MEDIA REACTION - US LIFTING OF FINANCIAL

UNCLAS TOKYO 001172 SIPDIS SIPDIS STATE FOR I/RF, PA/PR/FPC/W, IIP/G/EA, EAP/PD, R/MR, EAP/J, EAP/P, PM; USTR FOR PUBLIC AFFAIRS OFFICE; TREASURY FOR OASIA/IMI; SECDEF FOR OASD/PA; CP BUTLER OKINAWA FOR AREA FIELD OFFICE; PACOM HONOLULU FOR PUBLIC DIPLOMACY ADVISOR E.O. 12958: N/A TAGS: OIIP KMDR KPAO JA SUBJECT: MEDIA REACTION - US LIFTING OF FINANCIAL SANCTIONS ON DPRK - TOKYO LEAD STORIES: Friday morning's business daily Nihon Keizai front-paged an informal UNSC meeting Thursday in New York, during which Britain and other members proposed a resolution calling for additional retaliatory measures against Iran. ¶1. "What Effect Will US End to Financial Sanctions Have on DPRK Denuclearization?" An editorial in the top- circulation, moderate Yomiuri commented (3/16): "...The US Treasury Department, which had been investigating the Macau-based Banco Delta Asia (BDA) on suspicion of helping launder money for North Korea, formally decided to sever ties between BDA and US financial institutions on the grounds that the Macau bank turned a blind eye to illicit activities by North Korea.... The US decision, in effect, paves the way for unfreezing DPRK-related accounts at BDA, which are estimated at about 25 million USD. But some observers believe that less than half that amount will be released. A partial release of funds could make it less likely that North Korea will agree to abandon its nuclear programs in line with the agreement reached at the six-party talks in Beijing." ¶2. "US Should Not Back Away from Basic Principles of DPRK Policy" The business-oriented Nihon Keizai editorialized (3/16): "With a resumption of the six-party talks set for next Monday in Beijing, an announcement Wednesday by the US Treasury Department about the partial lifting of financial sanctions on North Korea was, as it were, a 'carrot' intended to accelerate talks with the North concerning its denuclearization.... We strongly hope that the US will not play into the hands of North Korea, making compromise after compromise and weakening its policy of dialogue and pressure. In the past, the Bush administration had called for the North's abandonment of its nuclear programs in a complete, verifiable, and irreversible manner and had expressed strong support for Japan on the abduction issue. Nonetheless, criticism is now growing in Japan and elsewhere that the Bush administration, tied down with Iraq and Iran, is violating the basic principles of its policy on North Korea. Any US attempt to take an ad hoc policy that would only kick the can down the road would harm not only the trust it shares with Japan but also its prestige in the world." SCHIEFFER