According to the latest reports, large chunks of the $25 million frozen in North Korea – related accounts at Macau’s Banco Delta Asia (“BDA”) have finally started to moving out of the country. According to the New York Times:

a Macao government official, who requested anonymity, said that the money was sent today to the United States to the Federal Reserve Bank of New York. From New York, the funds were to be transferred to the Russian central bank and then to an account controlled by the North Korean government in a Russian commercial bank.

That sounds bad, but before you hit the roof, consider what the leading Japanese daily Asahi Shimbun said recently: “It is still unclear whether North Korea, which demands it return to the international financial system, would start taking action toward abandoning its nuclear programme just because the money transaction is complete.”

The point is this: The transaction will not itself give North Korea what it really needs, which is access to the international financial system. As I argue in the new issue of National Review, the second- and third-order effects of the Treasury’s BDA ruling are entirely out of the Treasury’s control. All around the world, banks are putting in place due-diligence “know your customer” measures in order to avoid winding up in BDA’s shoes. Many have stopped taking new North Korean business, or closed suspect accounts altogether.

The Treasury ruling has been a disaster for North Korea, and the disaster can’t be undone, except by North Korea. I certainly agree with Ambassador John Bolton and others who argue that we should not be negotiating with the North Koreans. But it strikes me that these are not real negotiations. If the North Koreans are only pretending to negotiate, in order to get something for nothing, it seems as if we are also pretending to negotiate — in order to give them a taste of their own medicine. The $25 million is coffee money compared to the problem North Korea has now.

Conservative commentators and former administration officials have publicly and privately criticized Condi Rice and assistant secretary of state Christopher Hill for being “desperate to make a deal” with North Korea, and willing to make foolish unilateral concessions in order to get it. I don’t think historians will see it that way; the story is more complicated than that. Without making a single concession of strategic significance, Christopher Hill is driving the North Koreans crazy — and making an example of them. Not a bad result for otherwise pointless negotiations.