- The Washington Times - Thursday, December 21, 2006

BEIJING (AP) — Talks on dismantling North Korea’s nuclear arms program are deadlocked, with no sign of progress, Japan’s envoy said today, citing the North’s refusal to abandon its demand that the United States lift financial restrictions.

The chief U.S. negotiator acknowledged that the North Korean delegation refused to address anything beyond the financial issue, apparently instructed by superiors to resolve that before talking about nuclear weapons.

“We were hoping to make more progress than we made,” Assistant Secretary of State Christopher Hill said today.

While insisting that the financial restrictions were a separate issue from the arms talks, he acknowledged they were a means to protect against nuclear proliferation.

“There’s one thing that anyone involved in denuclearization can predict — that as long as [the North Koreans] stay in this nuclear business, they’re going to have more and more and more financial problems,” he said.

The Japanese envoy, Kenichiro Sasae, said the North’s refusal to address its disarmament was “extremely regrettable” and that one-on-one meetings between the United States and the reclusive communist nation have not changed the “confrontational” nature of the dialogue.

“The situation remains severe, and there is no prospect for a breakthrough,” Mr. Sasae said after the fourth day of six-nation talks in Beijing. “North Korea’s claims and its position on financial issues are very firm, and that is the biggest cause of the difficulty.”

North Korean officials are still angry about Washington’s blacklisting of a Macau bank in 2005 for its complicity in North Korea’s purported illegal financial activity, including money laundering and counterfeiting U.S. currency.

Communist officials have made the lifting of U.S. financial restrictions North Korea’s main condition for abandoning its nuclear weapons program. The North agreed to end a 13-month boycott of the six-nation nuclear talks because Washington promised to discuss the issue.

“North Korea has not sincerely responded” to pleas for implementing a September 2005 agreement in which the country pledged to abandon its nuclear program for aid and security guarantees, the Japanese envoy said.

“China is making efforts through repeated separate discussions with the United States and North Korea, but at this moment, there is absolutely no landing point in sight,” he said.

American and North Korean experts discussed the financial restrictions for two days in separate talks this week in Beijing but made no breakthroughs. They may meet again next month in New York.

The talks — including China, Japan, Russia, the United States and the two Koreas — are to continue until at least tomorrow. Mr. Hill said he planned to leave Saturday for Washington.

Meanwhile, a South Korean lawmaker said today there were signs North Korea could conduct a second nuclear test.

Rep. Chung Hyung-keun of the main opposition Grand National Party, a former intelligence official, said North Korea dug two tunnels in a mountain in the country’s northeast and used one of them for its earlier nuclear test.

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