Funds dispute 'won't impede nuclear talks'

Envoys met in China today to hammer out a detailed schedule for dismantling North Korea’s nuclear programmes amid efforts to resolve a sticking point over North Korean funds frozen in a Macau bank.

Top US nuclear envoy Christopher Hill said he met with representatives from the North Korea delegation yesterday and today to explain the US position on the funds in Macau’s Banco Delta Asia (BDA) bank and said he was hopeful that the issue had been resolved.

However, he had yet to meet with his North Korean counterpart, Kim Kye Gwan, who arrived yesterday but did not participate in preparatory meetings ahead of a formal resumption of six-party nuclear talks on Monday.

The talks are meant to assess progress since a landmark February 13 disarmament agreement was reached giving North Korea 60 days to shut its main reactor and a plutonium processing plant and allow UN monitors to verify the shutdown. In return, North Korea is to receive energy and economic assistance and the beginning of normalising relations with the US and Japan.

“I think we have gotten past the BDA issue and that will not be an impediment to our six-party process,” Mr Hill told reporters today. A US treasury department official arrived in Beijing today to also take up the issue.

Mr Hill said the North Korean officials he spoke with “made it very clear that they have begun their tasks for the purpose of denuclearisation.”

North Korean envoy Mr Kim told reporters upon his arrival in Beijing yesterday that North Korea “will not stop its nuclear activity” until the entire £12.8 million in the frozen accounts is released.

South Korean envoy Chun Yung-woo echoed Mr Hill’s optimism, saying today that he expected the funds issue to be resolved “within a short period of time in a way that will not be an obstacle to the progress of the six-party talks.”

Delegates from the six countries involved in the talks – China, the two Koreas, Russia, Japan and the US – met today for a denuclearisation working group aimed at helping set the targets necessary to meet the next April 14 deadline.

Japan’s representative to the talks, Akio Suda, said North Korean delegates at the meeting said “they are prepared to do what they are supposed to do on the condition that the five other members do what they are required to do,” without giving details.

Suda said “most representatives” stressed the need to focus efforts on closing the North’s main nuclear reactor at Yongbyon, getting the UN to verify the shutdown and getting clarification of the North’s alleged separate uranium enrichment programme.

US allegations in 2002 that North Korea has a secret uranium enrichment programme prompted the North to expel UN inspectors and eventually led to North Korea exploding its first nuclear device in October last year.

Under the agreement, North Korea eventually is to receive assistance worth 1 million tons of heavy fuel oil if it fully discloses and dismantles all nuclear programmes.

The US promise to resolve the frozen funds, some of which US authorities suspect may be linked to counterfeiting or money laundering, had become a key issue in the talks.

Washington promised to settle the issue as an incentive for North Korea to disarm. But its solution announced last week – an order to US banks to sever ties with the Macau – has been criticised by China and North Korea.

US treasury spokesman Daniel Glaser arrived in Beijing following meetings in Macau to discuss the issue with government officials, who have the authority to release the funds. Macau is a semiautonomous Chinese territory that maintains its own legal and financial systems.

The Treasury Department is expected to help Macau bank regulators identify accounts connected to North Korea that are not tainted by alleged links to nuclear proliferation or other crimes, possibly resulting in the release of about £10 million, one US official has said on condition of anonymity in accordance with policy.

Meanwhile, a former South Korean lawmaker, Jang Sung-min, said today that North Korea’s Kim had proposed to Hill earlier this month that the North would simultaneously destroy all its nuclear facilities, nuclear programmes and nuclear weapons through safe and controlled explosions in exchange for US concessions.

Mr Hill dismissed the report, saying he had no recollection of being presented with such an “extraordinary offer.”