Frozen funds row hinders North Korea talks

http://news.yahoo.com/s/nm/20070320/ts_nm/korea_north_dc&printer=1;_ylt=AsEyzOQ2GfXFSzZ1q3OqveBg.3QA

Six-party talks to end North Korea's nuclear threat turned into a tug-of-war on Tuesday, with Pyongyang focused on receiving unfrozen bank funds while other powers made frustrated efforts to advance disarmament plans.

Washington has said Pyongyang will soon get $25 million freed from a Macau bank, as the talks in Beijing seek to steer ahead a February 13 agreement giving North Korea aid and security assurances in return for shutting a nuclear reactor and agreeing other disarmament steps within 60 days.

But, in a sign of the pitfalls that could frustrate and even derail that agreement, wary North Korea pushed aside the agenda to demand that the money first reach it before the nuclear talks proceed as planned. The talks bring together North and South Korea, host China, the United States, Japan and Russia.

"China urged North Korea to come forward, but North Korea did not do so," Japan's chief negotiator, Kenichiro Sasae, told reporters. "There was no progress at all today."

The chief U.S. negotiator, Christopher Hill, said Pyongyang's demands had sapped the energies of a tight disarmament agenda that includes seeking agreement on how to disable the Yongbyon reactor after it is closed in mid-April and deciding other disarmament steps North Korea must take to get more aid.

"I frankly would have liked to have seen more progress today," Hill told reporters. "I don't think we can all stop while people are filling out bank forms."

A U.S. Treasury official said on Monday that North Korean money frozen in Macau's Banco Delta Asia would be released into a Chinese bank and turned over to Pyongyang, marking the end of an inquiry into claims that the bank had harbored North Korean earnings from international crime.

Hill said the United States had done its bit to solve the bank impasse, and it was now up to Macau and Chinese banks and authorities to usher the money through to North Korea -- something he could not control.

"DON'T TRY TO ANALYZE NORTH KOREA"

But officials said the bank wrangle could be solved soon, leaving envoys to focus on the difficult disarmament process.

South Korea's deputy chief envoy, Lim Sung-nam, said the procedures for lifting the bank freeze could be completed overnight.

North Korea's envoy Kim was upbeat. "It's going to go well," he told a South Korean envoy. "We're going to have a good dream tonight."

The talks have also been clouded by distrust between Pyongyang and Japan, which is demanding that North Korea accounts for Japanese citizens abducted in previous years before Tokyo offers full-scale aid and diplomatic ties.

Japanese Prime Minister Shinzo Abe said it was useless trying to "analyze or react to" North Korea.

"North Korea must realize that unless it implements what was agreed at the six-party talks, it will not get what it should get, it won't be accepted by the international community," he told reporters.

North Korea boycotted the six-party negotiations for more than a year over the Macau bank freeze, which came soon after it signed a broad disarmament statement.

Pyongyang came back to the table in December, months after conducting its first nuclear test, which drew international condemnation and U.N. sanctions.


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A moderate Moslem is one who sends others blow themselves up.