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6th Round (Stage 1) Talks

Outline

Outline
Time and Place March 19~22, 2007 in Beijing
Representatives
  • Chun Yung-woo
    Special Representative for Korean Peninsula Peace and Security Affairs
  • Kim Gye-gwan
    Vice-Minister of Foreign Affairs
  • Christopher Hill
    Assistant State Secretary for East Asian and Pacific Affairs
  • Wu Dawei
    Vice-Minister of Foreign Affairs
  • Kenichiro Sasae
    Director-General of Asian and Oceanian Affairs Bureau, Ministry of Foreign Affairs
  • Alexander Losyukov
    Deputy Minister of Foreign Affairs, Russian Federation

Outcomes

The sixth round was expected to proceed smoothly since the United States and North Korea had reached a last-minute agreement to release the North’s funds that had been frozen at Banco Delta Asia (BDA), a Macao-based bank. However, Pyongyang insisted that it would only take part in the talks after the transfer of its BDA funds was complete. Because the funds transfer was delayed due to technical issues, the talks could not progress as planned. As a result, the six parties took a recess without setting a schedule for the next meeting.

The parties agreed that

The parties failed to agree on specifics and only reaffirmed the principles:

To continue the six-party talks;
To faithfully carry out the Joint Statements of September 19, 2005 and of February 13, 2007; and
To take a recess and reconvene at the earliest possible opportunity.

Press Communiqué of the Head of Delegation Meeting of the Sixth Round of the Six-Party Talks

Beijing, 20 July 2007

The First Session of the Sixth Round of the Six-Party Talks was held in Beijing from 19 to 22 March 2007.

The Parties listened to reports by the five Working Groups, and conducted discussions on implementing the initial actions and an action plan for the next phase.

The Parties agreed they will continue to advance the process of the Six-Party Talks. The Parties reaffirmed that they will faithfully carry out their commitments in the Joint Statement of 19 September 2005 and the Initial Actions for the Implementation of the Joint Statement of 13 February 2007.

The Parties agreed to recess and will resume the Talks at the earliest opportunity to continue to discuss and formulate an action plan for the next phase.

Course of the Talks

  • Working Group Meetings
    Ahead of the six-party talks, the five working groups discussed their given agenda in accordance with the agreement of February 13, 2007.
    Two working groups on normalizing North Korea’s relations with the United States and Japan opened in New York and Hanoi, respectively. The other three working groups on denuclearizing the Korean Peninsula; on providing economic and energy assistance to North Korea; and on establishing a peace and security mechanism for Northeast Asia took place from March 15 to 17 in Beijing.
  • Opening
    Prospects for the round seemed bright as the United States and North Korea announced their agreement to release all of the North’s funds that had been frozen at Banco Delta Asia. Thus, the six parties expected to easily reach agreement on a denuclearization road map for the initial steps of freezing and sealing North Korea's nuclear facilities within the 60-day time limit, followed by the North's disabling of those facilities and the reporting of its nuclear programs.
    After the opening ceremony on March 19, each party’s top negotiator made a keynote speech. Pyongyang’s top negotiator Kim Kye-kwan said that North Korea would halt operations at the Yongbyon nuclear facility when its BDA funds were fully released. Kim also expressed satisfaction at the resolution of the BDA issue, saying that “spring knocked on Beijing,” even hinting at early implementation of the agreed initial actions.
  • Pyongyang’s Refusal
    However, the talks hit a snag when the North Korean delegation refused to take part in the negotiation process until the transfer of its funds previously frozen at Banco Delta Asia was complete. North Korean chief delegate Kim Kye-kwan did not leave his country's embassy to Beijing during the stalled negotiations. Working-level North Korean negotiators did participate in some bilateral contacts, but they were of little substance.
  • Recess
    The parties decided to extend the round. Meanwhile, the technical problems with the release and transfer of the BDA funds turned out to be much more complicated than anticipated. Since North Korea's chief delegate refused to return to the table, the talks could not continue. North Korea stood firm on its position that the BDA funds must be released first. Finally, Kim left Beijing and the remaining parties had virtually no other choice but to declare a recess without setting a date for the next meeting.

Key Issues

Initially, the sixth round was to review the results of working group discussions and outline the denuclearization road map and corresponding rewards North Korea could expect for implementing initial actions to disable its nuclear facilities and reporting all its nuclear programs. However, the technical problems in transferring North Korea's funds from BDA took center stage.

  • BDA
    Issue The United States and North Korea had agreed that all 25 million dollars of North Korean funds previously frozen at BDA would be released, but the funds' transfer was delayed due to a technical glitch. The two sides erred in their negotiations because they lacked a full understanding of the international finance system, failing to accurately anticipate and clearly stipulate possible problems. It is common sense that in order for a bank to transfer funds from an account, the account holder should make a transfer request. However, in the case of the North Korean accounts at BDA, there are several account holders including deceased individuals, which complicates the documentation process. In addition, neither Washington nor Pyongyang considered the possibility that the Bank of China, the receiving bank in Beijing, would refuse to accept the transfer or that they might need an alternative way to transfer the funds.
BDA Technical Issues
BDA Technical Issues
BDA - Requires an account holder's transfer request (with complete documentation and other procedures) to transfer funds out of an account
North Korea - Requested a simple transfer due to a lack of understanding of the financial system
- Lacked documentation for some 50 account holders including North Koreans and foreigners, individuals and companies
- Undecided on how it wanted to receive the funds
Bank of China - Refused to transfer the North Korean funds, citing concerns over possible credit risks for accepting alleged illegal funds.

Assessment

The round hit an unforeseen snag and may be remembered as an example of one of the most serious mistakes made in the history of diplomatic negotiations. Since the round yielded no specific progress, it may also be considered one of the least successful rounds in the six-party process.

Nonetheless, there were some benefits including the launching of the working group dialogues; the North’s reaffirmation of its commitment to fulfill its obligations under the joint statements of September 19, 2005 and Feb. 13, 2007; and the greater understanding gained of Pyongyang’s negotiation tactics.

Most of all, the biggest gain was the realization that a long, difficult road lay ahead.

Prospects and Goals

  • Optimistic on Implementing Initial Actions
    Most view the recent delay as an unfortunate circumstance. Once the BDA issue is resolved, Pyongyang is highly likely to carry out the agreed initial actions beginning with halting the operation of its nuclear facilities. Some go so far as to predict that it will speed up implementation to make up for the recent delay. These predictions are based on the North's statement that it would cooperate in shutting down and sealing its nuclear facilities within 60 days of the Feb. 13 six-way agreement, and that it would allow the return of IAEA inspectors. This is supported by the fact that North Korean working-level negotiators continued to come to the table during the latest round despite the standoff over the BDA funds transfer.
Prospects for Initial Actions
BDA Technical Issues
Step 1 North Korea and the IAEA discuss when and which nuclear facilities to shut down and seal off Operations of Yongbyon and four other nuclear facilities will be halted
Step 2 IAEA inspectors enter North Korea About a dozen inspectors carry out inspections of North Korean nuclear facilities
Step 3 Shut down North Korea to shut down its nuclear facilities
Step 4 Sealing IAEA Inspectors seal off the facilities

Tasks ahead

Resolve BDA Issue

Resolving the BDA issue is just a matter of time since the United States and North Korea have already agreed on the full release of the North’s BDA funds. As soon as technical issues are worked out, Pyongyang will receive its funds. However, the issue may not be as simple as it seems.

U.S., Japan to Overcome Hardliners

Within the two governments, hardliners may raise their voices again, criticizing North Korea’s behavior. If they do so, this could slow down the six-party process. The first task will be overcoming the hardliners within Washington and Tokyo.

Other Parties’ Response to North Korea's Attitude

The recent round reflected Pyongyang’s rigid attitude and North Korean delegates’ lack of discretionary power. Moreover, the other parties simply wasted their time due to the North’s stubbornness. These factors may complicate future negotiations, which will hinge on how the participant countries overcome such hurdles and reinvigorate the multilateral process.
Diplomatic sources view that, if the participant countries express discontent with the North and complicate the process, the six-party framework itself will be shaken.