China Says US, North Korean Envoys Resolve Bank Dispute

By Daniel Schearf Beijing 18 March 2007

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The U.S. chief negotiator on North Korea's nuclear programs says sanctions against a Macau bank for allegedly helping North Korean money laundering are no longer an obstacle to six-nation talks. As Daniel Schearf reports from Beijing, the financial sanctions have been a key problem to de-nuclearizing North Korea.

The chief U.S. negotiator on the nuclear talks, Christopher Hill, told reporters financial sanctions against Banco Delta Asia are no longer an issue and would not obstruct six-nation negotiations on North Korea's nuclear programs.

Ambassador Hill said he is expecting an announcement very soon on the fate of about $24 million in North Korean accounts at the bank frozen by Macau authorities for investigation under U.S. suspicions of illicit activity.

North Korea's chief negotiator to the talks Kim Kye-Kwan said Saturday North Korea would not implement a February agreement to move towards giving up its nuclear programs until the accounts were unfrozen.

The agreement calls for North Korea to shut down its main Yongbyon nuclear reactor and allow international nuclear inspectors back into the country within 60 days in exchange for aid and diplomatic incentives.

Despite the comments, Hill said North Korea is on schedule with the agreement. But he said negotiators from the two Koreas, China, Japan, and Russia needed to work out a step-by-step process beyond that two-month plan when they meet beginning Monday for talks in Beijing.

"We are going to need a roadmap ahead. I think we are going to have to discuss that. I think the DPRK wanted to keep the discussions pretty much focused on the sixty-day obligations. But, we need to keep, continue to go forward," said Hill.

Wednesday, the U.S. Treasury Department finished its investigation of the Macau bank, declared it guilty of helping North Korea with money laundering and counterfeiting and officially banned U.S. banks from doing business with the family-owned operation.

The bank denied knowledge of any wrongdoing and China's foreign ministry spokesman called the ban "regrettable."

North Korea had refused to participate in talks on its nuclear programs for more than a year because of the sanctions. But the United States agreed to discuss the issue in December, leading to the breakthrough agreement in February on a timetable for de-nuclearization.

China's official Xinhua News Agency quoted Chinese State Councilor Tang Jiaxuan as saying North Korea and the United States had worked out a solution to the frozen funds, but did not elaborate.