Update on the Stalled 6 Party Talks

Last week (or perhaps the week before) we were discussing the hold up over the transfer of funds from Banco Delta Asia (BDA) to a North Korean account at the Bank of China. This article sheds some light on the subject.

Essentially, Bank of China is reluctant to accept the funds because it fears a negative impact on it's credit rating. The U.S. designation of BDA as a "primary laundering concern," implies to Bank of China that the funds are illicit, thus making it reluctant to handle the money. The Chinese government has "encouraged" the Bank to accept the funds, but to no avail thus far. As a result, an electronic transfer that should have taken hours, has now stretched into weeks.

This implications of this delay are significant. Most importantly, Pyongyang has refused to come back to the negotiating table until the transaction is complete. This not only compromises future discussions but also the realization of already established benchmarks, namely, the shut down of the Yongbyon reactor by mid-April. This would be a blow to the 6 Party Talks and the denuclearization process, not so much within the negotiation process per se, but more in terms of external perceptions in participant countries' domestic political circles over the feasibility of such a diplomatic endeavor and the reliability of North Korea to live up to its end of the bargain.

Seoul and Beijing, North Korea's strongest "supporters" at the table are said to be working hard resolve the issue. We shall see what happens...