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Russia may help N.Korea with money crisis if U.S. gives nod -2

(Adds Lavrov quotes, details paras 5-7)

SEOUL, June 5 (RIA Novosti) - Russia could make a financial vehicle available for the transfer of North Korea's frozen funds, if Washington guarantees that no sanctions against Russia will follow, a deputy foreign minister said Tuesday.

The North Korean accounts held in Banco Delta Asia in Macao were frozen in September 2005 at the request of the United States, which accused the Communist regime of counterfeiting and money laundering.

"There is a chance we could use our facilities, if the U.S. side provides a written guarantee that they will not introduce any sanctions against our financial institutions, we may be in a position to look at the possible transfer of these funds to a Russian bank where the North Korean government has an account," Alexander Losyukov said.

He said "this would give us a chance to make progress on nuclear disarmament [of North Korea]."

Russia's Foreign Minister Sergei Lavrov, currently in Seoul, asked the United States to ensure funds from unfrozen North Korean accounts are transferred back to the Communist state.

Lavrov said a resolution over the North Korean nuclear issue was being blocked by "the inability of the U.S. to transfer $25 million from Banco Delta Asia to the North Korean account."

"The problem was not created by us - it is entirely down to the Americans," he said, adding that Washington had asked Russia for assistance in finding a solution, which he hoped would be found soon.

Earlier in May, North Korea accused the U.S. of foot dragging on Pyongyang's frozen $25 million at a time when it was ready to denuclearize.

North Korea's $25 million in BDA was unfrozen in March in an attempt to win Pyongyang's promise to shut down its nuclear reactor. But the fund transfer was stalled when Washington blacklisted the bank, making other banks wary of handling Korean funds and dealing with the BDA. In response, the regime delayed shutting down its Yongbyon reactor, planned for April.

The North has pledged that it will fulfill its February commitments with the five countries involved in a protracted nuclear dispute, as soon as it receives the funds.

The impoverished state has been cut off from global financial markets for several years and has used cash or complicated barter schemes to pay for supplies and services from other countries.

Pyongyang boycotted disarmament talks for more than a year over the funds and conducted its first nuclear bomb test in October 2006.

After North Korea's nuclear test in October 2006, Japan completely halted imports from the republic and closed all its ports to North Korean ships.

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