BEIJING - U.S. and North Korean financial experts met Tuesday over Washington's campaign to isolate the communist country from the international banking system, the key stumbling block in negotiations over Pyongyang's nuclear program.
The meeting came on the sidelines of renewed multinational nuclear negotiations, which North Korea had refused to attend for 13 months in anger over Washington's blacklisting of a Macau bank where Pyongyang deposited $24 million.
The U.S. alleged the bank was complicit in the North's counterfeiting of $100 bills and money laundering to sell weapons of mass destruction. American officials have sought to rally other countries to bar any North Korean accounts, saying all the country's transactions are suspect.
The North and U.S. delegations also held their first one-on-one meeting over the nuclear standoff Tuesday afternoon, the Chinese press center said.
All six nations involved in the nuclear negotiations - the two Koreas, Russia, China, Japan and the U.S. - met for two hours Tuesday morning at a Chinese state guesthouse in the second day of talks. Negotiators focused on the logistics of implementing a pledge made by the North in September 2005 to abandon its nuclear weapons program in exchange for security guarantees and economic aid.
During its long boycott of talks, North Korea test-fired a new long-range missile in July and then set off an underground atomic blast Oct. 9. The country agreed to return to negotiations because the U.S. said it could discuss the financial issue in separate meetings.
Representing the U.S. at the financial talks was Daniel Glaser, the Treasury Department's deputy assistant secretary for terrorist financing and financial crimes. The North Korean delegation was led by O Kwang Chol, president of the North's Foreign Trade Bank of Korea. The talks were held at the U.S. Embassy, an embassy official said on condition of anonymity because of policy.
Chinese Foreign Ministry spokesman Qin Gang said at a regular news briefing that Beijing hopes the two sides can "solve the issue properly."
"We wish to see them make positive achievements that we believe will facilitate the process of the (nuclear) talks," he said.
It is unlikely, however, that the U.S. would bow to the North's demands to remove the restrictions because Washington views them as a legal defense against criminal activity.
The isolated regime staked out a tough position as the six-nation talks opened Monday, demanding a long list of previously stated preconditions for its disarmament, including the lifting the U.S. financial restrictions and all U.N. sanctions.
North Korea also insisted it be treated as a full-fledged nuclear power, meaning the arms reductions should be mutual. But the United States has said time was running out for Pyongyang to dismantle its nuclear arsenal and threatened more sanctions.
U.S. envoy Christopher Hill told reporters Tuesday morning that "not too much progress" had been made toward implementing the North's 2005 agreement to disarm.
A South Korean official said some countries proposed forming working-level groups to implement the deal and "there have been many opinions on the issue."
"But no consensus has been reached and the issue is still in discussion," the officials said on condition of anonymity due to the sensitivity of the diplomacy.
The meetings "were held in a much more serious atmosphere," he said. "The countries "could better understand each other's position."
Pyongyang has insisted that the talks be transformed into negotiations over mutual arms reductions in which it would be accorded equal footing with the United States. If its demands aren't met, the North said it would increase its nuclear arsenal.
"It is extremely regrettable that North Korea claims to be a nuclear weapons state," Japan's chief Cabinet spokesman Yasuhisa Shiozaki said Tuesday in Tokyo. "While the comments were expected, nonetheless, the discussions should be more positive to bring about progress."
The latest North Korean nuclear crisis erupted in 2002 after U.S. officials said the North had admitted to a secret nuclear program in violation of a 1994 disarmament deal, leading to the North's withdrawal from the Nuclear Nonproliferation Treaty.
North Korea is believed to have enough radioactive material to make about a half-dozen atomic bombs, and its main nuclear reactor remains in operation to create more weapons-grade plutonium.