U.S. envoy seeking to resolve financial issues before nuke talks

In a round of shuttle diplomacy ahead of the resumption of the six-way talks over North Korea's nuclear program, senior nuclear envoys from China and the United States met in Beijing again on Tuesday.

Details of the meeting between Christopher Hill, the U.S. chief delegate to the nuclear talks, and his Chinese counterpart Wu Dawei remain a secret, but officials in Seoul said Hill's unannounced trip to Beijing was primarily intended to discuss the thorny issue of Banco Delta Asia (BDA). The Macau-based bank is at the center of the financial disputes between the U.S. and North Korea, and it is arguably one of the biggest stumbling blocks to progress in the six-way talks.

The U.S. blacklisted the BDA, alleging it served as a base for North Korea's counterfeiting and money laundering activities, which effectively froze US$24 million in the North's accounts in the bank and curbed its monetary transactions with the outside world. Pyongyang is calling on Washington to lift the de-facto sanctions in a show of trust before seeking progress in the nuclear talks that are expected to restart in early December after a year-long break. U.S. officials reject the demand, reiterating the BDA matter is a law-enforcement issue.

"The U.S. wants to lay the groundwork for bearing fruits in the six-way talks, and it is well aware that resolving the BDA issue is a key to progress," a ranking South Korean Foreign Ministry official said, requesting anonymity. "Assistant Secretary of State Hill's Beijing trip is in line with it."

U.S. officials were more guarded about the purpose of Hill's trip.

"This is all about the process of preparing for a return to the six-way talks," Tom Casey, deputy spokesman of the State Department said.

Hill arrived in Beijing on Monday night and met with Wu, and they had another meeting on Tuesday. The results of their talks were not available, however.

It was also unclear whether North Korea's top nuclear envoy Kim Kye-gwan was travelling to Beijing.

South Korean media reported Hill's potential encounter with the North Korean envoy.

The U.S. has already dangled a set of carrots for North Korea including security guarantees and economic aid, which was outlined in last year's Sept. 19 joint statement that was also signed by South Korea, China, Russia, and Japan.

After a summit between South Korean President Roh Moo-hyun and U.S. President George W. Bush held last week on the sidelines of the Asia-Pacific Economic Forum in Hanoi, Vietnam, White House spokesman Tony Snow said the U.S. incentives for the North could include a declaration of an end to the Korean War. The conflict ended in 1953 with a ceasefire, not a formal peace treaty.

Diplomatic sources in Beijing also said the Chinese authorities had unfrozen some North Korean accounts, believed to only contain funds from legal activities, in the BDA.

Macau's monetary authority denied the claim that China unfroze the accounts.

"Up to this point, our information indicates their assets remain frozen. We don't know what the source of the report is," Henrietta Lau, deputy director of banking supervision at the Monetary Authority of Macau, was quoted as telling The Associated Press. She added her office hasn't received instructions on when to unfreeze the accounts.

In Tokyo, Japan said it wants the six-way talks to restart before Dec. 8, citing a schedule for next month's meeting of the Association of Southeast Asian Nations.

"We are trying to make it happen as soon as possible," Japan's Foreign Minister Taro Aso told reporters.

Seoul/Beijing, Nov. 21 (Yonhap News)