- The Washington Times - Thursday, January 25, 2007

NEW YORK — The executive board of the U.N. Development Program yesterday authorized the office in North Korea to take back control over its programs from Pyongyang and cease hard-currency payments to local staff and suppliers, amid fears that the repressive government has been diverting funds for military use.

The board also agreed to stop subcontracting its local staff from the government and to complete a comprehensive audit within three months.

The action was taken a week after Washington warned that Pyongyang might be using the euros exchanged at the Pyongyang central bank to fund its nuclear program.

“We’re pleased with the approach that UNDP [Associate Administrator Ad Melkert] has laid out,” said acting U.S. Ambassador Alejandro Wolff. “A full, thorough, independent, outside audit of the program, and prospectively immediate remedial measures for some of the shortfalls that we’ve identified along with UNDP for the program to continue.”

Meanwhile, Japan demanded yesterday that the UNDP suspend all nonemergency projects in North Korea, except for humanitarian relief efforts coordinated directly with the people, until the country complies with all its obligations under the U.N. Charter, specifically the Security Council’s resolutions calling on Pyongyang to abandon its nuclear weapons program.

“It is Japan’s principled position that the government of a member state that does not comply with the obligations of the charter should not receive funds from the U.N.,” said Koji Tsuruoka, Japan’s director general for global issues.

“This is particularly relevant for programs funded by voluntary contribution which show strong economic and social development features and aim at supporting the government and not the individuals in need.”

Mr. Wolff called the Japanese proposal “compelling” and said Washington would consider it.

But North Korean delegate Jang Chun-sik rejected U.S. accusations as “ridiculous and nonsense” and said the board’s decision to review the North Korea program was “unfair and unacceptable.” Mr. Jang pledged that money had not been misused, and accused Washington of “actively mobilizing its mass media to distort the program” for political ends.

The UNDP has budgeted about $17 million a year for developmental and environmental activities in North Korea but has spent only about $4 million annually because of Pyongyang’s constraints on the program’s administration.

Mr. Melkert, the second-in-command at the UNDP, indicated that executive board members in future would be allowed to see all audits and reviews, which currently are handled by a small group of elected auditors. The United States had demanded to see original audits.

The UNDP’s executive board acts as the $2 billion program’s governing body.

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