- The Washington Times - Thursday, May 31, 2007

SEOUL — North Korea and the United States ignored a South Korean offer to help resolve a banking dispute that has bedeviled progress on Pyongyang’s nuclear disarmament, the South’s president said yesterday.

Roh Moo-hyun added that he thinks that Pyongyang’s nuclear program is strictly a bargaining chip and predicted that North Korean leader Kim Jong-il would give up the bombs if his conditions were met. North Korea has demanded security guarantees, economic aid and normal relations with the United States.

“North Korea harbors huge anxieties or fears toward the United States and [South Korea]. And in this climate, North Korea, I believe, chose the development of a nuclear program, and with this nuclear program, I believe they try to use it as a negotiating tool,” Mr. Roh told Associated Press President and Chief Executive Officer Tom Curley. “This was a political strategy.”

Mr. Roh, whose term expires in February, also said there is still time for a summit with Mr. Kim [-] but only if the North moved to abandon its nuclear program.

International talks on North Korea’s nuclear-arms program have been beset by repeated delays since late 2002, when Pyongyang expelled United Nations’ inspectors after Washington accused the communist nation of running a secret uranium-enrichment program in violation of a 1994 disarmament deal.

Most recently, the process has deadlocked over some $25 million in North Korean accounts frozen in a Macao bank. That bank was blacklisted in 2005 by Washington, which accused it of complicity in counterfeiting U.S. dollars and money laundering by the Pyongyang regime.

Washington agreed to help free the money to win North Korea’s promise to shut down its sole operating nuclear reactor by mid-April and eventually dismantle its weapons program. But the money has not been withdrawn because other banks have shunned the tainted funds — and North Korea has refused to shut down its reactor until it gets the money.

Mr. Roh said his government had hoped to help to resolve the dispute. He did not elaborate on the offer, but local news reports have said Seoul was considering asking a South Korean bank to be the middleman for getting the money to a North Korean account.

“We have offered to help in resolving the issue to both sides, but after our offer, there has not been an answer from either side,” Mr. Roh said, referring to Washington and Pyongyang.

U.S. officials told The Washington Times that they were not sure what offer Mr. Roh was referring to, but they acknowledged that South Korea was one of the countries the United States approached early on in its effort to find a bank willing to accept the money.

The top U.S. negotiator on North Korea, Assistant Secretary of State Christopher Hill, appealed yesterday for Pyongyang to shut its reactor regardless of the financial dispute.

A senior North Korean official rejected the appeal.

“Our position has been clear from the beginning,” Kim Myong-gil, deputy chief of the North Korean mission to the United Nations, told Yonhap by phone yesterday.

“The issue of BDA (Banco Delta Asia) has to be solved first. There is no other way.”

The two Korean states, which remain technically at war because the 1950-53 Korean War ended in a cease-fire, have been pursuing efforts to reconcile in recent years. But ties deteriorated last year after North Korea tested long-range missiles in July and then conducted its first nuclear test explosion in October.

Staff writer Nicholas Kralev in Berlin contributed to this article.

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