North Korea Nuclear Talks Break Down over Money

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The six-party talks on North Korea's nuclear weapons program have broken down in China, and Pyongyang's negotiator has left Beijing. The impasse revolves around North Korean funds frozen in a bank in Macau. The country refuses to talk until the account is released.

Diplomats insist that initial steps toward North Korea's nuclear disarmament are still on track. But today's snag is an example of the many details that could derail the process.

Diplomats thought they had the money issue settled. U.S. officials announced Monday that Macau's Banco Delta Asia would release $25 million in funds that the U.S. Treasury Department had linked to North Korean counterfeiting and money laundering.

But Tuesday, the North Koreans refused to continue the talks until the money was actually transferred into a Chinese bank. China's chief negotiator, Wu Dawei, said that the state-owned Bank of China had balked at accepting the transfer, and there was nothing the government could do about it.

Today, North Korea's lead negotiator Kim Gye-gwan hopped on a plane back to Pyongyang, leaving the other diplomats to ponder where things went wrong.

The banking issue was originally separate from the nuclear talks. But observers say the United States used the frozen funds as a sort of diplomatic carrot to keep the nuclear talks moving.

Zhang Liangui, a North Korea expert at the Communist Party's Central Party School in Beijing, says the current stalemate has just confirmed what he has thought all along: that Pyongyang is stalling for time while it builds up its nuclear arsenal.

"The North Korean nuclear issue is a security issue," he says. "We should give them security guarantees in exchange for denuclearization, and that's it. All these other issues such as economic aid are unrelated, and should be left out."

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