NKorea warns against U.S. missile plan

A man talks on a mobile phone in front of the headquarter of Banco Delta Asia in Macau, in this Friday, March 16, 2007 file photo. More than US$20 million (euro15.05 million) in disputed North Korean funds was transferred from a blacklisted Macau bank Thursday, June 14, 2007, an official said, possibly clearing the way for the North to start shutting down its nuclear reactor. The money dispute has dragged on for nearly two years between Pyongyang and Washington, which accused the bank of helping the North launder money. The funds were frozen in the troubled lender, Banco Delta Asia, prompting the North to storm out of talks to dismantle its nuclear weapons program. (AP Photo/Kin Cheung, FILE) Kin Cheung: AP

By BURT HERMAN Associated Press Writer

© 2007 The Associated Press

SEOUL, South Korea — North Korea on Friday warned it may strengthen its "self-defense deterrent," a term it usually uses to refer to its nuclear program, despite news that millions in frozen funds the country had sought as a condition to disarm was en route to its accounts.

The comments came in a statement from the communist regime criticizing U.S. efforts to build a missile defense system.

"The U.S. is claiming that it is building a global missile defense system to protect against missile attacks from our nation and Iran. This is a childish pretext," the North Korean foreign ministry said in a statement carried by the country's official Korean Central News Agency.

"We cannot but further strengthen our self-defense deterrent if arms race intensifies because of the U.S. maneuvers," it said.

The U.S. and its allies have urged North Korea to act on its pledge to start dismantling its nuclear program now that the money issue had appeared resolved.

The money has reached Moscow from a Macau bank and was awaiting deposit in North Korean accounts, a South Korean official said Friday on condition of anonymity due to the subject's sensitivity. Officials knowledgeable about the transfer have said more than $23 million of the disputed $25 million was involved in the transfer, though the exact amount remains unclear.

The North has not commented directly on the money transfer.

Despite the key demand apparently being met, other sides involved in the protracted six-nation arms talks with North Korea had acknowledged that progress still would be slow.

"Even though the fund transfer problem is resolved, North Korea could come up with more demands," Japanese Foreign Minister Taro Aso said in Tokyo. "There is no guarantee we can resume the six-party talks right away."

Some $25 million in North Korean accounts had been frozen at Macau's Banco Delta Asia since 2005, when the U.S. blacklisted the bank for allegedly helping the regime pass fake $100 bills and launder money from weapons sales.

The North made the money's release its main condition for disarmament and boycotted international nuclear talks for more than a year, during which it conducted its first-ever atomic bomb test in October.

But to win the North's promise to start dismantling its nuclear program, the U.S. agreed to allow the money to be freed and said it would happen within 30 days. The transfer instead has taken more than four months as the North insisted that it be sent electronically to another bank, apparently to prove the money is now clean.

Macau's Monetary Authority spokeswoman Wendy Au refused Friday to give details on the exact amount transferred, citing bank secrecy laws, and the Russian Central Bank declined to comment.

An official in Hong Kong who has been following the case closely said, "It's my understanding that some of the money has been left in the bank."

The official, who asked not to be identified because of the issue's sensitivity, said some of the funds were in accounts opened by Macau businessmen who deposited the money for North Koreans and wanted to keep the money in the Chinese territory.

Several media reports have said the money would be sent through the U.S. Federal Reserve branch in New York before arriving in North Korean accounts in Russia's Far East.

"The transfer is in progress," said South Korea's nuclear envoy Chun Yung-woo. "Let's wait and see how long it takes for North Korea to confirm it."

Regardless of the financial issue, the U.S. and Japan urged Pyongyang to start dismantling its nuclear weapons. The countries are part of arms negotiations that also include China, Russia and the two Koreas where the North promised in a Feb. 13 agreement to stop making nuclear weapons in exchange for aid and political concessions.

"North Korea must take concrete actions to implement steps that had been agreed by the six-party framework," Japan's Prime Minister Shinzo Abe said Friday.

"If and when transfer does take place, we expect the North Koreans to live up to the provisions of the Feb. 13 agreement," White House spokesman Tony Snow said in Washington.