North Korean Nuke Talks Remain Stalled Over Frozen Funds

Delegates at talks on disarming North Korea's nuclear program voiced impatience Wednesday that the negotiations remained stalled for a second day over a dispute on when $25 million of Pyongyang's funds will be released from a Macau bank.

North Korea said it would not take part in the six-party negotiations in China's capital to meet goals outlined in a landmark Feb. 13 disarmament agreement until the money was transferred.

U.S. Assistant Secretary of State Christopher Hill said it was upsetting that no talks had taken place while the problem was being resolved.

"While these forms have been filed out and faxes sent, while that is going on, our nuclear talks have not made progress. That has been the real opportunity cost to this," he told reporters.

But he was confident North Korea was still committed to the process, having "made clear on several occasions, including yesterday, that they will live up to the February agreement."

Hill would not say if Wednesday would be the last day of this round of talks. South Korea's Yonhap news agency said the delegates would meet later Wednesday to decide if they would continue the round.

"I don't know why we should waste our time waiting for the obstacle to be cleared," Chun Yung-woo, South Korea's representative, said of the talks that also have been complicated by Pyongyang's strained ties with Tokyo.

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North Korea is upset at Japan's insistence that the two nations settle issues related to Pyongyang's abduction of Japanese citizens in the 1970s and '80s before taking steps to improve relations.

Chun said the delegation was considering leaving if the situation didn't change, adding that "there is no realistic method to convince North Korea to take a practical attitude."

Planned group talks were called off on Tuesday, with some participants holding bilateral meetings instead, when North Korea said it would not take part until the money was in its account.

North Korea boycotted the six-nation talks for more than a year after Washington blacklisted the tiny, privately run Banco Delta Asia on suspicion the funds were connected to money-laundering or counterfeiting.

But U.S. officials announced Monday that the money would be transferred to a North Korean account in Beijing, saying it was up to the Monetary Authority of Macau, a Chinese territory, to release the funds.

Chun said the transfer has run into "minor technical problems," but he did not give any details.

"It's got to get solved, I am sure it will be solved," Hill said. "But it is not my issue. It is not a U.S. issue at this point ... The problem is you can't expect all these large delegations to sit around while it is being sorted out."

The Monetary Authority has declined to say if it will announce when the funds have been released. "I have no instructions from my superiors regarding when the money will be transferred," Wendy Au, a spokeswoman for the authority, said Wednesday.

BDA spokesman Joe Wong said the money remains frozen and that the bank hasn't been ordered by the authority to release the funds.

Despite the growing tensions, Japan's chief delegate, Kenichiro Sasae, said he was still optimistic of progress once the transfer dispute was resolved.

The setback comes as the two Koreas, the U.S., Japan, Russia and host China are trying to fine-tune a timetable for North Korea's disarmament under the February agreement.

Under the deal, North Korea is to receive energy and economic assistance and a start toward normalizing relations with the U.S. and Japan, in return for beginning the disarmament process.

North Korea ultimately would receive assistance equivalent to 1 million tons of heavy fuel oil if it fully discloses and dismantles all its nuclear programs.

Complete coverage is available in's North Korea Center.