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US to solve North Korea funds issue

The chief US negotiator on North Korea's nuclear program will meet his Chinese counterpart on Wednesday to try, once again, to resolve the issue of N Korean funds languishing in a Macau bank account.

world Updated: May 30, 2007 16:20 IST

The chief US negotiator on North Korea's nuclear program will meet his Chinese counterpart on Wednesday to try, once again, to resolve the issue of North Korean funds languishing in a Macau bank account.

Under a February deal reached at six-country talks in Beijing, North Korea agreed to begin work to scrap its nuclear weapons program but has demanded the once-frozen funds in Macau be transferred first.

The $25 million at Banco Delta Asia was blocked after the United States blacklisted the bank, accusing it of laundering illicit funds for the secretive communist state.

"Obviously we are way behind schedule right now and we're doing all we can to resolve this," US Assistant Secretary of State Christopher Hill told reporters in Beijing.

We will get it done but I think it would be helpful if the North Koreans got on with their tasks as well," he said, before leaving to meet his opposite number in China, Wu Dawei.

North Korea missed an April 14 deadline to start closing its Yongbyon reactor and source of plutonium for bombs as required by a six-way disarmament deal -- also involving South Korea, China, Japan and Russia -- under which it also agreed to allow International Atomic Energy Agency (IAEA) inspections.

But the Yongbyon reactor continued to function, apart from occasional shut downs for what appeared to be repairs, Hill said.

He added he was wary of predicting when the North may allow in the inspectors.

"We've been wrong so many times in terms of predicting when this should happen," Hill said.

The positive side is the North Koreans have continued to indicate they're prepared to do what they're supposed to do. The problem has been we've really had trouble resolving this issue in Macau."

Because the US Treasury Department blacklisted the Macau bank on the grounds that it is tainted by Pyongyang's counterfeiting and other illicit activities, reputable institutions have been reluctant to risk handling the funds.
"It's proven to be very difficult for any bank to move the money because of the previous legal issue, so we've got to see if we can resolve that," he said.

Hill said he expected to leave Beijing on Thursday.