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The number one ranked U.S. Women's Soccer team was very nearly embarrassed yesterday when they were forced to come back from behind against North Korea to tie 2-2 at the Women's World Cup in Chengdu, China. Football-ignorant Americans might be forgiven for not knowing that the hermit kingdom even fields an international team, but the North Korean women are actually ranked number five in the world. This is also not the first time North Koreans have distinguished themselves in the pitch. In a classic Cinderella story, the 1966 men's team tied Chile and beat heavily favored Italy to advance to the quarterfinals of the World Cup where they very nearly upset Portugal as well, winning many international fans with their aggressive style of play. North Korea's then-leader Kim Il Sung had these words of encouragement for his team:

Europeans and South American nations dominate international football. As the representatives of the Africa and Asian region, as coloured people, I urge you to win one or two matches.

Surprisingly, the normally effusive Korean Central News Agency of DPRK devoted only a one sentence blurb to the women's team humbling the country's greatest international rival. Kim Jong Il has also failed to comment. Dear Leader is known to be an avid sportsman however, having apparently scored 11 holes-in-one the first time he played golf.

MIKE CLARKE/AFP

After many, many fits and starts, North Korea reportedly got its $25 million in frozen funds back today. Banco Delta Asia released the money to a undisclosed location, possibly a Russian bank. 

The apparent issue holding up the transfer was that the North Koreans didn't want the United States to simply wire them the money; they wanted a private bank to handle the funds in order to confer a sense of legitimacy on the country's accounts. But no bank would take the reputational risk involved in passing along cash that could be tied to drugs or money laundering.

One thing the North Koreans will soon find out, however: Resolution of the $25 million won't end the country's financial isolation. As U.S. Secretary of State Condoleezza Rice told the Wall Street Journal recently:

Once one of these -- once you are -- your accounts are called out this way in the international financial system, the international financial system is not readily available.

This is a problem for the international community as well as North Korea, however. Kim Jong Il's regime engages in nasty illegal activities not for the heck of it, but to make up for an estimated $1.7 billion shortfall (pdf) in hard currency. Now that the nuclear deal appears to be going forward, serious effort needs to be made to help the North Koreans understand that there are other ways to make a buck.

Graphic by McClatchy

I've known about the questions regarding the "supernotes"—brilliant forgeries of U.S. $100 bills—for some time, but until Tuesday's McClatchy story, I considered them to be loony conspiracy theories. But now the Swiss federal police have weighed in:

WASHINGTON - Swiss police who closely monitor the circulation of counterfeit currency have challenged the Bush administration's assertions that North Korea is manufacturing fake American $100 bills. [...]

The Swiss federal criminal police, in a report released Monday, expresses serious doubt that North Korea is capable of manufacturing the fake bills, which it said were superior to real ones.

Until Tuesday, this argument had been advanced by a German journalist named Klaus W. Bender, author of Moneymakers: The Secret World of Banknote Printing. Bender accuses the CIA of producing the bills—which is why I looked upon his tale with a jaundiced eye when I first saw it last year. (The McClatchy story doesn't explore the CIA angle, presumably because it would undermine the story's credibility.)

In any case, the Swiss report as relayed by McClatchy may not be loony, but it's no more convincing than Bender. The U.S. government never accused North Korea of pulling off this counterfeiting scheme all by itself, as you can see from this Congressional Research Service report (pdf). Rather, the allegation was that there was a network, as this LA Times article from 2005 explains:

U.S. authorities have unsealed hundreds of pages of documents in support of the cases in recent months, including an indictment that directly accuses North Korea of making the counterfeit bills ... The documents paint a portrait of an extensive criminal network involving North Korean diplomats and officials, Chinese gangsters and other organized crime syndicates, prominent Asian banks, Irish guerrillas and an alleged ex-KGB agent.

Also worth noting, from the CRS report: The Chinese government and South Korean government, too, believe that North Korea is involved in counterfeiting. Are they, along with the Treasury Department, supposed to be in on the CIA plot? And finally, if North Korea can produce and test a nuclear weapon, why shouldn't they be able to make fake $100 bills? It's not exactly rocket science.

Back in April, amid speculation that Vice President Dick Cheney had lost influence within the Bush administration, I wrote of the North Korea deal:

Cheney, like Richard Perle and John Bolton, thinks the North Korea deal will ultimately fail. If and when it does, he'll be vindicated. That's why he let it go through.

Well, here comes former Ambassador to the U.N. Bolton with a big, fat, "I told you so" column in today's Wall Street Journal. Writing a day after a historic train ride between the two Koreas, Bolton crows:

Over a month has passed since sweetness and light were due to break out on the Korean Peninsula. On Feb. 13, the Six-Party Talks in Beijing ratified a bilateral agreement between the U.S. and North Korea, providing for Pyongyang to give up its nuclear programs. The first step, 60 days after ratification, was to be that North Korea "will shut down and seal for the purpose of eventual abandonment" the Yongbyon nuclear facility, and readmit inspectors from the International Atomic Energy Agency (IAEA).

Other steps were to follow, but the first move was unequivocally to be made by Pyongyang. The 60 days came and went, and indeed, another 35 days have come and gone. No IAEA inspectors have been readmitted, and not even Pyongyang claims that it has "shut down" Yongbyon.

I'm not ready to declare the deal a failure just yet. But you can expect Cheney to do so, and to use the situation to his advantage on other fronts—such as Iran, where he's been losing the policy fight to the State Department of late. (Witness the upcoming bilateral talks on Iraq between the United States and Iran.) Bolton hints at next steps in his piece:

How these issues play out will have ramifications far beyond North Korea, particularly for Iran.

Indeed they will. Cheney has hinted darkly that the United States may have to bomb Iran's nuclear facilities, if only because Israel will do so on its own. Incidentally, 71 percent of Israelis "believe that the United States should launch a military attack on Iran if diplomatic efforts fail to halt Tehran's nuclear program." Military action is not necessarily on the table—few in Washington think that, at least for now. We might just see a more confrontational approach to Tehran, tighter sanctions, less willingness to offer incentives, etc. The point is, if you think the hawks have completely lost this argument, think again. Of course, if U.S. negotiator Christopher Hill manages to get the North Korea deal back on track, Iran will then be State's game to lose.

AFP/Getty Images

North Korea seems to be back to its old tricks. Saturday's deadline for the country to "shut down and seal" the Yongbyon reactor, in accordance with the February deal to halt and eventually roll back the North Korean nuclear program, came and went—without even an official acknowledgment.

The deal has recently been stalled over the release of funds linked to North Korea totaling around $25 million, which are held in accounts at Banco Delta Asia in Macao. The United States, in what many saw as a significant concession, had previously green-lighted the unfreezing of the funds in hopes that the February deal would go forward. To save face, the United States demanded that the funds be used only for humanitarian purposes.

The Bush administration has now given up that demand, following the "enormously complicated" legal maneuvering required to release the money. This further concession could have been intended as an incentive for North Korea to move faster. It could also have been a nod to the inevitable, since the funds are controlled by a dizzying array of entities in North Korea; tracking them after their release would have been near impossible. In either case, it reveals just how weak the U.S. negotiating position is these days.

Interestingly, although the United States claims the funds were freed for collection last week, North Korea said on Friday that it would soon check whether it could access the money in Macau. Though unclear, this strongly implies the North Koreans had not checked already. It also indicates a surprising lack of urgency on their part, given how fiercely they fought to recover the money. Granted, the North Koreans did previously say they would freeze Yongbyon thirty days after the Macao funds were unfrozen (Saturday was the deadline under the original February agreement), but the Bush administration quickly rejected that position.

This incident also highlight's China's critical role: Beijing has asked for patience with North Korea. So, lacking better options, we wait.

Darren McCollester/Getty

Buried in Saturday's New York Times profile of Rudy Giuliani, Republican candidate for president and former mayor of New York City, was this embarrassing goof:

At a house party in New Hampshire, Mr. Giuliani suggested that it was unclear which was farther along, Iran or North Korea, in the development of a nuclear weapons program.

For the record, North Korea tested a nuclear device on October 9, 2006, while the Iranians have yet to do so. The U.S. intelligence community believes Iran could have a nuclear weapon as early as 2010, but most likely in the time frame of 2012-2015. 

I think it's time for Rudy to get new briefers. Alternatively, he could just read the newspaper every once in a while—lots of important information in there.

Passport first blogged this story back in January, when it looked like North Korean officials had seized upon dog-sized rabbits as the cure for their country's persistent food shortages. Turns out they may have just wanted a meal:

A German rabbit breeder who sold 12 rabbits to North Korea to breed giant bunnies said he won't be exporting any more to the reclusive communist country because he suspects they have been eaten.

Breeder Karl Szmolinsky was supposed to visit North Korea after Easter to consult about breeding the rabbits, but North Korean officials abruptly canceled his trip. Szmolinsky believes that the reason given, that officials were unhappy with media coverage of their interest in the bunnies, is just a cover story:

That's an assumption, not an assertion," he added. "But they're not getting any more." 

For a country facing severe food shortages, that's bad news. 

Pool/AFP/Getty Images

Joseph Cirincione, author of the brand-new book Bomb Scare: The History and Future of Nuclear Weapons and director of the Nuclear Policy Program at the Center for American Progress, has penned a hard-hitting new web exclusive for ForeignPolicy.com:

What once appeared the exception now seems the rule. Officials in U.S. President George W. Bush’s administration are gingerly walking back from claims that North Korea was secretly building a factory to enrich uranium for dozens of atomic bombs. The intelligence, officials now say, was not as solid as they originally trumpeted. It does not seem that the North Korean program is as large or as advanced as claimed or that the country’s leaders are as set on building weapons as officials depicted.

If this sounds familiar, it should. The original claims came during the same period officials were hyping stories of Iraq’s weapons. Once again, the claims involve aluminum tubes. Once again, there was cherry-picking and exaggeration of intelligence. Once again, the policy shaped the intelligence, with enormous national security costs. The story of Iraq is well known; that unnecessary war has cost thousands of lives, billions of dollars, and an immeasurable loss of legitimacy. This time, the administration’s decision to tear up a successful agreement—using a dubious intelligence “finding” as an excuse—propelled the tiny, isolated country to subsequently build and test nuclear weapons, threatening to trigger a new wave of proliferation.

Check it out, and don't miss yesterday's List on the world's most contentious religious sites.

The new BBC World Poll of public opinion in 27 countries is out. Here are some highlights:

Israel has few friends in Europe. For the first time, the poll measured public opinion on Israel, and the results are hardly flattering: An average of 56 percent of those surveyed finds Israel's influence to be mainly negative. It's not surprising that people in Muslim-majority countries don't like Israel. But in no European country surveyed does more than 20 percent of the population have a positive opinion of Israel's influence. In only three countries polled—the U.S., Nigeria, and Kenya—does Israel find support among strong pluralities.

Europe doesn't like Iran, either. Iranian influence is viewed most negatively in Europe, though it does garner comparatively strong support in Indonesia (50 percent) and Egypt (51 percent). Only a quarter of the Indian and Chinese populations see Tehran's influence as positive.

Somebody likes North Korea? While North Korea is duly viewed as a negative influence by Europeans and North Americans, people in Muslim countries are far more positive about Pyongyang's influence. About 40 percent of the Indonesian and Lebanese populations, for instance, rate it positively. Asian countries were also more sympathetic toward North Korean influence, with more than a quarter of the populations of both China and India seeing North Korean influence as a good thing.

The United States is as unpopular as ever. Overall, an average of 51 percent of the survey's participants believes U.S. influence to be a bad thing. A higher percentage in Nigeria, Kenya, and the Phillipines views the United States in a positive light than in the United States itself. Notably, countries with the largest pluralities sympathetic to North Korea, Iran, and Venezuela tend to give the United States the lowest marks—suggesting that support for those countries reflects antipathy toward U.S. foreign policy more than it does, say, love of Dear Leader.

STR/AFP

Diplomats from five capitals emerged in Beijing this week with what appears to be a  long-awaited deal with North Korea. The trade-off? In the first 60 days, North Korea would give up its main nuclear reactor at Yongbyon in exchange for roughly 50,000 tons of fuel oil, or its equivalent in economic aid (Passport will have more on the specifics later today). The agreement comes exactly four months and four days after North Korea's groundbreaking nuclear test. Chief U.S. negotiator Christopher Hill, who seems to have won over some fans in China, called the breakthrough "a very solid step forward."

Not everyone sees it that way. John Bolton, the former U.S. ambassador to the United Nations, has been the most vocal critic, saying that he would be the "saddest man in Washington" were President Bush to follow through on the agreement. To Bolton, among others, the deal is nothing more than a reward for Pyongyang's intransigence, a Pyhrric victory that comes three years, eight nuclear bombs, and one nuclear test too late.

So which is it? For this week's Seven Questions, we asked Robert Gallucci, dean of Georgetown University's School of Foreign Service and the diplomat who signed the 1994 accord with North Korea, to weigh in with his thoughts on this very early agreement. His take? 

We now are in a situation where we’re saying, “OK, we’ll go step by step with [North Korea]. We’ll provide some of the benefits you want, and you’ll provide some of the restraint that we want.” So we are on a track now that could lead to the ultimate dismantlement of their nuclear weapons programs. It’s a new and better position to be in.

Check out the entire interview here.

When not busy developing nuclear weapons or purchasing oversized garden animals, Kim Jong Il uses his spare time to cultivate a "robust" animation industry in North Korea. It ain't exactly Warner Bros.—the cartoons are designed to "implant into the minds of children warm patriotism and towering hatred for the enemy," according to official news agency KCNA. I'm not sure if that's also the underlying message in today's Thursday Video, episode 27 of the hit series A Squirrel and a Hedgehog. Politics aside, the technical and artistic skill is pretty impressive for a country that can't even feed itself:

The skill of North Korean animators is so well-regarded, in fact, that South Korean studios often farm out work to them. The industry is one of the few legitimate sources of foreign currency for Kim Jong Il's rogue regime.

Even more advanced computer animation is sometimes done in the hermit kingdom. As early as 2002 North Korea was producing episodes of the popular Lazy Cat Dinga, a Korean series evidently inspired by the American Garfield. The cat's taste for delivery pizza and lazy indulgence mean the show hasn't been broadcast in the North, which of course has neither of those things. But in South Korea, Singapore, and Malaysia, Dinga has been the smiling face of one of the few exports of a very unsmiling government:

Faced with recurrent food shortages and a barely-functioning economy, North Korea has finally made a tough policy call. Did Kim Jong Il relax stifling state controls? Stop spending the country's meager resources on its military? Stop provoking the world community and return to the international economic system?

Of course not. Instead, he's invested in giant bunnies:

An east German pensioner who breeds rabbits the size of dogs has been asked by North Korea to help set up a big bunny farm to alleviate food shortages in the communist country. Now journalists and rabbit gourmets from around the world are thumping at his door. [...]

Szmolinsky, 67, from the eastern town of Eberswalde near Berlin, recalls how the North Korean embassy approached his regional breeding federation and enquired whether it might be willing to sell some rabbits to set up a breeding farm in North Korea. He was the natural choice for the job.

"They'll be used to help feed the population," Szmolinsky told SPIEGEL ONLINE. "I've sent them 12 rabbits so far, they're in a petting zoo for now. I'll be travelling to North Korea in April to advise them on how to set up a breeding farm. A delegation was here and I've already given them a book of tips."

The six-party talks have failed yet again, though the North Koreans have promised to study more generous U.S. proposals. Pyongyang has also promised to "improved its nuclear deterrent."

The deal-breaker was North Korea's demand that U.S. financial restrictions be part of the negotiations on the North's nuclear weapons. That was met by a stiff refusal by Christopher Hill, the chief negotiator for the United States. The Bush administration says the sanctions are tied to North Korea's criminal enterprises, not to its nuclear program.

Our sympathies are with Mr. Hill, sandwiched as he is between the unrealistic demands of the White House and the unstable negotiating tactics of Pyongyang.

First, Hill must deal with Mr. Bush's North Korea policy: bluster and saber-rattling one day and pleading for a return to talks another. Until the North's nuclear test in October, Washington had demanded a complete dismantling of the nuclear program as a pre-condition to talks. Having had to crawl back to the table (a pattern), the Bush administration maintains that the only solution it is willing to accept is complete dismantlement. But out of the nine countries that have ever acquired nuclear weapons, only South Africa has ever given them up—and that happened because apartheid regime collapsed. Every other country has done what the UK just decided a few weeks ago: Maintain and improve their nuclear stockpiles.

A more realistic goal than complete disarmament, says Brookings scholar Ivo H. Daalder, would be for North Korea to freeze and verify its existing program. This means: No more testing, a freeze on plutonium production, the return of international monitors, and the end of North Korea's uranium enrichment program. As Daalder tartly observes, if the U.S. achieves these goals, we'd be back where we were under Clinton 12 years ago.

But the Bush administration's negotiating foibles pale in comparison to the calculated unpredictability of the North Koreans. Mr Hill is the latest of a series of envoys to match wits with Mr. Kim Kye-gwan, who has been North Korea's chief negotiator since the mid-1990s. As Tim Johnson explains, North Korea has honed erratic negotiating behavior to an art:

Make outlandish demands. Appear unyielding. Threaten to bolt at the slightest provocation…escalating a mood of crisis, demanding last-minute concessions and unilaterally reinterpreting past accords…"They basically demand everything but the kitchen sink, and they are not offering much in return so far," Snyder said. "It helps to shape the field of negotiation to their advantage."…"Nobody has ever effectively countered their negotiating style. That's why we're in the mess we're in," said Ralph A. Cossa, head of the Honolulu-based Pacific Forum of the Center for Strategic and International Studies, a policy institute.”

Mr. Hill got a taste of this strategy when the North Koreans pulled one of their favorite tactics, arriving a day late. Much of this is for show. The North Koreans are loth to display any sign of weakness in public, but according to U.S. negotiators, in private sessions there is greater willingness to talk and sort things out. Yet, if last week is any indication, they aren't very willing. For now, Mr. Hill faces an uphill battle to resolve East Asia's biggest security challenge.

Revenues from a popular form of pinball loved by the Japanese, Pachinko, is thought to be a "vital source of hard currency for the impoverished regime in North Korea." The Pachinko industry in Japan, which is run by ethnic Koreans, brings in about $200 billion a year, but it is unclear how much of the profits make their way to North Korea. Japan recently banned the Mangyonbong ferry from its ports, a move that it believes will deal a crucial blow against money that is hand-carried from Japan to North Korea. While the link between Pachinko and North Korea is making many Japanese uneasy,

officials in the pachinko industry say North Korea's image problems and the sanctions have not been a business issue.