North Korea says it wants to resolve U.S. financial restrictions at revived nuclear talks

Wednesday, November 1st 2006, 6:16 am

By: News On 6

SEOUL, South Korea (AP) _ North Korea said Wednesday that it was returning to nuclear disarmament talks to get access to its frozen overseas bank accounts, a vital source of hard currency.

The North's Foreign Ministry made only indirect mention of its underground nuclear detonation last month. Instead, it focused in an official statement on its desire to end U.S. financial restrictions by going back to six-nation arms talks that it has boycotted for a year.

Confirming other nations' reports of the Tuesday agreement, the North's Foreign Ministry said Pyongyang decided to return to negotiations ``on the premise that the issue of lifting financial sanctions will be discussed and settled between the (North) and the U.S. within the framework of the six-party talks.''

Washington had banned transactions between American financial institutions and Banco Delta Asia SARL _ a bank in the Chinese territory of Macau _ saying it was being used by North Korea for money-laundering.

The ban is believed to have blocked access to some $24 million for the North's leaders, who indulge their taste for luxury goods like cognac and fine wines while the vast majority of North Koreans live in poverty.

U.S. officials also sought to rally other countries to prevent the North from doing business abroad, saying all transactions involving Pyongyang were suspected of having to do with counterfeiting and money laundering.

In Seoul, South Korean Vice Foreign Minister Yu Myung-hwan said that he expects involved countries to discuss the disarmament talks when they gather in Vietnam for an Asia-Pacific summit in mid-November, and that negotiations among China, Japan, Russia, the United States and the two Koreas were expected to take place after that. He did not indicate when.

The top U.S. nuclear negotiator said that the negotiations should start as early as possible.

U.S. Assistant Secretary of State Christopher Hill cautioned as he left Beijing, where the deal was struck, that ``a full plan'' had to be in place for there to be any hope for progress in implementing an agreement reached in September 2005, in which the North pledged to abandon its nuclear program in exchange for aid and security guarantees.

He did not elaborate.

The North did not say whether it remained committed to an earlier agreement to abandon its nuclear ambitions _ a sign that negotiators could be facing another round of frustrating dialogue when the talks resume.

North Korea also emphasized that a direct meeting with the U.S. during the previously unpublicized negotiations Tuesday in Beijing, had made the diplomatic breakthrough possible.

``Bilateral and multilateral contacts took place in Beijing on Oct. 31 with main emphasis on the contact between (North Korea) and the U.S,'' it said, according to an official North Korean translation into English.

President Bush, who has long shunned direct talks with Pyongyang, credited China's mediation for the agreement.

The North only briefly noted that the country ``recently took a self-defensive countermeasure against the U.S. daily increasing nuclear threat and financial sanctions against it.''

The U.S. previously maintained that the financial issue was a matter of law enforcement separate from the nuclear talks. Hill confirmed that the financial restrictions were discussed on Tuesday, although he gave no details.

``We've had a good discussion with the North Koreans on that,'' he said.

White House press secretary Tony Snow insisted the United States made no promises to link the financial dispute to the nuclear one, but only agreed that ``issues like that may be discussable at some future time.''

In Washington, Bush cautiously welcomed Tuesday's deal and thanked the Chinese for brokering it. But he said the agreement would not sidetrack U.S. efforts to enforce sanctions adopted by the U.N. Security Council to punish Pyongyang for the nuclear test. Those measures ban the North's weapons trade and other items such as luxury goods.

In Tokyo, Chief Cabinet Secretary Yasuhisa Shiozaki said Japan will maintain sanctions on the North until it abandons its nuclear development.

South Korea's Yu also told lawmakers Wednesday in Seoul that ``just coming to the talks itself won't affect the level of Security Council sanctions'' against North Korea.

North Korea stepped up pressure on Seoul not to join the international move to slap sanctions on the North, warning against tampering with an inter-Korean tourism project in North Korea that has been under criticism over concern it may fund the North's arms program.

The North's Asia-Pacific Peace Committee issued the warning, saying: ``We cannot help but take corresponding measures'' if South Korea suspends cash payments to the tourism project.

Meanwhile, South Korean President Roh Moo-hyun announced a shakeup of top Cabinet security positions, naming a new foreign minister, unification minister, defense minister and spy chief.

The moves were triggered by the appointment of the current foreign minister, Ban Ki-moon, as the next U.N. Secretary-General and last week's resignation by the unification minister, who offered to step down to apologize for policy failures.

The South Korean government says the Cabinet reshuffle doesn't mean it plans to veer from its course of reconciliation with the North.