NK at impasse, threatens 2nd test

BEIJING, China (Reuters) -- North Korea will feel compelled to announce plans for another nuclear test if a financial dispute with Washington is not resolved, a source said on Wednesday, a sign of Pyongyang's impatience with a lack of progress in talks.

U.S. Deputy Assistant Treasury Secretary Daniel Glaser resumed talks with North Korean officials in Beijing on Tuesday over the dispute over currency counterfeiting. He said the talks were inching forward and had "established a framework" for more negotiations.

Glaser also said U.S. Secret Service officials had presented North Korean officials with their findings.

The source with close ties to the North Korean government said the United States lacked evidence of wrongdoing, and that North Korea would likely express its frustration when it comes to six-party talks aimed at dismantling North Korea's nuclear programs scheduled for February 8 in Beijing.

"If the United States does not resolve it, North Korea will have no choice but to announce at the six-party talks that it plans to conduct another test," the source told Reuters after being briefed by a North Korean official.

The last session of talks grouping the two Koreas, the United States, Japan, Russia and host China was held in December -- two months after Pyongyang dramatically raised the stakes by holding its first nuclear test -- and yielded no breakthrough.

The December session bogged down over Pyongyang's complaints about a U.S. financial crackdown that led to Macau freezing $24 million in North Korean accounts.

The U.S. Treasury has accused Macau's Banco Delta Asia of helping North Korea launder earnings from counterfeit U.S. dollars and drug trafficking.

U.S. officials have held out little hope of a quick resolution to the financial negotiations and South Korea cautioned against hopes for a breakthrough in the six-party talks.

"We hope to adopt a joint document," South Korean Foreign Minister Song Min-soon told reporters in Seoul.

"But the substance of the document is such that it's a ridge we have not set foot on. So, despite the strong will of the countries to get there, whether we actually can will depend on a lot of consultations and time."

Song said U.S.-North Korean talks about the financial curbs were key to the success of the six-party negotiations. The Beijing-based source described the curbs as a "huge insult" to a sovereign country.

"If the United States does not resolve it, North Korea would be a 'sinner' taking part in the six-party talks ... North Korea would have no face and could not be on equal footing with the other parties at the six-party talks.

"The United States has no evidence, just like it had no evidence Iraq had weapons of mass destruction," the source said.

The North Korean Embassy in Beijing declined to comment. The Chinese Foreign Ministry had no immediate comment.

A Japanese newspaper said on Wednesday North Korean leader Kim Jong-il's eldest son was in Macau, quoting diplomatic sources in Hong Kong.

The Yomiuri Shimbun said Kim Jong-nam may visit a bank in Hong Kong to give an explanation of his account held there.

The Hong Kong account is not subject to the U.S. crackdown but may have some link to the discussions, the paper said

Source: CNN.

Labels: Asia, News, Nuclear Weapons, USA

- posted by Rosemary Welch@8:02 PM