U.S. bans luxury exports to NKorea, sets money talks
Source: Reuters
(adds details about export list, financial talks, paragraphs 6, 14-17, cuts) By Carol Giacomo and David Lawder WASHINGTON, Jan 26 (Reuters) - The United States on Friday banned exports of iPods and other luxury items to North Korea, even as it set a date for talks on resolving a dispute over other U.S. financial curbs on the communist state. The related moves added to a flurry of diplomatic activity that U.S. and other officials say could lead to an agreement under which the North halts operations at its Pyongyang nuclear complex in return for energy aid and the release of some portion of $24 million frozen in a Macau bank. President George W. Bush -- his popularity plummeting and embattled by crises with Iraq, Iran and North Korea -- is desperate for a foreign-policy win, many U.S. officials and experts say, and seems willing to make previously resisted compromises. A rule issued by the U.S. Commerce Department details the luxury goods Washington plans to block under U.N. trade sanctions mandated after Pyongyang conducted a nuclear test on Oct. 9. Banned items include cognac, jet skis, iPods, jewelry and fancy cars, all part of an effort to pressure Pyongyang's communist leaders by denying their reputed high-end tastes in a desperately impoverished country. It was unclear how much of these exports now flowed to North Korea but the new rule, which requires would-be exporters to seek a license, "will have an impact," a U.S. official said. The Commerce Department issued a press release on the luxury-goods list in November, but publication of a formal rule was delayed so U.S. negotiator Chris Hill could pursue six-country talks aimed at persuading Pyongyang to end its nuclear programs, U.S. officials said. Hill's discussions with North Korea in Berlin this month appear to have made progress on the nuclear issue, prompting predictions that six-country negotiations could resume around Feb. 5 to 8. Some officials said Hill had resisted publication of the export rule, fearing it would give Pyongyang another excuse to jettison the six-country talks. 'PRIMARY MONEY-LAUNDERING CONCERN' Meanwhile, U.S. officials announced they would resume financial talks with North Korea on Jan. 30 in Beijing regarding Macau's Banco Delta Asia. The U.S. Treasury Department in September 2005 had labeled the bank a "primary money-laundering concern" that assisted Pyongyang's counterfeiting of U.S. dollars, drug trafficking and other illicit activities. Macau authorities froze $24 million in North Korean accounts after Treasury's designation. Pyongyang has cited this as a major reason for stonewalling the six-country talks.The U.S. designation of the bank largely cut North Korea out of the international financial system, U.S. officials say. Treasury has scrutinized the accounts to see if some of the money could be released to Pyongyang as legitimate, a major compromise. "We might be able to unfreeze certain funds," a U.S. official said. "We're prepared to make a step forward but that's going to depend on what they say and what they are prepared to do," the U.S. official said. Washington wants Pyongyang to halt all illicit financial activities but this has not yet happened, officials say. It wants in next week's Beijing talks to hear detailed explanations from North Korea on why certain accounts should be considered legitimate. Leading the U.S. delegation is Daniel Glaser, deputy assistant Treasury secretary for terrorist financing and financial crimes. Responding to North Korea's nuclear test, the U.N. Security Council voted to ban military supplies and weapons shipments -- sanctions already imposed by the United States. It also prohibited sales of luxury goods but left each country to define such items. The measures are targeted to hurt North Korean leader Kim Jong-il and the elite families he favors with luxury goods. U.S. officials argue that if the elites directly feel the sting of international outrage, it could loosen Kim's control of the government.
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