NKorea lashes out amid nuclear standoff

By JAE-SOON CHANG, Associated Press Writer
1 hour, 52 minutes ago



SEOUL, South Korea -       North Korea warned Friday it might increase its "self-defense deterrent," a term the communist nation usually uses to describe its nuclear program, even as its key condition for nuclear disarmament was being met.

North Korea's warning, in a statement criticizing U.S. missile defense plans, raised concerns the recalcitrant regime might be trying to find another reason to postpone disarming. As the statement was released, millions of dollars in frozen funds were headed to North Korean accounts, apparently resolving a banking dispute the country had used as a reason to delay.

"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's Foreign Ministry said in a statement carried by the official Korean Central News Agency. "We cannot but further strengthen our self-defense deterrent if the arms race intensifies because of the U.S. maneuvers."

North Korea has refused to act on its February pledge to shut down its nuclear reactor until it gets access to $25 million once frozen in a U.S.-blacklisted Macau bank.

Claiming the money freeze was a sign of Washington's hostility, North Korea boycotted international nuclear talks for more than a year, during which it conducted its first-ever atomic bomb test in October.

On Thursday, Macau's chief finance official said the money had been transferred from the bank, but it remained unclear if the entire amount has moved or whether it reached its destination. Officials knowledgeable about the transfer have said more than $23 million was involved but that the transaction was not complete.

A South Korean government official said Friday the money has "reached Moscow at its central bank" and was awaiting deposit in North Korean accounts in Russia. He spoke on condition of anonymity, citing the issue's sensitivity.

If the money goes into North Korea's accounts, it means the financial dispute is fully resolved, the official said. But he did not say when the deposit could take place.

In Washington, the State Department said Friday it was looking into North Korea's latest warning.

"At this point, not having seen the statement, I wouldn't attribute any particular significance to it. But we'll take a look at it," said Sean McCormack, a department spokesman.

The North Korean funds had been frozen at Macau's Banco Delta Asia since 2005, when the U.S. blacklisted the bank for allegedly helping North Korea's government pass fake $100 bills and launder money from weapons sales.

In an attempt to win North Korea's promise to start dismantling its nuclear program, the U.S. agreed earlier this year to give its blessing for the money to be freed.

The U.S., Japan, China, Russia and the two Koreas took part in the arms negotiations that prompted a pledge from the North in February to stop making nuclear weapons in exchange for aid and political concessions.

"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.

Japanese Prime Minister Shinzo Abe said said the international community would have to consider more serious actions if North Korea continued to stall.

       President Bush "and I have expressed that our patience is not limitless, and I hope North Korea takes this seriously," Abe said.