North Korea has told the head of the International Atomic Energy Agency that it will not shut down its 5-MW reactor at Yongbyon until the U.S. lifts its sanctions against the North:

“The DPRK mentioned that they are waiting for the lifting of sanctions with regard to the Macau bank before they implement the part of the agreement allowing the agency to monitor and verify the shutdown of the Yongbyon facility,” ElBaradei told a news conference….  [Reuters, Chris Buckley]

Kim Gye-Kwan didn’t actually manage to fit Baradei into his busy schedule, so Baradei  met with some lower-level official.  Anyone who dismisses the significance of that doesn’t understand the role of status in  Korean culture.  This was a contrived snub.

Needless to say, the agreement does not make the lifting of sanctions a precondition to the shutdown of Yongbyon.  This may well be our  critical failure point.  The U.S. side has just said North Korea won’t come off the terror-sponsor list quickly, and without that delisting, plenty of sanctions will remain.  South Korea’s National Intelligence Service  predicts, and I agree, that Japan will use its influence to block that delisting.  Treasury’s “fifth special measure” against Banco Delta Asia will also put scowls on plenty of pruny faces in Pyongyang.  Chris Hill, for his part, says the sanctions issue won’t be a “stumbling block” anymore, but didn’t really explain why.

More than half of North Korea’s 60-day deadline to shut down the Yongbyon reactor has passed, and even the South Koreans concede that there’s no sign the North Koreans have even begun the process.  One Australian diplomat says the North Koreans have begun “planning” it, and you can make of that what you will.  I suspect that our State Department will want to give them a pass, but with North Korea setting new preconditions, that may not be possible.