North Korea warns of 'actions' if bank squeeze not relaxed

North Korean nuclear envoy Kim Kye-gwan warned yesterday that if the United States failed to lift financial sanctions against it, his country would have to take "corresponding actions" in response.

Washington had promised to look into easing financial sanctions within 30 days of a February 13 agreement that offers North Korea millions of dollars in energy aid and improved security in return for steps on dismantling its nuclear facilities.

Kim did not elaborate on what "corresponding actions" his country might make, nor if that meant it would not fulfil its commitment to shut down its main nuclear reactor within 60 days of the February 13 deal.

About $24 million in North Korean accounts was frozen at Banco Delta Asia after the US designated the Macau bank a "primary money laundering concern" in 2005, a decision that complicated efforts to persuade the North to abandon nuclear arms.

But Washington agreed to resolve the matter as part of the February deal hammered out at talks in Beijing between the two Koreas, the United States, China, Japan and Russia.

Kim's remarks followed two-way talks in New York with his counterpart, Christopher Hill, earlier this week. The discussions there focused on obstacles to normalising ties between the countries that have been foes since the 1950-53 Korean War.

Transiting back to North Korea through Beijing, Kim met Chinese Vice Foreign Minister Wu Dawei, who said he had hopes of progress in implementing the February 13 agreement but cautioned that deep distrust was challenging efforts.

Next week, the chief of the International Atomic Energy Agency, Mohamed ElBaradei, will visit North Korea to discuss how it will close down its reactor and readmit inspectors from the UN watchdog.