North Korea: Lift financial restrictions

Updated: 2006-12-20 22:06

BEIJING - North Korea is refusing to back down from its demand at international arms talks that US financial restrictions be lifted before it dismantles its nuclear program, delegates said Wednesday.

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North Korea agreed to end a 13-month boycott of the talks - which also include China, Japan, Russia, South Korea and the US - to discuss a US campaign seeking to isolate the nation from the international banking system. Washington alleges the North is involved in a range of illegal activity, including counterfeiting $100 bills, money laundering and selling weapons of mass destruction.

US and North Korean experts discussed the US financial restrictions for five hours Wednesday, their second day of meetings this week that are separate from the arms talks, but made no breakthroughs and planned no further meetings.

Daniel Glaser, the US deputy assistant secretary for terrorist financing and financial crimes who is leading the American delegation, said the talks at the North Korean Embassy were "businesslike and useful."

Glaser said he would possibly meet the North Koreans next month in New York.

"For this process moving forward to be productive and useful, it's going to have to start focusing very, very closely on the underlying concerns of illicit finance," he told reporters. "We hope to get to do that."

The separate, six-nation nuclear talks are to continue until at least Friday, but negotiators said that does not mean results are guaranteed by then.

"The financial issues are a major interest for North Korea," Japanese envoy Kenichiro Sasae said after the third day of discussions in Beijing.

Sasae pleaded with the North to put aside that issue at the nuclear talks.

"I think it is not realistic to treat the financial issue as a major block while putting the broader discussion on hold," Sasae said.

However, the North said it would be willing to halt operation of its main nuclear reactor and allow international inspectors "under the right conditions," a South Korean official said on condition of anonymity due to the ongoing negotiations

"We are focusing our discussion on what those conditions would be," he said.

At the nuclear discussions, South Korea's main envoy, Chun Yung-woo, said it remained to be seen whether delegates could make progress by Friday on implementing a Sept. 19, 2005, agreement in which North Korea pledged to disarm in exchange for aid and security guarantees.

"We cannot predict that we will be able to produce a document of breakthrough agreements after two days," he said.

"We cannot be just optimistic about the situation since this round of talks opened after many difficulties," Chun said, referring to the long break, the North's nuclear test and U.N. sanctions.

Earlier Wednesday, Chinese Foreign Minister Li Zhaoxing met with all delegates and pressed them to find consensus.

"In order to realize a win-win situation, the urgent thing is to make some plans to enact the joint statement and to realize all the commitments every party made in the joint statement," Li said, according to a ministry statement. "We should make concerted efforts to overcome all differences in order for the talks to move forward and reach practical results."

Before talks began Wednesday, the main US envoy urged the sides to start hashing out substantive details on disarmament or risk squandering the opportunity.

"At this point I don't want to say I am pessimistic or optimistic," US Assistant Secretary of State Christopher Hill told reporters. "I just don't know where we are going to end up or when we are going to end up."

Hill has declined to release details of any US proposals to North Korea, but a news report Wednesday said the Americans had outlined a process in which the North would first freeze its nuclear program, followed by inspections and eventual dismantlement.

Washington would be willing to give the North a written security guarantee - a pledge that it would not seek to topple the regime by force - as soon as the North allows the return of international nuclear inspectors, South Korea's Yonhap news agency said, citing "diplomatic sources" at the talks.

South Korea's Chun declined to confirm specifics, but said the ideas were simply "an official detailed and concrete proposal" of what the sides had previously discussed.

North Korea's state media on Wednesday kept up its tough rhetoric against Washington, saying US-South Korean military preparations showed "the United States is trying to pull a dirty business against the (North) behind the curtain of talks."

"This is clear proof that it is seeking to vanquish (North Korea) with a military strong arm, whetting its sword of aggression under the mask of dialogue," the North's party newspaper Rodong Sinmun said in a commentary carried by the country's official Korean Central News Agency.

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