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

The United States says it has resolved its dispute with North Korea over 25 million dollars frozen in a Macau bank. The announcement came as diplomats from six nations open a new round of nuclear disarmament talks. VOA's Luis Ramirez reports from Beijing.

Diplomats on Monday hailed the announcement as clearing the way for delegates from six nations to move ahead with the process of getting North Korea to dismantle its nuclear weapons program.

Daniel Glaser, the U.S. Treasury's top official for money laundering and terrorist financing, told reporters that $25 million in frozen funds will be returned to Pyongyang after North Korea promised to use the money to help its people.

U.S. Treasury Department Deputy Assistant Secretary Daniel Glaser

Glaser said, "We have received assurances the funds are going to be transferred to an account in Beijing that is to allow them to be used for humanitarian purposes, for educational purposes."

The Macau government froze the funds during an 18-month U.S. investigation of Banco Delta Asia. Washington says the small Macau bank facilitated the North Koreans' laundering of money obtained from the counterfeiting of currency and cigarettes, drug trafficking and other illegal activities.

After the funds were frozen, North Korea boycotted the nuclear talks with China, Japan, Russia, South Korea and the United States for more than a year. Pyongyang returned to the negotiating table in December, and the six countries reached a preliminary disarmament agreement on February 13.

In the accord, North Korea agreed to shut down and seal its main nuclear reactor and plutonium factory by mid-April in exchange for energy aid and diplomatic concessions. Later steps are to lead to nuclear disarmament.

Pyongyang had said it would not stop the reactor until the frozen funds were released.

U.S. officials say the North Koreans proposed the terms of the deal announced Monday.

U.S. Assistant Secretary of State Christopher Hill

The chief U.S. negotiator at the talks, Christopher Hill, said Monday, "We feel this matter has been resolved and now we can move on to the problems, of which there are many."

The North Korean nuclear crisis erupted in 2002 when the United States said Pyongyang violated previous agreements by starting a secret nuclear weapons program. A few months later, North Korea expelled U.N. nuclear inspectors and restarted its main reactor.

The crisis worsened last year when the North exploded a nuclear device, drawing worldwide condemnation and U.N. sanctions.