U.S. Official Backtracks on Gaesong

“I don’t think the Gaesong Industrial Complex project and the Mt. Geumgang tourism program are used for developing weapons of mass destruction of North Korea.”

The Voice of America (VOA) reported on July 25 that U.S. Undersecretary of Treasury for Terrorism and Financial Crimes Stuart Levey told that to South Korean officials when he had recently visited Seoul.

Mr.Levey, however, denied the report on July 26 after returning to Washington from his visit to South Korea, Japan, Vietnam and Singapore.

He said in an interview with Yonhap News, “The U.N. Security Council passed a resolution to block cash from flowing into the North for weapon development in an effort to deal with the world’s concern on North Korea’s WMD development. The U.S. and its allies are right to worry on the issue.” He added, “But I did not talk with the South Korean government this time about the two Inter-Korean economic cooperation programs.”

He implied that he would consider on a broader basis the U.N. Security Council’s article to prevent any transfer of financial resources in relation to North Korea`s missile or weapons of mass destruction programs. He said, “Because the North could divert money from trading with other countries to developing WMD or missile programs, the world should be careful.”

In particular, the U.S. high-ranking official asked the South and China to participate in the U.S. State Department’s financial sanctions against 11 North Korean companies imposed last June and October. He said, “As the U.N. resolution mentioned, the six-party nations should join in sanctioning the North.”

The undersecretary also said that Macau`s Banco Delta Asia (BDA), which had been put on an international money laundering blacklist, is related to the North’s WMD program. That means the North’s $24 million fund frozen by the BDA is from missile or nuclear material sales.

He added, “Danchon Commercial Bank, an affiliate of the Chosun Mining Development Trading Corporation, is related to WMD proliferation and one of the BDA’s customers.” The bank has been called Korea Changgwang Credit Bank, and is among the 11 North Korean companies sanctioned by the U.S. State Department.

The undersecretary emphasized, “My inspection of Pyongyang has nothing to do with the concerns or diplomatic efforts of other countries.”

His remarks can be viewed that although some say the U.S should lift the restrictions when Pyongyang indirectly confesses to dollar counterfeiting, the U.S. would continue the inspection until the comprehensive security issues – nuclear weapons and missile development – are resolved completely.

A source in Washington said, “What Mr. Levey said is related to U.S. Assistant Secretary of State Christopher Hill’s remarks about North Korea’s behavior at the Senate hearing.”

Meanwhile, the White House said that Chinese state-run Bank of China’s decision to freeze North Korea’s fund is “a positive move,” Reuters reported. “The bank made that decision before the North test-launched missiles on July 4.” The report also added that according to a high-ranking official in the State Department, “The suspicion that North Korea seeks to transfer its funds in the BDA to a bank in China is highly likely to be true.”

Gee-Hong Lee Seung-Ryun Kim sechepa@donga.com srkim@donga.com