North Korea Says It Is Preparing To Shut Down Main Nuclear Facility

Saturday, March 17th 2007, 2:42 pm

By: News On 6

BEIJING (AP) _ North Korea sent mixed signals on nuclear disarmament Saturday, saying it was preparing to shut down its main plutonium program but that no action would be taken unless frozen funds were released from a Macau bank.

Arriving from Pyongyang for follow-up meetings on a disarmament agreement reached last month, North Korean nuclear envoy Kim Kye Gwan told reporters that North Korea ``will not stop its nuclear activity'' until all of the $25 million in Banco Delta Asia was returned.

But later in the day at the talks, another North Korean diplomat, Kim Song Gi, said the regime has ``begun preparations to shut down its Yongbyon nuclear facility'' as part of a Feb. 13 agreement, South Korean nuclear envoy Chun Yung-woo told reporters afterward.

In addition, the diplomat promised that North Korea will submit a list of its nuclear programs and disable its nuclear facility ``as soon as the right conditions are created,'' Chun said, without explaining what the conditions were.

Chun did not independently confirm that shutdown preparations had begun.

U.S. Assistant Secretary of States Christopher Hill, the top American envoy, said late Saturday that North Korea was still ``fulfilling their obligations.''

The fate of the frozen funds, the result of a blacklisting by U.S. authorities, has become a central issue in the disarmament talks.

The United States promised to resolve the bank issue as an inducement to North Korea to disarm, but its solution _ an order this past week to U.S. banks to sever ties with the Macau bank _ has been criticized by China and now North Korea's envoy.

Under the Feb. 13 agreement, which involves the United States, China, Japan and Russia as well as the two Koreas, North Korea has 60 days to shutter the Yongbyon reactor and a plutonium processing plant which have produced material for a nuclear weapons program.

U.N. monitors are supposed to be allowed in North Korea to verify the shutdown, and once confirmed North Korea is to receive energy and economic assistance.

The U.S. promise to resolve the Banco Delta Asia funds, which U.S. authorities suspect may be tainted by counterfeiting or money laundering, was part of a side agreement.

``We are on schedule for this first phase,'' Hill told reporters after daylong meetings with delegates in the other five countries.

A senior U.S. Treasury Department official traveled to Macau on Saturday to discuss the issue. The government of Macau _ a semiautonomous Chinese territory _ has the authority to decide whether to release any of the funds, which have been frozen since 2005.

``I think it is important to emphasize this was a Macanese action to freeze the funds, and it would be a Macanese process to determine'' whether to release them, U.S. Deputy Assistant Treasury Secretary Daniel Glaser told reporters.

The Treasury Department is expected to help Macau's regulators identify accounts connected to North Korea that are not tainted by links to alleged nuclear proliferation or counterfeiting, smuggling and other crimes.

That is expected to prompt bank regulators to unfreeze between $8 million and $12 million, one U.S. official has said on condition of anonymity in accordance with policy.

Hill said he expected ``the money to be moving very quickly in terms of completing this whole case and finally resolving it'' but gave no details.

As part of the disarmament meetings in Beijing, Hill said he would push North Korea to disclose all its nuclear programs, including an alleged uranium enrichment program.

``It's very important to resolve the uranium enrichment matter,'' he said. ``We need to know what this program was, we need to account for what their equipment was. ... We need clarity on what they have been doing with this equipment.''

U.S. allegations that North Korea has a secret uranium enrichment program brought on a nuclear crisis in 2002 that led the country to expel U.N. inspectors and eventually led to North Korea exploding its first nuclear device in October.

North Korea has never publicly acknowledged having a uranium program, although nuclear negotiator Kim indicated the North was willing to discuss the issue.