NKorean Macau fund transfer to begin Thurs: Kyodo

Tokyo, June 14: The transfer of North Korean funds that have been frozen in a Macau bank is to begin today, Japan's Kyodo news agency said, raising chances for a breakthrough in a deadlock that has stalled a nuclear disarmament deal with Pyongyang.

Pyongyang has refused to honour a February deal to begin shutting its Yongbyon nuclear reactor and source of material for atomic weapons until its funds at Banco Delta Asia are released through normal banking channels.

A Macau government spokesman declined to comment on the report, saying, ''Every minute the matter is changing so we can't comment on this at the moment.'' Russia said yesterday it was poised to allow one of its banks to transfer the 25 million dollars stuck in Banco Delta Asia, provided Washington gave written guarantees it would not fall foul of US sanctions against North Korea.

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

Banks have balked at acting as a conduit for the money to be returned to North Korea because of the stigma attached to holding Pyongyang assets.

The funds are likely to be transferred to a Russian bank with links to North Korea via the US Federal Reserve Bank and the Russian central bank, Kyodo said, citing Macau financial authorities.

Reuters>