Disarmament Documentation

US State Department spokesperson Sean McCormack on North Korea, April 10, 2007

Daily Press Briefing, Sean McCormack, Spokesman, Washington, DC April 10, 2007.

MR. MCCORMACK: Good afternoon, everybody. No opening statements other than to note the fact today is opening day at Fenway. Dice-K will face off against Ichiro. We'll see which of the Japanese national treasures will prevail. (Laughter.)

Opening to -- ready for questions.

QUESTION: Could you clarify where we stand on the unblocking of the North Korea assets -- the Macau?

MR. MCCORMACK: The Macanese authorities have put out a written statement and the Macanese Monetary Authority spokeswoman has also made some statements as well about this. The bottom line is authorized account holders as of now will be able to access the funds in those accounts. Now the Department of Treasury has also put out a statement with our views about this action by the Macanese authorities. And in our view, it conforms with international banking regulations as well as the February 13th understanding that these funds would be used by the North Korean Government on behalf of the North Korean people to better their situation and for humanitarian purposes. And our view is that we, as a member of the six-party talks, intend to hold North Korea to those obligations.

QUESTION: When you say you intend to hold North Korea to the obligations --

MR. MCCORMACK: Right.

QUESTION: -- about the money, right? Do you intend to hold North Korea to its obligations to shut down Yongbyon by Saturday?

MR. MCCORMACK: Where we stand on that is we're now bumping up against the technical ability to safety shut down all the facilities related to Yongbyon -- the reactor, the reprocessing, the fuel fabrication facilities. So we will see where we are on Saturday. It is our view that all the members of the six-party talks, including the North Koreans at this point, need to operate on the assumption that they have to meet the 60-day deadline which is up on Saturday. We will make an assessment at that point where we stand as we -- the United States -- as a member of the talks as well as the other five parties, will make a judgment about where we stand, whether or not the actions of all the parties have met the deadlines and whether or not they have made a good-faith effort to meet those deadlines.

QUESTION: Are you not insisting that they stick to the letter of the agreement because of safety concerns that you are not sure that it can actually be done by Saturday? I mean, you're not saying do it by Saturday. That's what you agreed to?

MR. MCCORMACK: Right. It is our view that everybody should meet the deadlines as outlined in the 60-day agreement. Ultimately, you are going to have the members of the six-party talks -- five members not including North Korea -- make a diplomatic and political judgment about the technical compliance with the 60-day deadline. You're not able to do that until you actually come up on the deadline and see what has been accomplished and make a judgment about whether or not this process is moving forward, whether or not the idea of confidence-building and good-faith effort has been moved forward by this process. But as of this point, we -- it is our view that the members of the talks, including the North Koreans, should operate in such a way that they meet the 60-day deadline.

QUESTION: Is there a meeting at the envoy level scheduled on Saturday or Sunday?

MR. MCCORMACK: There's not one scheduled right now. Chris Hill, our Assistant Secretary for East Asia and Pacific Affairs, is in the region now. He is currently in Seoul having visited Tokyo. In Seoul he had meetings with his South Korean counterpart and, by chance, his Chinese counterpart who was in Seoul for a bilateral visit, so he took the opportunity to see his Chinese counterpart. He will then travel from Seoul to Beijing for a couple days of meetings there and then back home by Saturday. There was a question also earlier this morning about whether or not Chris will see Governor Richardson and my understanding is they will see each other tomorrow in Seoul, local time.

QUESTION: Where is Richardson now? Do you know if he's still in North Korea?

MR. MCCORMACK: I don't. I'm not quite sure what his itinerary is.

QUESTION: And even if there's no envoy-level meeting now scheduled, is any consideration being given to trying to hold one so that you can make the assessment that you've just said you need to make on Saturday when Chris is out there? Are you giving consideration to the possibility of trying to convene such a meeting so you can judge whether people have met the deadlines?

MR. MCCORMACK: Right. I'm not aware that we have anything on the books or are considering a meeting. You can also do things by telephone or bilateral consultation, so we'll find a way. We'll find a way to do a poll among all the six party members to find -- determine where we are and how we might proceed from Saturday onwards.

QUESTION: How many days does it take to safely close down these reactors? What are your experts telling you?

MR. MCCORMACK: You know, you're going to have to -- you're going to have to check directly with the folks who have deep knowledge about the functioning of graphite reactors. Well, I don't -- maybe it's not a graphite reactor, but the reactor of the type that the North Koreans have. It can take -- you know, take anywhere from a week onwards. But again, you should really talk to the folks who have a deep understanding of how these things work and how you go about shutting them down in a safe manner.

QUESTION: So if it were to take a week or more, then you would be quite happy in the interests of safety to extend the deadline?

MR. MCCORMACK: Like I said, let's take a look where we are on Saturday.

QUESTION: Do you know or can you -- do you know or can you say based on this thing -- do you know or can you tell if they've even begun to take any preparations to close it down?

MR. MCCORMACK: Well, that gets -- since we don't have people on the ground, that gets into intelligence-related stuff, and just not an area that I can go into. Part of this agreement, the February 13th agreement, is that there would actually be IAEA inspectors on the ground who would be able to provide some feedback to the other members of the party as well as the IAEA as to what's going on on the ground. We also have our -- obviously our own means of assessing progress that has been made on the ground, but the IAEA is another data point for all the members of the six-party talks.

QUESTION: I don't think the agreement calls for the IAEA to be there, however, to verify the 60 -- the shutdown in 60 days.

MR. MCCORMACK: No, it's -- they are meant as -- their presence is meant as a way of, again, starting the regain the confidence of the international community as a whole. As you know, North Korea previously had kicked out the IAEA inspectors. They said that they had withdrawn from the NPT. So this is again part of the entire -- the larger effort (a) to denuclearize the Korean Peninsula and (b) eventually get the North Korean Government back into good standing with the international community on its treaty obligations, the NPT. And part of that is the reintroduction of the IAEA. They, of course, will offer technical advice, their technical views, but ultimately the decisions about how the negotiations go forward is going to be a decision made by the six parties. It's going to -- all of the collective judgment of those six parties.

George.

QUESTION: On the unblocking of the funds?

MR. MCCORMACK: Yeah.

QUESTION: I understand you talked earlier about the Macanese statement.

MR. MCCORMACK: Right.

QUESTION: I also understand that there's no direct reference to the funds or the unblocking of the funds in that statement.

MR. MCCORMACK: Right. In the written statement. Let me -- let me read for you -- again, this is a news account from Dow Jones out of Beijing and this quoting Wendy Au, A-u, from the Monetary Authority of Macau, and I quote, "The accountholders or authorized parties can go to the bank and withdraw or deal with their deposits." The arrangement takes effect -- "immediate effect," Au said after the bank's closure Tuesday. So this is, if you will, a supplement to the written statement that the Macanese authorities have put out.

QUESTION: Can you explain why -- I mean, does it not cause you a little concern that the written statement makes no reference to this? I mean, this goes much beyond what the written statement is. Do you have any doubts about whether they've actually done this?

MR. MCCORMACK: No, no, we don't have any doubts that this is, in fact, what they have decided to do and have done.

QUESTION: And do you think the North Koreans are going to take yes for an answer? Do you think they're actually going to take the money out?

MR. MCCORMACK: We'll see. We'll see if they take yes for an answer.

QUESTION: Just out of interest, was this the technical pathway that you were referring to on Friday and is this via Hong Kong Bank? I just wondered, you know --

MR. MCCORMACK: I'm going to -- those were confidential diplomatic discussions between the Treasury Department and Macanese authorities and North Korean officials, so I'm going to keep those confidential. Suffice it to say there are a number of different ways you could do this. This is one of them. And it's one of the means that meets the parameters laid out by the international system that any solution meet the standards of the international financial community and also that it would also hold the North Koreans to meeting their obligations to spend the money for the betterment of the North Korean people.

Nicholas.

QUESTION: Sean, I don't recall any other occasion of you reading a wire story from the podium, or part of a wire story from the podium, and I understand why you're doing it but the statement clearly says that the release of the funds is conditioned upon the agreement of all parties, meaning you and the Koreans and the Chinese. So as I understand, I haven't heard (inaudible) such an agreement has been reached. You said on Friday that you'd find a way to do it, then someone didn't like the way, you said there might be another way to do it. But the statement from Macau says this is conditioned on all parties respectively agreeing on a way to do this.

MR. MCCORMACK: Well --

QUESTION: So now you have a quote from Wendy someone who says, you know, they can take the money whenever they want. But these two things just don't square, as far as I'm concerned. Are you taking this quote from Ms. Wendy as the final decision and policy of the financial authority of Macau.

MR. MCCORMACK: I take it as authoritative. The Department of Treasury has already issued the statement saying that in their view, this deal meets the conditions that were laid out by the Department of Treasury. So from our standpoint, the ball is in the North Koreans' court.

QUESTION: Because neither the North Koreans nor the Chinese have come out and said this is all solved, the money will be released or transferred tomorrow or the next day. We only heard from the Treasury and now this quote from Macau, but why do you think the Chinese and the North Koreans have been silent about this?

MR. MCCORMACK: I can't tell you. You can speak to them.

Yes.

QUESTION: You mentioned earlier that you intend to hold North Korea to its obligations to use the funds for the betterment of the North Korean people.

MR. MCCORMACK: Right.

QUESTION: How do you intend to do this?

MR. MCCORMACK: Well, admittedly, that is a difficult task to -- in which we can have a hundred percent confidence that that is happening. However you present this, it is -- it always comes down to the irreducible point of holding the North Korean Government to the assurances it has given the six parties. Now how can we monitor everything that is going on in North Korea? That is very difficult. The World Food Program for several years had a difficult time doing that and actually suspended their shipment of food commodities as a result, so yes, this is difficult.

But the idea here is that we are trying to enter into a new kind of relationship between North Korea and the rest of the world. Previously, that relationship has been marked by mistrust, broken obligations that we all know about and that you've written about over the years. That isn't to say that we are suddenly going to abandon our senses and not go in a step-by-step fashion as we proceed in implementing the September 2005 agreement, which really gets to the point here, is a denuclearized North Korean peninsula, as well as outlining for the countries in the region a different kind of security framework and a different kind of political relationship.

So as we proceed to that, we're going to go in a step-by-step fashion. Now North Korea, at this part of the process, has said, "We pledge to you, all the members of the six-party talks, that we are going to spend these funds in a certain way." So this is something that we are going to watch closely, we are going to ask the North Koreans about in subsequent negotiations, whether or not they are abiding by their pledges, and to the best of our ability, determine whether or not they are abiding by that pledge as well as other pledges that they make in this process.

But overall, this is a process in which good faith actions will be met in turn by good faith, which results in a building of confidence, which allows all the parties to make some of the tough decisions that are going to be needed if we're going to achieve -- all achieve our goals. So this is -- we go into this with our eyes wide open, as do other members of the six-party talks.

QUESTION: And just to follow up, so how is this not a confession on the U.S. side or how -- because you said you wouldn't use the term, concession, to describe the BDA issue?

MR. MCCORMACK: Any -- in any negotiation, you are going to get a point where every party to the negotiation wants something and they're not going to get it exactly in the form that they want it, but -- and that's part of the negotiating process; you compromise and -- but you compromise with a reason. You compromise in order to achieve a larger objective and the important thing is that along the way, you not abandon principle and that you not abandon the -- what you want to achieve at the end of the process. That has been very clearly outlined.

QUESTION: Sean, Treasury on September 15th, 2005 designated Banco Delta Asia as a primary money-laundering concern.

MR. MCCORMACK: Yeah.

QUESTION: Then you know, as we all know, it then made final its designation.

MR. MCCORMACK: Right.

QUESTION: Are you absolutely certain that not a penny of the $25 million is in any way tainted?

MR. MCCORMACK: I'll let the Treasury Department talk about their assessment of the funds and who held them and what they may or may not have been used for.

QUESTION: Because if you don't have absolutely certainty that all of the money is untainted than it's reasonable to ask the question are you not compromising on an important principle by essentially allowing the money to be given back if some of it, even a penny, is tainted.

MR. MCCORMACK: Well, there are a couple of measures here. One -- and I'll let the Treasury Department talk about the details to the extent they wish to. There are a couple of things here. One, does -- do these agreements comply with international obligations, UN Security Council resolutions, international financial laws which were -- as well as domestic financial laws? And does the agreement actually meet the threshold terms that the North Koreans have laid out for themselves? Are they going -- how are they going to spend the money? So you can -- you have a definite answer on the first of those from the Treasury Department. They have essentially given the good housekeeping seal of approval to this particular arrangement. They've said that they've examined it and in their view it can proceed forward.

On the second that is going to bear watching. The Koreans -- the North Koreans have made a pledge and we as well as the other four members of the six-party talks are going to watch whether or not they abide by that pledge as well as other pledges that they make along the way in this process.

QUESTION: Sean, just one more on this. When you quoted the lady from Macau saying that they --

MR. MCCORMACK: You didn't seem to like her very much, Nicholas. (Laughter.) You don't seem to trust her very much.

QUESTION: I've regretted when I was there I didn't meet her but I should have. Is it your understanding that when she says that, you know, they can -- whoever's authorized can go to the bank and is it your understanding that they can actually withdraw the money in cash or are they going to just be there physically to authorize the transfer?

MR. MCCORMACK: I can't tell you. You'll have to talk to the Macau authorities. This is -- that's a level of detail I just don't have.

QUESTION: Because it strikes me that if you are just going to transfer you don't have to appear physically in person, you know, at the branch of the bank.

MR. MCCORMACK: I can only -- I can read again what she said here. I -- you'll have to talk to them about it.

QUESTION: Okay.

MR. MCCORMACK: The manner in which funds may be accessed.

Anything else on this?

QUESTION: So is Chris Hill making progress on bringing the focus back to denuclearization, do you think now that this is other issue is out of the way?

MR. MCCORMACK: Well, we've never taken our eye off the ball, the main objective. And all along the way we have been having discussions internally as well as with others about how this phase looks as well as what a second phase might look, which really gets to the heart of full declarations about North Korea, all of North Korea's nuclear programs, as well as how to go about the disabling and dismantlement of the North Korean nuclear program which are big questions and I expect going to be -- going to have very complicated answers to those questions: how do you go about doing it. And those things are all going to have to be negotiated. So it hasn't -- we haven't been sitting on our hands waiting -- just waiting for this to be resolved. There have been a lot of discussions about not only this phase but future potential phases. And we've been having some informal discussions as well. And Chris is going to talk about these very issues with his counterparts on his travels, where do we stand right now in the implementation phase as well as what are the potential next phases look like.

QUESTION: Is the deadline on Saturday absolute or could it be moved?

MR. MCCORMACK: Well, this is a different way of asking the question that Arshad and others have been asking.

QUESTION: She asked it very well though. (Laughter.) Really.

MR. MCCORMACK: She really got right to the point.

QUESTION: She hit the nail on the head.

MR. MCCORMACK: As I said before, we're going to take a look at where we are on Saturday and we call upon all the parties to operate on the basis of meeting the deadlines as outlined in the February 13th agreement.

QUESTION: And you're talking about intent this morning.

MR. MCCORMACK: Right.

QUESTION: I know that this might seem like a silly question, but if you get to Saturday and they start the process of shutting this plant down, would that suffice? I mean --

MR. MCCORMACK: Well, again, let's see where we are. We -- you know, what we expect is the February 13th agreement to be fully implemented, and that means shutting down the Yongbyon facilities. On that there is -- there can be no compromise. That's a predicate for moving forward, for the process moving forward, so that's -- so there's no partial credit on that. You need for that to happen.

We'll see exactly where we are on Saturday, and ultimately these come down to political and diplomatic judgments about technical matters and whether or not the process is moving forward. And we'll see where we are on Saturday.

QUESTION: Well, I'm asking though what -- in practical terms, what is the signal of intent?

MR. MCCORMACK: Well, we'll make those --

QUESTION: The whole thing or physically on the ground making moves to actually shut the thing down?

MR. MCCORMACK: You know, ultimately it's important where you end up. Do you have the facility actually shut down? Now, there are a lot of steps along the way to doing that and you can -- technical experts can tell you exactly what those steps are along the way. And we'll see where we are in that process on Saturday. Again, at the risk of beating a dead horse, we hope -- we would expect that North Korea would make every effort to abide by that 60-day deadline.

Matthew.

QUESTION: Yes, Sean, I'm sorry to do this because it is a dead horse, I know. But I just want to make sure I heard your comment about you take this Wendy Au's comments as authoritative --

MR. MCCORMACK: Mm-hmm, as quoted by a reputable news organization.

QUESTION: Yeah. But you're relying on a pickup of -- a Dow Jones pick up of a Kyodo story, okay? So I just want to make sure that you have been -- the U.S. Government has been informed through whatever channel that this is, in fact, the --

MR. MCCORMACK: We were told -- we were told that they would -- there would be a written statement as well as a verbal statement that is coming out, and this is --

QUESTION: And this is the verbal statement?

MR. MCCORMACK: This is what we expected the --

QUESTION: But did they tell you what was going to be in the verbal statement?

MR. MCCORMACK: Not the exact wording, but we understand the intent and the intent here is clear.

QUESTION: Okay, all right. Is there some -- were you told why they wanted to do it this way?

MR. MCCORMACK: You know, in fact, it doesn't really matter. You know, they can put it out in a written statement. They could, you know --

QUESTION: Smoke signals?

MR. MCCORMACK: They can do smoke signals. They can -- you know, they could, you know, get a piece of paper and tie it around a rock and throw it over the wall. I mean, it has the same effect.

QUESTION: But what she said in the verbal statement is -- it comports exactly with what you expected?

MR. MCCORMACK: Yes.

QUESTION: Okay. Or what they told you they were going to do? What they told you at they -- in other words, they told you we're going to unblock it?

MR. MCCORMACK: Yes, mm-hmm.

Anything else on this? Yes, (inaudible).

QUESTION: I asked this morning about the sanctions issue. Earlier today, Japan's Prime Minister Abe said that there's been no concrete progress on the nuclear issue among others, and without that Japan won't lift it sanctions. It seems like there's a little bit of a confidence gap here between your position and the Japanese. Do you think that's accurate?

MR. MCCORMACK: Is there any gap between us? No, I don't --

QUESTION: They seem a little less confident in the proceedings.

MR. MCCORMACK: Again, we'll see where we are -- we'll see where we are on Saturday. This is -- you know, the Japanese are taking steps to implement some sanctions that they feel as though they need to under 1718. That is a bilateral course of action that of course we support. We support implementation of 1718. I don't detect the Japanese in any way backing away from the six-party talks process. Now, there may be on their part a desire for the bilateral working group with the North Koreans to move forward in a more constructive manner regarding the abductee issue. We fully understand that and we fully support the Japanese pursuing that matter and pursuing it to a resolution that satisfies them. Ultimately, however, that's going to have to be done between the Japanese and the North Koreans.

QUESTION: So you don't think they have any, I guess, less public confidence in the ability of North Korea to meet its deadline by Saturday?

MR. MCCORMACK: I haven't been informed of anything.

Way in the back.

QUESTION: Do you think the North Koreans will be satisfied with today's decision? Because I believe that in the past the North Koreans have wanted the return of funds to the North Korean Government and I guess today's it's going back to the individual accountholders.

MR. MCCORMACK: We -- again, we'll see. I believe that the Macanese and Chinese authorities as well as the United States in its previous actions has acted in good faith in meeting its obligations, and we'll see if the North Koreans take yes for an answer.

QUESTION: And just on the monitoring of the funds, do you think it may be more difficult now because it's going to be returned to individual accountholders?

MR. MCCORMACK: Let's be honest here. I think it was going to be difficult under any circumstances. And what you -- as I've talked about previously, it's going to -- the six-party members are going to have to rely on the assurances at this point of the North Korean Government. Now, there may be other ways where they're able to discern how money was spent. I don't know. Perhaps that will be the case, and if so that's one more way to check whether or not the North Koreans are meeting their obligations. But again, this should be viewed as part of a whole negotiating process and the ultimate objective of this negotiating process is to see a denuclearized Korean Peninsula.

(The briefing was concluded at 1:10 p.m.)

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