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The United States and North Korea had struck a deal concerning the latter's funds frozen in a Macao bank, Xinhua News Agency reported yesterday.

 

This was announced by State Councilor Tang Jiaxuan when addressing a group of visiting Japanese lawmakers but no details were provided. This encouraging information came on the eve of the new round of six-party talks, starting today in Beijing.

 

North Korean funds, totaling some US$25 million, have been lying inactive in Banco Delta Asia (BDA) following Washington's blacklisting of the small, privately-run Macao-based bank in 2005 after it was suspected of aiding and abetting money-laundering or counterfeiting.

 

Last month's landmark agreement on North Korean nuclear disarmament saw Washington pledge to see the issue resolved by mid-March.

 

In a related development, US Deputy Assistant Treasury Secretary Daniel Glaser announced yesterday afternoon that a meeting with Macao monitoring authorities had gone well.

 

The chief negotiator of South Korea Chun Yung-woo had further cause for optimism, claiming yesterday the frozen funds issue would come to an end soon.

 

Chun spoke in Beijing following the first hour-long meeting of the denuclearization working group on Saturday at Diaoyutai State Guesthouse.

 

The issue of frozen funds has threatened to sabotage the six-party agreement reached last month on the initial steps to be taken towards North Korea denuclearization. 

 

On Saturday, North Korean nuclear envoy Kim Kye-gwan had stressed that Pyongyang would take no steps to close down its Yongbyon facility until the funds were released.

 

Kim added that North Korea had met its obligations by inviting the UN nuclear watchdog to visit Pyongyang and organizing separate working group meetings with the US and Japan.

 

Analysts seemed united in agreeing that the US-North Korea mistrust remained the foundation to the problems. 

 

"As long as this mistrust remains, it is going to be a very slow process but it is encouraging that the US is now engaged in active diplomacy," said Derek Mitchell, senior fellow with the Center for Strategic & International Studies.

 

Shi Yinhong, professor at Renmin University of China, noted that keeping its word would be in Pyongyang's interest and that North Korea had so far given no sign of breaking its promises. 

 

(China Daily March 19, 2007)