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Six-party nuclear talks in Beijing stalled yet again on Thursday because the transfer of US$25 million worth of funds the U.S. had unfrozen in the Banco Delta Asia (BDA) in Macau hit an unexpected snag. The talks broke down four days after they started amid unprecedented high hopes on Monday.
The chief negotiators continued to discuss remittance of the North Korean funds on Thursday but failed to produce a solution. The culprits are two banks. BDA says it cannot remit the money to the designated bank because it has yet to receive a request from North Korea, while the Bank of China, the recipient bank, is refusing to receive the money on grounds that the funds are illegal. Chinese Foreign Ministry spokesman Liu Jianchao said, "Resolving these issues was more difficult than expected, so we still need some time." A grim-faced North Korea's chief negotiator Kim Kye-gwan refused to answer questions from reporters before returning to North Korea by Air Koryo on Thursday. Observers speculate Kim was urgently recalled because the money failed to arrive.
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On Thursday, chief North Korean negotiator of the six-party talks Kim Kye-gwan, at Beijing Capital International Airport on his way home to Pyongyang after the talks collapsed./Yonhap
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The late entry of BOC as a key player is attracting plenty of comment. Many at the talks attribute the development to the relationship between the U.S. Treasury Department and the BOC. The bank has been under close U.S. watch due to its dealings with North Korea. It is apparently refusing to receive the funds, which the Treasury says were earnings from illicit activities, to force the Treasury¡¯s hand and improve its international credibility. Back in 2000, BOC was also the channel for money South Korea secretly paid the North to facilitate the first inter-Korean summit. At the time, the South Korean National Intelligence Service transferred $200 million to an account of North Korea's state-owned Daesong Bank in the BOC's Macau branch.
Diplomatic sources say there is an undisclosed problem between the Treasury and the BOC. After the Sept. 11, 2001 terrorist attacks, the Treasury in the process of blocking channels for North Korea's illegal funds discovered that BOC was involved in such transactions. Last year, the conservative Heritage Foundation released a report entitled "Is China Complicit in North Korean Currency Counterfeiting?" It said, "Although a Treasury spokesperson was candid about the Banco Delta Asia sanctions, she had 'no comment' about whether Treasury was also investigating Beijing¡¯s Bank of China branches in Macau."
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The headquarters of the Bank of China in Beijing, which refuses to handle North Korean money deposited in the Banco Delta Asia in Macau, on Thursday./Yonhap
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The United States reportedly shrouded the issue, while merely sending implicit "warning" to the BOC to stop illegal transactions with North Korea. The United States was concerned that if it mishandled the BOC, the world's 18th largest bank, this might cause ripple effects to the international financial community, as well as a diplomatic row with China. In fact, all these analyses are understood as if they are objective facts, as it was confirmed that the BOC temporarily froze North Korean accounts last year. But nobody has reliably confirmed the facts yet. Some people are suggesting a conspiracy theory that the U.S. Treasury Department, which had been negative about the release of the North Korean assets from BDA, may have laid a stumbling block in the way. But South Korean government officials said, "There is nobody this time who is playing with this issue."
(englishnews@chosun.com )
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