not all his fault.
However, generally speaking, the phrase, "ignorant diplomats in over their head" is not off the mark.
Foggy Bottom types enjoy getting the process going, even if the process has many significant flaws to produce the stipulated objective.
Maybe it is the other way around. Bolton got the wind of this kind of policy shift, did not want to be part of it, and left.
Based on my 28 years of working in the State Department as a Foreign Service Officer, I disagree. That is not the way it works. The State Department is only one of the players in the formulation of foreign policy. The other foreign affairs agencies plus some domestic ones, depending on the issue, are involved as well. The WH and NSC make the final decisions. I seriously doubt that Condi Rice would make such a decision without going through the inter-agency process.
However, generally speaking, the phrase, "ignorant diplomats in over their head" is not off the mark. Foggy Bottom types enjoy getting the process going, even if the process has many significant flaws to produce the stipulated objective.
As a "Foggy Bottom type," I would say it is way off of the mark. I find it amusing that when there is a foreign policy decision people disagree with, the State Department is the scapegoat and the one responsible. If it is a good decision, the WH gets the credit. Victory has many fathers, defeat is an orphan. I think you credit the State Department with far too much power and influence. Most of the time, it is the intelligence establishment and DOD that win the day.
It is indeed one of several major players. Every agency/dept has their own interest, and take the credit for success. Unless all media is lying, Condi has Bush's ears and it is her position which prevails. It is also true that many in foreign policy establishment like Condi's idea.
There are many different international situations. It just happened that the situation of N. Korea and Iran requires quite forceful and sustained measures in order for diplomacy to work. My beef is that many in foreign policy circles, and diplomats says that that is not the case, and all we need is our attitude adjustment, which I think is flawed.
Some people can't stand the prolonged stand-off, and begin to feel that there should be the clever way around it.
Without the firm foundation, you cannot build a skyscraper. I am sure that there are some who are not on the same page as Condi. If it bothers you that all blame is only directed to Condi, I will say that Bush has to take a chunk of blame himself. I have been polite to those Bush supporters here. However, if you demand more accurate description of the current events, Bush is as much responsible as Condi. Those who disagree with the two left the administration, are playing only the marginal role in the decision-making loop.
Bush went back to what he was during his Texas governor tenure and pre-9/11 days.
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