- The Washington Times - Tuesday, March 20, 2007

BEIJING — Six-party discussions under way in the Chinese capital to dismantle North Korea’s nuclear weapons facilities came to an abrupt halt yesterday when Pyongyang’s negotiators refused to attend future meetings until funds frozen in a Macao bank were released.

The talks, hosted by China, involve the two Koreas, the United States, Japan and Russia. They began in August 2003 in Beijing’s first major foray as a diplomatic broker seeking Northeast Asian stability by denuclearizing the Korean Peninsula.

Participants reconvened Monday for the sixth session of talks in what was supposed to be a three-day gathering focused on key issues to maintain momentum. An agreement was reached Feb. 13 on initial actions that various parties were to take within 60 days.

A second day of bilateral meetings in the morning was to be followed by an afternoon plenum progress report on what had been accomplished. But discussions on issues to reach a critical deadline in mid-April hit a sticking point with Pyongyang’s insistence that it receive $25 million frozen by Macao authorities before talks could resume.

Further talks were halted despite assurances by the U.S. Treasury Department and the lead U.S. negotiator, Assistant Secretary of State Christopher Hill, that the matter of financial sanctions imposed on Banco Delta Asia (BDA) had been cleared up.

BDA, a small, privately owned bank in Macao, a special administrative region of China, was blacklisted by the U.S. for participating in a variety of illegal financial transactions on North Korea’s behalf, including money laundering and counterfeiting. Some reports have called BDA the “private piggy bank” of Kim Jong-il, the regime’s supreme leader.

Authorities in Macao had frozen North Korean assets in 2005 in the wake of a run on the bank after the Treasury Department probe.

At a midday press briefing yesterday, Liu Jianchao, China’s foreign ministry spokesman, said, “Parties concerned have reached a solution regarding BDA, which we hope will contribute to the solution of the entire issue.”

Mr. Liu praised efforts, saying, “Overall, we think the agreement will be conducive to the six-party talk process.”

The spokesman, however, hinted that things had gone awry. He said bilateral meetings had taken place yesterday morning, but reporters had to “wait and see if there will be a meeting of heads of delegations” planned for the afternoon.

The head of the Japanese team, Kenichiro Sasae, revealed that the nuclear talks were at an impasse because Pyongyang had refused to participate in the afternoon event.

Mr. Sasae told reporters that “China urged North Korea to come forward, but North Korea did not do so” and “there was no progress at all today.”

Russia’s representative, Alexander Losyukov, confirmed the boycott in the Chinese state-controlled press, saying it was because funds had been not transferred into a North Korean account with the Bank of China in Beijing.

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