$25M bar to nuke deal is cleared

BEIJING

- The United States and North Korea resolved a dispute over $25 million in frozen North Korean funds in a Macau bank that threatened to hold up nuclear-disarmament negotiations, a top U.S. official said today.

Deputy Assistant Treasury Secretary Daniel Glaser said the funds would be transferred to a Bank of China account in Beijing to be used for education and humanitarian purposes in North Korea.

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

Glaser said details on the timing and procedures for transferring the BDA funds would be worked out later.

Washington promised to resolve the issue by mid-March as part of an agreement last month on North Korea's nuclear disarmament. On Saturday, North Korea's nuclear envoy said Pyongyang would not shut down its main nuclear reactor until the funds were released.

"We believe this resolves the issue of the DPRK-related frozen funds," Glaser said using the acronym for North Korea's formal name, the Democratic People's Republic of Korea. "North Korea has pledged ... that these funds will be used solely for the betterment of the North Korean people."

The six-party talks were scheduled to resume today. *

-Associated Presss