Evening Walkthrough With Reporters at Six-Party Talks

ASSISTANT SECRETARY HILL: How are you? We had another long day out there in Diaoyutai. Yesterday we had three plenary meetings, I guess. Today we didn’t have any plenary meetings. We had a lot of bilateral meetings. Towards the end of the day, I had a long bilateral meeting with the North Koreans and went through my list of issues, including my concern that I think it’s time for North Korea to get going on its bilateral relationship with Japan.

So, we had a good discussion on the getting the sixty-day events done, looking at the next phase, etc.

QUESTION: Did you meet with Kim Gye Gwan?

ASSISTANT SECRETARY HILL: I’m sorry? Yes, I met with him for, I think, about an hour later on in the day today. We had also met with some of his people at the working level earlier.

QUESTION: Where do we stand on BDA now?

ASSISTANT SECRETARY HILL: It’s not a political issue, so I haven’t really been on it, but it has to do with figuring out things like moving accounts to other accounts, etc. It’s a banking issue, basically.

QUESTION: Why did you not do the plenary sessions today?

ASSISTANT SECRETARY HILL: I am sorry?

QUESTION: Why didn’t you have plenary sessions?

ASSISTANT SECRETARY HILL: We had three of them yesterday. Today I had several bilateral meetings. I made the points I needed to make in the bilateral meetings.

QUESTION: I understand the North Koreans’ concern is whether they will be able to access the world banking system after this or if this is some sort of (inaudible) band-aid --

ASSISTANT SECRETARY HILL: I couldn’t hear. You understand what?

QUESTION: I understand that the North Koreans are concerned whether they will be able to access the world banking system after this agreement?

ASSISTANT SECRETARY HILL: After what agreement?

QUESTION: The agreement that you announced yesterday.

ASSISTANT SECRETARY HILL: We’ve had a working group going with the DPRK involving our Treasury Department. I think they met once in February, once previously in December, I think they met in the previous spring. We’ve told the DPRK that we are prepared to keep having these working group meetings for the purpose of essentially trying to make them understand the rules of the road in the international banking system and why they need to play by the right rules. So I hope that if they pay attention and really show an interest in this, they will be able to put themselves in a better position.

You know, they have certainly engaged in some illicit activities, which are big problems for us and for many countries. They’ve also engaged in producing weapons of mass destruction which are, frankly speaking, an even bigger problem. And the combination of these problems has meant that a lot of banks have not wanted to do business with them. So they’ve got to start crawling out of that hole.

QUESTION: We’ve heard, though, that the Treasury’s evidence was not very persuasive on their illicit activities -- for example, counterfeiting. We’ve heard that there was actually no evidence, what’s the real --

ASSISTANT SECRETARY HILL: I don’t know who you’ve heard that from.

QUESTION: I’ve heard it here and there. What have you heard?

ASSISTANT SECRETARY HILL: I’ve heard plenty of evidence, especially with respect to the problem of counterfeiting over the years.

QUESTION: In BDA, BDA --

ASSISTANT SECRETARY HILL: Again, I don’t want to get into BDA. I have discussed that. If you had been here a few days ago, you would have heard all you wanted to hear about BDA. The issue has been that there had been concerns about various institutions. That has been our concern for some time.

But the real issue for us with North Korea remains their program, their weapons of mass destruction, in particular their nuclear program. And that’s what we are involved in trying to deal with. And if the North Koreans will continue to work with us on that and implement the September ’05 statement -- where they will abandon all these nuclear programs, nuclear weapons programs -- I have no doubt, no doubt at all they would have a better future, including access to the international financial institutions.

QUESTION: Has North Korea’s funds been already transferred to Bank of China?

ASSISTANT SECRETARY HILL: I’m sorry, I don’t know. These are banking issues.

QUESTION: When did your bilateral meeting with Kim Gye-gwan take place?

ASSISTANT SECRETARY HILL: Late this afternoon, early evening.

QUESTION: Was that the initial plan, or was it later than you had hoped?

ASSISTANT SECRETARY HILL: I had meetings earlier with the Chinese. I think I met at 4:30; I don’t know.

QUESTION: Ambassador Hill, how long, sir, are you prepared to stay in Beijing at this round?

ASSISTANT SECRETARY HILL: For this round? The Chinese had told us two or three days, and I think they want to have another session tomorrow. So I guess we’ll have another session tomorrow.

QUESTION: Beyond that, would you be willing to stay?

ASSISTANT SECRETARY HILL: Willing to stay? I will stay as long as the Chinese are hosting the talks. I am not going to walk out of them. Have you heard that it’s going on beyond? If you have, I want to get a new airplane reservation, if you’ve heard some thing I haven’t heard. But my assumption is that it’ll be done tomorrow.

QUESTION: Mr. Ambassador, the Japanese reports are saying that the North Koreans don’t want to negotiate until they have their money.

ASSISTANT SECRETARY HILL: Yes, the North Koreans today, as I understand, were concerned about making sure this transaction involving getting their money -- involving this BDA issue -- is finalized. And to my knowledge, it has not yet been finalized, but I did have a pretty lengthy bilateral meeting with them.

So I think they are under fairly strong instructions from home to get this thing finalized. I think a lot of their energy today was taken up working with the Chinese on trying to finalize this arrangement.

QUESTION: The Japanese diplomat said that they wanted to count the sixty days from the moment when they got the money.

ASSISTANT SECRETARY HILL: I don’t think that’s been an issue for me. No, that has not come up. On the contrary, the February agreement was reaffirmed.

QUESTION: Mr. Ambassador!

ASSISTANT SECRETARY HILL: Wait, let me have some other people ask some questions, and then I can come back to you.

QUESTION: Ambassador Hill? You’ve been saying for few days now that you wanted to meet Kim Gye-gwan, and the meeting finally happened today. Why do you think that there has been a delay in this meeting, and do you think that there was enough progress today to keep the ball moving on this round?

ASSISTANT SECRETARY HILL: We have not looked on this round as a round where we are trying to get a joint statement. It’s not been really a negotiating round. I think what happened over, I guess, the weekend and Monday was, a lot of it was taken up with this issue of BDA and finally resolving that.

I think we had yesterday a fairly lengthy discussion on the working groups. And, as I told you, the result of those working groups I thought was kind of uneven at times. I thought some of them should have done more. And I think I’d talked to you a little about that yesterday. In particular, I would like to see a little more done on the Japan working group. I think I made my views on that clear yesterday.

Today I had hoped we could have discussed the 60 day clock. And I think we did that discussion, albeit not in a plenary session. And then tomorrow, the idea was to go forward and look at the issues of the next tranche of obligations, which includes disablement.

We had some discussions with the DPRK yesterday, and today we had additional discussions, plus a fairly lengthy bilateral that I had with Kim Gye-gwan. I think, though, it is very fair to say the North Koreans are very much focused on making sure that this bank transaction takes place. And the problem I have is it’s not a political issue. From our point of view, it’s not an issue involving our case -- because we are done with that as of last week.

QUESTION: Mr. Hill, do you see Mr. Kim Gye-gwan’s demand -- it’s not a deal breaker, it’s not going to prevent you from going home empty handed, it’s just a part of the entire process? But it’s not a deal breaker, right? His demand is that he gets the money before we get through on this --

ASSISTANT SECRETARY HILL: Yes, I think they want their money. But I assume that’ll be worked out in banking circles, and they’ll figure out the solution to that. From our point of view, we would like the money transferred as soon as possible. But that has to be resolved. I am sure there are number of banking institutions working on it as soon as they reopen in the morning. We’ve got to get on with the denuclearization process. And I am particularly focused on -- not so much the 60 day clock, because I think that’s fairly clear; the South Koreans have arranged the shipment of fuel oil, IAEA has made contact with the North Koreans, so I think that’s fairly clear what’s going to happen there -- the issue that I am focused on is the next step, because we want to keep the momentum going.

QUESTION: So, overall this is a small deal, compared to the past difficulties you faced, this demand that they get the money now?

ASSISTANT SECRETARY HILL: Yes, OK, we’ll put it that way. I think any issue is one that we obviously focus on. But there are certain things that are sort of beyond our control, and one of them is the banking issues. I am not in a position really -- once we went final on our situation -- I am not in the position really to do much more about getting signature cards done for bank accounts. So I am sure it will get taken care of.

QUESTION: Ambassador, did you -- when meeting with Mr. Kim Gye-gwan, did you get any commitment from him that North Korea realize to implement the first phase items?

ASSISTANT SECRETARY HILL: I did. You mean the February actions? Yes, I did.

QUESTION: Was there an expression of satisfaction from the North Koreans?

ASSISTANT SECRETARY HILL: Well, you would have to ask them. They are very focused on getting their money in another bank account. They are also very focused on continuing through this process that we’ve gotten under way. We are step by step, and then we need to get through the sixty days. Then we need to figure out the elements for the next period -- which, as you recall from the February agreement, talks about fuel oil and full complete declaration, plus disabling of the reactors. So we’ve got to sequence those events, figure out what our milestones are on the issue of denuclearization, and go from there.

Yes.

QUESTION: Yes, you are finally back to me!

ASSISTANT SECRETARY HILL: We are on number six now, but go ahead.

QUESTION: The question is this. Is the Treasury Department really on board for this? Are they ready to give North Koreans what they want?

ASSISTANT SECRETARY HILL: Yes.

QUESTION: Which is, as I understand it, access to the international banking system. It’s not just the money, it’s access to the international banking system.

ASSISTANT SECRETARY HILL: Yes, the Treasury Department does not regulate access to the international banking system. What they do is that they look at situations that could be a threat to the U.S. banking system. And this is done in terms of warning American banks not to deal with certain financial institutions that are deemed to have problems in this regard. That’s what’s the Banco Delta Asia issue was about. Now that issue has finally been resolved.

Now, as the North Koreans go further and begin a process of trying to deal in the international banking community, they are going to have to, of course, play by those rules. And we are prepared to work with them and try to work in a way that will facilitate their entry, provided they’re prepared to do what they need to do -- which is to get out of this illicit activities business and also to get out of the nuclear business.

QUESTION: Has the process stalled because of this issue, until the money is in hand?

ASSISTANT SECRETARY HILL: I want to emphasize we are not here to reach a new agreement. I had hoped that we could at least have more discussions on getting through to the next phase. But this is not like the situation we had in February, where every day we were trying to get closer to an agreement and every day it seemed kind of elusive; and so we ended up – I can’t remember, it seemed like six weeks, but I guess it was only about six days -- but we finally got an agreement. We’re not in that kind of situation.

It’s just that things have been slow, because I think it’s clear that the North Koreans want to see their money in the bank account. So we haven’t had as many meetings as I would have liked. I did have a good meeting today of an hour or so. If we start having problems with the 60 day clock, I’ll let you know.

QUESTION: Mr. Hill, what are some of the issues that you’re looking at in terms of access that IAEA monitors might have within North Korea once they’re there. For instance, the World Food Program is very tightly circumscribed about where they can go. What has North Korea told you about what is going to happen, and what is your working assumption about what is necessary to make it effective?

ASSISTANT SECRETARY HILL: First of all, I think what was very important was the IAEA had a team go into North Korea led my Mr. ElBaradei, and they had some preliminary discussions. I suspect they will try to do the same, have a follow-up team either meeting the North Koreans in Vienna or going back to North Korea. So they need to look at what it is they need to do to do their jobs, especially in Yongbyon. I think they need to work out with the North Koreans what the rules of the road are there. I think they have a good idea from the Agreed Framework on the sorts of things they are interested in in accomplishing their missions.

What we did over the weekend was to have a denuclearization working group and had some discussions within that working group among various participants of the working group, and I think we’ve shared the benefit of those discussions with the IAEA. So if you look at the February agreement, you see that the IAEA and the DPRK, the North Koreans, need to work that out.

QUESTION: Are you confident that you could reach the agreement which facility to be shutdown during this round of talks?

ASSISTANT SECRETARY HILL: You mean the 60 days? Oh yes, I’m not too concerned about that. We can get through that. The real issue will be when we get to disabling. How do you disable, what does it mean to disable, what facilities you disable? We have some work to do on that. Frankly, I would have liked to get on with that, but I must say, at least today and yesterday, the DPRK was very much focused – their delegation was very much focused on making sure that these banking issues are being taken care of. But the problem for us is that the banking issues are being handled in banking channels, not in diplomatic channels.

QUESTION: Ambassador Hill, you said that in your meeting with Kim Gye-gwan that you talked to him about the North Korea-Japan working group. Did he have a positive response to your concern? What did he say about that?

ASSISTANT SECRETARY HILL: I don’t want to get into divulging the whole conversation. So let me just say, from my point of view, as I said yesterday, I’d like to see more progress on that. We have an approach with respect to these working groups that we don’t like to link progress in one with progress in the other. But, on the other hand, we want to make sure all of them are doing OK. And so we think this is an opportunity for the DPRK to do more with Japan, and I said so.

QUESTION: Are you still confident that the North is committed to disabling its reactors?

ASSISTANT SECRETARY HILL: You’re asking whether they are committed to the February statement, which includes the disabling measure, and my answer is yes. But we have to figure out how those actions are going to be sequenced. There is a lot of fuel oil there, and the fuel oil is in amounts that would require more months to disburse -- because there’s an absorption capacity problem of how much fuel oil per month can the North Koreans take. We envision having to have fuel oil plus some economic programs which are based on some equivalent of fuel oil. So, without boring you too much, I’m just telling you it does get a little complicated, and we’re going to need some time to work on that -- especially in the energy and economic working group. I wish we could get a little more done on that, because time is wasting.

QUESTION: Mr. Hill, could you describe for us what you imagine will happen at Yongbyon at the end of this 60 day period and beyond that? What facilities are going to be closed down?

ASSISTANT SECRETARY HILL: Again, I would rather those questions be directed to the IAEA once they’ve had all their consultations with the North Koreans. Obviously, we have expectations of what they would do, and we’ve conveyed those expectations to the IAEA. They need to work out the details with the North Koreans. But as a general proposition, what we’re looking for is that, before day 60, that there should be an IAEA team there that would be part of an effort to be there when the reactor is shutdown, when it’s properly sealed and monitored. There would be television cameras, that sort of thing, put up. And then you would have a team there to monitor the facilities But I don’t want to get into the issue of whether it’s four facilities or five facilities, because this has to be worked out with the IAEA.

QUESTION: Mr. Hill, what’s the agenda for tomorrow like?

ASSISTANT SECRETARY HILL: I don’t know. We’re waiting for the Chinese to let us know.

QUESTION: Do you expect to meet with Kim again?

ASSISTANT SECRETARY HILL: I did late this afternoon. I probably will tomorrow. But I see when I predict that I’ll do it, then people ask why didn’t I do it. So I’m very leery about making predictions, except to say we’re really trying to make some progress on this next phase.

QUESTION: Ambassador, just a quick question. Japan expressed very strong frustration over having no plenary today. Again, why was there no plenary session, and do you expect to have plenary session tomorrow?

ASSISTANT SECRETARY HILL: I must say, plenaries are not necessarily our most productive moments at the Six Party Talks, but I would not want to go two days without a plenary. So I certainly would like to see one tomorrow as well. So let’s see if we can do that.

QUESTION: How would you characterize the events of today?

ASSISTANT SECRETARY HILL: Kind of slow, frankly -- except for this press conference. I think the issue is the North Koreans are very focused on making sure their monies are transferred. So they’re working with the Chinese on that. There are a lot of phone calls to various banks going on. We’re just not involved with that. I had some good meetings with Mr. Sasae, as I always have good meetings with him. I to talked the South Koreans. I talked to the Chinese and later on I talked to the North Koreans. But I frankly would have liked to see more progress today. Again, we’re not looking for an agreement today or even tomorrow, but we are looking for progress so we can get through this round and on to the next.

QUESTION: Do you hope to be back on track with the three things you set out to do – the discussion of the sixty day period, the working groups, and then the next phase? Do you hope to get back on track?

ASSISTANT SECRETARY HILL: I hope so. To some extent, the North Koreans are going to have to make sure they and their bankers are making progress. I hope we can make progress. Because I’m very focused on the need that, once the 60 day clock ends, then we have to begin very quickly and not have any down time, if you will, between this phase and the next one. So, it’s going to be a lot of work.

QUESTION: And on the 60 day deadline, when can we start being concerned as that deadline approaches? A week? Ten days? Two weeks?

ASSISTANT SECRETARY HILL: I try to be concerned from day one. It’s probably a good rule of thumb when we are dealing with the Six Party Talks. If something can go wrong, it often does go wrong. So I’m not sure I can give you the warning signs.

QUESTION: As you’ve said, the North Koreans are focused on the BDA issue right now, and there’s speculation that these talks will have to continue until the money is actually transferred to get the North Koreans focused. Do you think that these talks will continue until the money is transferred?

ASSISTANT SECRETARY HILL: I don’t know. The trouble is there’s nothing I can do about filling out bank forms and transferring money from accounts. It’s just not what I do. So I’m not sure what I’m supposed to do while bank forms -- I mean, I love talking to you, but I don’t know. Play ping pong or something? I’d like them to resolve that and then talk to us while someone is dealing with that.

QUESTION: Is necessary to have their focus in this round for (inaudible)?

ASSISTANT SECRETARY HILL: We’ve got a lot to do. We have the 60 day period, we’ve got a next phase, we’re going to have a phase after that. We’re really busy, and I don’t think we can all stop while people are filling out bank forms.

QUESTION: If you’re not looking for an agreement in this round, what would you call progress for this round?

QUESTION: That’s a fair question. I think we’re looking for probably a chairman’s statement, which would summarize in depth discussions which would aim toward a consensus about the next round. We have in this round -- the 60 days – I think we’re pretty much on schedule. But the next round is not as defined yet. I think we need to develop a stronger consensus. When I met with Kim Gye-gwan late this afternoon, I laid out elements that I would like to see set out together. But I think we do need to have a plenary discussion on this tomorrow, and then we’ll see what the chairman’s statement will be. But we’re not going to try to do an agreed statement in this round. We’ll probably have to meet again in another month to assess how we are on the 60 days and really lay out that next phase so we can get going on it immediately.

QUESTION: Did Kim explain to you why he wanted the money in hand? Is he afraid of counterfeits or --

ASSISTANT SECRETARY HILL: I don’t know. You’ll have to ask him. My impression is there are people back in Pyongyang who have a kind of literalist view of needing to see funds really taken care of. This problem has gone on for a long time, and I think they consider resolution to be when they see the money in their hand. We consider resolution to be when we are out of it and it’s turned over to just normal banking channels. They’re going to have to figure out how to deal with that.

QUESTION: So Mr. Hill, do you see all these things wrapped up on Thursday to have a plenary and possibly Chairman’s statement?

ASSISTANT SECRETARY HILL: I have lost track. What is today?

QUESTION: Today is Tuesday.

ASSISTANT SECRETARY HILL: Tuesday. Boy, I hope so. I sort of hope to get back --

QUESTION: Which flight are you booked on Thursday?

ASSISTANT SECRETARY HILL: I don’t know. I don’t know.

QUESTION: Ambassador, how do you feel about the North Koreans attitude today?

ASSISTANT SECRETARY HILL: As I mentioned, they’re clearly focused on getting their bank accounts done. The rest of us are focused on trying to move to organizing the next phase. But, certainly, the conversation we had was very businesslike and, I thought, very useful. It was a good discussion.

QUESTION: Did Mr. Kim Gye-gwan show a sense of satisfaction about your statement with Mr. Glaser?

ASSISTANT SECRETARY HILL: I think so. I didn’t ask if he has a sense of satisfaction. It’s just not what diplomats ask each other. You’ll have to ask him that question.

QUESTION: But do you have a sense that North Koreans are satisfied with your assurance about returning the money?

ASSISTANT SECRETARY HILL: I hope so, because we’ve said that we’re out of that.

QUESTION: I think what’s been confusing for observers sometimes is that we keep on saying we don’t do signature cards and, yet, we’re the ones who negotiated the deal with North Korea, and we’re the ones who are saying “this is so over.” Is there a disconnect here between who’s negotiating and who’s manipulating that’s caused this whole thing to trip up?

ASSISTANT SECRETARY HILL: I’m not sure I understand your question. We reached an agreement. From our point of view, from our concerns, we reached an understanding with the North Koreans. Now the bank account they have is not in the United States. It’s in the district of Macau, and they need to figure out how to move the funds.

Yes?

QUESTION: Do really believe that it’s this particular money they care about, or is it access to the international banking system from now on? What is the real question?

ASSISTANT SECRETARY HILL: I sense that you feel you have the answer to that and you’re trying to get me to give the same answer you have. I don’t know. I certainly, from the last few days, I had the impression that they were very concerned about getting monies that had been frozen. But logically, they should be very concerned about access to the international financial system, and the way to do that is to get out of illicit activities and get out of producing weapons of mass destruction. When you put those two together, you should not be surprised that your bank accounts have had some extra scrutiny over the years.

We are prepared to work with them on helping them understand what needs to be done to get better access internationally. And even though the matter of BDA is finished, we are prepared to continue to have working groups for the purpose of talking to them about this. It would be in our interest to have the DPRK understand what the real rules are and to get out of practices that have caused them so much trouble. We want the DPRK to get out of these problems. It would help everybody.

QUESTION: Ambassador, did North Koreans say today that they agree to have a plenary session tomorrow?

ASSISTANT SECRETARY HILL: Not that I’m aware of. We listen to what the Chinese tell us on that, so I’m not aware that we have a plenary session scheduled yet. I certainly told the Chinese – and in fact, I told the DPRK -- that it’s our preference to have a plenary tomorrow. Again, during the talks in February there were occasionally days when we did not have one, but I don’t like to go two days without one. So let’s see if we can get on track with that tomorrow.

Hey, I’ve really got to get some sleep here.

QUESTION: One more question. Did you talk about next round of the U.S.-North Korean working group?

ASSISTANT SECRETARY HILL: No, we did not talk about a next round of working groups. The most critical working groups are to get the economic and energy working group going, because that’s the one where we have to look at a lot of shipments of fuel oil in the next round. Similarly, I think the denuclearization working group needs to move along. But we haven’t scheduled any new working groups, and we haven’t scheduled one for us either.

OK? See you later.

QUESTION: What time are you coming down tomorrow?

ASSISTANT SECRETARY HILL: It kind of depends on the Chinese. I just don’t know.

QUESTION: Nine-ish?

ASSISTANT SECRETARY HILL: I’ll tell you ten-ish. I just don’t know. I’m sorry I don’t know.

OK?

QUESTION: Thank you.