'Funds must be released' before North Korea stops nuclear plans

North Korea will not stop its nuclear activity unless its funds held in a Macau bank are fully released, the country’s chief nuclear envoy said today.

Banco Delta Asia had been blacklisted by the US Treasury Department since September 2005, leading to a freeze of some $25m (€18.8m) in North Korean accounts.

Earlier this week, the United States said that ties would be cut between the small Macau lender and the US financial system. The move might lead regulators to unfreeze a portion of the money.

“We have not heard anything regarding the lifting of financial sanctions yet,” Kim Gye Gwan, North Korea’s top nuclear envoy said after arriving in Beijing today.

It was the first official response by the North to Washington’s decision.

“We will not stop our nuclear activity until our funds frozen in the BDA are fully released,” he said. “

We will not stop the Yongbyon nuclear facility until the United States fully releases our funds frozen in the BDA.”

Christopher Hill, the chief American nuclear negotiator, said earlier that he planned to brief Kim on the issue in working groups.

“I don’t think BDA will be an obstacle,” he said before meeting Kim. “I think we’ll work that out.”

The US treasury opened its investigation into the small Macau lender in September 2005. As part of this week’s announcement, it ordered all ties cut between the bank and the US financial system.

Washington had promised to resolve the issue as part of the implementation of the February agreement under which North Korea agreed to shut down Yongbyon, its main nuclear reactor and processing facility, and allow UN inspectors for verification by April 14.

In return, North Korea would receive energy and economic assistance and a start towards normalising relations with the US and Japan.

Hill also said the US plans to raise the issue of North Korea’s alleged uranium enrichment programme during international nuclear talks.

US allegations that North Korea has a uranium enrichment programme brought on the nuclear crisis in 2002 that led the country to kick out UN inspectors and ultimately contributed to North Korea testing its first nuclear bomb last year.

North Korea has never publicly acknowledged that it has such a programme, although Kim indicated the North was willing to discuss the issue with Washington.

“We are willing to cooperate with the United States to address the allegations,” Kim said. “We will clarify this when (the US) presents the evidence.”

Washington will also discuss benchmarks for progress in Pyongyang’s de-nuclearisation efforts, Hill said.

North Korea would be rewarded for meeting those benchmarks with deliveries of heavy fuel oil agreed under the agreement, he said.