The United States may very soon unfreeze North Korean funds tied up at a Macau bank over suspected links to illicit financial activities, but the State Department said Monday other measures to mend ties with the communist nation will take time.

The unfreezing of North Korea's US$24 million at the bank, Banco Delta Asia (BDA), is expected to set the stage for the North to begin shutting down its key nuclear reactor and a reprocessing facility at Yongbyon.

"We are working hard to resolve the BDA matter and will do so in the very near future," Molly Millerwise, a Treasury Department spokesperson, was quoted as saying by the Associated Press.

The move comes after Washington's chief nuclear negotiator Christopher Hill said Feb. 13 that his country will move to resolve the financial issue within a month.

The promise was part of political incentives offered to the North in a disarmament accord struck in Beijing earlier that day, under which the communist nation is to shut down the Yongbyon facilities within 60 days. It is also to receive 50,000 tons of heavy fuel oil in initial shipments, and an additional 950,000 tons of heavy oil or equivalent aid once it "disables" the nuclear facilities.

The U.S. move, however, is not going to acquit North Korea of the charges against it though Pyongyang will eventually get its money back, officials here and in Seoul said.

"The investigation has only confirmed the ongoing illicit activity at BDA, including the bank's willingness to facilitate illicit transactions on behalf of their North Korean-related clients," Millerwise was quoted as saying.

An official at South Korea's Foreign Ministry said Monday (Seoul time) that the bank was likely to be liquidated as the result of an official U.S. designation of it as a "money laundering concern" and that North Korea would get its money back in the process.

"I believe the owner of BDA would have to take responsibility for what he or she may be found responsible for based on the outcome of the investigation," said the official who asked not to be identified.

"I think (the issue of) how much money will be released to North Korea is now in the hands of the Macau government," the official added.

Washington blacklisted the bank in September 2005 on suspicions of being a front for the North's illicit financial activities, such as counterfeiting and money laundering.

North Korea had stayed away from the international negotiations over its nuclear weapons program for over a year, calling the financial sanctions a pillar of U.S. hostility toward it.

In addition to resolving the financial dispute, the Feb. 13 agreement also calls on the U.S. to begin a process to restore the North's reputation in the international arena by removing it from Washington's list of terror-sponsoring states and ending its application of the Trading with the Enemy Act on the communist state.

The top U.S. nuclear negotiator and his North Korean counterpart Kim Kye-gwan held two days of talks in New York early last week to begin the unprecedented process of normalizing their countries' diplomatic relations.

Tom Casey, a spokesman for the State Department, however, said removing the designation of North Korea as a state-sponsor of terrorism is a process that will require a lot of time and careful reviews.

The spokesman said Hill was likely to meet with his North Korean counterpart when he travels to Beijing this week for a new round of the nuclear disarmament talks set to start next Monday, but said a meeting has yet to be scheduled.

The nuclear talks are attended by South and North Korea, the U.S., Japan, Russia and host China.

Washington, March 12 (Yonhap News)