Pyongyang holds $25 million in Banco Delta Asia, which was frozen under U.S. pressure in 2005 over money laundering suspicions and unblocked April 13 after the North refused to continue denuclearization talks following a February breakthrough in the six-nation process.
The Seoul Shinmun newspaper said referring to informed sources that the Communist nation feared it would not be able to use the money in transactions and for payments.
Foreign banks have refused to receive the funds and refrained from working with BDA after Washington blacklisted the bank. Macao's financial authorities said Pyongyang could transfer or withdraw its funds.
Another South Korean paper, Chosun Ilbo, said Monday citing a government official that Seoul had moved to suspend rice and fuel supplies to the North in a bid to force the reclusive regime to allow UN inspectors into its nuclear sites and fulfill other disarmament commitments.
Seoul plans to suspend the delivery of the initial 50,000 metric tons of fuel oil for North Korea planned as an incentive in exchange for the closure of its Yongbyon reactor, the paper said. Pyongyang failed to meet the April 14 deadline for the latter pledge, citing the unresolved financial dispute.
South Korea will start the shipments when Pyongyang allows nuclear inspectors into its facilities and fulfills other obligations, the paper said.
The South also suspended the delivery of 400,000 metric tons of rice to the impoverished nation, which relies heavily on foreign aid.
Japan's chief Cabinet secretary urged Pyongyang to fulfill its obligation Monday.
"The reason that North Korea has failed to fulfill its commitments lies behind the framework of the six-party talks," Yasuhisa Shiozaki said. "Setting new timeframes would be incorrect. It is important that North Korea should fulfill its promises within 24 hours."
U.S. Assistant Secretary of State Chris Hill said in Beijing Sunday that Washington could wait for several more days for Pyongyang to act.
At talks with the United States, China, South Korea, Russia and Japan in February, Pyongyang, which conducted its first nuclear bomb tests in October, was promised other economic and political incentives for dropping its nuclear ambitions.
