North Korea and the United States have resolved a dispute over $25 million frozen at a Macau bank, US officials said, clearing a major obstacle to six-party talks on nuclear disarmament that resumed today.
US Treasury official Daniel Glaser said the funds frozen in Macau's Banco Delta Asia (BDA) would be returned to Pyongyang via a Chinese bank, but a ban on US financial institutions doing business with BDA - which Washington says was complicit in North Korea's illicit dealings - would remain.
"It will be funds deposited into a foreign trade account at a Bank of China in Beijing," Mr Glaser told reporters in Beijing.
"We have assurances that it will be used for humanitarian purposes."
The resolution clears the way for talks to push forward a February 13th deal that gave North Korea 60 days to shut its Yongbyon nuclear reactor in return for energy aid and security pledges.
Washington also agreed to settle within 30 days the bank crackdown, which caused Pyongyang to boycott the six-party talks for more than a year until last December.
The disarmament talks, which group the two Koreas, the United States, Japan, Russia and hosts China, resumed after the North's October 2006 nuclear test drew international condemnation and UN sanctions.
Chief US envoy Christopher Hill said North Korea and Macau had to work out the timing of the release of the frozen funds, but that it should happen "as soon as possible".
A diplomatic source close to the six-party talks quoted North Korea's chief envoy Kim Kye-gwan as saying the closure of the banking issue was important for building confidence.
Mr Kim reiterated that North Korea was prepared to shut Yongbyon once the issue was fully resolved, the source said.
With the bank agreement reached, the six-party talks could focus on implementing the February deal, envoys said.
"Now that the BDA issue is resolved there should not be any major obstacles to implementing measures to shut down North Korea's nuclear facilities within 60 days," chief South Korean negotiator Chun Yung-woo told reporters.