SEOUL: North Korea said Friday it was still working to solve a banking dispute which is blocking progress on its nuclear disarmament, 10 days after the United States said the issue had been settled.
Analysts said the delay indicated the complexity of the dispute over the 25 million dollars in Banco Delta Asia (BDA) even after the North’s accounts in the Macau bank were officially unfrozen.
The North’s official media reported “brisk” working negotiations between one of its banks and BDA to settle the issue. It did not say when or how a funds transfer would be achieved, but reaffirmed its promise to start denuclearising once it gets the cash.
The communist state wants above all to test whether it has regained access to the international banking system, the analysts said.
After the US Treasury blacklisted BDA in September 2005 on suspicion of money-laundering and handling the North's counterfeit notes, a series of other banks in Asia were persuaded to stop handling Pyongyang’s business – making even legitimate transactions difficult.
“If a US bank agrees to accept the North Korean money, this issue would be resolved overnight,” said professor Nam Sung-Wook of Korea University’s department of North Korean studies.
“But no bank in the world would handle the tainted funds designated as illegal” by the Treasury as they fear they might also be liable to sanctions, he said.
A US bank might need special authorisation to handle the cash.
The Treasury has banned all US financial institutions from maintaining correspondent accounts for BDA. Its order prevents BDA, which denies any wrongdoing, from accessing the US financial system directly or indirectly.
“Pyongyang not only wants the money back but it seeks to reopen its financial transactions in the international banking system,” said professor Kim Keun-Sik at the University of North Korean Studies.
South Korean Foreign Minister Song Min-Soon made the same point last week.
“I think North Korea finds it necessary that it should be able to freely dispose of the money to its own liking, and upon withdrawing the money it should be able to enter the normal international financial network and engage in normal transactions,” he said.
North Korea has since 2005 made denuclearisation conditional on a solution to the BDA funds, some of which belong to companies doing business in the North.
A six-nation agreement reached in February set April 14 as the deadline for the North to shut down its Yongbyon nuclear reactor as the first step in the accord. This slipped by because of the unresolved bank dispute.
Washington says the funds were freed for collection last week and it has done all that it should.—AFP