Pyongyang funds to be released

• Article
• Comments ()
• Click-2-Listen
• Videos

By

Negotiators have agreed on a method to release all $25 million in North Korean funds that are frozen in an Asian bank, eliminating a hitch that has stalled nuclear disarmament efforts.

After two weeks of talks in Beijing, banking officials from the United States, China, North and South Korea and the Bank of China have agreed on a "pathway" for the money to be returned to the North Korean capital, Pyongyang, the State Department said yesterday.

"We support the release of all the funds. It is now a matter of technical implementation," spokesman Sean McCormack told reporters, adding that the actual return of the money would be up to China and North Korea.

Previously, U.S. officials had privately suggested that some of the $25 million held in the blacklisted and recently shuttered Banco Delta Asia in the Chinese territory of Macao might be tainted and not released.

The State Department's envoy on North Korea, Christopher Hill, will travel to the region tomorrow to continue the nuclear disarmament efforts, Mr. McCormack said.

In a separate statement, the Treasury Department said yesterday its negotiators at the talks in China had worked to ensure the release of the money was consistent with international money-laundering laws and other financial regulations.

"We stand ready to assist the Macanese authorities in their efforts to release the funds and with all parties to effectuate the North Korean pledge that any money received by them would be used for humanitarian purposes of benefit to the North Korean people," it said.

A top U.S. Treasury official, Daniel Glaser, had been in Beijing for 13 days trying to sort out the matter. He and his delegation left China yesterday without commenting on the resolution of the hitch.

Mr. McCormack declined to comment on South Korean reports that the money would be transferred to North Korea through the Bank of China in Hong Kong. He referred questions about specifics to authorities in China and Macao. A U.S. official in Beijing, however, denied the reports.

Mr. McCormack refused to predict if, or even when, the "pathway" would actually be employed, but said the money returned must be used for the "betterment of the North Korean people and for humanitarian purposes."

The standoff over the money has threatened the next step in a February agreement, which committed North Korea to shut down its Yongbyon nuclear facility by April 14 in return for economic aid and political concessions.

The funds were frozen after Washington blacklisted the small Banco Delta Asia for purported complicity in money laundering and other illicit activities by North Korea.

Pyongyang said the freeze showed Washington's hostile intentions toward it and refused to return to international talks on its nuclear program for more than a year.

The problems stalling the transfer of the money are thought to be related to difficulties in finding a bank willing to accept the North Korean funds.

Mr. McCormack said Mr. Hill will hold talks with officials in the region during his trip next week on North Korea's progress in shutting down its main nuclear facility by a mid-April deadline.

Mr. Hill will travel to Tokyo, Seoul and Beijing to discuss the six-party process between North and South Korea, the United States, China, Russia and Japan aimed at getting Pyongyang to halt its nuclear weapons program.

Mr. Hill's visit will coincide with a trip to North Korea by New Mexico Gov. Bill Richardson and former Veterans Affairs Secretary Anthony Principi, which will focus on the repatriation of the remains of U.S. servicemen killed in the Korean War.