hankyoreh

Russia has accepted a U.S. request to help facilitate the transfer of US$25 million in "tainted" North Korean funds to resolve a banking dispute that has stalemated the North's nuclear disarmament procedures, South Korean sources said Sunday.

In February, North Korea agreed to dismantle its nuclear facilities in return for aid, but hasn't taken any initial steps, citing the stalled release of its funds in a Macau bank blacklisted by the United States.

The U.S. recently proposed that a Russian bank with a North Korean account accept the funds via an American financial institution before sending them back to the communist country, and Russia accepted the plan, said a South Korean government source privy to the banking issue. The proposal was made after top officials of the U.S., Russia, South Korea and China agreed on a solution which "all concerned parties can accede to," the source said on condition of anonymity.

To carry out the international money transactions, the U.S. is expected to temporarily bend its rules banning American banks from dealing with Banco Delta Asia, the Macau lender, said another South Korean government source, also speaking anonymously.

A U.S. bank will play an "intermediary role," but its name will not be disclosed so the process can be conducted smoothly, the source said, adding it would not be Wachovia Corp., the fourth-largest American bank that once considered helping with the fund transactions.

"With the new idea being pushed in a positive atmosphere, as the U.S., China and Russia agree on it, the chances for the transfer of the North Korean funds are getting higher," the source said.

Earlier this year, the U.S. agreed to unfreeze the money at Banco Delta Asia to win North Korea's agreement to shut down its nuclear facilities.

The U.S. had earlier frozen the money, accusing the bank of money-laundering for North Korea. Considering the sanctions a hostile U.S. policy against it, the communist North boycotted nuclear talks for more than a year, and performed its first-ever nuclear test during that time.

The transfer, however, has not been made amid difficulties in finding a financial institution willing to conduct it. This problem caused the North to miss an April 14 deadline to shut down its sole nuclear plant in Yongbyon, a key agreed-upon initial disarmament measure.

According to press reports, Pyongyang wants to get the money back through a U.S. institution, believing that would enable it to have continued access to the international financial system, although the North could withdraw the money in cash and ship it home. Several foreign banks were also asked to help process the transfer but were reluctant to do so as they were worried about tarnishing their images and getting cut off from the U.S. financial system, the reports said.

South Korean chief nuclear negotiator Chun Yung-woo is to leave for Washington on Monday for talks on how to implement the Feb. 13 disarmament accord, which was signed by the two Koreas, the U.S., China, Russia and Japan.

SEOUL, June 10 (Yonhap News)