Funds for North Korea unfrozen: South Korea

Seoul, Apr 6: Offshore funds that North Korea has demanded be unfrozen before it starts shutting a nuclear reactor will be released through a Hong Kong bank next week, a South Korean official was quoted as saying today.

But South Korean foreign ministry officials, speaking to Reuters, cast doubt on the report and one called it ''unfounded''.

North Korea walked out of six-country talks on ending its nuclear weapons programme last month when the transfer of 25 million dollars held at Banco Delta Asia (BDA) in Macau failed to go through.

''The United States, China and BDA decided to return the funds to the North after sending it to a bank located in Hong Kong,'' a senior government official was quoted as saying by JoongAng Ilbo daily.

Delay over the release of the funds has led to growing pessimism that North Korea would meet an April 14 deadline to start closing its Yongbyon nuclear reactor, a source of fissile material for atomic weapons.

The transfer will be made around April 10 and will probably go through a subsidiary of the Bank of China in Hong Kong, the official was quoted as saying.

The two Koreas, the United States, Japan, China and Russia agreed on February 13 to give the North 60 days to shut its nuclear facilities in return for energy aid.

The funds have been frozen since 2005 after the Macau bank was designated by US authorities as a ''primary money-laundering concern''.

REUTERS