Attached for your information are the texts of: 1) The U.S.-DPRK Joint Statement issued in Kuala Lumpur; 2) A resolution and press statement issued in Seoul by the KEDO Executive Board; 3) An ROK Foreign Ministry press release on the agreement; and 4) U.S. Negotiator Hubbard's comments on the Kuala Lumpur Statement, and an associated package of questions and answers. JOINT U.S.-DPRK PRESS STATEMENT KUALA LUMPUR, JUNE 13, 1995 The delegations of the United States of America (U.S.) and the Democratic People's Republic of Korea (DPRK) held talks in Kuala Lumpur from May 19 to June 12, 1995, with respect to implementation of the DPRK-U.S. Agreed Framework of October 21, 1994. Both sides reaffirmed their political commitments to implement the U.S.-DPRK Agreed Framework, and with particular regard to facilitating the light water reactor (LWR) project as called for in the Agreed Framework, decided as follows: - I - The U.S. reaffirms that the letter of assurance from the U.S. President dated October 20, 1994 concerning the provision of the LWR project and interim energy alternatives continues in effect. The Korean Peninsula Energy Development Organization (KEDO), under U.S. leadership, will finance and supply the LWR project in the DPRK as called for in the Agreed Framework. As specified in the Agreed Framework, the U.S. will serve as the principal point of contact with the DPRK for the LWR project. In this regard, U.S. citizens will lead delegations and teams of KEDO as required to fulfill this role. - II - The LWR project will consist of two pressurized light water reactors with two coolant loops and a generating capacity of approximately 1,000MW(E) each. The reactor model, selected by KEDO, will be the advanced version of U.S.-origin design and technology currently under production. - III - The Commission for External Economic Relations, representing the DPRK Government, and KEDO will conclude a supply agreement at the earliest possible date for the provision of the LWR project on a turnkey basis. On the basis of this statement, the DPRK will meet with KEDO as soon as possible to negotiate the outstanding issues of the LWR supply agreement. KEDO will conduct a site survey to identify the requirements for construction and operation of the LWR project. The costs of this site survey and site preparation will be included in the scope of supply for the project. KEDO will select a prime contractor to carry out the project. A U.S. firm will serve as program coordinator to assist KEDO in supervising overall implementation of the LWR project; KEDO will select the program coordinator. A DPRK firm will enter into implementing arrangements as necessary to facilitate the LWR project. - IV - In addition to the LWR project, the two sides decided to take the following steps towards implementation of the Agreed Framework. Experts from the two sides will meet in the DPRK as soon as possible in June to agree on a schedule and cooperative measures for phased delivery of heavy fuel oil in accordance with the Agreed Framework. KEDO will begin immediately to make arrangements for an initial delivery of heavy fuel oil, subject to conclusion of the above agreement. The DPRK-U.S. Record of Meeting of January 20, 1995, on safe storage of spent fuel will be expeditiously implemented. In this regard, a U.S. team of experts will visit the DPRK as soon as possible in June to begin implementation. THE EXECUTIVE BOARD OF THE KOREAN PENINSULA ENERGY DEVELOPMENT ORGANIZATION JUNE 13, 1995 RESOLUTION NO. 1995-12 The Executive Board of the Korean Peninsula Energy Development Organization, Having held its third meeting on June 13, 1995 in Seoul, Republic of Korea, attended by one representative each from the Republic of Korea, Japan, and the United States of America, Noting that the U.S.-DPRK joint press statement of June 13, 1995 confirms that the Korean Peninsula Energy Development Organization (KEDO) will select the reactor model for the Light- Water Reactor (LWR) project to be provided to the DPRK, Noting further that the joint press statement confirms that KEDO will select a prime contractor to carry out the LWR project, Noting further that the joint press statement calls for the DPRK to meet with KEDO as soon as possible to negotiate the outstanding issues of the LWR supply agreement, Understanding that the phrase "site preparations" used in the joint press statement consists of clearing and levelling the site and providing electricity and water services necessary for construction at the site, Recalling that Article II of the Agreement on the Establishment of the Korean Peninsula Economic Development Organization fone at New York on March 9, 1995 (hereinafter referred to as "the Agreement") provides that one of the purposes of the organization is to provide for the financing and supply to the DPRK of an LWR project consisting of two reactors of the Korean standard nuclear plant model with a capacity of approximately 1,000 MW(e) each, Desiring to facilitate the prompt and successful conclusion of the negotiations on the supply agreement between KEDO and the DPRK, 1. Supports the understandings between the U.S. and the DPRK reflected in the U.S.-DPRK joint press statement of June 13, 1995. 2. Determines that, as stipulated in Article II (a) of the Agreement, the LWR project in North Korea will consist of two reactors of the Korean standard nuclear plant model with a capacity of approximately 1,000 MW(e) each, and that Ulchin 3 and 4 will be the reference plants specified in the prime contract, upon the conclusion of mutually acceptable terms and conditions for the prime contract. 3. Determines that KEDO will select a qualified firm from the Republic of Korea as a prime contractor, which will carry out the LWR project, including design, manufacture, construction, and management, upon the conclusion of mutually acceptable terms and conditions for the prime contract. 4. Directs the Executive Director and, as appropriate, authorizes and requests the Chair of the Executive Board to begin discussions with Korea Electric Power Corporation (KEPCO) in connection with the prime contract. 5. Directs the Executive Director and, as appropriate, authorized and requests the Chair of the Executive Board to make the necessary arrangements for the next shipment of heavy fuel oil to the DPRK under the terms of the U.S.-DPRK Agreed Framework of October 20, 1994, subject to the conclusion of an agreement between the U.S. and the DPRK on schedule and cooperative measures (including phased delivery and monitoring measures) and concurrent with the initiation of steps to ensure the safe storage of the spent nuclear fuel in the Yongbyon nuclear complex. 6. Directs the Executive Director and, as appropriate, authorizes and requests the Chair of the Executive Board, in consultation with the representatives of the Executive Board, to make all necessary arrangements for a site survey and negotiations with the DPRK and the LWR supply agreement, including determining the composition of KEDO delegations and teams, which will include nationals of each member country of the Executive Board. JOINT PRESS STATEMENT EXECUTIVE BOARD OF KEDO June 13, 1995 SEOUL The representatives from the Republic of Korea, the United States and Japan to the Executive Board of the Korean Peninsula Energy Development Organization (KEDO) held the third meeting of the Executive Board on June 13, 1995 in Seoul and discussed issues related to the LWR project. Representatives to the Executive Board, Ambassador Choi Dong Jin from the R.O.K., Ambassador Robert L. Gallucci from the U.S., and Ambassador Tetsuya Endo from Japan attended the meeting. The Executive Board noted that the talks that took place in Kuala Lumpur between May 19 and June 13, 1995, involved close consultation among the ROK, the U.S. and Japan. These talks confirmed the basic principle for the implementation of the LWR project, i.e. the provision of Korean standard nuclear plant model and the ROK's central role in the project. The Executive Board noted that smooth progress of the LWR project is important to the implementation of the Agreed Framework, and emphasized that direct contacts between KEDO and North Korea should take place as soon as possible to discuss the outstanding issues of the LWR supply agreement and other related steps. In particular with regard to the meeting between the U.S. and North Korea in Kuala Lumpur, the Executive Board reaffirmed that the reactors to be provided to North Korea will be Korean standard model reactors and that the reference plants will be Ulchin 3 and 4. The Executive Board directed KEDO to begin discussion with KEPCO in connection with the prime contract. The Executive Board directed KEDO to make necessary arrangements for a site survey in North Korea and for direct talks between KEDO and North Korea on the LWR supply agreement. KEDO will also determine the composition of KEDO delegations and teams which will include nationals of each member country of the Executive Board. The Executive Board also decided to take necessary steps for the delivery of heavy fuel oil to North Korea. The delivery of heavy fuel oil will be subject to the conclusion of an agreement between the U.S. and North Korea on a schedule and cooperative measures and will be concurrent with the initiation of steps to ensure safe storage of the spent nuclear fuel in North Korea. The Executive Board decided to convene the General Conference of KEDO in New York at an early date. PRESS RELEASE KOREAN OVERSEAS INFORMATION SERVICE Foreign News Division Seoul Korea Phone: 730-4728, 2396 FAX: 933-2237 Ref. No. 95-61 June 13, 1995 KEDO Goes into Action to Provide Light-Water Reactors to the North The following press release was issued by the Ministry of Foreign Affairs this afternoon. In Kuala Lumpur, the United States and North Korea have just issued a joint press release announcing that the two sides have agreed on the major principles for providing light-water reactors (LWR) to the North. The Republic of Korea Government considers the Kuala Lumpur agreement as having laid the basis for implementing the LWR project and as being a meaningful forward step. We, therefore, support the accord. The most recent U.S.-North Korean agreement has upheld our two basic principles: that ROK-type LWRs must be provided to Pyongyang and that the ROK must play the central role in the project. Furthermore, at its meeting this afternoon, the Executive Board of the Korean Peninsula Energy Development Organization (KEDO) passed a resolution stipulating that Ulchin Units 3 and 4, which are of the Korean Standard Nuclear Power Plant (KSNP) model, will be used as the reference plant for the LWR project and that the Korea Electric Power Corporation (KEPCO) will be named as the prime contractor to take charge of all aspects of the project, from the design to the manufacture, installation and project management. KEDO has thus taken the first major step toward project implementation. The Kuala Lumpur agreement has concluded the U.S.-North Korean talks on the LWR project. KEDO is to take over future negotiations with Pyongyang pertaining to the project. As a member of KEDO, the ROK is planning to conduct surveys of prospective LWR sites in the North and join in signing an agreement with Pyongyang on the provision of the LWRs. To that end, the ROK intends to directly participate in LWR negotiations with North Korea with a view to playing the central role in the project. Opening Statement of Thomas C. Hubbard, Deputy Assistant Secretary of State for East Asian/Pacific Kuala Lumpur, Malaysia, June 13, 1995 Since May 19, delegations of the United States and the Democratic Peoples' Republic of Korea have met here in Kuala Lumpur to discuss implementation of the US-DPRK Agreed Framework, and, in particular, to resolve a number of important issues related to the light water reactor (LWR) project. I am pleased that these meetings have resulted in agreement on the key issues, as reflected in the joint press statement that our two delegations have just issued. During our talks, the U.S. and DPRK agreed that the Korean Peninsula Energy Development Organization (KEDO) will select the reactor model. As specified in the agreement establishing KEDO, the reactors will be of the type currently under production at Ulchin, South Korea. We also agreed that KEDO will select a prime contractor to carry out the LWR project. The prime contractor, which will be a South Korean firm, will be responsible for all aspects of the LWR project, including design, manufacture, construction and management. Finally, the DPRK has agreed it will now negotiate directly with KEDO on outstanding issues related to the DPRK-KEDO agreement on supply of the LWR project. Besides the LWR project, we and the DPRK delegation led by Vice Foreign Minister Kim Gye Gwan also discussed a number of other issues directly related to implementation of the Agreed Framework: -----The two sides reaffirmed their commitment to implementing all provisions of the Agreed Framework. In this context, the DPRK will maintain the freeze on its existing nuclear program. -----The DPRK agreed to receive this month a team of U.S. technical experts to begin implementation of our bilateral understanding on steps related to safe storage of the DPRK's spent fuel rods. This is an important step forward. -----We also agreed to begin discussions as quickly as possible on cooperative steps to monitor the phased delivery of heavy fuel oil KEDO is committed to provide the DPRK. We anticipate reaching rapid agreement on these monitoring steps and a schedule for delivery of 100,000 tons of oil by October 21, as called for in the Agreed Framework. During the meetings, we repeatedly stressed to the North Koreans the need to engage in dialogue with the South, as called for in the Agreed Framework. North-South dialogue is essential both for the full implementation of the Agreed Framework and for the creation of a stable peace on the Korean Peninsula. Our negotiations here have come to a successful conclusion. In large part, this is due to the strong support that my delegation has received from our allies, The Republic of Korea and Japan. Consultations and coordination among our governments could not have been closer. We also offer our thanks to the Government of Malaysia for allowing us to hold our talks in this hospitable and vibrant city. Thank you. I will now take your questions: - Q & A - PREAMBLE Q: Did the DPRK explicitly commit to maintain the freeze on its current nuclear program? A:-- IN THE JOINT STATEMENT THE DPRK REAFFIRMED ITS COMMITMENT TO IMPLEMENT THE FREEZE AND ALL OTHER ASPECTS OF THE AGREED FRAMEWORK. -- MOREOVER, WE MADE CLEAR TO THE DPRK THROUGHOUT THESE TALKS THAT OUR WILLINGNESS TO CONTINUE IMPLEMENTING THE AGREED FRAMEWORK IS CONTINGENT ON THE MAINTENANCE OF THE FREEZE OF THE DPRK'S EXISTING NUCLEAR PROGRAM. -- THE DPRK UNDERSTANDS THIS, AND KNOWS THAT THE FREEZE IS A KEY ELEMENT OF THE AGREED FRAMEWORK. Q: What about reports that the DPRK threatened to reprocess some of its spent fuel? A:-- AN IMPORTANT U.S. OBJECTIVE IN THESE TALKS WAS TO SECURE DPRK AGREEMENT TO IMPLEMENT QUICKLY THE U.S.-DPRK UNDERSTANDING ON SAFE STORAGE OF THE FUEL. -- IN THE JOINT PRESS STATEMENT, WE AND THE DPRK REAFFIRMED OUR COMMITMENT TO IMPLEMENTING THIS UNDERSTANDING. A U.S. SPENT FUEL TEAM WILL TRAVEL TO THE DPRK THIS MONTH FOR THIS PURPOSE. Q: What was said about North-South dialogue during these talks? A:-- NORTH-SOUTH DIALOGUE IS ESSENTIAL FOR THE FULL IMPLEMENTATION OF THE LWR AGREED FRAMEWORK AND FOR THE CREATION OF A STABLE PEACE ON THE KOREAN PENINSULA. -- IN THE AGREED FRAMEWORK, THE DPRK COMMITTED TO TAKE STEPS TO IMPLEMENT THE NORTH-SOUTH JOINT DECLARATION ON DENUCLEARIZATION OF THE KOREAN PENINSULA AND TO ENGAGE IN DIALOGUE WITH THE ROK. -- AS WE HAVE AT EVERY CONTACT SINCE THE FRAMEWORK WAS SIGNED, DURING OUR TALKS HERE IN KUALA LUMPUR, MY DELEGATION AND I STRESSED TO THE NORTH KOREANS THE NEED TO RESUME CONSTRUCTIVE DIALOGUE WITH SOUTH KOREA. SECTION I Q: North Korean media state that the U.S. will be solely responsible for provision of the LWR project. What does this mean? A:-- IN THE AGREED FRAMEWORK, THE U.S. PLEDGED TO ORGANIZE AN INTERNATIONAL CONSORTIUM TO FINANCE AND SUPPLY THE LWR PROJECT. THE U.S. SAID IT WOULD PLAY A LEADING ROLE IN THIS CONSORTIUM. -- THE PRESS STATEMENT JUST ISSUED SPELLS OUT IN SOME MORE DETAIL HOW THE U.S. WILL PLAY ITS LEADING ROLE IN KEDO, THE INTERNATIONAL ORGANIZATION FORMED TO PROVIDE THE DPRK WITH THE LWR PROJECT. SECTION II Q: Does North Korea accept the Korean Standard Reactor? A:-- THE JOINT PRESS STATEMENT RECORDS NORTH KOREA'S AGREEMENT THAT KEDO WILL SELECT THE REACTOR MODEL FOR THE LWR PROJECT. THAT IS A DEFINITIVE STATEMENT, GIVEN THE FACT THAT THIS WILL BE A TURNKEY PROJECT. THE KEDO CHARTER SPECIFIES THAT THE MODEL WILL BE THE KOREAN STANDARD REACTOR. Q: Did North Korea accept that Ulchin 3 and 4 will be the reference plant for the LWR project? A:-- REFERENCE PLANT IS A TECHNICAL ISSUE. I UNDERSTAND THE KEDO BOARD WILL PROBABLY DISCUSS THIS TODAY. -- THE IMPORTANT POINT IS THAT KEDO WILL SELECT THE REACTOR MODEL. AS I MENTIONED EARLIER, THE KEDO CHARTER SPECIFIES THAT THE MODEL WILL BE THE KOREAN STANDARD REACTOR. Q: Did North Korea repeat its demands that the U.S. design the reactors? A:-- WE MADE CLEAR OUR EXPECTATION THAT KEDO WILL HIRE A SOUTH KOREAN FIRM AS PRIME CONTRACTOR, AND THAT THE PRIME CONTRACTOR WILL BE RESPONSIBLE FOR ALL ASPECTS OF THE PROJECT, INCLUDING DESIGN. -- AS NOTED IN THE JOINT STATEMENT, THE REACTORS THAT WILL SERVE AS THE BASIS FOR THE PROJECT ARE BASED ON AN ORIGINAL U.S. DESIGN. THEY HAVE BEEN MODIFIED AND IMPORTED BY SOUTH KOREAN FIRMS WITH ASSISTANCE FROM AMERICAN COMPANIES. -- IN ACCORDANCE WITH THE STANDARD PRACTICE OF COMMERCIAL COOPERATION BETWEEN U.S. AND ROK FIRMS IN OTHER LWR PROJECTS IN KOREA, WE EXPECT U.S. FIRMS TO PARTICIPATE IN VARIOUS ASPECTS OF THE PROJECT AS SUBCONTRACTORS. SECTION III Q: What is the importance of the site survey? Who will carry it out? A:-- THE SITE SURVEY IS THE NECESSARY FIRST STEP TOWARDS ACTUAL CONSTRUCTION OF THE LWR PROJECT. THE U.S. AND DPRK AGREED THAT IT IS IN THE INTEREST OF BOTH SIDES FOR THE SITE SURVEY TO BEGIN AS SOON AS POSSIBLE. -- ON THIS BASIS, KEDO WILL SELECT A TEAM TO BEGIN THE SITE SURVEY AS SOON AS PRACTICALLY POSSIBLE. THE TEAM WILL BE LED BY AN AMERICAN CITIZEN, AND WILL INCLUDE MEMBERS FROM THE THREE ORIGINAL MEMBERS OF KEDO: THE U.S., THE ROK AND JAPAN. Q: Why did the US agree to include the cost of the site survey and site preparation in the scope of supply for the LWR project? Isn't scope of supply a matter for KEDO? A:-- IT HAS ALWAYS BEEN KEDO'S POSITION THAT THE LWR PROJECT WILL INCLUDE THE SUPPLY OF THE GOODS AND SERVICES--WHAT IS CALLED THE "SCOPE OF SUPPLY:--NORMAL TO SUCH PROJECTS. -- AS I SAID IN MY STATEMENT, WE HAVE CONFIRMED HERE IN KUALA LUMPUR THAT KEDO WILL BEAR THE COSTS FOR THE INITIAL WORK NECESSARY TO PREPARE THE REACTOR SITE FOR CONSTRUCTION BECAUSE IT IS NORMALLY AN INTEGRAL PART OF SUCH PROJECTS. OBVIOUSLY THE PROJECT CAN'T BEGIN WITHOUT SITE PREPARATION. Q: I understand that site preparation is not a normal part of the scope of supply for the construction of LWR in South Korea. Why is it being included in the scope of supply for the LWR project in North Korea? A:-- OBJECTIVE CONDITIONS IN NORTH AND SOUTH KOREA CAN HARDLY BE DESCRIBED AS COMPARABLE. AS I UNDERSTAND IT, SITE PREPARATION IS OFTEN INCLUDED IN LARGE POWER PROJECTS IN DEVELOPING COUNTRIES. Q: There have been stories reporting that the DPRK has requested $1 billion in additional scope of supply. Is this true? A:-- THE PRESS STATEMENT ADDRESSES ONLY THE SITE SURVEY AND SITE PREPARATIONS--A VERY SMALL PART OF THE WORK NORMALLY INCLUDED IN PROJECTS OF THIS KIND. -- ANY REMAINING ISSUES RELATED TO THE LWR SUPPLY AGREEMENT WILL BE ADDRESSED IN TALKS BETWEEN THE DPRK AND KEDO. AS I JUST SAID, KEDO'S POSITION IS THAT THE SCOPE OF SUPPLY FOR THE LWR PROJECT WILL BE THAT NORMAL TO SUCH PROJECTS. Q: Does the DPRK accept that the prime contractor will be a South Korean firm? A:-- AS WAS THE CASE WITH THE REACTOR MODEL, THE DPRK AGREED IN THE JOINT STATEMENT THAT KEDO WILL SELECT THE PRIME CONTRACTOR. KEDO WILL SELECT A SOUTH KOREAN FIRM. Q: What is the role of the US program coordinator? Will it have the power to interfere with the work of the prime contractor? A:-- THE PROGRAM COORDINATOR'S PRIMARY ROLE WILL BE TO ASSIST THE KEDO EXECUTIVE DIRECTOR IN ASSURING THAT THE PROGRESS ON THE PROJECT IS IN ACCORDANCE WITH KEDO'S CONTRACT WITH THE PRIME CONTRACTOR AND WITH THE KEDO-DPRK SUPPLY AGREEMENT. Q: When will KEDO and the DPRK begin negotiations on the supply agreement? What specifically will they discuss? Where will they meet? a:-- NO DATE OR VENUE HAS BEEN SET FOR THE START OF KEDO-DPRK NEGOTIATIONS ON THE SUPPLY AGREEMENT. WE HOPE THEY WILL BEGIN IN THE NEAR FUTURE. -- THE KEDO DPRK TALKS WILL COVER THE RANGE OF OUTSTANDING ISSUES RELATED TO THE CONCLUSION OF THE SUPPLY AGREEMENT. -- DURING U.S.-DPRK EXPERTS TALKS IN BERLIN EARLIER THIS YEAR, THE TWO SIDES IDENTIFIED MAJOR ISSUES WHICH MUST BE AGREED UPON FOR THE CONCLUSION OF THE SUPPLY AGREEMENT. WE HAVE RESOLVED TWO OF THESE ISSUES--REACTOR TYPE AND COMMERCIAL ARRANGEMENTS--HERE IN KUALA LUMPUR. SECTION IV Q: When will KEDO send the next shipment of heavy fuel oil to North Korea? How much will it send? A:-- THESE ARE MATTERS FOR EXPERTS TO DECIDE. WE INTEND TO SEND A TEAM OF EXPERTS TO NORTH KOREA IN THE VERY NEAR FUTURE TO DISCUSS THESE ISSUES. Q: A few weeks ago, Secretary Christopher was quoted as saying that no shipments of oil would be made until the North accounted for diversions from the shipment made by the U.S. is January. Has North Korea agreed to do so? A:-- THE U.S. HAS CONCERNS REGARDING THE POSSIBLE DIVERSION OF A SMALL QUANTITY OF OIL FROM THE JANUARY SHIPMENT FOR INDUSTRIAL-- NOT MILITARY--PURPOSES. -- WE HAVE MADE CLEAR TO THE NORTH KOREANS, INCLUDING HERE IN KUALA LUMPUR, THAT WE WILL NOT BE ABLE TO DELIVER ANY MORE OIL UNTIL A SYSTEM OF MONITORING IS IN PLACE TO ENSURE AGAINST DIVERSIONS IN THE FUTURE. [Question on spent fuel is addressed in the Q & A on the preamble (page 1).]