- The Washington Times - Tuesday, January 30, 2007

SEOUL — Chinese officials announced yesterday that six-party nuclear talks will resume on Feb. 8, raising hopes that North Korean objections over the freezing of a Macau bank account would be resolved by then.

U.S. Treasury Department officials held talks with North Korean delegates in Beijing on that issue yesterday, and published Asian reports said the Americans were prepared to see some funds released from the Chinese bank.

Chinese Foreign Ministry spokeswoman Jiang Yu said the new round of six-party talks — involving the United States, China, Russia, Japan and the two Koreas — should focus on implementing a September 2005 joint statement on the denuclearization of the entire Korean Peninsula.

Negotiations have been stalled almost since the statement was issued because of Pyongyang’s unhappiness with U.S.-backed financial moves, particularly the freezing of a North Korean government account at Banco Delta Asia, or BDA, in Macau.

The Treasury Department charges that the account in Macau, a Chinese autonomous territory, was being used to launder the proceeds of financial crimes, including the counterfeiting of U.S. currency.

Daniel Glaser, the Treasury Department’s deputy assistant secretary for terrorist financing and financial crimes, led the American side in the talks, which were to continue today. The North Korean team was led by O Kwang-chol, president of the North’s Foreign Trade Bank.

The talks create “the opportunity to discuss the concerns of the international financial community about illicit conduct in the international financial system,” Mr. Glaser told reporters.

“I know that there’s a lot of focus on Banco Delta Asia, and we’ll certainly be talking about the illicit conduct of that bank. We’ll also be talking about counterfeiting and other related issues.”

A Reuters news agency report from Beijing said the U.S. officials had confronted the North Koreans with documentary proof of illicit dealings at BDA.

The Treasury Department warned American and international financial institutions in September 2005 not to have dealings with BDA, because of suspicions of illicit activities on behalf of the North Korean government. Following the warning, international financial companies curtailed trade with BDA, for fear of being blacklisted by the U.S. government.

The Macau government took over the bank and froze an estimated $24 million in North Korean assets.

The North subsequently has made the lifting of what it calls U.S. sanctions against the bank a condition for progress in the six-party nuclear talks. With Washington refusing to link the two issues, the North boycotted the nuclear talks for over a year.

There was little progress when the six-party talks finally resumed in Beijing last month, with the U.S. and North Korean financial teams meeting on the sidelines. But both sides were upbeat after three days of closed-door bilateral meetings in Berlin earlier this month.

While Washington insists the Berlin meetings were held in the context of the six-party talks, it was the first time the countries had met without other countries’ delegates in proximity since the process began.

Japanese and South Korean news media, citing unnamed sources, have since reported that the United States might permit the unfreezing of some $13 million held by North Korea in BDA. And yesterday, South Korea’s Joongang Ilbo newspaper, without naming sources, said President Bush had ordered the Treasury Department to cooperate with the State Department on the North Korean issue.

Specialists say at least some of the North Korean funds held in BDA are from legitimate business dealings.

In an interview with The Washington Times last summer, Nigel Cowie, head of Daedong Credit Bank, the North’s only foreign-run bank, said that some of his bank’s funds were also locked up in BDA.

He confirmed the difficulties North Korea was facing, as international financial institutions were reluctant to deal with its banks after the Treasury’s September 2005 warning. This situation had forced North Korea to rely on couriers to carry international currencies in and out of the country, he said.

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