Asia-Pacific

US Treasury sends official to sort out N.Korea funds

(Reuters)
Updated: 2007-03-24 09:44

The US Treasury Department is sending its top North Korea negotiator back to Beijing on Saturday to help authorities in China sort out details of the planned transfer of frozen North Korean funds from a Macao bank.

The US Treasury said on Friday that Daniel Glaser, deputy assistant secretary for terrorist financing and financial crimes, will lead a five-person delegation to Beijing to work through details of the $25 million transfer. Delays in the transfer have stalled talks on North Korea's nuclear program.

The trip is to help the Chinese work through some of the implementation issues, a Treasury spokeswoman said.

On Monday, the Treasury announced that the US and North Korean governments had agreed that the funds would be released. North Korea wanted the funds put into a Bank of China account held by Pyongyang's Foreign Trade Bank.

But failure of the transfer to be executed again derailed talks on North Korea's nuclear program this week.

Chinese chief envoy Wu Dawei said on Thursday that the problem hinged on convincing the Bank of China to accept the transfer. He added that moving the money was not as simple as writing a check or shipping cash in the back of a truck.

After an 18-month investigation that Banco Delta Asia accepted proceeds of North Korea's counterfeiting, drug-smuggling and money-laundering operations, the US Treasury last week formally barred US banks from dealings with the tiny family-owned Macao bank.

The move effectively freezes Banco Delta Asia out of the American financial system and raises questions for foreign banks that deal with it, especially those with big US-dollar correspondent banking relationships.

"The policy and diplomatic issues have been solved -- this is now down to implementation," Glaser said in a statement, adding that the Chinese side has made clear that it wants to ensure implementation of the agreement is consistent with its own laws and international obligations, he added.

"We are bringing Treasury expertise to help the Macanese and Chinese wade through some of these implementation issues."