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Panama's President Ricardo Martinelli said Friday he wanted "some kind of agreement" to allow 35 crew members from a seized North Korean or carrying undeclared Cuban weapons to head home.
The crew of the North Korea-flagged Chong Chon Gang face arms trafficking charges after missile and other weapons parts and two Soviet-era fighter planes were seized.
They face a maximum of six years in prison.
The crew will face "a proceeding here in Panama," the president told the Telemetro channel.
But, he added: "I think eventually and diplomatically, one should seek some kind of agreement to repatriate them to North Korea."
Panama and North Korea, an authoritarian pariah state, do not share diplomatic ties
Authorities on the Caribbean side of the Panama Canal boarded the vessel on July 10 because they suspected it might be moving illegal drugs.
Instead they found undeclared Soviet-era missile equipment and planes.
Cuba claims the shipment on the Chong Chon Gang consists of"obsolete weapons it was sending to North Korea to be refurbished.
Panama is awaiting the August 5 arrival of a UN Security Council team it has asked to evaluate the weapons and determine if Pyongyang or Havana have violated UN sanctions.