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N.Korea demands talks with U.S. on sanctions

SEOUL, Dec 3 (Reuters) - North Korea has demanded high-level talks with the United States on sanctions imposed by Washington against its financial assets, saying this was necessary for progress in the six-country nuclear talks.

In the latest diplomatic spat between the two countries, a planned Dec 9-11 meeting between North Korean and U.S. Treasury officials was cancelled after what U.S. officials said were differences over the nature of discussions. Washington offered to brief North Korean officials on the legal basis of its crackdown on companies and banks accused of involvement in counterfeiting, money laundering and narcotics trafficking that it says finance Pyongyang's nuclear programme.

But a North Korean Foreign Ministry spokesman said the U.S. offer to brief North Korean officials instead of sitting down for talks amounted to "backtracking from the agreement on holding talks to find a solution to the issue". "The U.S. side should fulfill its commitment made before the five parties, if it truly wishes to see progress at the six-party talks," the official KCNA news agency quoted the Foreign Ministry spokesman as saying late on Friday.

At the nuclear talks in Beijing in September, the United States, North and South Korea, Japan, Russia and China agreed that the North should dismantle its weapons programmes in exchange for economic aid, security assurances and increased diplomatic recognition. North Korea's chief negotiator to the nuclear talks, Kim Kye-gwan, said he and U.S. negotiator Christopher Hill had also agreed to hold direct talks on financial sanctions.

Hill said the issue was one of law enforcement and stood outside the six-party nuclear talks framework.

The United States has cast a "great hurdle in the way of the progress of the six-party talks and the implementation of the joint statement", the North's spokesman said.

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