North Korea may still meet Accord deadline

North Korea may still meet an April 13 deadline to shut down its Yongbyon nuclear reactor even though a fund transfer to the communist nation has been delayed, the U.S. State Department said.

"There is certainly good faith on all sides to work through any obstacles that have presented themselves," department spokesman Sean McCormack said in Washington yesterday.

Under a Feb. 13 accord signed with the U.S., South Korea, China, Japan and Russia, North Korea has 60 days to shut down its plutonium-producing reactor as a first step in dismantling its nuclear program, in return for energy assistance.

North Korea is demanding the release of $25 million of its funds at Banco Delta Asia SARL in Macau before it readmits United Nations nuclear inspectors in compliance with the six-nation agreement.

China's envoy to the talks, Vice Foreign Minister Wu Dawei, said the deadline may not be met because of obstacles preventing the transfer of the funds, Kyodo News reported yesterday. China is North Korea's closest ally and the broker for the talks.

The transfer issue "has been more complex in its implementation than anybody from any of the six parties could have imagined," McCormack said, according to a transcript.

A delegation from the U.S. Treasury is working with Chinese officials and has been in touch with the North Korean government to "try to work through the execution of that agreement."

Money Laundering

The funds were frozen at the request of the U.S. Treasury in 2005 because of concerns about money laundering. The U.S. and North Korea agreed in March on releasing the funds, although the transfer to a Bank of China account in Beijing has been held up for technical and financial regulatory reasons.

The six-nation talks went into "recess" on March 22 because of the delay and Daniel Glaser, the U.S. Treasury's deputy assistant secretary for terrorist financing, remained in Beijing this week to resolve the issue.

Bank of China says it is concerned about receiving funds that the U.S. Treasury said were laundered. Complications also arise from a group of European investors who say a quarter of the funds belong to them.

The U.S. fulfilled its "legal requirements" in agreeing to release the funds. "As for the shutdown of the reactor and other obligations that exist under the Feb. 13 agreement, we believe that all parties should still be able to meet their obligations," said McCormack.

bloomberg.com