[USFK Forums] US briefs S Korea on North counterfeiting charges [FT]

[C. Y. Lee]

Uploaded by C. Y. Lee on Tuesday, January 24, 2006

US briefs S Korea on North counterfeiting charges

By Anna Fifield in Seoul, The Financail Times
Published: January 23 2006 12:47 | Last updated: January 23 2006 12:47

US Treasury investigators on Monday briefed South Korean officials on allegations that North Korea has been counterfeiting dollars as Washington presses ahead with financial sanctions while simultaneously trying to resolve its nuclear stand-off with the North.

The meetings, combined with a fresh burst of six-party diplomacy this month, have injected some momentum into the moribund talks aimed at persuading North Korea to abandon its nuclear ambitions.

However, with Pyongyang insisting it will not return to the talks while the US continues to impose crippling financial sanctions, hopes for substantive progress remain dim.

“All of the parties concerned are working hard to convene the next round of talks,” Song Min-soon, South Korea’s deputy foreign minister and chief delegate to the nuclear talks, told the FT on Monday.

“Once we meet we have to show some tangible progress, not just meet for the sake of meeting. All the parties are working seriously towards that goal,” Mr Song said.

After making some progress last year, the talks have appeared increasingly doomed since Washington claimed that North Korea has been counterfeiting dollars and laundering money obtained by nuclear proliferation and drugs through the Banco Delta Asia in Macao.

Pyongyang denies the allegations, as does the bank, while South Korea is waiting for evidence and China is conducting its own investigation.

Daniel Glaser, deputy assistant treasury secretary for terrorist financing and financial crimes, on Monday told officials from South Korea’s foreign, finance and unification ministries that the financial issue was separate from the nuclear discussions.

Mr Glaser outlined the legal grounds for financial sanctions, which foreign residents in Pyongyang say have effectively frozen North Korea’s ability to trade, and described the crackdown as a defensive measure.

“The US officials stressed that it was part of pure law-enforcement activities to protect US financial firms and system, not sanctions,” a foreign ministry official told reporters.

Although the financial issue has become the biggest hurdle to nuclear talks, Kim Jong-il’s visit to China this month and recent diplomatic meetings have at least raised hopes that the talks are not yet dead.

In particular, last week’s meeting in Beijing between Christopher Hill and Kim Kye-gwan, the chief negotiators from the US and North Korea, has led to suggestions that the parties might be discussing a date for the next session.

“The face-to-face meeting improved their mutual understanding of the present situation,” said one diplomat familiar with the meeting. “It doesn’t mean they came to any agreement, but based on their conversation, both know they have to find ways to make progress.”

The Treasury officials travelled to Tokyo on Monday night to present their case to Japanese officials.


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