updated 6/16/2007 1:08:20 AM ET 2007-06-16T05:08:20

North Korean funds that have held up a nuclear disarmament pact were in Russia on Saturday but technical problems were delaying final transfer to the country’s accounts there, U.S. nuclear envoy Christopher Hill said.

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Hill, speaking on a visit to Mongolia, said he expects the issue to be resolved in the next several days.

“I heard that the money was transferred, it’s in Russia, and they’re having some technical problems in getting it to the bank where the actual North Korean accounts are,” said Hill, who added that the next round of nuclear disarmament talks could be held in early July.

The envoy did not provide details of the technical problem.

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 had 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.

Hill said that once the North Koreans get the money, “we hope they will get on with what they need to do in terms of implementing the February agreement.”

Contentious money
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 the February pledge from the North to stop making nuclear weapons in exchange for aid and political concessions.

On Friday, North Korea warned in a statement criticizing U.S. missile defense plans that it might increase its “self-defense deterrent,” a term the communist nation usually uses to describe its nuclear program.

“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.”

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