June 25 (Bloomberg) -- North Korea said it will begin implementing a stalled agreement to scrap its nuclear program after receiving bank funds previously frozen because of U.S. concerns about money laundering.

``The vexing issue of the frozen funds is now resolved,'' the North Korean Foreign Ministry was cited as saying by the official Korea Central News Agency.

The government in Pyongyang said it will discuss closing its Yongbyon nuclear reactor with United Nations inspectors when they visit North Korea tomorrow.

North Korea signed an agreement on Feb. 13 with the U.S., South Korea, Russia, China and Japan to close the reactor, the source of its weapons-grade plutonium fuel, in return for energy assistance. It missed an April 14 deadline to do so because of holdups in getting $25 million frozen in Macau's Banco Delta Asia SARL, after the U.S. Treasury blacklisted the bank and accused it of laundering money for the communist state.

Officials will meet with representatives from the UN's International Atomic Energy Agency tomorrow ``regarding the shutdown of the nuclear facility and its inspection,'' North Korea's government said in a statement carried by KCNA.

In Washington, White House spokesman Tony Fratto told reporters the U.S. regards North Korea's pledge on Yongbyon as ``a positive first step.''

First Since 2002

UN inspectors are being allowed into the country for the first time since they were told to leave in 2002. Since then, North Korea has extracted plutonium from Yongbyon's spent fuel rods and on Oct. 9 tested its first nuclear device, prompting sanctions by the UN Security Council.

``The facility should be shut down and sealed,'' Olli Heinonen, head of the UN team, said in Beijing today, Agence France-Presse reported.

North Korea said the money, which it received from a Russian bank today after it was transferred from Macau, would be used to ``enhance the people's welfare and for humanitarian purposes.''

The funds were sent to an account held by North Korea's Foreign Trade Bank at Dalcombank, a Russian bank based in the city of Khabarovsk, the Russian bank said in a statement on its Web site. ``The problem of the funds' movement has been fully resolved,'' Dalcombank said.

The transaction ``was preceded by high-level negotiations that included Russia's Foreign Ministry, Finance Ministry and the Bank of Russia,'' Dalcombank said. It also included ``an exchange of notes with the U.S. Embassy in Moscow, which detailed the U.S. government's obligation not to take any legal steps against any of the Russian sides.''

Hill's Visit

North Korea's announcement that it will begin implementing the Feb. 13 agreement follows a visit , to Pyongyang last week by Assistant Secretary of State Christopher Hill, the U.S. chief nuclear negotiator.

North Korea said in a separate statement on June 23 that it may hold talks in the Philippines in August with foreign ministers from the U.S., China, Japan, Russia and South Korea on implementing the accord.

``What's important now is for North Korea to implement the first-phase measures,'' Japan's Chief Cabinet Secretary Yasuhisa Shiozaki said at a regular news conference today in Tokyo. ``What we must do first is to watch if this is fulfilled. Therefore, this must be guaranteed first before any six-party meeting or six-party ministerial meeting to be held.''

South Korea's Baik Jong Chun, chief of national security at President Roh Moo Hyun's office, was in Beijing today to discuss with Chinese officials how to coordinate the nations' policies toward North Korea, Seoul-based Yonhap News said, citing an unidentified official at the South Korean Embassy in the Chinese capital.

Baik told reporters before he left Seoul yesterday that the South Korean government is unchanged in proposing that Roh could hold a summit with North Korean leader Kim Jong Il after an improvement in the dispute over North Korea's nuclear weapons program, Yonhap said.

To contact the reporters on this story: Heejin Koo in Seoul at hjkoo@bloomberg.net; Michael Heath in Sydney at mheath1@bloomberg.net.

Last Updated: June 25, 2007 10:35 EDT