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China deeply regrets the US decision to prohibit American financial institutions from dealing with a Macao bank, which has been accused of laundering money for the Democratic People's Republic of Korea (DPRK).

"We deeply regret the United States' insistance on using American domestic law to apply a ruling on Banco Delta Asia (BDA)," Foreign Ministry spokesman Qin Gang said in a regular press briefing yesterday.

The central government and the Macao Special Administrative Region have repeatedly expressed their concerns over the issue to the US, he said.

China expects the US to take action that would help the Six-Party Talks to progress and maintain the financial and social stability of Macao. "We believe both should be taken into full consideration," Qin said.

The US Treasury Department finalized its rule against BDA yesterday, barring the bank from accessing the US financial market directly or indirectly.

Stuart Levey, the department's Under Secretary for Terrorism and Financial Intelligence, said the regulatory action was targeted at BDA as an institution, not Macao as a jurisdiction.

The Macao authorities, too, issued a statement yesterday, deeply regretting the US decision.

"The Chinese central government firmly supports the government of Macao SAR to appropriately resolve the related issues in accordance with the law," Qin said.

The Macao monetary authority took control of BDA in late 2005 after the US declared it a "primary money laundering concern" and froze US$24 million worth of DPRK's assets.

US Assistant Secretary of State Christopher Hill, who arrived in Beijing on Wednesday, was quoted as having said that the end of a US probe into Pyongyang's banking activities had paved the way for talks to end its nuclear programme.

He said talks were still needed on the bank but didn't expect that to be "a stumbling block" to the Six-Party Talks.

Analysts say the US move will allow Macao to decide whether or not to defreeze the accounts, a key obstacle in pushing forward the Six-Party Talks.

Earlier, chief of UN nuclear watchdog Mohamed ElBaradei told reporters after a two-day trip to Pyongyang that the DPRK was demanding the return of the money before fully cooperating with the International Atomic Energy Agency (IAEA).

The bank move was the latest action among a flurry of diplomacy before a new round of the Six-Party Talks, scheduled for Monday in Beijing.

Working group meetings

The Republic of Korea (ROK), the leader of the economic and energy cooperation group, organized a discussion at its embassy in Beijing yesterday.

Seoul's top nuclear negotiator Chun Yung-woo, who led the discussion, will attend tomorrow's working group meeting on the denuclearization of the Korean Peninsula, too.

Chaired by Deputy Foreign Minister Wu Dawei, the meeting will be attended by Hill and other senior officials from the six countries.

Upbeat over commitment

IAEA chief ElBaradei was in Beijing to brief other diplomats about the outcome of his trip. He exchanged views with Assistant Foreign Minister Cui Tiankai on Pyongyang's and Teheran's nuclear issues.

An Australian envoy, who visited the DPRK this week, shared ElBaradei's view, saying Pyongyang had assured him of its commitment to the February 13 agreement.

Peter Baxter, head of Australian Foreign Affairs and Trade Department's North Asia Division, said his country would continue to provide bilateral aid to the DPRK if it honored its commitment.

The DPRK will send a high level delegation, led by Vice-Foreign Minister Kim Yong-il, to Australia next month as part of its commitment to the February 13 statement, Baxter said.

(China Daily 03/16/2007 page2)