Korean Peninsula Today, 12 August 2009

Today’s highlights:

1) The North Korean Vice Foreign Minister Kim Yong-il stated, "There will be a major development shortly in the relationship between North Korea and the United States."

2) US State Department spokesman Robert Wood stated that the United States will not reward North Korea for its recent provocations and reiterated calls for Pyongyang to return to the Six-Party Talks

3) US Treasury Department’s designation of Korea Kwangson Banking Corp. (KKBC) for involvement in WMD related activities under the Executive Order 13382

4) The South Korean Unification Ministry spokeswoman Lee Jong-joo stated that there were no new developments on the release of the detained South Korean worker

and 5) After a 48-hour probe into the North Korean cargo ship MV Musan's illegal presence in Indian waters, the Indian Navy and the Coast Guard Monday [10 August] handed over the 39-member crew to the local police and intelligence agencies.

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High-Ranking North Korean Official; [There Will Be] 'Major Development Shortly' in the US-North Korea Relationship (Kyodo – Original in Japanese)

Ulaanbaatar, Kyodo – North Korean Vice Foreign Minister Kim Yo'ng-il, who is visiting Mongolia, held a meeting with high-ranking officials of the Mongolian Foreign Ministry in Ulaanbaatar on 10 August. Kim said, "There will be a major development shortly in the relationship between North Korea and the United States," hinting that there has been a move toward holding talks between the United States and North Korea. A Mongolian diplomatic source has revealed this on 10 August.

Vice Foreign Minister Kim commented on the Six-Party Talks on the North Korea's nuclear issue, reiterating again that North Korea "decided in the end that the country will not return [to the talks]." In addition, he said that his country "has not denied a dialogue, and if good conditions are fulfilled, a door is opened toward holding talks between the United States and North Korea," according to the source.

North Korea and Mongolia have held vice foreign ministerial-level meetings regularly every year since 2006; the recent meeting marks the fourth. Vice Foreign Minister Kim visited Mongolia on 8 August and will depart the country on 11 August. A Vietnamese Government source said that North Korean officials, including Kim, will visit Hanoi on 12-15 August.

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U.S. not to reward N. Korea for recent provocations: State Dept. (Yonhap)

WASHINGTON – The United States Monday said it will not reward North Korea for its recent provocations and reiterated calls for Pyongyang to return to the six-party talks on its nuclear dismantlement.

"They are not going to be rewarded, as the secretary and president said, for their previous behavior," State Department spokesman Robert Wood said, referring to the pledge by President Obama and Secretary of State Hillary Clinton not to reward the North just because of its coming back to the multilateral talks without taking substantial measures for its denuclearization.

"It's not going to have that kind of a relationship if it continues along -- the behavior along the lines that it's exhibited in the past," he said. "We want them to come back to the table and negotiate based on the commitments that they've made. And the ball, we believe, right now is in the court of North Korea."

Critics have said North Korea has used the talks since their inception in 2003 to buy time to build a nuclear arsenal. Its first nuclear test in 2006 was followed by a second in May.

"I think the president and Secretary Clinton have spoken very clearly on this that the North cannot be rewarded for its past behavior," Wood said. "Simply, what the North needs to do is to live up to its obligations. If you remember, the North signed on to the joint statement from 2005, committing to a verifiable denuclearization of the Korean Peninsula."

The six-party deal, signed in September 2005 by the two Koreas, the U.S., China, Japan and Russia, calls for the North to abandon its nuclear ambitions in return for massive economic aid, diplomatic recognition by the U.S. and Japan and establishment of a permanent peace regime on the Korean Peninsula to replace the armistice that ended the 1950-53 Korean War.

Pyongyang, however, has said it will boycott the multilateral talks for good due to U.N. Security Council sanctions for its recent nuclear and missile tests.

Instead, the North has called for direct talks with the U.S.

Washington declined, and threatened to continue sanctioning Pyongyang until it returns to the multilateral negotiations.

"The international community expects the North to live up to its obligations," Wood said. "These are obligations it took freely. And we want to see them come back to the table."

The spokesman noted the North's expressed willingness to have a dialogue and improve ties with the U.S.

"The North has said it wants dialogue, it wants to have good relations with the United States and other members of the international community," he said.

He was talking about the discussions former President Bill Clinton had for more than three hours with North Korean leader Kim Jong Il last week when Clinton visited Pyongyang to win the release of two American journalists held for illegally entering the North.

National Security Adviser James Jones made a similar point on Sunday.

"The North Koreans have indicated they would like a new relationship, a better relationship with the United States," Jones said in an interview with "Fox News Sunday." "They've always advocated for bilateral engagement. We have put on the table in the context of the talks we would be happy to do that if, in fact, they would rejoin the talks."

Jones also said that Kim is "in full control" despite rumors of his failing health after apparently suffering a stroke last summer.

He expressed optimism last week amid allegations that Kim Jong Il proposed a "grand deal" for a breakthrough in the stalled negotiations and improved ties between the sides.

"We certainly hope it could lead to other good things, but we won't know that for a while," Jones told reporters Thursday. "Who knows where the future will lead."

Former President Clinton will likely meet with Obama in the coming days to brief him about his trip, U.S. officials said.

Meanwhile, South Korean and U.S. officials said they have been discus sing a "comprehensive package," a possible breakaway from a six-party deal on the North's denuclearization that calls for action for action in the North's nuclear dismantlement.

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U.S. sanctions another N. Korean bank for WMD involvement: Treasury Dept. (Yonhap)

WASHINGTON – The United States Tuesday blacklisted another North Korean financial institution for its affiliations with North Korean firms and banks already sanctioned under U.N. resolutions adopted after North Korea's nuclear and missile tests in recent years.

In a statement, the Department of Treasury said it has "designated the Korea Kwangson Banking Corp. (KKBC) under Executive Order (E.O.) 13382 for providing financial services in support of both Tanchon Commercial Bank (Tanchon) and Korea Hyoksin Trading Corporation (Hyoksin), a subordinate of the Korea Ryonbong General Corporation (Ryonbong)."

Executive Order 13382 "freezes the assets of proliferators of weapons of mass destruction and their supporters and prohibits U.S. persons from engaging in transactions with them, thereby isolating them from the U.S. financial and commercial systems."

Hyoksin is among five North Korean firms blacklisted by the U.N. Security Council in June under Resolution 1874, adopted after North Korea's second nuclear test on May 25.

Ryonbong was among three North Korean firms targeted by the Security Council in 2006 under Resolution 1718, adopted after the North's first nuclear test in 2006.

The additional listing comes amid growing optimism for a breakthrough in the stalled negotiations over North Korea's nuclear weapons program after the landmark visit to Pyongyang by former U.S. President Bill Clinton last week to win the release of two American journalists held there for four months for illegally entering the North.

Clinton met with reclusive North Korean leader Kim Jong Il [Kim Cho'ng-il] for more than three hours, during which Kim expressed his willingness to have bilateral talks and improve ties with the U.S., according to U.S. officials who debriefed the former president.

U.S. officials dismissed Kim's proposal for bilateral talks, saying those will be possible only within the framework of the six-party talks involving the two Koreas, the U.S., China, Japan and Russia, which Pyongyang refuses to attend, citing punitive U.N. resolutions.

National Security Adviser James Jones, however, was a bit optimistic about the future U.S.-North Korea ties after the Clinton trip.

"We certainly hope it could lead to other good things, but we won't know that for a while," Jones told reporters last week. "Who knows where the future will lead?"

U.S. officials have, meanwhile, dismissed the Clinton trip as a "private mission," warning the U.S. will continue to sanction the North unless Pyongyang returns to the six-party talks.

In blacklisting KKBC, Stuart Levey, undersecretary for terrorism and financial intelligence, said, "North Korea's use of a little-known bank, KKBC, to mask the international financial business of sanctioned proliferators demonstrates the lengths to which the regime will go to continue its proliferation activities and the high risk that any business with North Korea may well be illicit."

KKBC is based in North Korea and has operated at least one overseas branch, in Dandong, China, according to the department.

Tanchon, Ryonbong and Hyoksin have already been listed by the U.N. resolution as well as the Treasury Department for their involvement in the North Korean WMD programs.

The Treasury Department accused Tanchon of utilizing KKBC since 2008 to "facilitate funds transfers likely amounting to millions of dollars, including transfers involving Korea Mining Development Trading Corporation (KOMID)-related funds from Burma to China in 2009."

KOMID is "North Korea's premier arms dealer and main exporter of goods and equipment related to ballistic missiles and conventional weapons," and Tanchon "plays a key role in financing KOMID's sales of ballistic missiles," the department said, suspecting Hyoksin "sought to us e KKBC in connection with a purchase of dual-use equipment in 2008."

In a strategic dialogue here last month, U.S. Secretary of State Hillary Clinton and Treasury Secretary Tim Geithner agreed with their Chinese counterparts to cooperate closely on implementing U.N. resolutions on sanctioning North Korea.

Any sanctions on North Korea, already one of the most heavily sanctioned nations in the world, are seen as ineffective without the full participation of China, North Korea's staunchest communist ally.

China has often been accused of disregarding U.N. resolutions against North Korea, which is heavily dependent on its communist neighbor for food, energy and other necessities.

Beijing is believed to dislike any instability on its border with North Korea as it is gearing up to be an economic power in the coming decades to match the world's superpower, the U.S.

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Hyundai Chief Extends Pyongyang Visit Seeking Worker's Release (Yonhap)

SEOUL – The chairwoman of South Korea's Hyundai Group, visiting North Korea to bring a detained employee home, extended her stay by one day, her company said Tuesday, as progress in the negotiations appeared to have been delayed.

Hyun Jung-eun was scheduled to return home Wednesday after a three-day visit to Pyongyang, during which she was largely expected to meet with North Korean leader Kim Jong Il to win the worker's release.

"We received the message from Hyun's entourage in Pyongyang that her return will be put off until Thursday," a Hyundai spokesman, Kim Ha-young, said over the phone.

The reason for the extension was not immediately known.

It appeared that Hyun has not yet met with the North Korean leader, said Unification Ministry spokeswoman Lee Jong-joo. Hyundai requested government approval for the trip extension Tuesday night, and "there are no particular reasons not to approve," Lee said.

Hyun drove across the inter-Korean land border Monday in the wake of former U.S. President Bill Clinton's trip to Pyongyang last week to win the release of two American journalists. Hyun's visit raised hopes that the Hyundai employee, identified only by his family name of Yu, would be released after a detention of nearly four-and-a-half months.

Yu was detained in late March at a joint park in the North's border town of Kaesong on accusations of criticizing the North's political system and trying to persuade a local woman to defect to the South. The 44-year-old with Hyundai Asan Corp., the group's North Korea business unit, had been working at the joint park for years.

In contrast to the American reporters, who were detained for illegal entry in mid-March, North Korea has not allowed Yu any phone calls to his family or access to Seoul officials, only saying an investigation was underway.

In a positive sign, North Korea gave a hearty welcome to the Hyundai chief, opening the land border for her drive to Pyongyang and sending a high-level official, Ri Jong-hyok, to receive her.

Sources in Seoul said Hyun appeared to be staying at the Paekhwawon State Guest House, North Korea's highest-level guest house reserved for foreign heads of state and top dignitaries, judging from the background of a photograph of her released by state media on Monday. Clinton stayed at the same guest house and dined there with the North Korean leader.

Hyun stayed there during visits in 2005 and 2007, when she was granted a meeting with the leader.

The high-profile trips by Clinton and the Hyundai chief have spurred hopes for progress in political relations in the region. Tensions rose after North Korea's rocket and nuclear tests earlier this year, and the U.N. Security Council adopted resolutions to stem the cash flow used to fund the North's weapons program. Pyongyang withdrew from regional denuclearization talks in protest.

Experts say North Korea's key concern is improving relations with the U.S., and to that end it is necessary to mend ties with Seoul.

Hyundai is deeply involved in inter-Korean relations, with several North Korea ventures initiated by its late founder Chung Ju-yung, born in North Korea. But the ventures hit a snag as political ties unraveled after President Lee Myung-bak took office last year with a tougher stance on North Korea's nuclear program and on economic aid.

The South Korean government suspended Hyundai's major tourism program to North Korea's Mount Kumgang in July last year after a female tourist was shot dead by a North Korean solider there.

North Korea closed another Hyundai tour program to the historic border town of Kaesong in December as part of retaliatory steps against the South's hard-line posture.

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Indian Navy, Coast Guards hand over North Korean ship crew to police (PTI News Agency)

New Delhi – After a 48-hour probe into the North Korean cargo ship's illegal presence in Indian waters, the Navy and the Coast Guard Monday [10 August] handed over the 39-member crew to the local police and intelligence agencies.

Navy and Coast Guard sources said here that their investigation did not lead them to any clandestine activities on the part of the crew members and that they had handed over the men to the local police and intelligence agencies for further action.

However, Indian authorities were yet to decide when the cargo vessel, carrying 16,000 tons of sugar, would be allowed to set sail again to its destination in Iraq.

The ship, M V Musan, was found anchored about 65 nautical miles south of Port Blair, Andaman and Nicobar, last Wednesday and the Navy and Coast Guard ships carried out an operation, including firing of a round, to force the vessel to accompany the enforcement agencies to the port.

The vessel was on its way to a port in Iraq and had set sail from a Thai port on 27 July. The ship's captain told Indian authorities that the vessel had a mechanical fault, due to which it had to enter Indian waters.