Frozen N Korean funds released

 

The majority of North Korean funds frozen in a Macau bank have been released to raise hopes of ending the deadlock over a nuclear disarmament deal with Pyongyang.

A Macau government spokesman said today the "Banco Delta Asia has remitted a sum of over $20 million (€15 million)" out of the Chinese-controlled territory.

North Korea has refused to honour a February agreement to begin shutting its Yongbyon nuclear reactor and source of material for atomic weapons until $25 million (€19 million) is released through normal banking channels.

The funds were blocked after the United States blacklisted Banco Delta Asia, accusing it of laundering illicit funds for Pyongyang.

Banks had baulked at acting as a conduit for the money to be returned to North Korea because of the stigma attached to holding Pyongyang's assets.

Japan's Kyodo news agency reported the funds are to be transferred through the New York branch of the Federal Reserve and Russia's central bank to a Russian bank where North Korea holds accounts.

Russia confirmed yesterday that it would allow one of its banks to transfer the $25 million stuck in Banco Delta Asia, provided Washington gave written guarantees that it would not fall foul of US sanctions against North Korea.

The unblocking of the money would in effect allow the reclusive communist state - which conducted its first nuclear test last year - back into the international banking system from which it is ostracised.