U.S. and Macau (2006)

U.S. Department of State

Recent Developments in U.S.-Democratic People's Republic of Korea (DPRK) Relations

Christopher R. Hill, Assistant Secretary, East Asian and Pacific Affairs
Statement Before the House International Affairs Committee, Subcommittee on Asia and the Pacific
Washington, DC
June 29, 2006

(As prepared)

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Six-party Talks

North Korea 's nuclear program is not a bilateral problem facing the U.S. alone. It involves the major countries in the region and the international community as a whole. We want to achieve the denuclearization of the Korean Peninsula through multilateral diplomacy, the Six-party Talks. The Administration's approach is to keep the focus on the Six-party process, working with our partners to get the North Koreans back to the negotiating table. We don't want to bilateralize our dealings with the D.P.R.K.

The six parties -- the U.S., Japan, the R.O.K., China, Russia and the D.P.R.K. -- unanimously adopted a Joint Statement on September 19, 2005, which provides a vision of the end-point of the Six-party process -- from North Korea, the elimination of all of its nuclear weapons and existing nuclear programs; and in that context, from the other parties, energy and economic cooperation, security provisions, and steps toward normalization subject to bilateral polices.

All the parties will benefit from full implementation of the Joint Statement. But North Korea won't be on a path to get the economic, political and security benefits envisioned in the Joint Statement until it returns to the table and starts implementation of its commitment to eliminate all of its nuclear weapons and nuclear programs, verifiably and irreversibly. We are prepared to rejoin the Talks without preconditions, and to continue to talk directly to North Korea in the context of those Talks. I traveled to Beijing in January, to meet my D.P.R.K. and Chinese counterparts, to deliver that message directly. I told them we were doing our homework to begin implementation of the Joint Statement. I don't think there's any ambiguity or misunderstanding about the U.S. position. The problem we face is that North Korea appears not to have made the strategic decision to eliminate its nuclear weapons and nuclear programs in exchange for a new relationship with the international comm!
unity. Still, despite this challenge and the specific challenge of the D.P.R.K.'s missile launch preparations, active diplomacy between the U.S. and other parties is continuing, to establish a basis for North Korea to make the decision that we firmly believe is in its interest.

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Illicit Activities

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In particular, the team described the reasons for Treasury's September 2005 designation of a bank in Macau, Banco Delta Asia, under Section 311 of the Patriot Act as a "primary money laundering concern." They discussed our ongoing efforts with authorities in Macau to resolve the issues that led to that designation.

As stated in the Federal Register September 20, 2005, BDA had been providing financial services for many years, with little oversight or control, to a number of North Korean entities engaged in illicit activities, including drug trafficking, smuggling counterfeit tobacco products and distributing counterfeit U.S. currency.

Our designation of BDA - which warns our financial institutions about doing business with the bank - has produced encouraging results. Macau has adopted new anti-money laundering legislation and and compelled the bank to institute more effective internal controls. U.S. law enforcement and regulatory agencies are working with Macanese authorities to resolve the concerns that led to the designation.

U.S. regulatory and law enforcement measures to protect our financial system from abuse are not subject to negotiation. We will continue to manage our financial system as we deem appropriate in accordance with U.S. law.

The September 19, 2005 Joint Statement contemplates, in the context of DPRK denuclearization, discussions on a broad range of issues, including trade and investment cooperation and steps toward normalization.

The North Korean accounts frozen by the Macao Monetary Authority total roughly $24 million. That the DPRK is using the Macanese action as a pretext not to return to the Talks - where benefits would dwarf what we're talking about with BDA - makes us seriously question Pyongyang's commitment to implement the September 19 Joint Statement, and its willingness to denuclearize.

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Refugees

The U.S. is deeply concerned over the grave humanitarian situation that exists within North Korea and over the plight of North Korean refugees who have fled the country.

In concert with other countries and international organizations, we seek to promote human rights in the D.P.R.K. and to improve protection and assistance for refugees from the D.P.R.K. We are mindful of the important role of the R.O.K. in this regard.

We have been working with other governments and refugee organizations to find ways to deal with cases of individual North Korean asylum seekers as they arise.

We have recently resettled some North Korean refugees in the U.S. Under U.S. law and policy, in order to protect the applicants, their fa mil ies and the integrity of the program, we do not comment on individual asylum or refugee cases. Procedures to consider North Korean nationals for resettlement are the same as for nationals from other countries. We will consider any North Korean brought to our attention by the United Nations High Commissioner for Refugees (UNHCR), U.S. Embassies and Consulates, and reputable non-governmental organizations. In all cases, host government concurrence is required for refugee processing on foreign territory. The U.S. continues to press China to live up to its international obligations with respect to processing North Korean refugees. We will continue to work closely with the Congress and with the Subcommittee as we pursue this important initiative.

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