Talks stall over failure to return money

March 23, 2007|By New York Times News Service

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BEIJING --Talks aimed at dismantling North Korea's nuclear weapons program were halted by China late yesterday after they stalled over the unexplained failure to release from a Macao bank up to $25 million that North Korea had demanded be returned before it continued negotiations.

Christopher R. Hill, the assistant secretary of state who is leading the U.S. team at the disarmament talks, confirmed that the transfer of the frozen money had been delayed by technical banking issues and said Chinese officials were working to transfer the money from Banco Delta Asia.

No date has been set for the talks to resume, but Hill said a Feb. 13 agreement that North Korea would shut down its Yongbyon reactor by April 13 in return for economic aid and security pledges remain on track.

He declined to comment on the reasons it was proving difficult to release the money from accounts linked to North Korea. The accounts have been frozen since September 2005, when the United States accused Banco Delta Asia, a small, family-owned bank, of money laundering and distributing counterfeit U.S. currency on North Korea's behalf. Banco Delta Asia has denied any wrongdoing.

Over days of six-nation talks here this week, North Korean negotiators refused to discuss arms control until the money is transferred to an account that North Korea controls in the Bank of China, a state-owned Chinese lender.

Hill said he expects the money to be transferred within days, but there was confusion yesterday about how North Korea would get it and how much of the $25 million the North was entitled to.

China's chief negotiator, Wu Dawei, said the Bank of China had concerns about accepting it and that "not all the concerns have been assuaged."

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