By Carol Giacomo, Diplomatic Correspondent WASHINGTON, Nov 2 (Reuters) - One solution to the dispute over the crackdown on North Korea's financial assets would be to unfreeze accounts involved in legitimate trade, but U.S. officials on Thursday showed no sign of compromise. "It's all one big criminal enterprise," a senior U.S. official said of North Korea's trading system. "You can't separate it out." The U.S. Treasury Department reaffirmed its tough line on Banco Delta Asia, the Macau bank designated a "primary money laundering concern" in 2005 because of involvement with Pyongyang's accounts. "We have been engaged in an ongoing investigation of BDA, and everything that has come to light confirms the illicit conduct of the bank, including that the bank took a fee from the North Koreans in exchange for lax due diligence on their accounts," said spokeswoman Molly Millerwise. Three weeks after its first nuclear test, North Korea said on Tuesday it was returning to six-country nuclear talks because Washington agreed to discuss a U.S.-led crackdown on financial assets that Pyongyang says drove it from the negotiating table. U.S. officials say the offer has long been on the table and what is significant is that Pyongyang stopped demanding it would only return to negotiations if the assets freeze was lifted. "There were no U.S. concessions as far as I can see," Mike Green, formerly Asia adviser at the Bush White House, told the Center for National Policy policy group. A date for resuming negotiations over the North's nuclear weapons program has not been announced. The plan is for a separate working group to discuss the crackdown within the nuclear talks framework, involving China, South Korea, Japan, Russia, the United States and North Korea. The last six-party round broke off in November 2005 after Washington squeezed Pyongyang's access to the world financial system to punish it for illicit activities, including printing fake U.S. bank notes, worth about $550 million annually. 'WILLING PAWN' About $24 million in Banco Delta Asia accounts was frozen after the U.S. Treasury Department described the bank as a "willing pawn" in Pyongyang's counterfeiting, cigarette and drug-smuggling and money-laundering schemes. Treasury's designation sent a chill through the international banking community, which did not want to risk being tarred as a facilitator of illicit pursuits. Since China, Pyongyang's main benefactor, ordered its banks in mid-October to halt operations with the North, much of the banking world has been off-limits to the North, U.S. officials say. What the working group might try to accomplish -- apart from insisting Pyongyang end illicit activities -- is unclear. One U.S. official insisted that "all we did was agree to take up the (assets freeze) in a working group" and another said there was little "wiggle room" in the U.S. position. North Korea expert Selig Harrison said it was plausible that U.S. negotiator Chris Hill led Pyongyang to believe Washington had ideas for resolving the financial dispute. One idea might be for Treasury to halt its investigation of Banco Delta Asia and to support a move to unfreeze accounts associated with legitimate North Korean activities, while illicit accounts remain frozen, he said. Harrison said $7.5 million of the $24 million in frozen BDA accounts was from the Daedong Credit Bank, a British bank representing foreign companies doing business in North Korea, he said. Hill has explored compromises, including returning funds to Pyongyang if they are unrelated to illicit activities, but met resistance from Treasury and other administration hard-liners who say it is impossible to distinguish among the accounts. An administration insider said Hill may have told the North that Treasury would soon finish its investigation but doubted he gave ground on the frozen accounts because President George W. Bush is determined to pursue Pyongyang's illegal activities.
