Order Code IB91141
Issue Brief for Congress
Received through the CRS Web
North Korea’s Nuclear
Weapons Program
Updated March 17, 2003
Larry A. Niksch
Foreign Affairs, Defense, and Trade Division
Congressional Research Service ˜ The Library of Congress

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CONTENTS
SUMMARY
MOST RECENT DEVELOPMENTS
BACKGROUND AND ANALYSIS
Implications of North Korea’s Actions Since October 2002
Bush Administration Policy
North Korea’s Nuclear Program
International Assistance
North Korea’s Delivery Systems
State of Nuclear Weapons Development
Diplomatic Background to the Agreed Framework and Amending Agreements
The Agreed Framework: Provisions, Implementation, Costs, Future Issues
U.S. Objectives: Primacy to the Freeze of North Korea’s Nuclear Program
Benefits to North Korea
Light Water Nuclear Reactors
Oil at No Cost
Diplomatic Representation
Lifting the U.S. Economic Embargo
North Korean Obligations Beyond the Freeze of the Nuclear Program
Inspections and Broader Nuclear Obligations
Disposition of Fuel Rods from the Five Megawatt Reactor
Dismantlement of Nuclear Installations
Role of Congress

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North Korea’s Nuclear Weapons Program
SUMMARY
North Korea’s decisions to restart nuclear
international coalition to pressure North Ko-
installations at Yongbyon that were shut down
rea; and (4) proposing multilateral talks in-
under the U.S.-North Korean Agreed Frame-
volving North Korea and other countries,
work of 1994 and withdraw from the Nuclear
possibly under United Nations auspices; (5)
Non-Proliferation Treaty create an acute
warning and planning for future economic
foreign policy problem for the United States.
sanctions against North Korea; and (6) warn-
North Korea’s major motive appears to be to
ing North Korea not to reprocess nuclear
escalate pressure on the Bush Administration
weapons-grade plutonium, including asserting
to negotiate over Pyongyang’s proposed non-
that “all options are open,” including military
aggression pact and/or a new nuclear agree-
options. China, South Korea, and Russia have
ment that would provide new U.S. benefits to
criticized the Bush Administration for not
North Korea. However, re-starting the
negotiating directly with North Korea, and
Yongbyon facilities opens up a possible North
they voice opposition to economic sanctions
Korean intent to stage a “nuclear breakout” of
and to the use of force against Pyongyang.
its nuclear program and openly produce nu-
The Administration has placed emphasis on
clear weapons within six months. North Ko-
China as a source of pressure on North Korea.
rea’s actions follow the disclosure in October
2002 that North Korea is operating a secret
The crisis is the culmination of eight years
nuclear program based on uranium enrichment
of implementation of the 1994 Agreed Fram-
and the decision by the Korean Peninsula
ework, which provides for the shutdown of
Energy Development Organization (KEDO) in
North Korea’s nuclear facilities in return for
November 2002 to suspend shipments of
the delivery to North Korea of 500,000 tons of
heavy oil to North Korea.
heavy oil and the construction in North Korea
of two light water nuclear reactors. The
The main elements of Bush Administrat-
United States pledged to issue a nuclear secur-
ion policy are (1) terminating the Agreed
ity guarantee to North Korea as North Korea
Framework; (2) no bilateral negotiations with
complied with its 1992 safeguards agreement
North Korea until it satisfies U.S. concerns
with the International Atomic Energy Agency.
over its nuclear program; (3) assembling an
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MOST RECENT DEVELOPMENTS
In mid-January 2003, the Bush Administration attempted to develop a new strategy
toward North Korea after North Korea withdrew from the Nuclear Non-Proliferation Treaty,
reopened nuclear installations shut down under the 1994 U.S.-North Korean Agreed
Framework, expelled monitors from the International Atomic Energy Agency (IAEA), re-
started operation of a nuclear reactor (February 2003), and demanded new negotiations with
the United States. The Administration also was influenced to adjust policy by increased
criticisms from South Korea, China, and Russia, calling on the Bush Administration to
negotiate with North Korea and opposing statements by Administration officials concerning
future economic sanctions against North Korea. In February 2003, the Administration
promoted a multilateral forum for talks on the North Korean nuclear issue, involving the five
permanent members of the U.N. Security Council and five other countries, including Japan,
South Korea, and North Korea. Secretary of State Powell gained qualified support of the
proposal from Japan and South Korea during his February trip to East Asia. However, the
Administration reportedly was unwilling to commit to U.S.-North Korean talks within a
multilateral framework. As war with Iraq appeared closer, the Administration gave mixed
signals on whether it would use military force to prevent North Korea from taking advantage
of the war to reprocess weapons-grade plutonium and use the plutonium to produce several
atomic bombs.
BACKGROUND AND ANALYSIS
Implications of North Korea’s Actions Since October
2002
The Bush Administration disclosed on October 16, 2002, that North Korea had revealed
to U.S. Assistant Secretary of State James Kelly in Pyongyang that it was conducting a secret
nuclear weapons program based on the process of uranium enrichment. North Korea
admitted the program in response to U.S. evidence presented by Kelly. The program is
based on the process of uranium enrichment, in contrast to North Korea’s pre-1995 nuclear
program based on plutonium reprocessing. North Korea began a secret uranium enrichment
program after 1995 reportedly with the assistance of Pakistan. North Korea provided
Pakistan with intermediate range ballistic missiles in the late 1990s. The Central Intelligence
Agency issued a statement in December 2002 that North Korea likely could produce an
atomic bomb through uranium enrichment in 2004.
In admitting to the secret program, Vice Foreign Minister Kang Sok-ju (an important
figure in the North Korean regime) declared to Kelly that North Korea also possesses “more
powerful” weapons. North Korea proposed a new U.S.-North Korean negotiation of a
bilateral non-aggression pact and an agreement for the United States to cease “stifling” North
Korea’s economy. The North Korean proposal asserts that these agreements would open the
way for resolving the nuclear issue. Some U.S. experts, however, believe that the non-
aggression pact proposal is a “smokescreen” for North Korea’s long-standing proposal (since
1974) of a U.S.-North Korean bilateral peace treaty. As stated, both proposed pacts would
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replace the 1953 Korean armistice, and neither would include South Korea as a participant.
North Korea has long stated that a negotiation of a bilateral peace treaty would include
provisions for the withdrawal of U.S. military forces from South Korea. The United States
and South Korea have rejected consistently the bilateral peace agreement proposal.
However, reports in early January 2003 held that the South Korean government was
exploring formulas under which the United States could offer North Korea a security
guarantee as part of a nuclear settlement. Some experts also believe that North Korea’s
demand for the cessation of U.S. “stifling” of its economy is a subterfuge for Pyongyang’s
demand since 1999 that the United States remove North Korea from the U.S. list of terrorist
countries, thus, in effect, making North Korea eligible for financial assistance from the
World Bank, the International Monetary Fund, and the Asian Development Bank.
By their own admission, Bush Administration officials were surprised by the intensity
of North Korea’s moves in late December 2002 to re-start nuclear facilities at Yongbyon and
expel officials of the International Atomic Energy Agency placed there under the U.S.-North
Korean Agreed Framework of 1994 to monitor the shutdown. North Korea announced that
it would re-start the small, five megawatt nuclear reactor shut down under the Agreed
Framework and resume construction of two larger reactors that was frozen under the
agreement. The reactor began operating in February 2003. It also announced that it would
re-start the plutonium reprocessing plant that operated up to 1994. It withdrew from the
Nuclear Non-Proliferation Treaty (NPT) in January 2003. It justified its action by citing the
U.S.-initiated cutoff of heavy oil shipments in December 2002 and by charging that the Bush
Administration planned a “pre-emptive nuclear attack” on North Korea.
North Korea’s major motive appears to be to escalate pressure on the Bush
Administration to negotiate over Pyongyang’s proposed non-aggression pact and/or a new
nuclear agreement that would provide new U.S. benefits to North Korea. Pyongyang long
has emphasized “intimidation tactics” in its diplomacy; and since October 2002 it has issued
other threats including a resumption of long-range missile tests and stepped-up proliferation
of weapons to other countries. However, re-starting the Yongbyon facilities opens up a
possible North Korean intent or option to stage a “breakout” of its nuclear program in 2003
by openly producing nuclear weapons. The most dangerous follow-up North Korean move
would be to move 8,000 stored nuclear fuel rods at Yongbyon into the plutonium
reprocessing plant for the production of nuclear weapons-grade plutonium. According to
estimates by nuclear experts and reportedly by U.S. intelligence agencies, if North Korea
began to reprocess the fuel rods, it would take about four months to produce weapons grade
plutonium and another one or two months to produce four to six atomic bombs.
Bush Administration Policy
The Bush Administration’s policy response to North Korean actions since October 2002
consists of:
(1) Continuing priority to Iraq: President Bush reportedly has said that he does not want
two simultaneous crises. U.S. officials say they will rely on diplomacy and expect diplomacy
to run well into 2003. They argue that North Korea’s actions do not constitute a crisis.
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(2) Progressive suspension of the Agreed Framework: Administration officials have
stated that the Agreed Framework will be terminated. Statements indicate a debate with the
Administration over the timing of ending it. In November 2002, the Administration’s
initiative led the Korean Peninsula Development Organization (KEDO, the international
body administering the 1994 Agreed Framework) to suspend heavy oil shipments to North
Korea – a key component of the Agreed Framework – beginning in December 2002. North
Korea cited this as justification for re-starting the Yongbyon nuclear facilities. South Korea
reportedly argued against the suspension, and the South Korean government reportedly
favors a resumption of oil shipments as part of a settlement with North Korea. The next
decision for KEDO will be whether to continue or suspend construction of the two light
water nuclear reactors promised to North Korea in the Agreed Framework. North Korea’s
nuclear provocations since mid-December 2002 may have made the Administration cautious
about a termination of the construction of two light water nuclear reactors (LWRs) in North
Korea–another key provision of the Agreed Framework. In January 2003, the Administration
decided to request of Congress $3 million dollars for the continuance of KEDO in FY 2003.
(3) Ambivalence toward negotiations with North Korea: Until January 7, 2003, the
Administration rejected negotiation of any new agreement with North Korea over the secret
nuclear program, insisting that North Korea first abide by its past nuclear agreements, which
Pyongyang increasingly has violated. On January 7, 2003, the Administration proposed a
dialogue with North Korea that would not be the negotiation of a new agreement. In a
communique of January 7, 2003, with Japan and South Korea, the proposal stated that “the
United States is willing to talk to North Korea about how it will meet its obligations to the
international community” but that “the United States will not provide quid pro quos to North
Korea to live up to its existing obligations.” President Bush then said that the United States
might consider agricultural and energy aid to North Korea after North Korea satisfied U.S.
concerns over its nuclear and military policies. Secretary of State Powell referred to a “new
arrangement” with North Korea to replace the Agreed Framework. In February 2003, the
Administration began to promote a multilateral framework for negotiations, specifically a
“five plus five” proposal that would involve the five permanent members of the U.N.
Security Council and North Korea, South Korea, Japan, Australia, and the European Union.
The Administration remained vague, however, on its view of the nature of U.S.-North
Korean dealings in such a framework.
(4) Forming an international coalition to pressure North Korea to end its nuclear
program: The Administration’s “five plus five proposal” is the latest tactical move in this
strategy. President Bush, Japan’s Prime Minister Koizumi, and South Korea’s President Kim
Dae-jung issued a statement at the APEC summit on October 26, 2002, that North Korea
should “dismantle this [secret] program in a prompt and verifiable manner and to come into
full compliance with all its international [nuclear] commitments” The Administration has
agreed to continued Japanese and South Korean talks with North Korea but has urged Japan
not to commit any of the economic aid (up to $10 billion estimated) that Koizumi promised
to North Korea in the Japan-North Korean agreement to begin talks to normalize relations
on September 17, 2002. Japanese officials have stated repeatedly that Japan will not commit
any aid until North Korea satisfies U.S. and Japanese concerns over the secret nuclear
program and other security issues. The Administration has asked for Chinese cooperation
and reportedly requested that China warn North Korea against re-opening the nuclear
facilities shut down under the Agreed Framework. The Administration has placed emphasis
on China as a source of pressure on North Korea, citing China’s stated support for a non-
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nuclear Korean peninsula. China has a mutual defense treaty with North Korea and supplies
North Korea with large quantities of oil and food.
The Administration’s response to the re-starting of the Yongbyon installations and
North Korea’s withdrawal from the NPT was to place additional weight on international
pressure on North Korea. The Administration promoted the IAEA’s decision in February
2003 to formally refer the issue to the U.N. Security Council. However, South Korea,
Russia, and China criticized the Bush Administration for not conducting a diplomatic
dialogue with North Korea, and they criticized the idea of economic sanctions against North
Korea. They stated opposition to the Security Council formally taking up the issue. This
influenced the Administration’s attempts to adjust further its position on negotiations with
the “five plus five” proposal of February 2003. Secretary Powell’s trip to East Asia at the
end of February 2003 appeared to achieve progress on gaining Japanese and South Korean
support for the “five plus five” framework. China continued to voice skepticism, arguing
that the Administration should enter direct talks with Pyongyang.
(5) Warning of the prospect of economic sanctions if North Korea does not end its
nuclear program: The Administration reportedly is drafting plans for economic sanctions,
including cutting off financial flows to North Korea from Japan and other sources and
interdicting North Korean weapons shipments to the Middle East and South Asia.
References to economic sanctions have produced an open dispute with South Korea; Roh
Moo-hyun, the new President, strongly criticized the idea of economic sanctions. China and
Russia also oppose economic sanctions.
(6) Ambivalence concerning U.S. military options if North Korea fully activates its
nuclear program: The Administration stressed in January 2003 that the United States would
not attack North Korea; this was in response to North Korea’s repeated charge that the
United States planned a pre-emptive attack and to concerns voiced by China, Russia, and
South Korea. However, in February 2003, the Administration asserted that “all options are
open,” including military options. This reportedly reflected the growing belief that North
Korea would attempt to reprocess the 8,000 spent nuclear fuel rods at Yongbyon into
weapons-grade plutonium and produce five or six atomic bombs. In late 2002, Clinton
Administration officials disclosed that in 1994, the Administration had approved a Pentagon
plan to bomb Yongbyon to prevent reprocessing of the fuel rods.
The Administration’s response to the secret nuclear program is set on the background
of a progressively hard U.S. policy toward North Korea in 2001 and 2002. As part of a
policy review toward North Korea, President Bush issued a statement on June 6, 2001,
outlining policy objectives related to implementation of the U.S.-North 1994 Agreed
Framework on North Korea’s nuclear program, North Korea’s missile program, and its
conventional forces. He stated that if North Korea took positive actions in response to U.S.
policy, the United States “will expand our efforts to help the North Korean people, ease
sanctions, and take other political steps.” President Bush’s designation of North Korea as
part of an “axis of evil” in his January 29, 2002 State of the Union address clarified the
Administration’s policy that emerged after the June 6 statement. The policy is aimed at
reducing and/or eliminating elements of North Korean military power, including nuclear
weapons and/or nuclear weapons-grade materials, weapons of mass destruction (WMDs),
and conventional artillery and rocket launchers positioned just north of the demilitarized
zone (DMZ) within range of the South Korean capital, Seoul. The Administration’s
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emphasis on WMDs mounted after the Central Intelligence Agency gained documentary
evidence in Afghanistan that al Qaeda seeks WMDs (including nuclear weapons) and plans
new attacks on the United States. This reportedly influenced the Bush Administration to
broaden the definition of the war against terrorism to include states like North Korea that
potentially could supply WMDs to al Qaeda.
The Administration’s strategy is to employ public accusations and warnings to pressure
North Korea to make policy changes regarding its military assets in line with U.S. objectives.
(For a discussion of overall Bush policy toward North Korea, see CRS Issue Brief IB98045,
Korea: U.S.-South Korean Relations–Issues for Congress.) According to Administration
officials, the policy insists that North Korea come into full compliance with its obligations
to the International Atomic Energy Agency (IAEA) regarding its nuclear program. When
President Bush waived certification in March 2002 that North Korea was in compliance with
the Agreed Framework, Administration officials asserted that this was an added warning to
North Korea to begin the process of compliance with its obligations to the IAEA.
North Korea’s Nuclear Program
Most of North Korea’s plutonium-based nuclear installations are located at Yongbyon,
60 miles of the North Korean capital of Pyongyang. The key installations are:
! An atomic reactor, with a capacity of about 5 electrical megawatts,
constructed between 1980 and 1987: it reportedly is capable of expending
enough uranium fuel to produce about 7 kilograms of plutonium annually
— enough for the manufacture of a single atomic bomb annually. North
Korea in 1989 shut down the reactor for about 70 days; U.S. intelligence
agencies believe that North Korea removed fuel rods from the reactor at that
time for reprocessing into plutonium suitable for nuclear weapons. In May
1994, North Korea shut down the reactor and removed about 8,000 fuel
rods, which could be reprocessed into enough plutonium for 4-6 nuclear
weapons. These fuel rods remain in storage.
! Two larger (estimated 50 electrical megawatts and 200 electrical
megawatts) atomic reactors under construction at Yongbyon and
Taechon since 1984: According to U.S. Ambassador Robert Gallucci,
these plants, if completed, would be capable of producing enough spent fuel
annually for 200 kilograms of plutonium, sufficient to manufacture nearly
30 atomic bombs per year.
! A plutonium reprocessing plant about 600 feet long and several stories
high: The plant would separate weapons grade Plutonium-239 from spent
nuclear fuel rods for insertion into the structure of atomic bombs or
warheads.
Satellite photographs reportedly also show that the atomic reactors have no attached
power lines, which they would have if used for electric power generation.
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Persons interviewed for this study believe that North Korea developed the two reactors
and the apparent reprocessing plant with its own resources and technology. It is believed that
Kim Chong-il, the son and successor of President Kim Il-sung who died in July 1994, directs
the program, and that the military and the Ministry of Public Security (North Korea’s version
of the KGB) implement it. North Korea reportedly has about 3,000 scientists and research
personnel devoted to the Yongbyon program. Many have studied nuclear technology (though
not necessarily nuclear weapons production) in the Soviet Union and China and reportedly
Pakistan. North Korea has uranium deposits, estimated at 26 million tons. North Korea is
believed to have one uranium producing mine.
North Korea’s secret uranium enrichment program appears to date from 1995 when
North Korea and Pakistan reportedly agreed to trade North Korean Nodong missile
technology for Pakistani uranium enrichment technology. The Clinton Administration
reportedly learned of it in 1998 or 1999, and a Department of Energy report of 1999 cited
evidence of the program. In March 2000, President Clinton notified Congress that he was
waiving certification that “North Korea is not seeking to develop or acquire the capability
to enrich uranium.” The Japanese newspaper, Sankei Shimbun, reported on June 9, 2000, the
contents of a “detailed report” from Chinese government sources on a secret North Korean
uranium enrichment facility inside North Korea’s Mount Chonma. Reportedly, according
to a CIA report to Congress, North Korea attempted in late 2001 to acquire “centrifuge-
related materials in large quantities to support a uranium enrichment program.”
International Assistance
Knowledgeable individuals believe that the Soviet Union did not assist directly in the
development of Yongbyon in the 1980s. The U.S.S.R. provided North Korea with a small
research reactor in the 1960s, which also is at Yongbyon. However, North Korean nuclear
scientists continued to receive training in the U.S.S.R. up to the demise of the Soviet Union
in December 1991. East German and Russian nuclear and missile scientists reportedly were
in North Korea throughout the 1990s. Since 1999, reports have appeared that U.S.
intelligence agencies had information that Chinese enterprises were supplying important
components and raw materials for North Korea’s missile program.
North Korea’s Delivery Systems
North Korea succeeded by 1998 in developing a “Nodong” missile with a range
estimated at up to 900 miles, capable of covering South Korea and most of Japan. North
Korea reportedly deployed nearly 100 Nodong missiles by 2003. On August 31, 1998,
North Korea test fired a three stage rocket, apparently the prototype of the Taepo Dong-1
missile; the third stage apparently was an attempt to launch a satellite. U.S. intelligence
estimates reportedly concluded that such a missile would have the range to reach Alaska,
Guam, and the Northern Marianas Commonwealth. Media reports in early 2000 cited U.S.
intelligence findings that, without further flight tests, North Korea could deploy an
intercontinental ballistic missile that would be capable of striking Alaska, Hawaii, and the
U.S. west coast.
These projections led the Clinton Administration to press North Korea for a new round
of talks over North Korea’s missile program. In talks held in 1999 and 2000, North Korea
demanded $1 billion annually in exchange for a promise not to export missiles. U.S.
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negotiators reportedly rejected North Korea’s demand for $1 billion but offered a lifting of
U.S. economic sanctions against North Korea in exchange for an agreement on missiles.
This laid the ground for the Berlin agreement of September 1999 in which North Korea
agreed to defer further missile tests in return for the lifting of major U.S. economic sanctions.
North Korea continued the moratorium but threatened to end it after revealing its secret
uranium enrichment program.
State of Nuclear Weapons Development
In August 2001, Secretary of Defense Donald Rumsfeld stated in Moscow that “North
Korea possessed enough plutonium to produce two to three, maybe even four to five nuclear
warheads.” This was largest official U.S. estimate of the possible number of North Korean
nuclear weapons. U.S. intelligence agencies had disclosed an estimate that North Korea had
extracted enough plutonium from its nuclear reactor to produce one or two nuclear weapons.
However, in December 2001, the U.S. National Intelligence Council issued a revised finding
that “North Korea has produced one, possibly two, nuclear weapons.” North Korea’s
approximately 70 day shutdown of the five megawatt reactor in 1989 gave it the opportunity
to remove nuclear fuel rods, from which plutonium is reprocessed. However, the U.S.
Central Intelligence Agency and the Defense Intelligence Agency reportedly estimated in late
1993 that North Korea extracted enough fuel rods for about 12 kilograms of plutonium —
sufficient for one or two atomic bombs. The CIA and DIA apparently based their estimate
on the 1989 shutdown of the five megawatt reactor. David Albright of the Institute for
Science and International Security produced in 1994 a detailed study of the 1989 reactor
shutdown and concluded that if North Korea removed all of the fuel rods from the reactor
during the shutdown, the rods would have contained 14 kilograms of plutonium.
South Korean and Japanese intelligence estimates reportedly are higher: 16-24
kilograms (Japan) and 7-22 kilograms (South Korea). These estimates reportedly are based
on the view that North Korea could have acquired a higher volume of plutonium from the
1989 reactor shutdown and the view of a higher possibility that North Korea removed fuel
rods during the 1990 and 1991 reactor slowdowns. Russian Defense Ministry analyses of
late 1993 reportedly came to a similar estimate of about 20 kilograms of plutonium, enough
for 2 or 3 atomic bombs.
There also is a body of analysis suggesting that North Korea could produce more
nuclear weapons from a given amount of plutonium than standard intelligence estimates have
believed. State Department and U.S. intelligence estimates of the plutonium/bomb
production ratio are close to the IAEA standard that a non-nuclear state would need about
eight kilograms of plutonium to produce a nuclear bomb. However, IAEA spokesman,
David Kyd, stated in August 1994 that Agency officials have known for some time that the
eight kilogram standard was too high. He said that the IAEA retained it because of the
wishes of member governments.
Kyd was reacting to a report of the National Resources Defense Council. Using North
Korea as a standard non-nuclear state, the report concluded that a non-nuclear state with “low
technology” could produce a one kiloton bomb (a small atomic bomb but “with the potential
to kill tens of thousands of people”) with three kilograms of plutonium. A non-nuclear state
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with “medium technology” could produce a one kiloton bomb with 1.5 kilograms of
plutonium.
Before the Natural Resources Defense Council released the report, the U.S. Department
of Energy in January 1994 lowered its mean estimate of plutonium required for a small
atomic bomb from eight to four kilograms. Secretary of Defense Perry suggested in July
1994 that, with a higher level of technology, North Korea could produce more nuclear
weapons with a given amount of plutonium: “If they had a very advanced technology, they
could make five bombs out of the amount of plutonium we estimate they have.”
Russian and U.S. intelligence agencies also reportedly have learned of significant
technological advances by North Korea towards nuclear weapons production. On March 10,
1992, the Russian newspaper Argumenty I Fakty (Arguments and Facts) published the text
of a 1990 Soviet KGB report to the Soviet Central Committee on North Korea’s nuclear
program. It was published again by Izvestiya of June 24, 1994. The KGB report asserted
that “According to available data, development of the first nuclear device has been completed
at the DPRK nuclear research center in Yongbyon.” The North Korean Government, the
report stated, had decided not to test the device in order to avoid international detection.
Additionally, there are a number of reports and evidence that point to at least a middle
range likelihood that North Korea may have smuggled plutonium from Russia. In June 1994,
the head of Russia’s Counterintelligence Service (successor to the KGB) said at a press
conference that North Korea’s attempts to smuggle “components of nuclear arms production”
from Russia caused his agency “special anxiety.” In August 1994, members of Germany’s
parliament and Chancellor Kohl’s intelligence coordinator stated that they had been briefed
that a German citizen arrested in May 1994 with a small amount of plutonium, smuggled
from Russia, had connections with North Korea. U.S. executive branch officials have
expressed concern in background briefings over the possibility that North Korea has
smuggled plutonium from Russia. One U.S. official, quoted in the Washington Times, July
5, 1994, asserted that “There is the possibility that things having gotten over the
[Russia-North Korea] border without anybody being aware of it.” The most specific claim
came in the German news magazine Stern in March 1993, which cited Russian
Counterintelligence Service reports that North Korea had smuggled 56 kilograms of
plutonium (enough for 7-9 atomic bombs) from Russia.
Diplomatic Background to the Agreed Framework and
Amending Agreements
In 1991, the Bush Administration took several actions aimed at securing from North
Korea adherence to Pyongyang’s obligations as a signatory of the Nuclear Non-Proliferation
Treaty (NPT); North Korea had signed the treaty in 1985. Bush Administration actions
included the withdraw of U.S. nuclear weapons from South Korea in late 1991. North Korea
entered into two agreements, which specified nuclear obligations. In a denuclearization
agreement signed in December 1991, North Korea and South Korea pledged not to possess
nuclear weapons, not to possess plutonium reprocessing or uranium enrichment facilities,
and to negotiate a mutual nuclear inspection system. In January 1992, North Korea signed
a safeguards agreement with the International Atomic Energy Agency (IAEA), which
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requires North Korea to report all nuclear programs to the IAEA and gives the IAEA the right
to conduct a range of inspections of North Korean nuclear installations and programs. In
1992, North Korea rebuffed South Korea regarding implementation of the denuclearization
agreement, but it did allow the IAEA to conduct six inspections during June 1992-February
1993.
In late 1992, the IAEA found evidence that North Korea had reprocessed more
plutonium than the 80 grams it had disclosed to the Agency. In February 1993, the IAEA
invoked a provision in the safeguards agreement and called for a “special inspection” of two
concealed but apparent nuclear waste sites at Yongbyon. The IAEA believed that a special
inspection would uncover information on the amount of plutonium which North Korea had
produced since 1989. North Korea rejected the IAEA request and announced on March 12,
1993, an intention to withdraw from the NPT.
The NPT withdrawal threat led to low and higher level diplomatic talks between North
Korea and the Clinton Administration. North Korea “suspended” its withdrawal from the
NPT when the Clinton Administration agreed to a high-level meeting in June 1993.
However, North Korea continued to refuse both special inspections and IAEA regular
inspections of facilities designated under the safeguards agreement. In May 1994, North
Korea refused to allow the IAEA to inspect the 8,000 fuel rods, which it had removed from
the five megawatt reactor. In June 1994, North Korea’s President Kim Il-sung reactivated
a longstanding invitation to former U.S. President Jimmy Carter to visit Pyongyang. Kim
offered Carter a freeze of North Korea’s nuclear facilities and operations. Kim took this
initiative after China reportedly informed him that it would not veto a first round of
economic sanctions, which the Clinton Administration had proposed to members of the U.N.
Security Council.
The Clinton Administration reacted to Kim’s proposal by dropping its sanctions
proposal and entering into a new round of high-level negotiations with North. This
negotiation led to the Agreed Framework of October 21, 1994. Two amending agreements
were concluded in 1995: a U.S.-North Korean statement in Kuala Lumpur, Malaysia in June
and a supply contract for the provision of nuclear reactors to North Korea, concluded in
December.
The Agreed Framework: Provisions, Implementation,
Costs, Future Issues
U.S. Objectives: Primacy to the Freeze of North Korea’s Nuclear
Program
The heart of the Agreed Framework and the amending accords is a deal under which the
United States will provide North Korea with a package of nuclear, energy, economic, and
diplomatic benefits; in return North Korea will halt the operations and infrastructure
development of its nuclear program. The Agreed Framework commits North Korea to
“freeze its graphite-moderated reactors and related facilities” with the freeze to be monitored
by the IAEA. Ambassador Robert Gallucci, who negotiated for the United States, stated that
“related facilities” include the plutonium reprocessing plant and stored fuel rods. According
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to Gallucci, the freeze includes a halt to construction of the 50 and 200 megawatt reactors
and a North Korean promise not to refuel the five megawatt reactor. The Agreed Framework
also commits North Korea to store the 8,000 fuel rods removed from the five megawatt
reactor in May 1994 “in a safe manner that does not involve reprocessing in the DPRK
[North Korea].” Clinton Administration officials reportedly said that a secret “confidential
minute” to the Agreed Framework prohibits North Korea from construction of new nuclear
facilities elsewhere in North Korea.
Gallucci and other officials emphasized that the key policy objective of the Clinton
Administration was to secure a freeze of North Korea’s nuclear program in order to prevent
North Korea from producing large quantities of nuclear weapons grade plutonium through
the operations of the 50 and 200 megawatt reactors and the plutonium reprocessing plant at
Yongbyon. Gallucci referred to the prospect of North Korea producing enough plutonium
annually for nearly 30 nuclear weapons if the 50 and 200 megawatt reactors went into
operation. The Administration’s fear was that North Korea would have the means to export
atomic bombs to other states and possess a nuclear missile capability that would threaten
Japan and U.S. territories in the Pacific Ocean.
Benefits to North Korea
Light Water Nuclear Reactors. North Korea is to receive two light water reactors
(LWRs) with a generating capacity of approximately 2,000 megawatts. The Agreed
Framework set a “target date” of 2003. The United States is obligated to organize an
international consortium arrangement for the acquisition and financing of the reactors. The
Clinton Administration and the governments of South Korea, Japan, and other countries
established in March 1995 the Korean Peninsula Energy Development Organization (KEDO)
to coordinate the provision of the LWRs. After the groundbreaking at the reactor site in
August 1997, KEDO officials changed the estimated completion date from 2003 to 2007;
other experts predict a much later date. The laying of the foundation for the LWRs occurred
in August 2002.
KEDO’s estimated cost of the reactors is currently around $5 billion. South Korea is
to supply the reactors through a South Korean company as the main contractor; and South
Korea and Japan will provide most of the financing. An agreement reached by KEDO
members on November 9, 1998, set South Korea’s contribution at $3.22 billion, Japan’s
contribution at $1 billion, and the European Union’s contribution at $76 million.

KEDO rejected North Korea’s demand that KEDO finance modernization of North
Korea’s electric power grid. The cost of this has been estimated at $750 million. North
Korea reissued the demand in an amended form in U.S.-North Korean talks in March 2000,
calling for U.S. “compensation” for electricity shortages because the light water nuclear
reactors will not be completed by 2003. It since has periodically raised the demand for
electricity, as its domestic output of electricity declined substantially after 1995.
Oil at No Cost. Prior to the construction of light water reactors, the Agreed
Framework commits the United States to facilitate the provision to North Korea of
“alternative energy” to compensate for the freeze of nuclear facilities. The alternative energy
is to be “heavy oil”. In January 1995, the Clinton Administration arranged for the shipment
of 50,000 metric tons of U.S. heavy oil to North Korea. This was followed by a shipment
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of 100,000 metric tons of oil in October 1995. Starting in October 1995, the United States
is to facilitate shipments of 500,000 metric tons of heavy oil to North Korea annually until
the first of the two light water reactors becomes operational. The oil shipments continued
until KEDO’s decision in November 2002 to cancel future shipments because of North
Korea’s secret uranium enrichment program.
Diplomatic Representation. The United States and North Korea announced in the
Agreed Framework an intention to open liaison offices in each other’s capital and establish
full diplomatic relations if the two governments make progress “on issues of concern to each
side.” By April 1995, most technical arrangements for liaison offices were completed.
However, North Korea displayed reluctance to finalize arrangements, and talks over liaison
offices waned. Ambassador Gallucci asserted that a full normalization of diplomatic
relations would depend on a successful resolution of non-nuclear military issues, especially
the heavy deployment of North Korean conventional military forces along the demilitarized
zone separating North and South Korea and North Korea’s program to develop and sell to
other governments longer range missiles. In October 1999, William Perry, the
Administration’s Special Adviser on North Korea, cited normalization of diplomatic
relations as one of the benefits which the United States could offer North Korea for new
agreements on nuclear and missile issues.
Lifting the U.S. Economic Embargo. The Agreed Framework specifies that within
three months from October 21, 1994, the two sides will reduce barriers to trade and
investment, including restrictions on telecommunications services and financial transactions.
This required the Clinton Administration to relax the U.S. economic embargo on North
Korea, which the Truman Administration and Congress put in place during the Korean War.
On January 20, 1995, the Administration announced initial measures, including permission
for telecommunications links with North Korea, permission for U.S. citizens to use credit
cards in North Korea, permission for American media organizations to open offices in North
Korea, permission for North Korea to use U.S. banks in financial transactions with third
countries, and permission for U.S. steel companies to import magnesite from North Korea.
North Korea pressed the Clinton Administration to end all economic sanctions. In U.S.-
North Korean talks in September 1999, the United States agreed to end a broader range of
economic sanctions in exchange for a North Korean moratorium on future missile testing.
President Clinton ordered the end of most economic sanctions in June 2000.
North Korean Obligations Beyond the Freeze of the Nuclear
Program
North Korea’s primary obligation is the freeze of its nuclear program. However, as the
time comes for delivery to North Korea of plant and equipment for the light water reactors,
the Agreed Framework alludes to certain other obligations for Pyongyang. Ambassador
Gallucci and other Clinton Administration officials were more specific in describing these.
They have disclosed the existence of a secret minute that the Administration and North
Korea concluded in conjunction with completion of the Agreed Framework. North Korea,
however, has not acknowledged such a secret minute.
Inspections and Broader Nuclear Obligations. The Agreed Framework
contains a clause which the Administration claims constitutes a North Korean obligation to
allow the IAEA to conduct the special inspection of the two suspected nuclear waste sites at
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Yongbyon in conjunction with the delivery of equipment for the light water reactors. The
Agreed Framework states: “When a significant portion of the LWR [light water reactor]
project is completed, but before delivery of key nuclear components, the DPRK will come
into full compliance with its safeguards agreement with the IAEA, including taking all steps
that may be deemed necessary by the IAEA, following consultations with the Agency, with
regard to verifying the accuracy and completeness of the DPRK’s initial report on all nuclear
material in the DPRK.” Ambassador Gallucci contended that this binds North Korea to
accept a special inspection before the key nuclear components of the first light water reactor
are delivered to North Korea, if the IAEA still wishes to conduct a special inspection.
However, North Korean descriptions of its obligations omit reference to special inspections.
North Korea also stated in the Agreed Framework that “The DPRK will remain a party
to the Treaty on the Non-Proliferation of Nuclear Weapons (NPT) and will allow
implementation of its [1992] safeguards agreement under the Treaty.” Gallucci stated in
congressional testimony that the Agreed Framework did not restrict the right of the IAEA to
invoke special inspections if it discovered any new North Korean nuclear activities. Gallucci
said that the Agreed Framework only restricted the IAEA with respect to the two suspected
nuclear waste sites and the nuclear installations and the stored fuel rods at Yongbyon and
Taechon. He stressed that any North Korean nuclear program, other than the specific
facilities and activities covered in the Agreed Framework, would fall immediately under the
IAEA-North Korea safeguards agreement and that North Korea must place any such program
under IAEA safeguards. Failure to do so, he said, would constitute a violation of the Agreed
Framework. Thus, North Korea’s secret uranium enrichment program violates this clause
of the Agreed Framework.
In the Agreed Framework, North Korea pledged to “consistently take steps to implement
the [1991] North-South Joint Declaration on the Denuclearization of the Korean Peninsula.”
North Korea thus extended its obligations to South Korea in the North-South
denuclearization agreement to the United States. This clause of the Agreed Framework also
is relevant to North Korea’s secret uranium enrichment program, since the North-South
denuclearization agreement specifically prohibits uranium enrichment.
Disposition of Fuel Rods from the Five Megawatt Reactor. Following Kim
Il-sung’s offer of a nuclear freeze to former President Carter, Administration officials
stressed the importance of securing North Korean agreement to the removal to a third country
of the 8,000 fuel rods which North Korea removed from the five megawatt reactor in May
1994. However, the Administration abandoned the objective of securing an immediate
removal of the rods after the negotiations started in September 1994. It also gave up support
for the IAEA’s attempts to inspect the fuel rods in order to gain information on the amount
of weapons grade plutonium that North Korea secured from the five megawatt reactor prior
to 1994. The Agreed Framework provided for the storage of the rods in North Korea and a
North Korean promise not to reprocess plutonium from the rods. It also provides for
subsequent talks on the “ultimate disposition” of the rods.
Dismantlement of Nuclear Installations. The Agreed Framework states that
“Dismantlement of the DPRK’s graphite-moderated reactors and related facilities will be
completed when the LWR project is completed.” A State Department interpretation holds
that dismantlement will begin when the first light water reactor is installed and completed
when the second reactor is fully installed. South Korean government experts reportedly
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estimate that dismantlement of the 50 and 200 megawatt reactors will cost about $500
million but that dismantlement of the radioactive five megawatt reactor and the plutonium
reprocessing plant will require a much higher cost.
Role of Congress
Congress has voiced much skepticism regarding the Agreed Framework, but its actions
have given the Administration flexibility in implementing U.S. obligations. Congress has
played three roles. First, there have been numerous oversight hearings. Second, Congress
included in the Omnibus Appropriations bill for FY1999 (H.R. 4328) the requirement that
the President certify progress in negotiations with North Korea over the nuclear, missile, and
other issues before the Administration could allocate money to KEDO operations. President
Clinton issued two such certifications in 1999 and 2000. President Bush notified Congress
in March 2002 that he could not certify that North Korea was abiding by the Agreed
Framework. H.R. 4328 also called on the President to name “a very senior presidential
envoy” as “North Korea Policy Coordinator” to conduct a review of U.S. policy and direct
negotiations with North Korea. This resulted in President Clinton’s appointment of William
Perry as a special adviser and the issuance of the Perry report in October 1999. The Bush
Administration, however, terminated the senior envoy position. Third, Congress has
considered and approved Administration requests for funds to finance implementation.
Congress approved for fiscal years 1996, 1997, 1998, and 1999 Administration requests for
$22 million, $25 million, $30 million and $35 million respectively for U.S. support of
KEDO and $20 million for the encasing of 8,000 nuclear fuel rods put in storage under the
Agreed Framework. For FY2000, the Administration raised its request to $55 million.
Congress appropriated only $35 million, but President Clinton secured an additional $18
million, using discretionary clauses in foreign operations legislation. For FY2001, Congress
appropriated the entire $55 million requested by the Clinton Administration. For FY2002,
Congress approved the Bush Administration’s request for $95 million.
On October 20, 1994, President Clinton sent a letter to North Korean leader, Kim
Jong-il, stating that he “will use the full powers of my office” to carry out U.S. obligations
related to light water reactors and alternative energy (oil). President Clinton added that if
contemplated arrangements for light water reactors and alternative energy were not
completed, he would use the powers of his office to provide light water reactors and
alternative energy from the United States “subject to the approval of the U.S. Congress.”
In early 2003, Congress will take up for foreign operations bill for fiscal year 2003,
which contains money for heavy oil and shipments and KEDO’s expenses. In considering
this, Congress will face the new situation brought about by the revelation of North Korea’s
secret uranium enrichment program, KEDO’s suspension of heavy oil shipments, and North
Korea’s announced re-starting of the Yongbyon nuclear facilities and expulsion of IAEA
monitors.
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