Progress Toward Korea Deal

MACAU (AP) - More than $20 million in disputed North Korean funds was transferred from a blacklisted Macau bank Thursday, an official said, signaling a breakthrough in a dispute that has held up the North's pledge to shut down its nuclear reactor.

It was not immediately clear where the money was sent.

North Korea has refused to move forward on a February pledge to start dismantling its nuclear program until it receives the money that had been frozen by Banco Delta Asia, which was blacklisted by the United States.

Washington had accused the bank of complicity in money-laundering by the Pyongyang regime, but gave its blessing for the funds to be freed to win progress on the nuclear issue.

But North Korea had not withdrawn the funds, apparently seeking to prove the money was now clean by receiving it through an electronic bank transfer. Other banks have apparently been reluctant to touch the disputed money.

"Banco Delta Asia transferred more than $20 million out of the bank this afternoon in accordance with the client's instruction," Francis Tam, Macau's secretary of economy and finance, told reporters on the sidelines of a business gathering.

But Mr. Tam would not say where the money was sent. "We have heard reports in foreign media that the money can be wired via the U.S. or Russia, for example. I think these routings are possible," Mr. Tam added.

North Korea had $25 million in the bank, and Mr. Tam would not say how much of the money was transferred. But he said, "Most of the money in this account has already transferred out. There will probably not be another transfer."

If some of the money remains in the bank, it could become a new reason for the recalcitrant and unpredictable North to delay progress with the pledge to shut down its nuclear weapons program.

Optimism had grown this week that the banking dispute could come to an end after Russia offered to help resolve it. It was not immediately clear Thursday what role, if any Russia had played.

In the landmark Feb. 13 agreement, the hard-line Communist regime agreed to shut down its main nuclear reactor in return for food aid and other concessions. The other countries participating in the six-party talks were America, South Korea, Russia, China and Japan.