[Update: More here, at the Daily NK]
Consistent with reports I’d linked previously, China is now offering a financially beleaguered Kim Jong Il a massive bailout, in obvious retaliation for America’s assistance in helping Taiwan to defend itself against the Chicom missiles aimed at its cities, and likely also as a way to bail Kim Jong Il out after the self-inflicted catastrophe of The Great Confiscation.
China’s decision factors in the assumption that America lacks the spine to respond by escalating our military assistance to Taiwan and helping it to develop an indigenous nuclear ICBM capability:
Beijing will invest billions of dollars in North Korea as an incentive to bring the communist leadership to the table of six-party nuclear negotiations. This was revealed by a source inside North Korea, the decision is linked to the meeting last week between Kim Jong-il and a high profile Chinese diplomat.
The day after the face to face with Wang Jiarui – Head of International Department of the Chinese Communist Party – and the “Dear Leader”, took place the chief North Korean nuclear negotiator visited Beijing. Pyongyang claims that before the resumption of six-party talks – involving North and South Korea, China, Japan, Russia and the United States -, international sanctions are removed and a peace agreement is signed with Seoul. It would replace the armistice that ended the Korean War of 1950/53.
Many Chinese state-owned banks and other multinational companies have entered into an investment plan in North Korea amounting to 10 billion dollars to build roads, ports and houses. Over 60% of the sum, reports the South Korean Yonhap News Agency, comes from the Bank of China and the agreement should be signed in mid-March. [AsiaNews.it]
As the Korea Times asks, $10 billion for what, exactly? There’s absolutely nothing in North Korea’s recent behavior that justifies any sort of reward. North Korea is still balking at returning to six-party talks, it has been caught red-handed violating U.N. weapons trade sanctions (also with China’s involvement), and its behavior toward the South has been belligerent to say the least.
The move is just the latest example of Chinese duplicity in undermining U.N. Security Council resolutions it voted for, just months after their passage. Here is what UNSCR 1874 says about financial aid to North Korea:
18. Calls upon Member States, in addition to implementing their obligations pursuant to paragraphs 8 (d) and (e) of resolution 1718 (2006), to prevent the provision of financial services or the transfer to, through, or from their territory, or to or by their nationals or entities organized under their laws (including branches abroad), or persons or financial institutions in their territory, of any financial or other assets or resources that could contribute to the DPRK’s nuclear-related, ballistic missile-related, or other weapons of mass destruction-related programs or activities, including by freezing any financial or other assets or resources on their territories or that hereafter come within their territories, or that are subject to their jurisdiction or that hereafter become subject to their jurisdiction, that are associated with such programs or activities and applying enhanced monitoring to prevent all such transactions in accordance with their national authorities and legislation;
19. Calls upon all Member States and international financial and credit institutions not to enter into new commitments for grants, financial assistance, or concessional loans to the DPRK, except for humanitarian and developmental purposes directly addressing the needs of the civilian population, or the promotion of denuclearization, and also calls upon States to exercise enhanced vigilance with a view to reducing current commitments;
20. Calls upon all Member States not to provide public financial support for trade with the DPRK (including the granting of export credits, guarantees or insurance to their nationals or entities involved in such trade) where such financial support could contribute to the DPRK’s nuclear-related or ballistic missile-related or other WMD-related programs or activities; [UNSCR 1874]
This is why the U.S. Congress should add a provision to its money laundering statutes to help enforce UNSCR 1874. This does not mean we have no capacity to respond to this double-dealing, of course. Unless China can demonstrate to the Treasury Department in detail how it will meet the accounting requirements of these resolutions, Treasury should assume that those funds will be used in part for North Korea’s banned WMD programs and impose sanctions under Executive Order 13,382 against the “state-owned banks and multinational corporations” that help funnel this aid.