Wednesday, March 21, 2007
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Who's leveraging who in Northeast Asia?
The Financial Times' Demetri Sevastopulo and Andrew Yeh explain the rather bizarre goings-on over the past three days involving North Korea, the financial sanctions against Banco Delta Asia, and the strange Treasury department statement that, "North Korea has pledged, within the framework of the Six-Party Talks, that these funds will be used solely for the betterment of the North Korean people, including for humanitarian and educational purposes."
What the heck happened? According to Sevastopulo and Yeh:
Condoleezza Rice, US secretary of state, orchestrated a significant shift in US policy towards North Korea by persuading the US Treasury to agree to Pyongyang’s demands to release $25m frozen in a Macao bank since 2005.Full disclosure: I worked with Glaser during my stint at Treasury, and he always exuded competence.
Beyond that, Flake's statement seems internally inconsistent. The financial sanctions cannot be both a strict law-enforcement matter and a source of leverage. It's one or the other. Clearly, it appears that they were leverage.
The sentence in the story that bothers me is China's linkage of this move to the SED. If that's what tipped the scales, then Beijing better be making some concessions in those negotiations that no one knows about.
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