N. Korea Nuclear Talks Break Down

North Korean denuclearization talks were meant to resume on Monday.
North Korean denuclearization talks were meant to resume on Monday.

Talks on disarming North Korea's nuclear program broke down abruptly on Thursday with the country's chief nuclear envoy departing for home after a dispute over money frozen in a Macau bank could not be resolved.

Kim Kye Gwan went to Beijing's airport after refusing to take part in six-party talks on ways to push forward a February agreement calling for North Korea to give up its nuclear program in return for energy aid and political considerations.

Kim waved to reporters when he arrived at the airport but did not say anything.

An official close to the negotiations, who spoke on condition of anonymity because of the sensitivity of the talks, said earlier that there was a "high possibility" the talks would recess.

Xinhua News Agency said Russian envoy Alexander Losyukov also was leaving Thursday to prepare for a state visit to Moscow by Chinese President Hu Jintao next week.

The talks have been bogged down since they started on Monday, with Pyongyang refusing to take part for two days because of problems over the transfer of $25 million in North Korean funds frozen since 2005 at Banco Delta Asia in Macau under pressure from the United States.

U.S. officials announced this week that the money would be transferred to the North Koreans, saying it was up to the Monetary Authority of Macau, a Chinese territory, to release the funds.

China had promised to resolve the issue as quickly as possible by transferring the funds to a North Korean account at the Bank of China.

"Everybody has the political will to resolve the BDA issue fast, but it is yet to be resolved because of technical problems," South Korean envoy Chun Yung-woo said early Thursday.

Officials say is it up to the Monetary Authority of Macau to release the funds. So far, neither the monetary authority nor Banco Delta Asia have indicated when that would be, or said why the transfer has been delayed.

But various reasons have been offered by other parties.

A Japanese government official, who spoke on condition of anonymity because of the sensitivity of the talks, said the Bank of China was reluctant to accept any money that has been the focus of investigations.

South Korea's Yonhap news agency said the money transfer was being delayed because Macau authorities were having difficulty confirming the ownership of 50 North Korean accounts, most of which are under the names of the heads of Zokwang Trading Co., a North Korean-run firm in Macau that U.S. officials have long suspected of being involved in money laundering.

The chief U.S. envoy Christopher Hill said that the Chinese side had "made some progress" since Wednesday on getting the money cleared, but did not give details or a timeframe.

A woman from the publicity department at the Bank of China, who would not give her name, said she had no information on the issue.

The six parties -- the two Koreas, the United States, Russia, China and Japan -- were in Beijing to discuss how to push forward a landmark Feb. 13 deal in which Pyongyang agreed to start dismantling its nuclear facilities in exchange for energy and economic aid.

Banco Delta Asia was blacklisted by Washington on suspicion the funds were connected to money-laundering or counterfeiting. The North boycotted the international nuclear talks for more than a year over the issue.

Under the Feb. 13 deal, the North is to receive energy and economic aid and a start toward normalizing relations with the U.S. and Japan, in return for beginning the disarmament process. The regime ultimately would receive assistance equivalent to 1 million tons of heavy fuel oil if it fully discloses and dismantles all its nuclear programs.

Meanwhile, South Korea said Thursday it would resume emergency flood aid to North Korea that had been suspended after last year's nuclear test -- the latest sign that Pyongyang's recent agreement on nuclear disarmament has warmed ties between the Koreas.

Vice Unification Minister Shin Eon-sang said Seoul decided to resume sending rice and other aid following progress in the international nuclear talks, requests from the North and considering the fact that it was purely humanitarian assistance as part of emergency relief.

Copyright 2007 The Associated Press. All rights reserved.This material may not be published, broadcast, rewritten, or redistributed.