Accord reached on North Korean funds

Negotiators have agreed on a method to release $25 million in North Korean funds frozen in an Asian bank, removing a snag that has stalled nuclear disarmament talks, the State Department said Friday.

After two weeks of discussions in Beijing, banking officials from the United States, China, North and South Korea and the Bank of China have agreed on a “pathway” for the money to be returned to the government in Pyongyang, department spokesman Sean McCormack said.

“We support the release of all the funds. It is now a matter of technical implementation,” he said, adding that the actual return of the money would be up to China and North Korea.

Previously, U.S. officials had suggested privately that some of the money held in the blacklisted and now-shuttered Banco Delta Asia in the Chinese territory of Macao might not be released.

McCormack refused to predict whether or when the pathway would be employed, but he said the money returned must be used for the “betterment of the North Korean people and for humanitarian purposes.”

He also announced that Washington’s top East Asia diplomat, Christopher Hill, would travel to the region Sunday for talks with officials there on North Korea’s progress in shutting down its main nuclear facility by a mid-April deadline.

The standoff over the money has threatened the next step in a February agreement committing North Korea to close its Yongbyon nuclear facility by April 14 in return for economic aid and political concessions.

The funds were frozen after Washington blacklisted the small Banco Delta Asia for alleged complicity in money laundering and other illicit activities by North Korea. Pyongyang then refused for more than a year to return to nuclear talks.