SEOUL - NORTH Korea said on Sunday it would resume work to disable its plutonium-producing nuclear plants and readmit UN inspectors after the United States removed Pyongyang from a terrorism blacklist.

South Korea said Washington's move had put the nuclear disarmament process back on track, after a six-party deal appeared close to collapse, but a Japanese minister strongly criticised the US decision.

What does US terrorism list mean for North Korea? THE United States said at the weekend it would remove North Korea from its terrorism blacklist after agreeing to nuclear verification checks with Pyongyang to salvage a floundering disarmament-for-aid deal. Here are some facts about the list and its implications: What is the list? In 1979, the United State prepared a list of countries it said were providing either direct or indirect support to terrorist groups. What it implies? Under the Trading With the Enemy Act, the designation on the terrorism list bars the country from receiving US exports, controls sales of items with military and civilian uses, limits US aid and requires Washington to vote against loans from international financial institutions. Apart from North Korea, the list includes Iran, Cuba, Syria and Sudan. What does North Korea receive once removed? North Korea will be able to better tap into international finance and see the removal of some trade sanctions. More importantly, it will be able to use international settlement banks to transfer money abroad. This will help its destitute economy attract business and investment. At present, many international companies have to use suitcases to move cash in and out of North Korea. Even if the gains from removal amount to US$1 billion or US$2 billion a year, the impact would be huge on its annual economy estimated at about US$20 billion. What stays in place? North Korea will still be subject to UN Security Council sanctions for its ballistic missile test and nuclear test in 2006 The sanctions limit its export of arms and its import of sensitive military material. Missiles are one of the few products North Korea can export for cash. When and why was North Korea added to the list? North Korea has been on the list since Jan 20, 1988. Pyongyang was put on the US list based on the confession of a North Korean agent over the mid-air explosion of a South Korean passenger jet in 1987 which killed more than 100. It has abducted Japanese nationals and returned only some to their homeland. It has also kidnapped several hundred South Koreans. -- REUTERS Japan minister says US-NKorea deal 'regrettable' TOKYO - JAPAN'S government struggled to respond on Sunday to a US decision taking North Korea off its terrorism blacklist, with a senior minister saying the step was 'extremely regrettable'. Washington's decision was aimed at saving a crumbling nuclear disarmament deal, but Tokyo had been urging it not to delist the communist state pending progress on a dispute over Japanese kidnapped by the North. ... more

'As the US fulfilled its commitment to make political compensation and a fair verification procedure...the DPRK (North Korea) decided to resume the disablement of nuclear facilities in Yongbyon and allow the inspectors of the US and the IAEA to perform their duties,' a foreign ministry spokesman said.

The North had stopped work to make the Yongbyon plants unusable and had begun work to reactivate them becase of the dispute over nuclear 'verification' inspections and its inclusion on Washington's terrorism list.

Last week it barred inspectors from the International Atomic Energy Agency, the UN nuclear watchdog, from the plants, which produced the fuel for a nuclear test in October 2006 and possibly for up to half a dozen atomic weapons.

The spokesman, quoted by the official Korean Central News Agency, welcomed the US move announced Saturday and said Pyongyang would cooperate in verification.

But the spokesman cautioned that the US must ensure the delisting 'actually takes effect.' Signatories to the six-party deal must also complete delivery of energy aid worth hundreds of millions of dollars which was promised in return for the disbaling of Yongbyon.

The US refused to drop the North from its list of state sponsors of terrorism, a designation which blocks bilateral economic aid and some multilateral assistance, until an inspections deal was reached.

This was achieved after a visit by US chief negotiator Christopher Hill to Pyongyang early this month.

The US State Department said the North had agreed to verification of all of its nuclear programmes, including an alleged covert highly enriched uranium programme and suspected proliferation.

'Every element of verification that we sought is included in this package,' State Department spokesman Sean McCormack said Saturday.

The deal allows for outside experts to visit both declared and undeclared sites in North Korea, take and remove samples and equipment for analysis, view documents and interview staff, US officials said.

However, visits to sites not included in the North's nuclear declaration delivered in June will require 'mutual consent'.

The June declaration dealt directly only with the admitted plutonium operation based at Yongbyon.

The North's spokesman said the agreement relates to 'the verification of objects of the disablement of nuclear facilities,' a reference to Yongbyon.

Seoul's top nuclear envoy Kim Sook said he now expects six-party talks to resume 'as early as possible' to finalise verification procedures.

The talks group the two Koreas with the United States, Russia, China and Japan.

'The government appreciates that the measure will contribute to putting six-party talks back on track, a move that will eventually lead to North Korea's nuclear abandonment,' Mr Kim told reporters.

'A key is if North Korea will cooperate in the verification process with sincerity.' Japan had urged Washington not to delist North Korea, pressing first for more information on the fate of Japanese kidnapped by the North in the 1970s and 1980s to train its spies.

'It's extremely regrettable, and I believe abductions amount to terrorist acts,' Finance Minister Shoichi Nakagawa told reporters in Washington at a Group of Seven meeting of finance ministers.

'I don't think the United States made the decision after a close consultation with its ally Japan.'

Critics suspect the administration of US President George W. Bush rushed for a deal before he leaves the White House in January.

'It's an agreement for an agreement's sake,' said Kim Taewoo, of the Korea Institute for Defense Analyses in Seoul.

'There exists a risk of North Korea and others interpreting it arbitrarily. They claim that they have agreed on what had actually not been agreed on,' he told AFP.

He said he suspected the United States and North Korea both had 'political reasons' to reach this kind of agreement to pacify critics at home. -- AFP

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