N Korea likely to miss reactor deadline

By Anna Fifield in Seoul, Michiyo Nakamoto in Tokyo and Demetri Sevastopulo in Washington

Published: April 5 2007 03:14 | Last updated: April 5 2007 03:14

North Korea is unlikely to shut down its main nuclear reactor before next week’s deadline because of delays resolving a dispute over Pyongyang’s frozen assets, according to diplomats involved in the six-party talks.

Pyongyang was not likely to comply with the requirement to detail all its nuclear weapons programmes and close its Yongbyon reactor by April 14, they said, because Washington had not yet made good on its pledge to return the $25m (£12.6m) in North Korean-linked funds frozen at a small bank in Macao.

The US Treasury department last month signalled its approval to the Macao monetary authorities to return the money held at Banco Delta Asia – meeting the 30-day deadline – but logistical problems have hampered the transfer of the cash.

The deadlines were part of the February 13 agreement under which the North Korean regime agreed to move towards disabling its nuclear weapons programme.

A senior South Korean government official said that he would not rule out the possibility that the 60-day deadline would be missed.

“It all depends on how quickly we get this BDA problem behind us,” the official said. “If it can be resolved in the next few days then we can still have a chance of meeting the 60-day deadline. But I would not be surprised if it takes more time.”

Michael Green, a former senior Asia adviser to President George W. Bush, said he was not confident that the 60-day deadline would be met. Mr Green said Chinese banks had been reluctant to transfer funds that the US Treasury had previously determined were tainted by illicit activity.

A Treasury spokesman said a US negotiating team was still in China trying to resolve the issue.

Japan’s top negotiator also indicated it would be difficult for North Korea to meet the deadline. “But that does not mean we will give up,” said Kenichiro Sasae, director-general of Asian and Oceanian Affairs at the foreign ministry. “Even if it is delayed, the important thing is to carry out what has been agreed and that is still possible.”

On Tuesday, Wu Dawei, the chief Chinese negotiator, was quoted as saying the deadline would not be met.

The South Korean diplomat said it was not particularly significant if the deadline was missed. “It’s not a matter of political will – this is a technical, procedural problem that is not easy to resolve,” he said.

But any delays are likely to reduce support for the deal on Capitol Hill.

Mr Green said: “People are going to have to be really careful not to let this become a tactical process where we are spending all our time trying to satisfy the North Koreans.

“At some point, the administration is going to have to say to the Chinese and North Koreans that this is all that can be done, and retain some solidarity among the other parties to put the monkey back on North Korea’s back.”

The Treasury last month reversed its initial stance and said all the money frozen at BDA as part of a crackdown on North Korea’s alleged illicit activities could be returned.

The Macao Monetary Authority is understood to be trying to contact all 50 BDA account holders to secure their approval to transfer their money to the Bank of China in Beijing. This difficult logistical exercise is complicated by the fact that at least one account holder has died without naming a beneficiary, according to South Korean newspapers.

Pyongyang also has something to lose by missing the deadline. Under the terms of the agreement, it stands to receive 50,000 tonnes of heavy fuel oil in return for meeting its requirements.

The six-party talks were unlikely to resume until North Korea had completed actions it was required to take under the deal, diplomats said.

FT.com / Asia-Pacific - N Korea likely to miss reactor deadline