Evening Walkthrough With Reporters at the Six-Party Talks

QUESTION: So how did your meeting with the Japanese go? Did you talk about the abduction issue? Do you get the feeling things are moving along the path?

ASSISTANT SECRETARY HILL: We wanted to coordinate our activities in the Northeast Asian security mechanism working group and also in the denuclearization group. I talked to both the chairs of that group from the Japanese side to coordinate how we’re going to approach these. And, as usual, we had very similar views. It was a good discussion.

QUESTION: The abduction issue didn’t come up?

ASSISTANT SECRETARY HILL: It didn’t come up directly, but of course we talked about it. We talked about it, but not in terms of the agenda for denuclearization or Northeast Asian security.

QUESTION: Did they comment on the meetings in Hanoi and their impressions of the meetings in Hanoi? Did they give you a readout about that?

ASSISTANT SECRETARY HILL: Yes, but I’d previously gotten a readout on that from Ken Sasae, so we didn’t spend a lot of time on discussing Hanoi. We talked about the timing of future working groups and what we might raise in the plenary when we have it next Monday. It was a useful discussion, mainly on agenda items for those two working groups coming up tomorrow and Saturday.

QUESTION: Besides the working group, any schedule for tomorrow?

ASSISTANT SECRETARY HILL: No, the working group, but I anticipate more bilateral meetings, and maybe I’ll touch base with the Chinese as well. As I understand, Kim Gye Gwan is not in until Saturday, so we can’t really talk with him until that time.

OK?

QUESTION: Can I ask one more question?

ASSISTANT SECRETARY HILL: Yes, sure.

QUESTION: The reaction from the Foreign Ministry here was really quite strong regarding the Banco Delta Asia issue. I know you spoke about it a little earlier. But is that an indication that the Chinese heard the North Koreans are really upset about this?

ASSISTANT SECRETARY HILL: You’d have to ask the Chinese. My sense is they were concerned about the effect on Macau, on its reputation as a banking center. But as I said before, our concern is with the long-term management of Banco Delta Asia, not with Macau monetary authorities, with whom we had very good cooperation throughout the 18 months. So I think they are clear. The Chinese are concerned that -- There is no sense that Macau is somehow going in the wrong direction. Frankly, I think we tried to make very clear that we are supportive of Macau and appreciative of their cooperation.

QUESTION: How soon do you think the money will be released, because this is such a fundamental point for North Korea? If some of the funds are not released within weeks, is that going to gum up the works?

ASSISTANT SECRETARY HILL: As I said, I can’t get into details. We’ve got a little more consultation, but I am pretty confident we will get through this just fine. This is not going to be a problem for Six-Party undertakings.

QUESTION: What do you think has to be done to make everyone happy on this issue?

ASSISTANT SECRETARY HILL: We just need a little consultation. I think we’ll be fine.

QUESTION: Did we --

ASSISTANT SECRETARY HILL: I can’t give you much more detail than that. Maybe I can in a couple of days. We were hoping we could see the North Koreans, but they’re not coming until Saturday.

OK?

QUESTION: Could you give me some idea of the modalities of the shutdown? Maybe, what is the necessary element for calling it a shutdown? Maybe (inaudible) thinks that it’s a shutdown if North Korea only puts the control rods in the reactor, and --

ASSISTANT SECRETARY HILL: Well, I think the modalities of that are something that we will hear something from, I think we’ll hear something about that from ElBaradei. As you know, we consider this a shutdown for the purpose of eventual abandonment -- meaning that when it is shut down, the next stage will be that it is disabled. The next stage after that will be that it’s dismantled. We see this as a one-way ticket, if you will. From all indications, the DPRK fully understands that. I’m sure Mr. ElBaradei will have some thoughts on that when he greets the Japanese and us and the South Koreans tomorrow morning.

QUESTION: From what you’ve heard from Mr. ElBaradei already, what’s your sense of North Korea’s preparations at Yongbyon and their degree of cooperation with IAEA on nuclear (inaudible)?

ASSISTANT SECRETARY HILL: I think what I heard from him was pretty much what he said to you all last night – a sense of looking forward and that they can improve on the DPRK-IAEA relationship. We expect to hear more during the briefing that we have tomorrow morning.

QUESTION: Just on the BDA issues, has China raised similar concerns with you in the past and were they consulted on this announcement that was made in Washington, or were they out of the loop on this?

ASSISTANT SECRETARY HILL: They had been consulted throughout on this matter. They have certainly known that our concern has been with the long-term management of BDA and not with Macau. And so I did want to draw to their attention the fact that if this long-term management issue at BDA is addressed, then Treasury will have another look at this question of U.S. financial entities dealing with BDA. I think we’re going to be okay on this issue.

QUESTION: It’s difficult to imagine a reputable financial institution wanting ties to BDA given its past…

ASSISTANT SECRETARY HILL: BDA has been the subject of considerable scrutiny by the Macau monetary authorities, and they have sought to help improve the internal controls at BDA. But at the end of the day, BDA does need to, from our perspective BDA will need some new long-term management if we are going to allow U.S. banking or U.S. financial institutions to deal with BDA. I just want to emphasize that our problem is not with Macau monetary authorities. They have done a lot of work. Our problem is with this BDA – the current management of it.

QUESTION: But it’s not just BDA. The Treasury went after that Vietnamese bank in December that was doing business with this (inaudible). Is Treasury still trying to strangle North Korea (inaudible)?

ASSISTANT SECRETARY HILL: We’ve made clear all along that we feel that we’ve been concerned about illicit activities for some time. And we have a responsibility to the U.S. financial system to make sure that our banks are not doing business with banks that are engaged -- or that act as money laundering centers. That’s the nature of this U.S. legislation, or this section of the U.S. legislation -- the Section 311 action that Treasury has taken.

I think the problem that the DPRK has faced over the years, and especially in the most recent years, is that they have been, unfortunately, allowing illicit activities to go on -- plus they’ve been engaged in building weapons of mass destruction. I think we, the United States, and every other member state of the UN has a duty to try to deal with that.

So that’s been the nature of our activities. I think we have communicated that to the DPRK. This is not some symptom of a hostile policy toward the DPRK, but rather an indication of the fact that we cannot ignore illicit activities or programs involving weapons of mass destruction.

Okay?

QUESTION: What time is your breakfast meeting in the morning?

ASSISTANT SECRETARY HILL: I’m not sure what time the meeting is. I guess I’ll be leaving the hotel before 8:30 to get to the meeting.

QUESTION: Before 8:30?

ASSISTANT SECRETARY HILL: Yes, probably 8:15 or something.

All right? So you can sleep in tomorrow. All right. See you later.