Counterterrorism Blog

As Deputy Assistant Secretary of the Treasury's Daniel Glaser meets in Beijing with North Korea, it remains difficult to assess whether North Korea is using Treasury's freeze of $24 million of its assets in a Macau bank as an excuse not to move forward with six-party talks on halting its proliferation program, is genuinely feeling a pinch as a result of the sanctions, or is simply outraged in principle that the U.S. could grab its money through imposing sanctions from afar.

The six-party talks are due to begin February 8. But the North Koreans are refusing to discuss anything but how and when the U.S. will unfreeze some or all of the assets, which the U.S. has identified as being the proceeds of illicit activity. The question will be whether the U.S. is in a position to offer the North Koreans some of the assets back to take the issue off the table on the basis that those assets aren't traceable to particular criminal activity, or will find some process solution for resolving the issue.

At Davos this week, Treasury Deputy Secretary Robert Kimmitt made it clear that North Korea had asked for the talks, that the U.S. viewed progress was being made in helping North Korea understand the "technical elements" of the freeze, and that on substance, the U.S. would be taking a hard line. `According to Kimmitt, "these are a set of talks, from our perspective, designed to make clear that the action that we took was narrowly targeted, focused on illicit conduct - and the way to cure it is to foreswear such conduct, make restitution for what's been done in the past, and move forward.''

Apparently, the North Koreans will be asked to show clean sources for any funds to secure their release. That may not be easy in light of their history of using Macao to pass counterfeit U.S. currency, launder drug money, and to handle smuggled goods.