- The Washington Times - Saturday, April 14, 2007

SEOUL — One day before today’s critical deadline for the first stage of its denuclearization process, North Korea said it would stick to a multilateral agreement once it confirms the release of funds frozen in a Macao-based bank.

Quoting a Foreign Ministry official, Pyongyang’s Korea Central News Agency (KCNA) said the country “remains unchanged in its will to implement the Feb. 13 agreement and will also move when the lifting of the sanction is proved to be a reality.”

Under the agreement, reached at six-party nuclear talks in Beijing, North Korea would close down its plutonium-based nuclear reactor at Yongbyon by today, in return for a first installment of energy aid: 50,000 tons of fuel. However, the communist state has first been demanding the release of $25 million of its funds, frozen at Banco Delta Asia (BDA).

The KCNA said it had taken note of statements from the U.S. Treasury Department and Macao monetary authorities, and a North Korean financial institution would “soon” confirm the validity of the statements.

Meanwhile, the Japan-based pro-Pyongyang newspaper Choson Shinbo wrote: “If the settlement of the BDA issue, as has been reported in the media, is true, it is safe to say that the obstacle to implementing the Feb. 13 agreement has now been removed.”

The Treasury Department, in 2005, warned U.S. financial institutions against dealing with BDA, which it accused of money laundering for Pyongyang. The warning effectively locked North Korea out of global financial networks. Despite recent U.S. moves to free the funds in return for denuclearization, there have been complications in their release, with China-based banks declining to handle the money.

Given the delays in the release of the BDA money, other parties to the Feb. 13 agreement seem prepared to relent if the deadline for the reactor shutdown passes without compliance. Yesterday, South Korea Foreign Minister Song Min-soon, speaking at a forum, said that if the reactor shutdown is “implemented within acceptable boundaries of the deadline,” the Feb. 13 agreement should be upheld.

In Seoul on Wednesday, New Mexico Gov. Bill Richardson, returning from a four-day trip to the North, said he would be satisfied if Pyongyang issued an invitation to the U.N. International Atomic Energy Agency by today. But he said Washington had rejected the North’s demand to extend the deadline by 30 days.

However, even if the reactor is shut down, serious obstacles to the full implementation of the Feb. 13 agreement are expected — such as the North’s commitment to make a full declaration of its nuclear programs.

If it fully implements all aspects of the agreement, including declaring and disabling all nuclear facilities, North Korea stands to gain another 950,000 tons of fuel, as well as possible diplomatic normalization with the United States and Japan.

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