US Treasury and the North Korean Nuclear Bomb Test

Fascinating article by Simon Tisdall in the Guardian.

Twelve months ago it seemed the west's nuclear confrontation with North Korea had reached an unexpectedly happy ending. Then the US treasury department stuck its oar in. In a deal brokered by China on September 19 2005, Kim Jong-il's regime pledged to give up its atomic weapons, abandon existing nuclear programmes and rejoin the UN Nuclear Non-Proliferation Treaty that it had repudiated in 2003.

In return the US agreed to recognise North Korea's territorial integrity and eschew all hostile actions. The Bush administration thereby effectively withdrew its earlier threats of forcible regime change levelled against a founder member of President George Bush's "axis of evil"...

The September deal brought sighs of relief across Asia and in Washington, where rightwing newspaper editorials hailed a "triumph of US policy". It spawned talk of a new era of strategic cooperation between the US and China, a denuclearised Korean peninsula, and the peaceful reunification of North and South Korea.

But the celebrations were premature. For reasons that remain unclear, the US treasury department chose almost the exact moment the deal was struck to move against a Macau-based bank called Banco Delta Asia...

Apparently facing financial strangulation, Pyongyang's leadership resorted to the only diplomatic weapon it had. The foreign ministry said North Korea would boycott further talks on relinquishing its nuclear activities until the threat of US financial sanctions was lifted. North Korea has reiterated the same demand on numerous occasions since and repeated it this week following its underground weapons test. But it also said it was ready to resume dialogue if Washington eased financial pressures.

There has been no response. US officials maintain that the steps taken against Banco Delta Asia last autumn were unconnected to the nuclear talks. On Wednesday Mr Bush accused North Korea of "walking away" from the September 19 disarmament deal. Pyongyang and Pyongyang alone was to blame for recreating the crisis, he said.