Top S. Korean envoy heads to U.S. amid nuclear stalemate

Posted on : 2007-06-11 21:10 KST Modified on : 2019-10-19 20:29 KST

South Korea's top nuclear negotiator headed for Washington Monday to meet with his U.S. counterpart on ways to resolve an impasse in the North Korean nuclear negotiations caused by the delayed release of North Korean funds frozen in a Macau bank.

Chun Yung-woo will hold talks with U.S. Assistant Secretary of State Christopher Hill shortly after arriving there Monday (Washington time), Foreign Ministry officials said.

"The two will delve into the issue" of the release of the funds in the Banco Delta Asia (BDA) in Macau, an official said.

The South Korean envoy is expected to leave Washington on Wednesday.

Chun's visit follows the chief U.S. envoy's trip earlier this month to Beijing, where he reportedly urged his Chinese counterparts to make efforts to facilitate the transfer of the funds.

The funds at the Macau bank had been frozen since September 2002, when the United States blacklisted the bank as a "primary money laundering concern" for its alleged link to the North's illicit financial activities that included counterfeiting, smuggling and money laundering.

The U.S. Treasury Department finalized the 2002 rule on the BDA in March, but shortly afterward agreed to the release of the North's US$25 million there for the sake of implementing a six-nation nuclear accord signed in February.

In the accord, also signed by South Korea, the U.S., Japan, China and Russia, North Korea agreed to shut down and seal its key nuclear reactor at Yongbyon by April 14. Pyongyang missed the deadline has threatened not to take those steps if its money in the bank was not released.

Macau's financial authorities unblocked the funds for withdrawal in April with an apparent nod from Washington, but Pyongyang has since upped its ante, saying it will not implement the February agreement unless the money is released to it via a different bank account, a transfer that has proven to be nearly impossible due to U.S. restrictions on the Macau bank.

No solution to the banking issue has been found, but Chun told reporters before heading for Washington from South Korea's Incheon International Airport, "I hope we will be able to make a breakthrough during my visit to the United States."

An initial arrangement between Pyongyang and Washington announced in Beijing on March 19 said the North Korean funds would be transferred to an account at the Bank of China.

But Washington has been unable to find a bank to handle the transfer, apparently due to fears of possible consequences from handling money that was once labeled "dirty" by the U.S. The Chinese bank also backed out of the initial arrangement.

However, a Foreign Ministry official, asking not to be identified, told reporters last week "There is a new idea on ways to solve the BDA issue we are pursuing."

The official refused to elaborate on what he called a possible solution, but others have said the new idea may be to send the money to Russia, which has reportedly agreed to accept it.

"The U.S. has reportedly requested Russia to have a Russian bank receive North Korea's BDA funds on condition that a U.S. bank will work as a proxy, and I understand Russia has agreed to this arrangement," a source close to the nuclear disarmament talks said Sunday, speaking anonymously.

Quoting an unidentified U.S. official, Japan's NHK reported Monday that the proposed transfer to a Russian bank may take place "as early as this week."

The February agreement calls on the communist North to irreversibly disable the Yongbyon reactor and submit a complete list of all its nuclear programs to the U.N. nuclear watchdog in exchange for 1 million tons of heavy fuel oil or equivalent aid.

No deadline has been set for the second phase of the nuclear deal, in which the North is supposed to disable its nuclear programs.
SEOUL, June 11 (Yonhap News)

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