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Daily Press Briefing

Sean McCormack, Spokesman
Washington, DC
March 15, 2007


Withholding of Comment on Government, Platform Until Final Decisions Made
Sec Rice, President Abbas Talks
U.S. Call for Transparent Resolution / In Accordance with Pakistani Law
Assistant Secretary Hill Travel's to Asia
Deputy Assistant Secretary Bryza's Travel to Europe, Eurasian Region
S Meeting with Deputy Prime Minister Kheim
Resolution of BDA accounts / Treasury Ruling Issued
Implementation of 30-day Agreement Plan is Proceeding / Working Group Meetings
Implementation, Execution, Dispersal of Fund to be Authorized by Macanese, not USG
Hill, US Committed to Resolving Fund Issue / Providing Information to Macanese
U.S. Monitoring Arrest of Chief Justice of the Supreme Court
Internal Pakistani Matter / Looking to Better Understand Nature of Chief Justice's Arrest
Chinese Perception of BDA Situation
U.S. Agreement with Diversified Energy Sources, Means of Transporting
Diversified Energy Suppliers, Pipelines to Transport Important
Initial Sanctions Affecting Iranian Government / Chapter 7 Resolution is Important
Prevention of Exploitation of Financial System for Creation of Nuclear Weapons
Attractive Offer Being Offered to Iranian Government by P-5+1
Concern for Human Rights Abuses, Systematic dismantling of Democratic Rights
Review of Diplomatic Tools, Sanctions with Minimal Effect on Suffering Population
Assessment of Working Groups' Status, Travel Plans, Locales / U.S. Optimism Over Process
Iraq Budget Passed / Hydrocarbon Law to be Debated Soon
Political Process is Moving Forward, Functioning / Helping to Define Place in Region
Compact Group Meeting
No New Date on Sudanese Resolution
Administration's Characterization of Kosovo / Uniqueness


12:25 p.m. EST

MR. MCCORMACK: Hello, everybody. Good afternoon. Who wants to start off? We don't have any opening statements.

QUESTION: Do you have anything -- any comment on the new Palestinian government? They had actually released parts of their platform.


QUESTION: And Israel is saying that -- you know, based on this early information, it's not someone with whom they can deal with and the aid embargo should continue. I wondered if you had had a chance to look at this platform.

MR. MCCORMACK: Well, a few things. One, the government hasn't been officially seated. It has to get approved by the Palestinian legislature. It has, at this point, just been proposed to President Abbas. And while there are perhaps pieces of their platform that may be floating around in the electronic ether, we're going to withhold any final judgment about the government, its platform, and its actions until we have a sense of exactly who finally is going to be sitting in this government, what exactly they are going to base their governing decisions on, what's their platform, and then what actions they take. So we're going to take a look at those things and then we'll have a judgment. Until that time, we're just going to reserve comment.

QUESTION: If you're going to be waiting for actions -- so, I mean, that's several steps along. I mean, how long will it take you -- I mean, actions that could take months to see exactly what the --

MR. MCCORMACK: Or it could take the day after it's officially seated and their platform is announced. At the time when we feel as though we have the facts that we need to make a determination about this government and its composition, its platform, and its actions or what, based on those things, our extrapolation of what we expect that they will do and whether or not it meets those foundational principles for peace that have been outlined by the Quartet, we'll make a judgment. But until that time, we're going to withhold any further comment.



QUESTION: Have you spoken to President Abbas today at all about --

MR. MCCORMACK: Secretary Rice has not. Secretary -- you heard that?


MR. MCCORMACK: Make sure you heard that Secretary Rice hasn't.


MR. MCCORMACK: I don't know if anybody else has talked to him, whether from the consulate or anybody else.

QUESTION: Is David Welch there at the moment, do you know?

MR. MCCORMACK: He is not. I have to get an update on his travel. He is, I do not believe, in the Palestinian territories at the moment.

Nicholas, you want to jump in here?

QUESTION: Okay. North Korea; correct me if I'm wrong, but I thought that in the run-up to the decision yesterday, Chris Hill and you were giving the impression that you were hoping this would resolve the outstanding issues on the BDA, in that it would help the six-party talks in the deal that was signed on February 13th. Is that still your position? Are you hoping that now this should have solved all the issues that the North Koreans had on the BDA?

MR. MCCORMACK: Well, there are a couple of steps here. One, the United States has "resolved" to come to a conclusion with respect to the BDA accounts. Treasury issued its rule yesterday. There is a next step to this and that is the actual implementation of it, which is going to be up to the Macanese authorities.

And what the -- I understand the Department of Treasury is doing is sending Deputy Assistant Secretary of Treasury Danny Glaser who's been the point man working with the Macanese on this issue to consult with the Macanese authorities, provide them the information -- all the information that we have managed to accumulate, our analysis of the accounts, so that they can make a fully informed decision as to the final disposition of the funds that are in those accounts.

And remember, it's the Macanese authorities who are the ones holding those actual funds. The United States has acted in good faith and in accord with the February 13th agreement. So the process is moving along. Chris Hill referenced some further consultations which I think he was referring to Danny Glaser's trip out there.

So it is now in the hands of the -- or will soon be in the hands of the Macanese authority once they have all of this information that they can possibly have.

QUESTION: And the next part of it, which was do you think they should remove any obstacles to the nuclear negotiations so that implementation of the deal -- because the North Koreans didn't come back to the six-party talks for a year because they had a problem with it. So now a year --

MR. MCCORMACK: Well, the actually implementation of the February 13th agreement is proceeding. And the fact that you have the Department of Treasury issuing this rule is one indication of that; another indication is that Chris Hill is in Beijing. He's attending the working group meetings. I believe that all the other -- four of the other parties, I don't know if the North Koreans are there are not. I know Kim Gye Gwan isn't expected to arrive into Beijing until Saturday -- either tomorrow or Saturday. So it is being implemented.

We are moving forward with what we need to do and I understand that the other parties are doing so as well. The North Koreans have met with Director General ElBaradei, which is another piece of the agreement that needs to be set in place so that you can move beyond the 30-day agreement and into the 60-day timeframe.

QUESTION: I ask because -- I'm just sort -- and the last one -- because the Chinese said today they don't think this would actually resolve the North Korean objection to --

MR. MCCORMACK: Well, again, the U.S. has taken the steps that it needs to in terms of resolving the issue by issue -- by making public this rule. We don't actually have the assets under our control; they're not controlled by the United States Government. They were actually frozen by the Macanese authorities.

QUESTION: So as a result of your -- as a result of the United States going to the Macanese authorities is actually alerting them to the activities --


QUESTION: -- of the bank, right?

MR. MCCORMACK: Correct, right.

QUESTION: So now you've lifted those objections and they can do whatever they decide to do, is that right?

MR. MCCORMACK: Well, we -- what they, as well as we, think is important is that they have access to all the information that we have managed to accumulate through our forensics as well as our analysis of the situation so they can make a judgment about the money in all of the accounts and what the disposition of those funds will be. So at that point, it will -- once they have all the information, it will be up to the Macanese authorities to decide on how those funds are distributed and to whom.

QUESTION: So has the U.S. told the North Korean Government that they can expect to get some of the money that had previously been frozen? They can get it back? I mean, is that an understanding between the U.S. and North Korea? I would assume that --

MR. MCCORMACK: Again, the way that this works is the U.S. has issued this rule, the Treasury has issued this rule and then it's going to be up to the Macanese authorities to decide on what money --

QUESTION: You must have some understanding of what --

MR. MCCORMACK: -- what funds and to whom those are disbursed and I'm not going to get involved, dig any deeper into that process.



QUESTION: Is it fair to assume that Chris Hill outlined to the North Koreans what was going to be in this decision yesterday and exactly how that was going to work, talk them through it before it was --

MR. MCCORMACK: He obviously consulted with the North Koreans on this. It was part of the February 13th agreement. Beyond that, I'm not going to get into any of the diplomatic conversations that we may have had. It is accurate to say that we committed to resolving the issue. We believe that this is on a pathway to being resolved. The United States has issued the rule that it needed to issue in order to allow the Macanese authorities to take the steps that they deem appropriate in terms of a final disposition of the funds that were in those BDA accounts.

QUESTION: But had he gotten any indications from the North Koreans that this kind of an approach by the U.S. would satisfy their demands?

MR. MCCORMACK: Everybody's goal is to resolve the issue and we believe that it will be resolved. We just need, I guess, a couple more steps in terms of the consultations. We want to provide the information to the Macanese authorities and then they are going to take the steps that they deem appropriate.


QUESTION: But China has a very different view about all of this and they say that far from resolving this dispute, it actually kind of muddies the water further and raises questions about Macau's sort of financial reputation and puts their financial stability into question.

MR. MCCORMACK: Understandably, they have larger concerns about, well, how does this rule affect the perceptions of the -- of Macau's financial institutions as well as China's by extension and we understand that. The BDA role is limited to BDA. I think Treasury can get into any other description of the rule, but it is -- this is focused on BDA. We are in the process of providing the information that we think we need to and as I said, the issue is on its way to being resolved. We believe that we have done our part in that regard through the issuance of this rule.


QUESTION: Two weeks ago Mr. Hill said how important each one of these deadlines is and that to miss one could create this broken window theory. It seems that there are still some steps left to resolve this. So given anyone's talk about what 30 days is, today would have to be the outside deadline. So has the U.S. broken the deadline?

MR. MCCORMACK: Again, we have done our part of this. The next step of this, the actual implementation and execution of the decision, is going to be up to the Macanese authorities. Let me assure everybody that we as well as the other members of the six-party talks are acting in good faith in accordance with the agreement that was signed on February 13th and we would hope that everybody views it in that light as well.

QUESTION: But since the Macanese are not party to the six-party talks, it's feasible that the North Koreans may not think that, you know, them deciding all this stuff is good faith on the part of the U.S.

MR. MCCORMACK: Well, it's a practical matter. The United States is not within the powers of the -- the power of the United States to release funds that we don't control. So just as a practical matter of executing the steps necessary to resolve the issue, the Macanese need to be involved in some regard. I think everybody understands that. And again, we hope to provide any information that they might need to take those final steps to resolve the issue.

QUESTION: As a follow-up, do you expect them to release the funds?

MR. MCCORMACK: It's going to be -- that is going to be their decision.

QUESTION: Change the subject?

QUESTION: Can I have one more on this?


QUESTION: Sean, I got the impression -- you keep talking about the Macanese authorities and the bank as two separate entities that have nothing in common. But in fact, the financial authority of Macau which is part of the government manages the bank, right?


QUESTION: So the Treasury said yesterday that they got great cooperation and then a few hours later the Macanese Government releases a statement that says it deeply regrets the U.S. action. How does that, in effect, you know, cooperate with exactly the U.S. decision to do this? I mean, it seems to me that you're praising them for cooperating with them and they're criticizing you for your decision. How does that square? I don't get it.

MR. MCCORMACK: They're not -- those things aren't mutually exclusive.

QUESTION: On Pakistan. Do you have any comment on the arrest of the Chief Justice of the Supreme Court? There is - (inaudible) of President Musharraf say that his move is unconstitutional and it's created a rather difficult situation to his opposition.

MR. MCCORMACK: Right. Now, understood we have -- it's a situation actually that we have been monitoring very closely for some time and I think this occurred several days ago and we are watching it closely. It is a matter of deep concern. And we believe that the resolution of this matter should take place in a way that is completely transparent and strictly in accordance with Pakistan's laws. It's essential for any developing democracy to adhere to the rule of law and conduct any investigations, any proceedings that may follow on from those investigations in a clear, aboveboard, transparent manner that strictly accords with Pakistan's laws.

QUESTION: And has it been conducted in a transparent manner thus far?

MR. MCCORMACK: We're -- again, we're early on in this and we're going to be watching it very closely.

QUESTION: And have you sent a formal complaint to the Pakistani Government and asked them for further information?

MR. MCCORMACK: It's not a matter of our complaining about it. It's an internal Pakistani matter. But clearly, it's something that in terms of Pakistan's functioning as a democratic state, that we would watch very closely and that (inaudible) would have initially deep concerns about what has taken place.

QUESTION: But your ambassador has not approached the Pakistani authorities for more information or --

MR. MCCORMACK: We have talked to them about it. I can't tell you at what level we have, but we have talked to them about it. I wouldn't use the word "complaint" because I don't think it's appropriate in this particular case, but we have talked to them about it.

QUESTION: So would it be appropriate then to say that you've just approached them for more information or --

MR. MCCORMACK: We want to understand better the action that was taken.


QUESTION: On Greece.


QUESTION: Mr. McCormack, the Greek Prime Minister Kostas Karamanlis and the President of Bulgaria (inaudible) and Putin signed the agreement of the well-known pipeline Burgas, Alexandropoulos. Do you have anything to say either in favor or against this agreement, a huge energy project of southeast Europe?

MR. MCCORMACK: I think that very basically we have no problem with agreements that do a couple of things: further the cause of diversifying the supplies of energy for Europe and diversifying the means of transport of those supplies of energy, so this certainly contributes to it. There are a number of other pipeline proposals that are on deck and it is important that the states of Europe, as well as the energy suppliers, Russia as well as those of the Caucuses, work in a cooperative manner, that they act based on market principles. And part of those -- part of that set of principles is diversifying the supplies as well as diversifying the means of transport of those energy supplies.

QUESTION: One more, Mr. McCormack. May we have a readout about DAS Matt Bryza trip to Istanbul, Athens and (inaudible) and do you know if Mr. Bryza discussed also in Greece energy issues and to which -- what extent?

MR. MCCORMACK: We'll have to get something for you on that, Lambros.

QUESTION: Thank you.


QUESTION: On the pipeline, you have been criticizing the policy, the Russian policy of using energy for politic -- politician reason. Do you think there is a risk that it would be -- it will happen again with this pipeline?

MR. MCCORMACK: I certainly don't want to foreshadow or try to predict such events occurring. There have been events in the past with respect to the Ukraine and Georgia as well as others in the immediate border area of Russia that have caused concern. I'm not going to try to predict that that may happen in this case, but we do think that it is important to diversify suppliers as well as the pipelines that deliver those energy supplies.


QUESTION: On Iran, President Ahmadi-Nejad has said that the Iran resolution is nothing more than just a torn piece of paper and it's going to have no impact at all. I wondered if you had any comment on that. And then also I know this is a broad question, but how much of an impact do you think these sanctions will have on the Iranian Government and why do you think that these are going to be so effective this time?

MR. MCCORMACK: Well, the initial sanctions have actually had an effect on the Iranian Government. They haven't succeeded in changing their behavior to this point, but you've noticed that they are once again on the eve or coming up on passage of a new Security Council resolution all of a sudden, some -- the Iranians trying to lay out the perception of flexibility when, in fact, they're really not offering anything new. In terms of his referring to this just as a torn piece of paper, I think that more than anything, it would cause distress among the members of the Iranian regime and among the population of Iran.

It's not just a piece of paper. It says "Force of International Laws, Chapter 7 Resolution." It's serious business and it has had an effect on the ability of the Iranian Government to participate and use the international financial system for ends that we as well as the other members of the international system have said are, at the very least, suspicious and at worse were wrong.

And so we are taking action together with other members of the international system to see that they aren't able to exploit the global financial system to build a nuclear weapon or to be able to further develop their missile technology that could be used to deliver a nuclear warhead potentially. So it does have a real effect. It's not just a torn piece of paper. We take this very seriously and I suspect that the other members of the Security Council take passage of this kind of resolution very seriously. And I expect that they would be dismayed by that kind of reaction from President Ahmadi-Nejad.

Sadly, it's the kind of reaction that we've come to expect from him, flouting the will of the international community. And if the Iranian Government continues down that pathway, you are going to see further such actions. And that's rather unfortunate, because that's not what we want for Iran. There still is a pathway to negotiation that is available to them. There's an attractive offer that is on the table. They haven't taken us up on it yet.

One can only say that the pathway that President Ahmadi-Nejad is pursuing on behalf of the Iranian people is misguided and unfortunate. But it's important that the Iranian people know that they have a way out and that way out is via the negotiating table and having this regime take up the P-5+1 on its offer of negotiation.

Yeah, all the way in the back.

QUESTION: (Inaudible) was that Madame Secretary sent a letter to Congress on the Armenian resolution?

MR. MCCORMACK: I'll have to check and see if she's -- anything's actually gone up to them.

Dave Gollust.

QUESTION: Sean, could you preview the Secretary's agenda for the meeting with the Vietnamese Foreign Minister? Especially whether she intends to raise reported backsliding by Vietnam in the human rights area.

MR. MCCORMACK: Right. She is going to meet with Deputy Prime Minister Khiem and they are going to touch on, really, the whole spectrum of U.S.-Vietnam relations. They're going to touch on trade, human rights, Vietnam's role in the broader Southeast Asian region. They're also going to discuss preparation for a possible visit by Vietnamese President Triet to the United States later this year. So that's all that is on the agenda. Human rights will be at the top of our agenda. It continues to be. The Vietnamese have made some advances in that regard. They've made some advances with respect to religious freedoms in Vietnam.

There have, however, been some detentions that have been of real concern to the United States and we have raised those issues with the Vietnamese officials. Secretary Rice has done that in the past and I would expect that certainly, a general discussion about human rights, if not a specific one about these cases, will take place during the meeting.


QUESTION: Do you have any comment on President Mugabe's comments today saying that Western governments should -- you know, basically go and hang themselves because of their criticism of his handling of protests and --

MR. MCCORMACK: It's a real sad state of affairs in Zimbabwe. It's a real tragedy, what's occurring there in terms of the systematic dismantling of democratic rights, the abuses of human rights that we have seen recently, and just the terrible economic destruction that the Mugabe regime has wreaked on the Zimbabwean economy. This is now an economy that is suffering from hyperinflation and it's sad because it's the people that suffer.

Certainly, they suffer as a result of the lack of political rights, of the lack of human rights, but they're also suffering the very real effects of an economy that is just -- is going down the drain and it's a sad thing to watch. So it's -- you know, while Mr. Mugabe may want to paint this as an issue of his defying the rest of the world trying to dictate to him what should be happening in Zimbabwe, it's really a case of the international system expressing real concern for a tragedy that is unfolding in that country.

QUESTION: The UN and the EU have suggested that imposing new sanctions on Zimbabwe will make the situation even more difficult for people who already face inflation of like 1700 percent or something.


QUESTION: I know the U.S. is considering new sanctions against Zimbabwe. How are you looking at those new sanctions and how will you be able to impose those without causing even more grief to people on the ground there?

MR. MCCORMACK: It's a tough issue. It's always a hard issue when you try to balance the possible effect of diplomatic tools that you might have at your disposal, for instance, sanctions and the effect they'll have on the regime versus the effect that they may have on the population which is already suffering. So we'll take a close look at what we might do to try to bring about a change in behavior of this regime and that we are working very closely with the EU as well as others on this. We're consulting closely. I can't tell you that we've come to any final conclusions in that regard.

QUESTION: So it would be a joint effort in terms of sanctions or are you going to go unilaterally?

MR. MCCORMACK: We'll take a look at what we think is the right thing to do.

QUESTION: Are you looking at some UN action? Is this going to be something circulating in the next few days or --

MR. MCCORMACK: Like I said, there are a number of options available to us so we'll -- we want to try to do what's effective as well as what is something that has as minimal effect as possible on the humanitarian situation that's unfolding in Zimbabwe.

QUESTION: Can we go to Iraq, please, just going back to this conference on the weekend? Do you have sense yet of the progress that's being made in terms of these working groups, have they been established, are you confident they'll be able to report back to the ministerial level within the next month? Do you get a sense of how the process is playing out?

MR. MCCORMACK: I have to -- you know, honestly, I have to check on that one. I have to check with David Satterfield and see -- and get his assessment of where we stand with these things. I know that people are already talking in terms of travel dates and locations for a ministerial-level conference, so there is a degree of optimism that we are going to get to that point. But I have to check for you exactly on the working groups and exactly what's happening there.

QUESTION: What the make-up is of them and are they completely international and just basically what was happening between now and --

MR. MCCORMACK: What's the process -- yes, we will get you an answer.

QUESTION: Okay. And do you think this is, again a rather broad question, but do you think this has put extra pressure on the Iraqi Government to step up themselves? I mean, in terms of -- I'll give one specific, you know, something like de-Baathification -- you know, certain benchmarks that they're expecting to be reaching. Do you think this is giving them more momentum? Are they held more to account now because of this do you think?

MR. MCCORMACK: I think -- well, they have their own motivations for getting things done in terms of de-Baathification or the hydrocarbons law or their budget or amendments to the constitution, so their own -- they have self-generated interest in getting those things done and moving forward. The international support manifested itself by attendance at the conference and expressions of support for the Iraqi Government certainly helped. And that helps reinforce the work of those in Iraq who want to push forward on all of these political issues, because they're really important. And the -- in terms of the budget, there has been progress. They actually passed a budget, voted on it, and they are now working on disbursing about $10 billion, so that's positive.

The hydrocarbons law has been -- is going to be up for debate in the Council of Representatives coming up here soon in the coming weeks. I expect that to be a healthy debate because it gets to really fundamental issues of the division of the patrimony of Iraq, its oil wealth, how that is used and how that is controlled. And that gets, again, to core issues of Sunnis, Kurds, and others working together for a common good for an Iraq. De-Baathification, there's been less progress on and that's something that we have urged the Maliki government and the Council of Representatives to move forward on.

So there has been progress. There is -- the Iraqis themselves set out some benchmarks that they -- notional benchmarks that they had hoped they could meet. They're a little behind on that. We understand that. Not to draw a direct comparison, but our own legislative process doesn't always move at the pace that they would have wished. So they -- but the bottom line story here is that they -- the political process is moving forward. It is functioning. It is functioning within an atmosphere of extreme violence, which makes the process more difficult.

But to get back to the original point, the international support that is manifested by these meetings and these conferences is important. It helps reinforce the idea for the Iraqis that they do need to move forward and that there are benefits to moving forward. Just -- I think tomorrow, the members of the International Compact for Iraq, which is a separate yet related effort, are actually going to work to try to finalize the terms of the deal on both sides, both what the Iraqis are going to do and what might get done by the international system. So those are all positive reinforcing moves for the Iraqis and the benefits for the neighbors and others in the international system are that Iraq starts to find its place in the region.

QUESTION: What do you really expect in real terms from the compact group tomorrow? Is it going to be some kind of list, like a manifest of how they're going to move forward or --

MR. MCCORMACK: Well, it's essentially a contract in simple terms that everybody understands. On one side, the Iraqis commit to take certain steps on the economic reform front and then in return, the international system will take certain steps. Those are going to differ for each individual state, but it's essentially a deal. If you commit to doing X, we will commit to doing Y; we being the collective international system.


QUESTION: Do you have any date on the new resolution on Sudan that you would like to be discussed at the UN?

MR. MCCORMACK: I don't. Let me see where we are on that, Sylvie. I'll see if there are discussions on it.


QUESTION: On Andrew Natsios, did you ever check whether he was traveling to Khartoum again?

MR. MCCORMACK: Did we? Did we check to see if he was traveling to Khartoum again? We did --

QUESTION: (Inaudible)


MR. CASEY: We care, Libby (inaudible).

QUESTION: Okay. That's okay.

MR. MCCORMACK: We will get you an answer.

QUESTION: Okay. Thank you.

QUESTION: Mr. McCormack?

MR. MCCORMACK: Oh, Lambros, yes.

QUESTION: On Kosovo, because somebody criticizes you as a troublemaker, but I consider you as a problem-shooter.

MR. MCCORMACK: Some people call me a troublemaker?

QUESTION: Yes, but they consider you as --

MR. MCCORMACK: Who's calling me a troublemaker?

QUESTION: As -- let me say the question. The (inaudible) publication (inaudible) from New York City criticizing your recent statement of Kosovo is a unique situation and not a precedent, correct?


QUESTION: But what is so "unique" -- in quotation, the unique -- about Kosovo? Apparently, Kosovo is unique because the Department of State says so and the U.S. will support or oppose self-determination on a case-by-case basis on the supposed "uniqueness" of the situation, but not on the (inaudible) self-determination. Are we to assume that by virtue of divine right, the U.S. is the earth's court of "last resort"? Yes or no? How do you respond?

MR. MCCORMACK: Is there in there -- you know, it just comes with the territory here. You know, sometimes people like what you say and sometimes, people don't. You know, I'm expressing the view of the President and the Secretary of State on this matter.

QUESTION: Thank you.

QUESTION: Thank you.


The briefing was concluded at 12:55 p.m.

# # #

DPB # 45

Released on March 15, 2007

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