JOINT KEDO-DPRK PRESS STATEMENT

	The Korean Peninsula Energy Development Organization (KEDO) 
and the Democratic People's Republic of Korea (DPRK) today 
concluded in New York City an agreement on the supply of a light-
water reactor (LWR) project to the DPRK.  This Supply Agreement, 
which is the result of talks that began September 11 in Kuala 
Lumpur and resumed October 16 in New York City, was concluded in 
accordance with the U.S.-DPRK Agreed Framework of October 21, 
1994, and the U.S.-DPRK Joint Press Statement of June 13, 1995.

	Throughout these negotiations, both delegations conducted 
themselves in a professional and constructive manner that led to 
the successful conclusion of the negotiations.  Ambassador 
Stephen W. Bosworth, KEDO's Executive Director who led the KEDO 
delegation, and Ambassador-at-Large Ho Jong, who led the DPRK 
delegation, signed the Agreement.

	This Agreement marks an important step towards the full 
implementation of the U.S.-DPRK Agreed Framework and the U.S.-
DPRK Joint Press Statement of June 13, 1995.  Both KEDO and the 
DPRK will continue to perform in good faith and cooperative 
spirit their respective undertakings.  Within the next few days, 
KEDO will send a third site survey team to the survey area, and 
during the coming months KEDO and the DPRK will hold a series of 
further discussions on additional details concerning the LWR 
project.

FACT SHEET

THE SUPPLY AGREEMENT SIGNED BETWEEN THE KOREAN PENINSULA ENERGY 
DEVELOPMENT ORGANIZATION (KEDO) AND THE GOVERNMENT OF THE 
DEMOCRATIC PEOPLE'S REPUBLIC OF KOREA (DPRK) ON DECEMBER 15, 1995

Scope of Supply

KEDO will provide two light-water-reactor (LWR) units with a 
total generating capacity of approximately 2,000 MW (e) to the 
DPRK on a turnkey basis.  The reactor model, selected by KEDO, 
will be of advanced US-origin design and technology. The LWR 
project will conform to a set of codes and standards equivalent 
to those of the IAEA and the U.S. and applied to the reactor 
model selected by KEDO. KEDO will be responsible for:

( Site survey and preparation ( Technical documents necessary for 
the operation and maintenance of the LWR plants ( Certain 
preconstruction infrastructure integral to and exclusively for 
use in the construction of the LWR plants ( A comprehensive 
training program for the operation and maintenance of the LWR 
plants, including provision of full-scope simulator ( Inventory 
of spare parts, wear parts, consumables and special tools as KEDO 
deems necessary for a two-year period of plant operation ( A low 
and medium radioactive waste storage building with a ten-year 
storage capacity for the two LWR plants ( Nuclear fuel for the 
initial loading of each LWR, including such fuel rods as may be 
necessary to preserve safety for initial operation ( Certain 
technical support services for operation and maintenance of the 
first LWR plant for one year after its completion ( Other items

 Terms of Repayment

KEDO shall finance the cost of the tasks and items specified 
above KEDO will be repaid by the DPRK interest free over 20 
years, inclusive of a three-year grace period, beginning with 
completion of each LWR.  Repayment will occur in equal, 
semiannual installments Repayment may be in cash, equivalents or 
through transfer of goods

 Delivery Schedule

KEDO will develop a delivery schedule for the LWR project aimed 
at achieving a delivery date of 2003.  This delivery schedule is 
mutually conditional with the following steps by the DPRK.

	DPRK will:

( Continue to freeze its graphite-moderated reactors and related 
facilities, and refrain from building the same ( Allow the IAEA 
to resume ad hoc and routine inspections of facilities not 
covered by the nuclear freeze when the Supply Agreement is signed 
( Continue to cooperate on the sage storage and ultimate 
disposition of spent fuel from its 5 MW (e) experimental reactor 
( Remain a party to the Treaty on the Non- Proliferation of 
Nuclear Weapons and allow implementation of its safeguards 
agreement under this Treaty ( Come into full compliance with its 
IAEA safeguards agreement when a "significant portion" of the LWR 
project is completed, but before the delivery of key nuclear 
components ( Conclude a bilateral agreement for peaceful nuclear 
cooperation with the U.S. prior to the delivery of key nuclear 
components (if U.S. firms provide such components) ( Transfer 
spent fuel from its 5 MW (e) reactor from the DPRK when the 
delivery of key nuclear components for the first LWR begins ( 
Begin to dismantle its frozen graphite-moderated reactors and 
related facilities upon completion of the first LWR and complete 
dismantlement upon completion of the second LWR

(A separate protocol on the delivery schedule is scheduled to be 
concluded in 1997)

 Implementing Arrangements

KEDO will select a prime contractor to carry out the LWR project 
and will conclude a commercial supply contract with this 
contractor KEDO will select a U.S. firm as program coordinator to 
assist KEDO in supervising overall implementation of the LWR 
project The DPRK will recognize KEDO's independent juridical 
status and shall accord KEDO and its staff privileges and 
immunities in the DPRK as necessary to carry out KEDO's functions 
The DPRK will take steps to protect the safety of and to extend 
consular protection to all personnel sent to the DPRK by KEDO, 
its contractors and subcontractors

 Services

The DPRK will process for approval all applications, permits, 
licenses, etc. necessary for completion of the LWR project 
expeditiously and free of charge KEDO, its contractors and 
subcontractors and respective personnel shall be exempt from DPRK 
taxes, duties and charges in connection with the LWR project The 
DPRK shall, to the extent possible, make available at a fair 
price port services, transportation, labor, potable water, food, 
off-site lodging and offices, communications, fuel, electrical 
power, materials, medical services, currency exchanges and other 
financial services, and other amenities necessary for living and 
working by personnel sent to the DPRK by KEDO, its contractors 
and subcontractors KEDO, its contractors and subcontractors shall 
be allowed unimpeded access to the project site and to 
appropriate and efficient transportation routes to and from the 
project site KEDO, its contractors and subcontractors shall be 
allowed unimpeded use of available means of communications in the 
DPRK.  KEDO, its contractors and subcontractors shall also be 
permitted to establish secure and independent means of 
communications for their offices based on a timely and case-by-
case review of equipment requests and in accordance with relevant 
telecommunications regulations of the DPRK (A separate protocol 
on services (including services provided to KEDO, its contractors 
and subcontractors) is scheduled to be concluded during 1996)

 Site Selection and Study

KEDO will conduct a site survey of Kumho area near Sinpo City The 
DPRK shall cooperate and provide KEDO with access to relevant 
available information (A separate protocol on site take-over is 
scheduled to conclude during 1996)

 Quality Assurance and Warranties

KEDO is responsible for the design and implementation of a 
quality assurance program in accordance with the set of codes and 
standards equivalent to these of the IAEA and the U.S. and 
applied to the reactor model selected by KEDO KEDO will guarantee 
the generating capacity of each LWR at the time of completion 
KEDO will guarantee civil construction work and the major 
components of each plant for two years after completion.  The 
guarantee on major components will not exceed five years after 
the shipment of such components (A separate protocol on quality 
assurance and warranties is scheduled to be concluded in 1996)

 Training

KEDO will design and implement a comprehensive training program 
in accordance with nuclear-industry practice.  Training will be 
held at mutually agreed locations as soon as practicable (A 
separate protocol on training is scheduled to be concluded in 
1996)

 Operation and Maintenance

KEDO will assist the DPRK to obtain LWR fuel (other than that 
provided in initial loading) through commercial contracts KEDO 
will assist the DPRK to obtain spare and wear parts, consumables 
and special tools and technical services through commercial 
contracts.  KEDO will provide these items for an initial two-year 
period of plant operation KEDO and the DPRK will cooperate to 
ensure the safe storage of spent fuel from the LWR plants.  If 
requested by KEDO, the DPRK must relinquish any ownership rights 
over the LWR spent fuel and agree to the transfer of the spent 
fuel out of the DPRK through commercial contracts

 Nuclear Safety and Regulation

KEDO is responsible for assuring that the design, manufacture, 
construction, testing and commissioning of the LWR plants are in 
compliance with safety and regulatory codes and standards 
equivalent to those of the IAEA and the U.S. and applied to the 
reactor model selected by KEDO The DPRK is responsible for the 
safe operation and maintenance of the LWR plants, appropriate 
physical and environmental protection, and the safe storage and 
disposal of radioactive waste, including spent fuel Prior to 
shipment of any fuel assemblies, the DPRK will observe the 
provisions set forth in following Conventions:

( Convention on Nuclear Safety ( Convention on Early Notification 
of a Nuclear Accident ( Convention on Assistance in the Case of a 
Nuclear Accident of Radiological Emergency ( Convention on the 
Physical Protection of Nuclear Material

After completion of the LWR plants, KEDO and the DPRK will 
conduct safety reviews to ensure the safe operation and 
maintenance of the LWR plants In the event of a nuclear emergency 
or accident, the DPRK will permit immediate access to the site 
and information by personnel sent by KEDO, its contractors or 
subcontractors to determine the extent of safety concerns and to 
provide safety assistance

 Nuclear Liability

The DPRK will ensure a legal and financial mechanism is available 
in the event of a nuclear incident The above-mentioned legal 
mechanism will include the channeling of liability to the 
operator on the basis of absolute liability The DPRK will ensure 
that the operator is able to satisfy such liabilities Prior to 
the shipment of any fuel assemblies to the DPRK, the DPRK will 
enter into an indemnity agreement with KEDO

 Intellectual Property and Non-Replication

KEDO and the DPRK agree to protect the confidentiality of the 
other side's intellectual property Neither KEDO nor the DPRK will 
replicate or copy any of the equipment or technology of the other 
side provided in connection with the LWR project

 Assurances

The DPRK assures the following:

( The reactors, technology and nuclear material transferred for 
the LWR project as well as any nuclear material used therein or 
produced through the use of such items will be used exclusively 
for peaceful, non-explosive purposes ( The above items will be 
used properly and exclusively for the purposes of the LWR project 
( The above items will not be transferred outside the DPRK 
without prior consent by KEDO ( The DPRK will apply IAEA 
safeguards to the LWR project ( The DPRK will not reprocess or 
increase the enrichment level of any nuclear material for the LWR 
project or any nuclear material used in or produced through the 
use of any reactor or nuclear material transferred in connection 
with the LWR project

 Actions in the Event of Noncompliance

In the event of late payment or nonpayment by either side with 
respect to financial obligations incurred implementing the Supply 
Agreement, the other side will have the right to assess and apply 
penalties against that side (A separate protocol on actions in 
the event of noncompliance is scheduled to be concluded in 1996)



The above information is only a summary of certain parts of the 
Supply Agreement signed by KEDO and the DPRK on December 15, 
1995.  It does not encompass all aspects of the Supply Agreement.

INFORMATION AND BACKGROUND PAPER

What is KEDO?

The Korean Peninsula Energy Development Organization (KEDO), 
founded on March 9, 1995, is the international organization 
established to implement most of the "Agreed Framework" signed by 
the United States of America and the Democratic People's Republic 
of Korea (DPRK) on October 21, 1994.  The Agreed Framework 
addresses international concerns about nuclear activities in the 
DPRK, and, it implemented, will ultimately lead to the complete 
dismantlement of those aspects of the DPRK's nuclear program, 
including reprocessing-related facilities, that have undermined 
the viability of the international nuclear non- proliferation 
regime and the stability of the Asia- Pacific region.

 The U.S.-DPRK Agreed Framework

The Agreed Framework calls for the DPRK to:

Freeze and eventually dismantle its graphite- moderated reactors 
(Dismantlement will be completed upon completion of a light-water 
reactor (LWR) project (see below)) Seal, cease activities at, and 
eventually dismantle all reprocessing-related facilities.  
(Dismantlement will be completed upon completion of LWR project) 
Cooperate in finding a safe method to store existing spent fuel 
from the DPRK's 5 MW (e) experimental reactor and to dispose of 
such fuel in a safe manner that does not involve reprocessing in 
the DPRK Allow the International Atomic Energy Agency (IAEA) to 
monitor the aforementioned freeze and to resume ad hoc and 
routine inspections of facilities not subject to the freeze upon 
conclusion of a Supply Agreement for the LWR project Come into 
full compliance with the DPRK-IAEA safeguards agreement upon 
completion of a significant portion of the LWR project Remain a 
party to the Nuclear Non-Proliferation Treaty (NPT) Engage in 
North-South dialogue, and take consistent steps to implement the 
North-South Joint Declaration on the Denuclearization of the 
Korean Peninsula

 In exchange for implementing its commitments under the Agreed 
Framework, the DPRK will receive:

Two light-water, proliferation-resistant nuclear reactors (on a 
turnkey basis) with a total generating capacity of approximately 
2,000 MW (e).  KEDO will develop a delivery schedule for the LWR 
project aimed at achieving a completion date of 2003 150,000 tons 
of heavy-fuel oil for heating and electricity production by 
October 1995 and 500,000 tons annually thereafter until the start 
of full- power operation of the first light-water reactor (LWR) 
Formal assurances from the U.S. against the threat or use of 
nuclear weapons

 In addition to the above, the Agreed Framework calls for the 
U.S. and the DPRK to:

Reduce barriers to trade and investment, including restrictions 
on telecommunications services and financial transactions Open a 
liaison office in the other's capital Upgrade bilateral relations 
to ambassadorial level following progress on issues of concern to 
each side

 KEDO's Obligations

KEDO's primary obligations are to:

Provide for the financing and supply of the LWR project Provide 
heavy fuel oil to DPRK according to the schedule in the Agreed 
Framework

 KEDO's Budget

To fulfill its obligations over the next decade, including the 
supply of two LWRs and the provision of heavy fuel oil until 
completion of the first LWR, it is estimated KEDO must raise 
between US$4 billion and US$5 billion.

Much of KEDO's costs are covered by Japan, the ROK, and the U.S., 
including all administrative costs.  The ROK and Japan will 
finance a major portion of the LWR project, while the U.S. will 
contribute to the cost of heavy fuel oil and the safe storage of 
the DPRK's spent fuel.  KEDO continues to need funding for the 
provision of heavy fuel oil.

 KEDO's Composition

Current Membership:

KEDO is currently composed of seven members:  Australia, Canada, 
Finland, Japan, New Zealand, the Republic of Korea (ROK), and the 
U.S.  Other countries have contributed to KEDO as non-members.  
KEDO expects membership to increase further over the next year.

Executive Board and Staff:

KEDO's Executive Board - consisting of representatives from the 
organization's three 'Original Members' (Japan, ROK, U.S.) - sets 
the general direction for KEDO.  The Executive Director, the Hon. 
Stephen Bosworth (U.S.), and two Deputy Directors, Dr. Choi 
Young-Jim (ROK) and Mr. Itaru Umezu (Japan) are responsible for 
day-to-day operations.  KEDO's staff consists of 26 professionals 
and expert consultants drawn mainly, but not exclusively, from 
Japan, the ROK and the U.S.  The KEDO Secretariat is located in 
New York.

General Conference and Advisory Committees:

All members of KEDO play an active role in KEDO through their 
participation in KEDO General Conferences, which are held at the 
discretion of the Executive Board at intervals of no longer than 
one year.  The Executive Board intends to hold frequent meetings 
in the initial years of KEDO's operations.

All KEDO members may further participate in KEDO Advisory 
Committees, which are chaired by KEDO members other than Japan, 
the ROK, and the U.S.  Advisory Committees meet at such times as 
they determine, and influence the decision making of KEDO through 
advice to the Executive Director and Executive Board.  There are 
currently advisory committees for the LWR project, the safe 
storage and disposition of the DPRK's spent fuel, and the 
provision of heavy fuel oil to the DPRK.

 What Nuclear Reactor Model Will Be Provided?

Following extensive negotiations between the U.S. and the DPRK in 
Kuala Lumpur in May-June, 1995, it was agreed the reactor model 
to be provided to the DPRK will be the Korean Standard Nuclear 
Power plant model currently under construction.  The reference 
plants will be Ulchin 3 and 4, based in Ulchin, ROK.  These 
nuclear reactors are an advanced version of US-origin design, and 
have undergone extensive safety analysis and documentation; they 
are considered among the best commercial plants available.

 International Safety Conventions

Prior to the shipment of any fuel assemblies to the DPRK, the 
DPRK is required to ensure that the highest nuclear regulatory 
standards and procedures are in place to promote the safe 
operation of the LWRs.  This includes observing provisions set 
forth in the Convention on Nuclear Safety, the Convention on 
Early Notification of a Nuclear Accident, the Convention on 
Assistance in the Case of a Nuclear Accident of Radiological 
Emergency, and the Convention on the Physical Protection of 
Nuclear Material.  KEDO will assist the DPRK in developing the 
capability to operate and regulate its nuclear power facilities.

 Site Surveys

KEDO site survey teams have undertaken two site surveys (Aug. 15-
22, Oct. 24-Nov. 7) in the Kumho area of the Sinpo region in the 
DPRK.  The survey area, 22 kilometers-squared in size, had 
previously been selected for a similar DPRK-USSR study for the 
same purpose.  No formal designation of this site as the location 
of the LWR project has been made.  A third site survey will take 
place in late December 1995 and early 1996.

Actions and findings:

The general area is believed suitable for the LWR project.  The 
exact location may be selected from four potential sites in the 
area KEDO survey teams have addressed potential concerns relating 
to seismology, environmental safety, and constructability.  
Following extensive consultations with the DPRK and on-site 
visual surveys conducted by KEDO experts, there do not appear to 
be any significant concerns that would impact construction of the 
LWR project.  Seismic monitoring is underway. More site-specific 
data collection and analysis to determine site characteristics 
related to constructability and safety will by conducted during 
the next site survey.  Site-specific safety analysis includes the 
effect on plant design of factors such as population density, 
industrial activity, regional weather conditions, and water 
levels in and around the potential location of the LWR project.  
Site- specific analysis is primarily intended to ensure that 
public safety and ecological issues are adequately accounted for 
in the design of the LWR project.  Survey experts will address 
these and additional issues in the period leading up to and 
including the site preparation.

Oil Shipments to the DPRK (through October, 1995)  			
			

DATE (1995)     METRIC TONS             TOTAL COST - US $
                                                                  
(cargo, insurance, freight)     
January 16*       22,428.000                        2,393,574.90            
January 19*       27,972.000                        2,895,245.10            
August 18         20,299.155                         2,081,283.86            
August 24         20,192.795                         2,071,913.10            
September 29   21,591.743                         2,199,557.75            
October 9         8,151.535                           830,399.48              
October 18       15,156.000                         1,502,155.27            
October 28       15,000.000                         1,546,076.08            
TOTAL            150,791.228                       15,580,205.54   

* Shipment arranged and funded by U.S. Department of 
Defense prior to KEDO's founding