The chief U.S. negotiator in the North Korea nuclear disarmament talks says a U.S. decision to punish a bank in Macau will help smooth the process. But the U.S. action has drawn fire from China. VOA's Luis Ramirez reports from Beijing, where diplomats from six nations are gathering for new discussions on how to bring about the end of North Korea's nuclear program.

A branch of Banco Delta Asia in Macau (file photo)

The U.S. Treasury's ruling against Macau's Banco Delta Asia bans all U.S. financial dealings with the bank. The decision follows an 18-month probe into the bank's relationship with North Korea, which Washington says involved the laundering of millions of dollars in money obtained through counterfeiting currency and cigarettes, and drug trafficking.

As a result of the U.S. investigation, Macau froze the North Korean funds. This angered Pyongyang officials, prompting them to boycott nuclear negotiations for more than a year.

A preliminary accord reached February 13 calls for the resolution of the financial sanctions as one of the conditions on which North Korea agreed to shut down its only nuclear plant by mid April.

U.S. envoy Christopher Hill told reporters in Beijing more talks are needed on the Banco Delta Asia matter, but the U.S. action is intended to smooth the six-party negotiations.

U.S. Assistant Secretary of State Christopher Hill speaks to the media after his arrival in Beijing, 14 March 2007

"What we are trying to do in this 30-day period is to do what we said we would do, which is to resolve this matter and turn it over to the Macau authorities consistent with their obligations," he said.

Now the Chinese-controlled Macau government can take whatever action it deems necessary on the North Korean funds, including releasing them.

But China protested the U.S. ruling against the Macanese bank. Chinese Foreign Ministry spokesman Qin Gang accused Washington of overstepping its authority.

"We express our regret at the United States insisting on using U.S. domestic law to apply a ruling," he said.

North Korean officials had no immediate comment.

Representatives of the six nations - which also include Japan, Russia, and South Korea - gathered in Beijing for the start of working group meetings before a formal session on Monday.

The delegates are to discuss energy aid and diplomatic concessions that the nations are to make to North Korea in exchange for its shutdown and eventual dismantling of its nuclear programs.