Chris Hill at Six-Party Talks – March 17-19, 2007

FOUR RELEASES

Morning Walkthrough and Joint Remarks at Six-Party Talks

Christopher R. Hill, Assistant Secretary for East Asian and Pacific Affairs;
Daniel Glaser, Deputy Assistant Secretary of Treasury for Terrorist Financing and Financial Crimes
St. Regis Hotel
Beijing, China
March 19, 2007

ASSISTANT SECRETARY HILL: Good morning everyone.

QUESTION: Morning.

ASSISTANT SECRETARY HILL: Stand up here, Danny. Well we've been busy, and we're very pleased that we've been able to reach an understanding with the DPRK on the full return of funds as soon as possible. So, I'm going to introduce my colleague and friend Danny Glaser here - who's been traveling the Pacific and watching all those movies on those airplanes - to tell you what exactly has happened. And we can take some of your questions. Danny?

DEPUTY ASSISTANT SECRETARY GLASER: Thanks, Ambassador Hill. I do have a prepared statement to read, and I am going to read it. But before I start I do want to just thank Ambassador Hill for all the support that he's given us. He's really - he's been pretty involved and has provided us very, very important guidance and advice and support on the diplomatic end of this. I really do think that in the future when people look back on this, they will look at this as a model for the way the Treasury Department and the State Department can work together in addressing very, very important issues in the international financial sector. So I just wanted to thank Ambassador Hill for that.

Let me read the prepared statement that I have for you all, and then I'll be happy to take some questions. And we are going to be releasing the following prepared statement on the Treasury Department web site:

"The United States and North Korean Governments have reached an understanding on the disposition of DPRK-related funds frozen at Banco Delta Asia.

"The DPRK has proposed the transfer of the roughly $25 million frozen in BDA into an account held by North Korea's Foreign Trade Bank at the Bank of China in Beijing.

"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. We believe this resolves the issue of the DPRK-related frozen funds.

"The disposition of the frozen assets has always been and remains a decision by the Macanese authorities to be taken in accordance with Macanese law. North Korea will need to work out the legal and technical intricacies of the arrangement with the Macanese. The Treasury has communicated to both the Macanese and Chinese Governments the United States' support of this arrangement.

"Separately, the final rule against Banco Delta Asia, issued by the Treasury Department under Section 311 of the USA PATRIOT Act, remains in place. The Treasury will continue to cooperate with the Macanese on this and other anti-money laundering issues.

"The events of the past 18 months demonstrate our lack of tolerance for illicit activity conducted in the global financial system. Financial institutions that facilitate weapons proliferation, terrorist financing, narcotics trafficking, and other illicit financial activity should be on notice of the significant consequences they face."

That concludes the prepared statement, and, again, we'd be happy to take questions.

QUESTION: Ambassador Hill, could you explain why it was so difficult to reach this agreement and why we had to wait for the - for a finalization of the agreement between the U.S. and North Korea?

ASSISTANT SECRETARY HILL: What makes you say it was difficult? (Laughter)

QUESTION: It's taken a number of days to get to -

ASSISTANT SECRETARY HILL: Well, I mean, the problem was, first of all, we needed to brief the various concerned parties on this. So as soon as the rule was published, Danny got on an airplane and got out to Macao within a day or two. He's here in Beijing to talk as well to the Chinese. And as soon as the North Koreans were able to pull together their team, I was able to brief them - I believe it was on Saturday. So it just took a couple of extra days.

QUESTION: So does this mean that all the money is being released? Does this mean none of the money was involved in illegal activities?

ASSISTANT SECRETARY HILL: What this means is the North Koreans, the DPRK, understood our concerns and are prepared to cooperate with us to make sure this money is used appropriately.

QUESTION: Mr. Glaser, do you not have any concerns that this might send the wrong message, saying that all the money was involved in illicit activities?

DEPUTY ASSISTANT SECRETARY GLASER: No, I think the message at this time is, as I said in the prepared statement, first of all, the broad message that I think it sends, is that we will not be tolerating illicit conduct by financial institutions in the international financial system. With respect to the actual disposition of the funds, I think it's important to look where we were eighteen months ago and look where we're going now. Eighteen months ago, these funds were in a bank that did not have adequate anti-money laundering protections and that was facilitating illicit activity. There was very little being done about it. Eighteen months later, the bank is under responsible management, and we have received assurances that the funds are going to be transferred to an account in Beijing that can allow them to be used for humanitarian purposes, for educational purposes.

I think that's a great success. It's all part of an ongoing process to work with North Korea on trying to address what we've said before are a lot of the fundamental underlying concerns of the international financial community.

QUESTION: How do you guarantee those funds will be used for humanitarian purposes?

DEPUTY ASSISTANT SECRETARY GLASER: Well, there are no guarantees in this life, but this is an important step in our working through this problem. The North Koreans have given us assurances that it will be used for humanitarian purposes, for educational purposes, and we'll see if we can work this out. We've been meeting them in our bilateral financial working group. We're going to continue to meet with them in that group. This is part of an ongoing process of working with North Korea and explaining to North Korea what the issues are - what the concerns of the international financial community are - and trying to resolve those concerns.

QUESTION: Sir, you said as soon as possible. How - what is your timeframe on the return of the funds?

ASSISTANT SECRETARY HILL: (to Mr. Glaser):What's the timeframe?

DEPUTY ASSISTANT SECRETARY GLASER: The timeframe for the return of the funds?

QUESTION: Yes.

DEPUTY ASSISTANT SECRETARY GLASER: Well, it's going to have to be conducted under Macanese law and in conformity with Macanese procedures and regulations. So that's going to be something for the North Koreans and the Macanese to work out. It's not going to happen overnight. There are going to be steps that are going to have to be taken.

QUESTION: And the fact -

ASSISTANT SECRETARY HILL: But I want to make clear: from the U.S. perspective, we want it to happen as soon as possible

QUESTION: The fact that these are going into a Bank of China account - does that suggest that China will have some responsibility in ensuring that the funds are used appropriately?

ASSISTANT SECRETARY HILL: I think any regulator has certain responsibilities, and I would put the Chinese in that category, as would any regulator of any bank account anywhere.

QUESTION: After saying that it was totally up to the Macanese authorities how to hand over the money, why is the U.S. announcing this?

DEPUTY ASSISTANT SECRETARY GLASER: We had - I was in Macau just on Saturday, and we discussed a number of things with the Macanese authorities. It was an opportunity for us to present the results of the investigation that we had conducted into BDA, and we did that. It was an opportunity to discuss the finalization of the Section 311 rule, and it was an opportunity to discuss the overarching mechanisms that could be used with respect to bringing a resolution to the funds transfer issue. Now this is a North Korean proposal, and both we and the Macanese thought that it was a very promising proposal. So I don't think this is about anyone imposing anything on Macau. I think this works very well for Macau, and I think that they found it to be a promising proposal. It will have to be accomplished in conformity with their laws, and I'm sure it will be.

QUESTION: But it is not only North Korean Government but also the 50 account holders. All of them agree with this agreement? I mean, you know, the money to be used for the humanitarian assistance? Because the bank holders are not only North Korean government, right?

DEPUTY ASSISTANT SECRETARY GLASER: That's right. There are non-North Korean Government account holders, and again, this will have to be conducted within Macanese law. And I'm sure the Macanese and the North Koreans - I'm sure the Macanese will discuss it with the North Koreans and explain to them exactly what needs to be done to accomplish this.

ASSISTANT SECRETARY HILL: We're not here to explain Macanese laws and procedures. What we're here to do is explain our role, and the fact that we've concluded our role.

QUESTION: Who are the people that are in charge of the humanitarian funds? Is it the North Korean Government, or --

DEPUTY ASSISTANT SECRETARY GLASER: I'm sorry?

QUESTION: Who's going to be in charge of the humanitarian funds?

DEPUTY ASSISTANT SECRETARY GLASER: I think the specific modalities of this have yet to be worked out, but it will be probably deposited into a foreign trade bank account at the Bank of China in Beijing. And as we said, we have assurances that it will be used for these purposes - humanitarian purposes. And this is going to be - and these assurances have been made in the context of an ongoing process, an ongoing dialogue. And we are going to use that to make sure that our concerns are addressed and that commitments are lived up to.

QUESTION: Mr. Glaser, you been acting under the strict laws of the Patriot Act, or whatever the law is. How do you respond to the argument that the whole disagreement is motivated by political purposes?

DEPUTY ASSISTANT SECRETARY GLASER: We've laid our case out publicly; we laid our case out when we issued the notice for proposed rule-making. I think it's a fairly straightforward one. This was a bank that did not have adequate anti-money laundering controls. In spite of that it was soliciting high-risk clients. It was not only soliciting those high-risk clients but was providing them with a facilitative environment to engage in deceptive financial practices. This wasn't a very difficult case for us.

QUESTION: How do you verify the money will be used properly for humanitarian and educational purposes? How will the United States verify?

DEPUTY ASSISTANT SECRETARY GLASER: As I said, there are no guarantees in this, and we're embarking into this in the spirit of an ongoing process. We have received assurances. We're expecting that the assurances will be lived up to. We will be engaged in an ongoing dialogue, and we're going to have to take it from there. If North Korea wants to have access to the international financial system, they're going to have to start getting used to working productively with other members of the international financial system. Hopefully this is something that's going to be beneficial for everybody. We're going to continue to work with them. The funds are [to be deposited] in a Chinese bank, as Ambassador Hill said, regulated by Chinese regulators. We expect that people will live up to their obligations.

QUESTION: What's your plan for the counterfeiting issue?

DEPUTY ASSISTANT SECRETARY GLASER: What's the plan for the counterfeiting issues? Well counterfeiting issues are, I suppose, related to this in a tangential way. I don't want to speak for the U.S. Secret Service, but the U.S. Secret Service takes very seriously the counterfeiting of the U.S. currency. At the last bilateral working group that we had with the North Koreans, I had two senior Secret Service investigators with me to discuss with the North Koreans those concerns. The Secret Service is going to continue to pursue their law enforcement investigations, and it continues to be an issue that we're going to raise -- because it's not acceptable for us to have our currency counterfeited.

QUESTION: So are your dealings with the North Koreans now done or are you going to continue your working group with the North Koreans, work on financial issues?

DEPUTY ASSISTANT SECRETARY GLASER: Yes, I hope we continue the group. I think it's important -- because resolving the Banco Delta Asia issue was one of the purposes of the group, but it was not the only purpose of the group. And frankly, I don't even think it was the fundamental underlying purpose of the group. The fundamental underlying purpose of the group was to explain to North Korea -- to try to work with North Korea on addressing the broad range of concerns that the international financial community has with respect to their conduct and to try to work with them to change that conduct and to put them in a position where they can be reintegrated into the international financial system. We still have work to do on that, and we hope to be able to take advantage of this group in order to continue to raise these concerns and to continue to try to address them.

QUESTION: So it's your hope, but there's no plan, no specific date?

DEPUTY ASSISTANT SECRETARY GLASER: I don't have a specific date. There's not one scheduled, but I anticipate that we'll meet again.

ASSISTANT SECRETARY HILL: Our point is if the DPRK is interested in continuing these working groups with respect to the financial sector and how they might integrate themselves, we're prepared to do that. But it really is up to them. If they find it useful to continue, we're prepared to do that.

QUESTION: You said you were taking the North Korean proposal as is. This is a North Korean proposal that you have accepted, that the United States had no part in this proposal whatsoever. By doing that are you accepting that this was a problem - an issue with the bank - and that the bank is to blame for this issue, or does North Korea share some of the problem in this whole issue?

DEPUTY ASSISTANT SECRETARY GLASER: This was a North Korean proposal. It was actually put to us in the bilateral working group that we had with them. So yes, it's a North Korean proposal. With respect for who's to blame, I think there's a lot of blame to go around. There were problems with the bank that we've articulated, and we've also articulated problems with many of the account holders. I think that there's a lot of blame to go around.

ASSISTANT SECRETARY HILL: I think as Mr. Glaser has pointed out, the cooperation of the Macanese authorities has been very good, and I think it's continued throughout the 18-month investigation. We feel this has really helped the Macanese reputation internationally. We were very pleased with the cooperation.

QUESTION: Ambassador Hill, are you confident the North Koreans will not raise this issue again in the Six Party Talks or in bilateral meetings?

ASSISTANT SECRETARY HILL: As Mr. Glaser said, this was a proposal they made, and it's a proposal we've accepted. It's a proposal that takes into account our concerns. It's a proposal that derives from a number of these bilateral discussions that Mr. Glaser held with the DPRK financial officials. We feel this is the basis of the solution. We met our 30-day requirement by announcing the rule. We then followed that up with intense consultations, as Mr. Glaser has been doing.

And so we feel this matter has been resolved and now we can move on to the next problem, of which there are many. And we continue to work hard; in fact today we have our first Six-Party meeting. We're going to evaluate all five of the working groups and evaluate how we're doing in terms of the 60-day set of actions and then the next phase as well. So we have a lot of work to do and we're very pleased that due to the hard work - and especially the hard work of the Treasury Department by Danny Glaser and his very strong team and also the team back in Washington with Stuart Levey and others - we feel that we're ready to move on.

QUESTION: Mr. Hill, with the BDA issue put aside, people are talking about the next milestone. When do you expect the next one is coming?

ASSISTANT SECRETARY HILL: Milestones in what sense, I'm sorry?

QUESTION: Such as the shutdown?

ASSISTANT SECRETARY HILL: We have had some 30-day actions, and one of them has been to resolve the BDA issue. That's been done, and I think it's been done to mutual satisfaction. And then we've also looked at the completion of the working groups in the 30-day time frame, and we've been able to get that done.

And so now we're going to look at 60-day requirements. There are a number of those. First of all, I think the DPRK has gotten off to a good start with the IAEA, with Mr. ElBaradei's visit to Pyongyang. And we would look forward to that process continuing in the next 30 days so that we will have the shutdown of the Yongbyon facility, the sealing of it, and the monitoring of it by IAEA personnel. We would also look forward to making sure the first shipment of fuel oil - which is called for in the February agreement - reaches the DPRK within the 60-day time frame. And then looking beyond for the additional fuel oil and the additional milestones and denuclearization, we'll need to synchronize those steps. They involve some very important steps, including the disablement of the North Korean nuclear program as well as the issuing of a full declaration in return for considerable amounts of fuel oil and economic assistance. I think we'll continue on that, and for that reason we have a lot of work to do in the next couple of days with this meeting.

Also - I want to emphasize the importance of this - at the end of the 60 days we're looking forward to having a Six-Party ministerial, also called for in the February agreement, where Dr. Rice and all her colleagues, including the DPRK minister, will get together and begin to chart the course ahead.

So a lot of work to do.

QUESTION: About shutting down, we heard that North Korea actually sought temporary extension for shutting down their Yongbyon facility?

ASSISTANT SECRETARY HILL: Well, we're at day - I don't know - day 33, day 34. I don't see any reason we need to talk about that. I think they understand they've got some obligations in 60 days; we have some obligations in 60 days. And we'll get to work very hard and get that all done.

QUESTION: Do you have a schedule for you bilateral with the North Koreans?

ASSISTANT SECRETARY HILL: No, I think we'll all be out at the very familiar Diaoyutai. We look forward to having bilats with a number of delegations. I'm sure we'll be meeting with the DPRK delegation as well.

QUESTION: And Secretary Glaser, what is your schedule for the afternoon?

DEPUTY ASSISTANT SECRETARY GLASER: I plan on having some consultations with Chinese counterparts. I don't have anything locked down yet, but as the day evolves we'll see what my schedule is. But I will be having consultations with Chinese.

QUESTION: And you'll be staying in Beijing how long?

DEPUTY ASSISTANT SECRETARY GLASER: I'll be staying in Beijing today and leaving tomorrow.

ASSISTANT SECRETARY HILL: Thank you very much.

QUESTION: Thank you.

Released on March 19, 2007

Evening Walk-Through With Journalists at Six-Party Talks

St. Regis Hotel
Beijing, China
March 19, 2007

ASSISTANT SECRETARY HILL: Today, we had the first day of the Six-Party Talks. I must say, a lot of it was taken up this morning by the subject of BDA [Banco Delta Asia, a Macau bank], where I explained to the participants what we’ d done, and the fact that it has been resolved, and the funds are being transferred as soon as possible. I don’t have any further details on that, but as far as we understand, everything will be fine in that regard.

So our attention very much turned to the task at hand, the first task being a review of the working groups. I think as we reviewed the five working groups, there was an appreciation for the fact that we’ve set up a structure for these talks. And we’re pleased that all the groups met and had some discussions, but, frankly speaking, some of the working groups did better than others. We feel that we need to make sure that things are proceeding on all of them.

I personally made a strong pitch to the D.P.R.K. to pick up the pace with the Japan working group. I think it’s very important that, as we look at the landscape of issues that we’re dealing with in Northeast Asia, that it& rsquo;s very important that that bilateral working group get going. We had some discussion about that. We discussed all of the groups.

We’re expecting that this Six-Party meeting will last three days. We're not expecting a joint statement of the kind that was issued in February. I think tomorrow, the subject will turn to the completion of the 60-day tasks. In this regard, the D.P.R.K. has an obligation to make sure that they are shutting down, sealing the Yongbyon complex within 60 days. There is a lot of work to get done there. The R.O.K. has moved ahead on getting the first shipment of heavy fuel oil. That looks like it’s on track as well. As I& rsquo;ve told you, BDA is very much on track.

My sense is that we’ll be in good shape for the first 60-day obligations. And then what we’d also like to do – and I think this is the aim of our Chinese hosts, who once again have shown themselves not only to be great hosts, but a very strong delegation with excellent preparation – that we would like to begin to sequence events for the next phase, which involves the complete declaration plus the disabling of their nuclear facilities.

So we have, I think, a lot of work to do, and we’ll try to see how far we can get with that, with the understanding that we will not be attempting at this time to be putting together a joint statement. So, all in all, I think that it was a good start. I don’t have any exciting headlines for you, except to say that everyone’s pretty much on task, and I think we’ ll be on schedule.

QUESTION: Are we beyond BDA?

ASSISTANT SECRETARY HILL: We’re beyond BDA. I think the announcement we made this morning speaks for itself. And, I think we’ve got a lot of other things to do, starting with getting this reactor shut down on time.

QUESTION: How did your working group go?

ASSISTANT SECRETARY HILL: I’m sorry?

QUESTION: How did your working group go?

ASSISTANT SECRETARY HILL: Well, I reported from my side how the working group went. I basically reported here what I’d reported in New York. I certainly didn’t change my story that we did have a very useful exchange of views on a number of bilateral issues. Everything I’ve said today I& rsquo;ve said in the past.

QUESTION: Mr. Ambassador, there were reports that the North Korean chief delegate warned Japan that it should take part in the proceedings such as economic assistance. Can you confirm that?

ASSISTANT SECRETARY HILL: I wouldn’t put it in those terms. I mean, I feel that the D.P.R.K. needs to do more to square up its relationship with Japan. I think Japan is obviously a very important country to us all, and I would include the D.P.R.K. in that. I would hope that the D.P.R.K. will understand where their interests are. Needless to say, we were -- I made very clear the report of the D.P.R.K. walking out of the working group meeting -- I think it was day one in Hanoi -- I don’t think it was appropriate for anyone to be walking out of working group meetings. I hope that working group can pick up the pace, and this is I think is certainly an issue for us in the U.S. delegation. We want to see more progress on the Japan issues, and I think we all know what those issues are.

One question per customer, now. (Laughter) I answered one last night for you; now let’s go to the other side here.

QUESTION: You were talking about the next phase and the other day about Secretary Rice’s upcoming visit, but the North Korean plan was ostensibly, “We won’t move until we get the money transferred.& rdquo; The Japanese side is that – actually, today they’ve said no, they’re not ready to give assistance unless there’s more progress on the abduction issue. So are you sure, and how could you convince us that everyone is really on board in terms of being ready to provide oil and energy assistance? What has actually been said?

ASSISTANT SECRETARY HILL: The North Koreans were very interested in BDA being resolved, and that’s been done. We didn’t get any ultimatums on whether the money has to arrive in their bank account today or yesterday, et cetera. We didn’t get ultimatums. So we were able to talk about the issues. Clearly they wanted it resolved. It’s been resolved. They saw our press release on that matter. I’m not too worried about BDA, as I tried to suggest.

I think I was fairly frank about expressing some sense that the D.P.R.K. needs to pick up the pace in the relationship with Japan. Japan, I think, has made very clear its views on the economic assistance, its desire to participate as its concerns are met. I think we are in pretty good shape about meeting the assistance goals, certainly in the first 60 days -- that is, the shipment of heavy fuel oil that the R.O.K. is providing. I think we’ve got a plan for going from there.

But I think the real issue will be to start organizing that second phase so that we can get to the full list, the declaration of North Korea’s nuclear programs and the issue of disabling their programs. It’s a complex thing we’re trying to do, but I think we’re pretty much on schedule as of today. I can’t promise you how it will go tomorrow, but it ’s okay.

QUESTION: Ambassador Hill, you emphasized a couple of times now your concerns about the North Korea-Japan working group. Is it a consensus that that working group is the one in most need of making progress at this point? That it’s falling behind?

ASSISTANT SECRETARY HILL: First of all, none of the groups has met more than once. These were all introductory meetings. I’m not inclined to say one working group fell behind the other. What I will say is that I think the D.P.R.K. needs to do more to address its relationship with Japan. I cannot imagine a country being successful in Northeast Asia that doesn’t have a good relationship with Japan. I think it’s in the D.P.R.K.’s interest. I don’t feel it’s for me to tell them what their interests are. But I think if they thought about it for a bit, I hope they would arrive at that conclusion.

Each working group met once. I think these working groups need to meet more than once before we start evaluating whether they’re falling behind or getting ahead. So we’ll have to see, but I think with respect to what the D.P.R.K. needs to do, I think they ought to be thinking seriously what they need to do to improve their relationship with Japan, and I think they know what they have to do there.

QUESTION: Does Japan need to do more as well?

ASSISTANT SECRETARY HILL: I would focus on what the D.P.R.K. needs to do there.

QUESTION: What was Kim Gye-gwan’s reaction about the statement of Treasury?

ASSISTANT SECRETARY HILL: He never smiles very much, so it’s hard to tell, but I think they recognize that this indeed means that the matter is resolved. I think it’s moving in a very positive direction. It’s not something we’re expecting to come up tomorrow or the next day as we continue in these talks.

QUESTION: They don’t give any signs about when they shut down, stop the nuclear facilities?

ASSISTANT SECRETARY HILL: They had Mr. ElBaradei there. I think there’s a follow-on meeting with the IAEA. We’re certainly expecting them to meet the 60-day deadline. They understand that’s a requirement.

QUESTION: Mr. Hill, vis-a-vis Japan, do you think the D.P.R.K. should be more forthright on the abduction issue?

ASSISTANT SECRETARY HILL: I just feel that a good relationship with Japan is beneficial to every country in the world, and I would include the D.P.R.K. This is not such a huge neighborhood here in Northeast Asia, and they ought to be looking to figure out how to improve the relationship with Japan. Japan for us is a very close ally. They have worked very hard in this Six-Party process. They have an excellent team. They have an excellent negotiator, Mr. Sasae. This is a really quality team, and I think this is an opportunity for the D.P.R.K. to follow up with Japan and try to address some of these issues. I would hope that they’ll do that as we go forward in this process.

QUESTION: What do you hope to accomplish in this particular round, in the next two days?

ASSISTANT SECRETARY HILL: We reviewed the working groups. We’ve had some discussion about how we might get those to do more in their second sessions. For example, do we have to improve the mandates of the people who are the chairmen of the working groups? Do we have to improve the amount of homework that they’ve done and as they come forward to deal with these issues? We had a good discussion, so that was useful. Tomorrow we’ll probably review the 60-day actions. I think it’s in fairly good shape. Being an optimist in this business is truly a triumph of hope over experience. Nonetheless, I think we are in good shape for the 60 days.

So in answer to your question, what I want to see is more clarity on the next phase -- because the next phase is very important, because then we go to the full declaration, as we’ve discussed. And full means full, so there has to be some real clarity, understanding, on where we are on HEU. Then we need to go to disablement, and that will also be a very important development. Then we are talking about an enormous amount of fuel oil and the beginnings of economic assistance to the DPRK that could, I think, begin a process of alleviating the suffering that their citizens now face.

The answer to your question is this third issue, this attempting to chart out this next phase, is to me what I would like to get clarity on. We are not looking for a joint statement at this time. We are not looking to negotiate a joint statement. But we certainly want to get what the elements are, what the milestones are that we’re looking at in denuclearization, some common definitions. Now a lot of good work was done over the weekend in the denuclearization working group on having an agreement, or at least an understanding among some of the participants. But that is going to be the real issue. These 60 days, I think we’re in good shape. But it’s the next phase that we’ve really got to work on.

QUESTION: You mean there would be practical steps for the second phase? That will be decided in these days?

ASSISTANT SECRETARY HILL: We’re going to try to have everyone go away from this in a couple of days with a pretty clear understanding of what that second phase is going to look like.

QUESTION: Ambassador, did you have bilateral talks with Mr. Kim Gye-gwan today?

ASSISTANT SECRETARY HILL: I talked to him, I talked to him. We had some bilateral talks with their delegation, going over the details of this resolution on BDA. So we agreed we’ll meet tomorrow morning for some bilateral talks. What I want to do is meet them and not hear the word “ BDA.” So that’s my plan tomorrow.

QUESTION: Will it be part of the Six-Party Talks?

ASSISTANT SECRETARY HILL: No, it will be out there in the Diaoyutai.

Today I had a good bilateral with the Russians, and tomorrow I think we’ ll do a number of other bilaterals. But we did a lot of plenaries today. We had two head of delegation meetings plus the overall plenary. So a lot of our time -- several hours -- was taken up in plenaries, which is a little unusual. Usually we have more bilaterals.

QUESTION: Did the North Koreans give any explanation or their point of view on what happened in Hanoi and their perspective on relations with Japan?

ASSISTANT SECRETARY HILL: There was some discussion of it. I can’t say there was anything terribly new, but they certainly did state their position on that. I’m making a comment about what I see is a need in the coming weeks and months, not necessarily the coming days. But I just feel that Japan has really an excellent team there -- one of the best I’ve seen, really good people -- in this process. We’re not just doing a denuclearization and energy deal here. The Six-Party process is attempting to deal with overall issues in the region. There’s a great team there from Japan, and I would hope the D.P.R.K. will take advantage of that opportunity and deal seriously with some of those issues.

QUESTION: Beyond these 60 days, so you see the process evolving? What you have now is a very tight sequence of actions. You’re telling the public it& rsquo;s multilateral. It sounds like it could derail very easily, and as things get to –

ASSISTANT SECRETARY HILL: You sound very pessimistic. Why do you think it& rsquo;s going to derail really easily? I think everybody’s got an interest in moving forward. Especially I think the D.P.R.K. has a real interest in moving forward on this. There’s a lot on offer to the DPRK, a lot of assistance on offer. I think it could really help their economy, help their people. I think everybody has an interest in going forward.

I think the logic of it argues optimistically. Sometimes logic is not always the most operative element in international relations, so we’ll have to see.

QUESTION: Will the declaration also have to include any foreign contacts in the nuclear arena, any material they may have received or have given to other countries?

ASSISTANT SECRETARY HILL: Yes, we need to know what the full picture of their nuclear programs are so that when they are dismantled and abandoned, that we have done all of it. The IAEA has a lot of experience with these types of declarations, so we’re sure that they can be addressed, and there has to be verification elements involved in it as well.

Obviously, this will involve considerable scrutiny in a country that’s not used to scrutiny. So it’s going to take some hard work and some patience from all of us.

QUESTION: Can you give us a sense of where the heavy fuel might come from, how it might get there? I mean, are you concerned that the U.S. might have to foot most of the bill?

ASSISTANT SECRETARY HILL: Well, actually, we’re not going to foot most of the bill, because it’s been agreed among four participants to share the energy and economic assistance. The first tranche will come from the R.O.K. I think there is already agreement on where the second tranche will be, although I don’t want to say yet because I don’t know if it has been really confirmed. I think we can work that out. We’re sharing it right now among four. And I think as Japan’s concerns are met, Japan will also join in this process.

QUESTION: Can you be any more specific than “as soon as possible” on the unfreezing – the release of these funds?

ASSISTANT SECRETARY HILL: No, I can’t. I’m really – I don& rsquo;t work for the Macau Monetary Authority nor for any banks in China. But I can assure you that there are some people with a real incentive in getting it done. From our point of view, we are out of it, except to say that we want to see everything move as soon as possible.

QUESTION: Did the North Koreans say that they would start the process of Yongbyon’s shutdown once they had the money in hand?

ASSISTANT SECRETARY HILL: I’ve heard that quote in the press, but I would say that they understood that things are moving very quickly and that the United States has resolved this matter. We would have resolved it a couple of days earlier if they had been in Beijing a couple of days earlier. Again, I don ’t know how many different ways I can tell you: I don’t think BDA is going to be our problem.

QUESTION: Do you get the sense now that the Chinese are happier with the way BDA was resolved?

ASSISTANT SECRETARY HILL: You will have to ask them.

QUESTION: Do you have anything new to stress in your plenary –

ASSISTANT SECRETARY HILL: In my what?

QUESTION: In your plenary remarks?

ASSISTANT SECRETARY HILL: I can’t remember what I said. (Laughter) No, I took some time to explain to people what we’ve done on BDA. And I supported the Chinese approach, which is to review the working groups, review 60-day actions, and preview the next actions. Obviously, we’ve had some discussions on all three, and I think all of that is quite doable and quite logical.

QUESTION: Ambassador Hill, you said you didn’t have a chance to meet with Kim Gye-gwan today and the reason was because you didn’t want to have the BDA issue come up.

ASSISTANT SECRETARY HILL: No, no, I said the reason was we had a number of & ndash; we had three plenaries, basically two head of delegation meetings, plus an overall plenary, plus lunch, plus we had a working-level meeting with the D.P.R.K. delegation to explain some of the details of what we had done. We& rsquo;d had some discussions with them over the weekend on Sunday and also on Saturday. So I just didn’t get a chance to see Mr. Kim. We will do that tomorrow morning.

QUESTION: Ambassador, do you see a risk that the Japan-North Korea issue can become the next version of BDA in the sense that –

ASSISTANT SECRETARY HILL: No, I’m not putting it in those terms. I’ m just arguing for the point that the Six-Party process is aiming to address important issues in the region. We just feel that it’s time that progress was made on that relationship. That’s all I’m saying. I’m not looking for problems. I don’t think there will be an obstruction here. I think it’s just an issue that – Japan, as I said, has really been a full participant in the Six-Party process, very valuable. I speak to my Japanese counterpart every day about the various issues. They are fully engaged. And I just want the D.P.R.K. to understand that it’s time to move forward on that relationship. The D.P.R.K. has a lot of work to do, a lot of relationships to improve, a lot of relationships to repair, and I think one of them is their relationship with Japan.

Hey, I’m kind of talked out, guys. This is longer – All right, go ahead. Ask your second question. (Laughter)

QUESTION: You answered my second question, so another question.

ASSISTANT SECRETARY HILL: A third question. Why not? Okay.

QUESTION: What do your plans look like for today, and when are you leaving tomorrow morning?

ASSISTANT SECRETARY HILL: Those are two questions. What time are we leaving in the morning? We don’t know yet, but I would think I’ll leave here around 8:30.

QUESTION: Any more meetings today?

ASSISTANT SECRETARY HILL: For the rest of the day, no. I’ve had a long day, okay?

QUESTION: Many of us have noticed your new coat, by the way.

ASSISTANT SECRETARY HILL: Oh, thank you very much. I appreciate that. My other one wore out. There was a tear in the sleeve. That was the problem.

Thank you very much. When I’m taking advice from journalists on what I& rsquo;m wearing, I know I’m in trouble. (Laughter) See you later.

ENDS

Afternoon Door-Stop With Reporters at Six-Party Talks

Christopher R. Hill, Assistant Secretary for East Asian and Pacific Affairs
Hong Qiao Market
Beijing, China
March 18, 2007

QUESTION: (Inaudible)

ASSISTANT SECRETARY HILL: I didn't but some of the members of my delegation did.

QUESTION: …with Banco Delta Asia?

ASSISTANT SECRETARY HILL: As I've said on a couple of occasions before, this will not be a problem for the Six-Party process. I hope we can give you some details at some point.

QUESTION: Did North Korea say anything about it?

ASSISTANT SECRETARY HILL: We have discussed this, as you know. We conveyed some information to them the other day. This will not be a problem for our Six-Party process.

QUESTION: Do you know if the delegation met with the North Korean delegation? Did you hear any response about the BDA?

ASSISTANT SECRETARY HILL: Yes, we had a discussion about that, and I can't say much more right now -- except to say I don't believe this is going to be a problem in the future.

QUESTION: Are you thinking about the visit to Pyongyang in April?

ASSISTANT SECRETARY HILL: That was news to me. I'm not sure where that came from.

QUESTION: The Japanese TV --

ASSISTANT SECRETARY HILL: Was that your story? Because I don't know anything about it. It was news to me.

QUESTION: And regarding the HEU program, they want the U.S. to provide the clear, complete evidence. So are you going to provide that?

ASSISTANT SECRETARY HILL: Well we have to figure out how we're going to sit down and work on that. And if we can't have a discussion of that today - We're going to have plenary session today on the denuclearization working group, and perhaps we'll be discussing it tomorrow in the Six-Party working group.

QUESTION: Do you have a time to meet Mr. Kim Gye Gwan today?

ASSISTANT SECRETARY HILL: I think it will be tomorrow.

QUESTION: Any plan like meeting or having dinner with them?

ASSISTANT SECRETARY HILL: No, no plan yet.

QUESTION: Is Mr. Kim really sick this time?

ASSISTANT SECRETARY HILL: You have to ask him. How would I know the answer to that question? I'm not a doctor.

QUESTION: Will tomorrow be a big day for you?

ASSISTANT SECRETARY HILL: This is a session where we're simply looking at our progress and measuring - trying to arrange certain schedules. We don't have any big agreement to reach this time. It's not like the one in February. Sorry to disappoint you.

Released on March 18, 2007

Morning Walkthrough With Reporters at Six-Party Talks

Christopher R. Hill, Assistant Secretary for East Asian and Pacific Affairs
St. Regis Hotel
Beijing, China
March 17, 2007

ASSISTANT SECRETARY HILL: Hi, I don't have very much this morning -- except I need to go, want to see Kenichiro Sasae. And I don't want to be late. We're going to do some consultations. He got in late last night, and we want to consult about the denuclearization working group and look ahead to the Monday Six-Party meeting. As I mentioned last night, I look forward to seeing Mr. Kim Gye-gwan after he arrives on the Air Koryo flight. I think we'll have a full day today, and I'd be happy to let you know at the end of the day what it looks like.

QUESTION: Any schedule for the Kim Gye-gwan meeting yet?

ASSISTANT SECRETARY HILL: No, I think it depends on the Air Koryo flight. I haven't checked the website, so I'm not sure when it gets in.

QUESTION: Will you meet him out at the Diaoyutai for lunch?

ASSISTANT SECRETARY HILL: Probably the Diaoyutai. Also, since I'm participating in the denuclearization working group, maybe we need to schedule it around that.

QUESTION: What kind of issues are you going to talk about for the working group?

ASSISTANT SECRETARY HILL: On denuclearization? I think we're going to assess where we are in the first 60 days, compare notes on the meeting with ElBaradei - with Mohamed ElBaradei. Then I think we're going to talk about the list of nuclear programs to be abandoned, and that needs to be completed during this upcoming second phase. As you recall, in the February 13th statement the DPRK is obliged to discuss the list. Of course I'll be briefing the DPRK on the BDA decision.

QUESTION: Mr. Ambassador, you said last night that you spoke with North Korea about the U.S. Treasury --

ASSISTANT SECRETARY HILL: I will do that.

QUESTION: -- only on general terms in New York. Have you got the same news from China or did you --

ASSISTANT SECRETARY HILL: Oh no, I think we've had -- The Treasury people have been here more recently to talk to the Chinese, and I think Mr. Glaser will come to Beijing as well. But we've had some discussions with the Chinese in the last few days on this.

QUESTION: My question is, will your consultations with Chinese be held with North Korea?

ASSISTANT SECRETARY HILL: Well, in the sense that we've seen them more recently, and we've seen them in the run-up to the actual announcement that was made by Treasury the other day, and we saw them after the announcement, and we have not seen the DPRK in that time frame. We haven't talked to them since New York. And at the time it was very general discussions, as they were at the time with the Chinese and the others.

QUESTION: Will you be dealing with the enriched uranium issue in this round of talks?

ASSISTANT SECRETARY HILL: I'm not sure we'll deal with it in the - We'll certainly, it'll certainly be brought up in the denuclearization working group. We have agreed in the past to have a sort of sub-working group to deal with it specifically. So we might try to schedule when we could actually do that in a sub-working group entirely devoted to the issue of HEU purchases - equipment purchases.

QUESTION: Will you be dealing with issues like the sealing of Yongbyon and what exactly that entrails?

ASSISTANT SECRETARY HILL: I think we have an idea from ElBaradei, Mohamed ElBaradei, on that, so I'm sure that will come up. But I think to the extent that we'll be talking about IAEA actions, it might be more in terms on the next phase, which is the disabling of the Yongbyon complex.

QUESTION: What are you talking about when meeting with Mr. Kim Gye-gwan today?

ASSISTANT SECRETARY HILL: What will I be talking about?

QUESTION: Yesh.

ASSISTANT SECRETARY HILL: I'll probably spend more of the time briefing the BDA issue. And we might talk a little about what he's going to say in the Six-Party meeting and to get an idea of what their desired time frame is for the second phase. One issue is the question of, as we learned in the energy working group, is the question of how quickly they can absorb heavy fuel oil -- and how the schedule of absorbing heavy fuel oil relates to the schedule of their denuclearization actions. We might try to see if we can talk about what milestones there might be for denuclearization, so we can match up denuclearization milestones with heavy fuel oil delivery milestones.

EMBASSY PRESS OFFICER: We have time for one more question.

QUESTION: Are you confident North Korea will be satisfied about your --

ASSISTANT SECRETARY HILL: Yes, I think we'll work that out. I'm not concerned with - I think the BDA will not pose an obstacle. It's a big decision.. I know there will be a lot of questions. That's why I wanted the opportunity to meet with Mr. Kim Gye-gwan. But I don't - I'm very confident we will not be talking about BDA a couple of days from now. You may be, but I won't. [Laughter]

Okay, see you later.

Released on March 17, 2007

ENDS

© Scoop Media