NewsMax.com Wires
Monday, April 30, 2007

Reprint Information

Book on Katie Couric Makes Waves White House: We're Not Subject to FOIA FBI Seeks 2 Mysterious Men on Ferry Publisher: Conservatives Do Read As Much As Liberals Romney Shrugs Off Mormon History Film

WASHINGTON -- An obscure banking inquiry has hijacked a landmark nuclear disarmament deal with North Korea, to the surprise and dismay of U.S. and some foreign officials who have tried for months to resolve the mess.

To try to salvage the nuclear pact, Washington first truncated and then throttled back a Treasury Department inquiry related to alleged money-laundering sanctioned by the North Korean government. Ultimately, the Bush administration agreed to help hand over money it had earlier identified as tainted.

North Korea missed a mid-April deadline to begin shutting down its nuclear reactor because the communist nation was not satisfied. The North has not budged much since.

The February deal gave North Korea 60 days to shut down its main reactor and a plutonium processing plant and allow U.N. monitors to verify the steps. In return, the North would get energy and economic assistance and a start toward normalizing relations with the U.S. and Japan.

The wrangling over just $25 million has been complex. The issue had held up disarmament talks for more than a year when the latest wrinkles developed.

The money belongs not to the North Korean government itself, but to 52 account holders at a Macau bank blacklisted by Washington since September 2005 for alleged complicity in the North's money laundering.

U.S. sleuths flagged 17 account holders at Banco Delta Asia, accounting for about $12 million, as troublesome.

Story Continues Below

As a half-measure, the U.S. at one point offered to let the North Koreans use that portion of the quarantined money for unspecified humanitarian purposes and release the rest of the money to its owners.

Not good enough, North Korean negotiators said after nearly two weeks of bargaining sessions with Treasury officials last month in Beijing.

The North wanted the whole $25 million.

Even after Washington decided to concede, neither the United States nor banking authorities from Macau or China could just hand over the money. The account holders must come and get it, something U.S. officials had assumed would happen within hours when the freeze was lifted more than a week ago.

Macau is a semiautonomous Chinese territory.

North Korea has not explained the delay in retrieving the money. One theory in the U.S. is that the North wants further concessions; another holds that it simply took time to explain the complex transaction to North Korean dictator Kim Jong Il.

U.S. officials say they believe the North wants to resolve the money issue and that it intends to follow through on its pledge to shut down the reactor when the matter is resolved.

The five nations negotiating with North Korea have set no new deadline.

"We're giving a little bit of extra berth to this because of the complications" involving the bank, State Department spokesman Sean McCormack said.

© 2007 Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.

Editor's note:
The Clinton Crack-Up Has Arrived — FREE Offer
You Can Profit from Globalism and Technology Advances - click here now!
Why gold could skyrocket in 2007. Two best ways to cash in.
Doctor: Germs Linked to Many Health Conditions

Read more on this subject in related Hot Topics:
North Korea