North Korea has done it again. It gained a concession from the United States with a mere promise that it has completely failed to fulfill.

More than a week has passed since a deadline for North Korea to shut down its Yongbyon nuclear reactor and invite International Atomic Energy Agency (iaea) inspectors back in, and North Korea still has not complied.

In a February 13 agreement signed by the U.S., the two Koreas, Japan, China and Russia, North Korea agreed to shut down and seal its Yongbyon nuclear reactor within 60 days in return for aid. North Korea made it clear, however, that no progress would be made until the U.S. released $25 million of its money frozen in a Macau bank, Banco Delta Asia (bda).

The money was frozen back in 2005 after Washington accused the bank of helping North Korea launder money and circulate counterfeit bills. North Korea’s economy is largely built on criminal activities such as selling narcotics and gun-running. The bda sanctions took a toll on the North Korean regime, which needs the support of hard currency—to pay off the cronies that carry out the illicit activity, and to pursue its nuclear and other weapons programs. In fact, the need for cash motivated the North Koreans to become experts at counterfeiting U.S. money; some of their counterfeits are so hard to detect, it is impossible to estimate how much counterfeiting they have done.

The bda sanctions were a blow for North Korea’s economy and a diplomatic slap in the face. They showed that the U.S. was willing to use its last remaining form of punishment short of military action.

But that was back in 2005. Since then, U.S. policy toward North Korea has become more muddled. The Bush administration, burdened by Iran and Iraq and, since January, additionally facing pressure from a newly Democratic-led Congress, has moved from a policy of isolation and punishment to one of re-engagement with North Korea.

The North Korean regime is fully aware of the shift. It has been amid this shift that Pyongyang launched a provocative series of missile tests last July and a nuclear test last October. Both times, the reaction of the U.S. and the West was restrained—even weak. This emboldened the North Korean regime demand for its $25 million back. And this time, Washington caved.

North Korea forced the Bush administration into a humiliating reversal on an issue of principle.

The U.S. position had been that it would not unfreeze the money because of the illicit activity for which it would be used, and because it would set a bad precedent. By completely reversing its stance, the U.S. lost the only leverage it had other than military action.

And not only did Pyongyang get the funds released, it blew the deadline to shut its plant down. It got what it wanted and still hasn’t fulfilled its end of the agreement.

According to present arrangements, even if North Korea does shut down its nuclear plant, not a single bit of plutonium has to leave the nation. This means that this unpredictable nation, after exacting the concessions it has sought, can restart its nuclear program and once again take more aid for nothing.