March 6, 2006

US Says Door Remains Open to N.Korea Nuclear Talks

By Paul Eckert, Asia Correspondent

WASHINGTON (Reuters) - North Korea should return to six-country nuclear talks regardless of the outcome of discussions on the U.S. financial crackdown on Pyongyang over money laundering, the State Department said on Monday.

Senior North Korean diplomat Ri Gun was due in New York on Tuesday for a briefing from a U.S. team led by the Treasury Department on measures imposed to combat Pyongyang's suspected money laundering and counterfeiting of U.S. currency.

State Department spokesman Tom Casey took pains to separate the technical explanation of the financial penalties from efforts to get North Korea to rejoin nuclear talks with the United States, China, Japan, Russia and South Korea.

"It's not related to the six-party talks," Casey said.

"We think that regardless of this briefing, and regardless of anything else, that the North Koreans ought to come back to those talks as soon as is possible," he told reporters.

North Korea has denied involvement in any illegal activities and has boycotted the talks since November, arguing that the crackdown was an attempt to topple its leadership.

But the visit to Washington by Ri, the North's deputy envoy to the six-party talks, has raised hopes that the North may be poised to return to negotiations hosted by China.

The meeting in New York is "an opportunity for us to explain to the North Koreans simply how our law works and the kind of actions that we took," said Casey, who reiterated Washington's stance on the nuclear talks.

"The door is not closed to the resumption of the six-party talks. We're ready to go back today," he said.


The six countries agreed in principle in September that the North would dismantle its nuclear programs in exchange for aid and better diplomatic ties. But their last session in November ended without progress.

Japan's Kyodo news agency quoted Ri as saying in Beijing at the weekend that North Korea was a "victim" of money laundering. "We plan to convey our readiness to cooperate in international efforts" to tackle financial crime, Ri said.

In September, the Treasury Department branded Banco Delta Asia -- a bank in Macau that did business with North Korean firms -- a "willing pawn" in Pyongyang's illicit financial activities. The bank denied the allegations, but said in February that it had stopped dealing with North Korea.

The State Department's International Narcotics Control Strategy Report issued on March 1 cited "compelling evidence" that North Korea was involved in a wide range of criminal activities, including trafficking in counterfeit cigarettes and high-quality counterfeit U.S. currency.

Estimates of North Korea's illicit earnings from trafficking and counterfeiting range as high as $1 billion a year. Some U.S. officials have said Pyongyang has enough paper and ink to make $2 billion in counterfeit American money.

The Institute for International Economics' Marcus Noland, a leading expert on the North's economy, said North Korea probably makes only a fraction of the face value of the fake currency it sells to criminal groups in bulk.