North Korea Negotiations Key to U.S. Security

In the past, well-aimed economic pressure on North Korea has paid off. For example, in March 2007, international financial pressure spearheaded by the United States was instrumental in forcing flexibility on the rigid communist regime. The Bush administration declared Banco Delta Asia (BDA), based in Macau, a renegade institution assisting illegal financial activities by Pyongyang. U.S. businesses were banned from dealing with BDA, and others followed suit. Macau government authorities froze US$25 million in North Korean funds.

Washington then offered to facilitate return of the funds to Pyongyang in return for flexibility by Pyongyang. This transfer was carried out by BDA, reportedly with assistance from the Federal Reserve Bank of New York, the central bank of Russia and a small private Russian bank, the Far East Commercial Bank.

The very serious global financial crisis has provided powerful incentive for governments to cooperative more closely, including greater financial transparency. The G-20 and International Monetary Fund, among other international agencies, facilitate this pointed progress. One useful byproduct may be greater effectiveness by five of the six parties in dealing with North Korea.