A technical glitch was holding up the final transfer of previously frozen North Korean funds, US nuclear envoy Christopher Hill said yesterday, but added that the issue would likely be resolved soon to facilitate disarmament talks next month.
The six countries involved in the disarmament process will consult with each other once the glitch is resolved and the North Koreans receive the money, Hill said.
"I heard that the money was transferred, it's in Russia, and they're having some technical problems in getting it to the bank where the actual North Korean accounts are," said US Assistant Secretary of State Hill, speaking to reporters at an Asia Society conference in Mongolia.
The envoy did not provide details of the technical problem, which he said the US side first learned about from the North Koreans.
He said it should be resolved by Monday.
North Korea has refused to act on its February pledge to disarm until it gets access to US$25 million once frozen in a Macau bank blacklisted by the US. The US accused Banco Delta Asia of helping North Korea's government pass fake US$100 bills and launder money from weapons sales.
Claiming the financial freeze was a sign of Washington's hostility, North Korea boycotted international nuclear talks for more than a year, during which it conducted its first-ever atomic bomb test in October.
Although the timing of the next round of six-party talks is up to the host country, China, Hill said he expected them to be held in early July.
However, he said it was important for North Korea to fulfill its obligations for the first phase of the disarmament agreement before the next meeting.
The first phase of the agreement requires North Korea to shut down its main nuclear reactor and allow UN inspectors back into the country within 60 days. North Korea kicked out the International Atomic Energy Agency (IAEA) inspectors in December 2002.
In return, it is to receive aid equal to 45,000 tonnes of heavy fuel oil from the other participants in the nuclear talks.
In the next phase, North Korea will be required to make a complete declaration to the IAEA and the other parties about its nuclear program, which then is to be dismantled.
To negotiate the North's promise to start dismantling its nuclear program, the US agreed to allow the money to be freed. But the transfer has taken months as the North insisted that it be sent electronically to another bank, apparently to prove the money is now clean.
Several media reports have said the money would be sent through the US Federal Reserve branch in New York before arriving in North Korean accounts in Russia's far east.
Hill did not confirm the exact route of the money transfer, but said: "One thing I know is that it's not in Macau, it's not in the US, it's in Russia."
Still, it was not clear whether the resolution of the banking dispute would bring about progress in North Korea's nuclear disarmament.
The country warned on Friday that it may increase its so-called "self-defense deterrent," a term it usually uses for its nuclear program, raising concerns that the regime might be trying to find another reason to drag its feet.
"The US is claiming that it is building a global missile defense system to protect against missile attacks from our nation and Iran. This is a childish pretext," the North Korean Foreign Ministry said in a statement carried by the official Korean Central News Agency. "We cannot but further strengthen our self-defense deterrent if the arms race intensifies because of the US maneuvers."
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