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. Last Updated: 07/27/2016

U.S., N. Korea Unfreeze Funds

ReutersHill, far right, next to Glaser, speaking to the press Monday in Beijing.
BEIJING -- The United States and North Korea have resolved a dispute over $25 million in frozen North Korean funds, clearing the way for progress in dismantling the North's nuclear programs, U.S. officials said Monday.

The U.S. nuclear envoy, Christopher Hill, said the six-party talks, which resumed Monday, could now "move on to the next problem, of which there are many."

Meanwhile, North Korea questioned Japan's qualifications to participate in the talks, ratcheting up recent tensions between the two sides.

U.S. Deputy Assistant Treasury Secretary Daniel Glaser said the funds would be transferred into a North Korean account at the Bank of China in Beijing to be used for education and humanitarian purposes. Glaser said Pyongyang had proposed the arrangement.

The funds, some of which U.S. authorities suspect may be linked to counterfeiting or money-laundering by cash-starved North Korea, had held up progress in nuclear disarmament talks.

"North Korea has pledged ... that these funds will be used solely for the betterment of the North Korean people," Glaser said.

"We believe this resolves the issue of the DPRK-related frozen funds," he said, using the acronym for North Korea's formal name, the Democratic People's Republic of Korea.

The Feb. 13 disarmament agreement gave North Korea 60 days to shut down both its main reactor and a plutonium processing plant and allow United Nations monitors to verify the closures. In return, North Korea is to receive energy and economic assistance and a start toward normalizing relations with the United States and Japan.

The North Korean deposits have been frozen in Banco Delta Asia, or BDA, since Washington blacklisted the tiny, privately run Macau-based bank 19 months ago on suspicion that the funds were connected to money-laundering or counterfeiting.

Washington promised to settle the issue by mid-March as an inducement to North Korea to disarm.

Details on the timing and procedures for transferring the BDA funds into the Bank of China account, held by North Korea's Foreign Trade Bank, would be worked out between the North and regulators in Macau, a semiautonomous Chinese territory, Glaser said.

Hill said the resolution showed that "the DPRK understood our concerns and are prepared to cooperate with us to ensure that this money is used appropriately."