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US Assistant Secretary for East Asian and Pacific Affairs Christopher R. Hill on North Korea, February 28, 2007

North Korea and the Current Status of Six-Party Agreement Christopher R. Hill, Assistant Secretary for East Asian and Pacific Affairs Statement Before the House Foreign Affairs Committee Washington, DC February 28, 2007.

I am happy to say that we have made some progress since I last appeared before the The agreement at the most recent round of Six-Party Talks in Beijing is an important first step -- but only a small step -- toward the complete, verifiable and irreversible denuclearization of the Korean peninsula and the establishment of a more stable, peaceful and prosperous Northeast Asia. We are fulfilling the President's objective of approaching this problem diplomatically, multilaterally, and peacefully.

In the September 2005 Joint Statement, North Korea committed to abandoning all its nuclear weapons and existing nuclear programs. The February 13 agreement is an important initial step in that direction.

The current approach is broad in scope, with a comprehensive vision that seeks a lasting solution to the problem by addressing a wide range of economic and security issues. The agreement commits all six parties, a key difference from previous bilateral efforts. It establishes tight timelines for actions that are measured in months, not years. Within 60 days, the D.P.R.K. will:

Shut down and seal for the purposes of eventual abandonment the Yongbyon nuclear facility;
Invite back the IAEA to conduct all necessary monitoring and verifications;
Discuss with the other parties a list of all its nuclear programs, including plutonium extracted from used fuel rods, that would be abandoned pursuant to the Joint Statement.

The Parties agreed to provide emergency energy assistance to North Korea in the initial phase. The initial shipment of emergency energy assistance equivalent to 50,000 tons of heavy fuel oil (HFO) will commence within the first 60 days of the agreement. The Six Parties also established five working groups to carry out the initial actions and formulate specific plans for the implementation of the September 2005 agreement -- leading to a denuclearized D.P.R.K. and a permanent peace.

The working groups are:

Denuclearization of the Korean Peninsula
Normalization of U.S.-D.P.R.K. Relations
Normalization of Japan-D.P.R.K. Relations
Economy and Energy Cooperation
Northeast Asia Peace and Security Mechanism

The details of the economic, energy and humanitarian (up to the equivalent of 1 million tons of HFO) assistance will be determined through consultations and assessments in the Economy and Energy Cooperation working group and will be commensurate with the steps the D.P.R.K. takes to fulfill its commitments, building on our commitment in the Joint Statement to take "Action for Action."

An important aspect of this agreement is that it begins to lay out a path to complete denuclearization, not just a temporary shutdown of the reactor at Yongbyon. Under the agreement North Korea will discuss in the first 60 days a list of its nuclear programs that would be abandoned pursuant to the Joint Statement.

The fact that there are six parties is very important. We now have five parties aligned and watching to make sure that North Korea's commitments in the September 2005 Joint Statement are fulfilled. Having these partners participating ensures that this approach is more robust -- because it provides both stronger incentives and stronger leverage for fulfillment of North Korea's commitments.

One of the benefits of the Six-Party process has been the development of our relationship with China. The new and highly constructive role of China as the convener of the Six-Party Talks is especially important, and our coordination with them in this area has been outstanding.

The Six-Party Talks have also become a useful mechanism for addressing regional issues, for example between North Korea and Japan. Our participation in these Talks is an important example of our commitment to the region and is also a sign of how seriously we take Northeast Asia's security.

These multilateral efforts have had a stabilizing effect and reduced the negative impact in the region of the D.P.R.K.'s nuclear test last October. The very important alliances we have with Japan and the Republic of Korea are essential to maintaining regional security, but the Six-Party process also gave people in the region the sense that there was a mechanism to deal with this problem. Without that process we could have seen a much more dangerous counter-reaction in the region.

North Korea is well aware that it remains under Chapter VII UN sanctions. Today, UNSCR 1718 remains in effect, and North Korea understands that the international community will continue to fully and effectively implement the resolution. North Korea continues to face a basic strategic choice. There are political and material incentives on offer to North Korea, but it must fully denuclearize to realize the full benefits of those incentives. North Korea understands that it must abide by its commitments to receive these benefits.

The Banco Delta Asia (BDA) issue is being discussed on a separate track from the Six-Party Talks, managed by experts from the Treasury Department. In December and January, Treasury had two rounds of useful discussions with D.P.R.K. authorities, where the North Koreans provided information about BDA account holders. This week Treasury officials were in Macau and Hong Kong to discuss details of the BDA case. We are hopeful that this will help in bringing about a rapid resolution of the BDA case. Treasury advised the D.P.R.K. about steps it could take to avoid future problems, be less isolated in the international financial system, and eventually join international financial institutions.

The measures the U.S. Treasury Department has taken with respect to North Korean finances, specifically the designation of Banco Delta Asia in Macau as an "institution of primary money laundering concern," clearly had a significant impact on the regime. These actions affected Pyongyang's ability to access the international financial system and conduct international transactions as banks everywhere began to ask themselves whether doing business with North Korean entities was worth the risk.

Treasury is now prepared to resolve the Banco Delta Asia matter. But this will not solve all of North Korea's problems with the international financial system. It must stop its illicit conduct and improve its international financial reputation in order to do that.

Once Treasury has concluded its regulatory action with respect to BDA, the disposition of the bank and of the funds that were frozen by the Macau Monetary Authority will be the responsibility of Macau, in accordance with its domestic laws and international obligations.

The President has repeatedly said that if North Korea makes a strategic decision to denuclearize, then much is open to them. The denuclearization steps by North Korea announced in Beijing on February 13 are only the beginning of their commitment to full denuclearization. While this represents a first step, it is an important one on the path towards our goal of a denuclearized Korean peninsula.

Thank you. I would be happy to answer your questions.

Source: US Department of State, http://www.state.gov.