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Russia Agrees To Help End North Korea Banking Row

The private Russian bank cited as likely to receive the funds is the Far East Commercial Bank, where Pyongyang has a dormant account.
by P. Parameswaran
Washington (AFP) June 11, 2007
Russia has agreed to help the United States break the impasse over a long-running banking dispute blocking North Korea's nuclear disarmament, the US Treasury said Monday. Moscow reportedly granted a US request for a private Russian bank to accept purportedly illicit North Korean funds currently frozen in Macau's Banco Delta Asia (BDA) before they are moved to Pyongyang.

"The United States is working with Russian and Macanese authorities to facilitate the transfer of the DPRK (North Korea)-related funds previously frozen at Banco Delta Asia," US Treasury spokeswoman Molly Millerwise told AFP.

"We appreciate the willingness of the Russian government to facilitate this transaction and the good cooperation of the Macanese authorities," she said, without elaborating.

North Korea insists the funds should be in its hands before it shuts down a key nuclear reactor. The move is part of an agreement the United State, Russia, the two Koreas, China and Japan reached to end Pyongyang's nuclear weapons drive.

Amid indications that the complex dispute could be resolved as early as this week, top US nuclear negotiator Christopher Hill met his South Korean counterpart Chun Yung-Woo for talks in Washington Monday.

"They talked about how to move the six party talks forward," said a US official, speaking on condition of anonymity.

Ahead of his trip to Washington, Chun spoke of a possible "breakthrough" in the banking row.

Hill said in a weekend interview with local television that the United States had sought Russia's help to resolve the BDA issue.

"We'd all like to see this behind us so we can get back down to the real business of the six-party talks, denuclearization of the Korean Peninsula," US State Department spokesman Sean McCormack told reporters.

Washington has not yet received confirmation that the North Korean government had received the money, he said.

The North Korean funds are expected to be transferred to a private commercial bank in Russia where Pyongyang has an account, the Wall Street Journal, a US business newspaper, reported Monday, quoting US officials.

They said Russian President Vladimir Putin's government has talked with the White House, but that financial institutions in Moscow needed assurances they would not face penalties from US financial regulators if they agreed to receive the funds. The plan called for the North Korean money to transfer through the New York Federal Reserve and Russia's central bank before it can be deposited, the report said.

The private Russian bank cited as likely to receive the funds is the Far East Commercial Bank, where Pyongyang has a dormant account.

To make the money transfer possible, Washington also agreed to make "a temporary exception" to its ban on US banks' trades with the blacklisted BDA, reports said.

Under a February 13 six-nation agreement, the nuclear-armed North agreed to disable its atomic programs in return for aid and diplomatic benefits.

The first stage, the shutdown of the Yongbyon reactor, was to have been completed by April 14 but North Korea refuses to make a start until it receives the money.

The US Treasury says it blacklisted the Banco Delta Asia on suspicion it was handling the proceeds of North Korean money-laundering and counterfeiting.

It says the North's funds have now been freed, but Pyongyang has been unable to find a foreign bank willing to transfer money seen as tainted.

The communist state insists on a transfer rather than a withdrawal to prove it has regained access to the international banking system.

Source: Agence France-Presse

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North Korea Test-Fires Short-Range Missiles
Seoul (AFP) Jun 07, 2007
North Korea on Thursday test-fired two short-range missiles, less than two weeks after its previous launch, the South Korean military said. The communist state fired two missiles into the Yellow Sea, one in the morning and one in the afternoon, a spokesman for the Joint Chiefs of Staff told AFP. They are believed to be ground-to-ship or ship-to-ship missiles with a range of some 100 kilometres (62.5 miles), he said. All landed in North Korean waters.

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