South Korea state bank to mediate North funds

SEOUL (Reuters) - South Korea is considering using one of its state-run banks to act as an intermediary to transfer North Korean funds out of a Macau bank, a South Korean newspaper reported on Monday.

Pyongyang has demanded the transfer $25 million (12.5 million pounds) in assets at Macau-based Banco Delta Asia as a condition for starting the shutdown of its nuclear facilities under a February 13 deal among six countries.

North Korea missed a April 14 deadline for the start of the nuclear shutdown.

Under South Korea's plan, the Export-Import Bank of Korea will act as an intermediary between BDA and a North Korean bank account at a third country, a high-ranking national security source was quoted as saying by the Chosun Ilbo newspaper.

"The United States has agreed to the government's plan, and I understand it has conveyed the position that it won't raise issues if the Export-Import Bank of Korea mediates the transfer of BDA funds," the source was quoted as saying.

South Korea's foreign ministry could not immediately comment on the report.

A Japanese daily reported on Sunday that North Korea wanted to open an account at a New York bank for the transfer but the idea had been rejected by Washington.