BEIJING (Reuters) - Nuclear negotiators gathering in Beijing will turn their focus to implementing a disarmament agreement with North Korea, the chief U.S. envoy said on Friday, seeking to bury a rift with China over a small Macau bank.
China has criticised Washington’s decision to ban U.S. banks from dealing with Banco Delta Asia, or BDA, which the U.S. Treasury has accused of sheltering illegal North Korean earnings.
The bank’s parent company on Friday denied the bank had knowingly laundered illicit North Korean money, holding out hopes the ban would be lifted.
The United States made the move as it seeks to fulfil its side of a February 13 agreement offering North Korea improved aid and security in return for shutting down the reactor at the heart of its nuclear weapons programme by mid-April.
Macau, a tiny gambling enclave under indirect Chinese control along the coast from Hong Kong, may now free up frozen North Korean accounts found to be above board.
North Korea has yet to comment on the U.S. announcement.
Chinese Foreign Ministry spokesman Qin Gang said on Thursday that he “deeply” regretted the U.S. decision, which he suggested could destabilise Macau’s financial system and harm six-party nuclear talks that restart on Monday.
But the chief U.S. negotiator, Christopher Hill, maintained on Friday that the bank decision would not upset the talks, which bring together both Koreas, China, the United States, Japan and Russia.
“Frankly, I think it has been resolved,” Hill told reporters of the bank issue. “I’m sure that this will not pose any obstacle to our six-party process.”
The rift over BDA came amid intensifying diplomacy to implement the disarmament deal.
Hill said that in the coming days negotiators would be “shifting very much towards the six-party process” as they seek to implement the February deal before a 60-day deadline.
“I would say we are in pretty good shape after 30 days.”
Nonetheless, a U.S. Treasury Department official will head to Macau this weekend to explain the bank decision, which also brought a protest from Macau. Hill said Treasury official Daniel Glaser was also likely to visit Beijing.
Stanley Au, chairman of BDA’s parent company, Delta Asia Financial, said he hoped Glaser’s talks would help lift the U.S. ban. Au said the bank had done nothing wrong.
The February disarmament deal was sealed after Washington and Pyongyang held breakthrough bilateral talks in the wake of North Korea’s first ever nuclear test in October, drawing international condemnation and U.N. sanctions.
The head of the International Atomic Energy Agency, Mohamed ElBaradei, left Beijing on Friday after briefing envoys about his trip to North Korea, where he was negotiating the return of IAEA inspectors.
The U.S. Ambassador to Japan, Thomas Schieffer, said on Friday that the goal of the disarmament talks remained a long way off.
“The February agreement is not an end in itself,” he told reporters in Tokyo. “The end of the process comes when there are no nuclear weapons on the Korean peninsula and there’s nobody trying to build nuclear weapons on the Korean peninsula.”
Additional reporting by James Pomfret in Macau and Linda Sieg in Tokyo