Bank of China (BOC) has concerns about accepting the transfer of frozen funds from the accounts of North Korea now being held at a Macao-based bank, according to top Chinese nuclear envoy Wu Dawei.
The latest round of the six-party talks on denuclearizing Korean Peninsula has recessed, Wu announced yesterday, after four days of talks in which Pyongyang's top negotiator Kim Kye-gwan boycotted multilateral discussions.
North Korea insisted that receiving the US$25 million frozen at Banco Delta Asia (BDA) was a prerequisite for returning to the meetings.
Wu said all the parties are seeking a solution to the issue and the key is who should be responsible for handling the funds transferred from BDA.
"China has a socialist market economy system and we need to consult with BOC on whether or not it can fulfill this responsibility," Wu told a news conference yesterday. "This is a matter that cannot be decided by the government."
He said he appreciated BOC's earnest consideration in resolving the issue, saying it was the only financial institution that has been seriously exchanging views with all the relevant parties.
Describing BOC as "very courageous," Wu said not all their concerns have been assuaged.
He noted that the banking issue would not be an obstacle to the nuclear talks, saying all the parties believe that they are confident and capable of resolving the problem in a way acceptable to all.
Meanwhile, BOC Chairman Xiao Gang said his bank has not been required by the government to accept the transfer.
"As a listed company, BOC will strictly comply with laws, regulations and international conventions on anti-money laundering and anti-terrorism," Xiao said at a press conference in Hong Kong yesterday.
The US and North Korea reached a deal on Monday to settle the financial dispute by transferring Pyongyang's frozen accounts from BDA to BOC in Beijing with the money promised to be used for the betterment of its people.
The optimism faded as Pyongyang refused to take part in the nuclear talks the next day until the money was returned.
The money was frozen in late 2005 after the US declared the financial institution a primary money laundering concern.
Washington last week prohibited US financial institutions from dealing with BDA and barred the bank from accessing the US financial system either directly or indirectly.
China, the host of the talks, issued a Chairman's Statement yesterday, saying "the parties agreed to recess and will resume the talks at the earliest opportunity to continue to discuss and formulate an action plan for the next stage."
Wu did not give a date for resumption of the six-party talks, which also involve the US, Russia, Japan, North and South Korea.
"We attempted to solve the banking issue within five days," he said.
Wu said there are difficulties and twists ahead and the six parties are working hard to look for convergence of their interests.
He said that the first session of the sixth round of the talks, which opened on Monday, was successful as the parties listened to reports by the five working groups, and held discussions on implementing the initial actions and an action plan for the next phase.
He said the talks came to a standstill because of technical and procedural factors as well as unexpected issues.
Meanwhile, Chun Yung-woo, chief negotiator of South Korea, told reporters yesterday that the six parties settled the framework of a solution to the funds issue during the discussion, but resolving the technical problems would still take time.
Chief US delegate Christopher Hill was cautiously optimistic about the prospect, saying the talks process was still on track. However, he wanted to see "much more in-depth discussion in the next phase."
He said he hoped the declaration and disablement of North Korea's nuclear facilities could be done by the end of 2007 and there could be a precise timing on the disablement of the facilities.
(China Daily March 23, 2007)