Presidential Documents

Federal Register / Vol. 61, No. 101 / Thursday, May 23, 1996 / Presidential Documents 26021

Presidential Determination No. 96–21 of April 4, 1996

Determination Under the Heading ‘‘International Organizations and Programs’’ in Title IV of the Foreign Operations

Appropriations Act for FY 1996: U.S. Contribution to the Korean Peninsula Energy Development Organization (KEDO)

Memorandum for the Secretary of State

Pursuant to the requirements set forth under the heading ‘‘International

Organizations and Programs’’ in Title IV of the Foreign Operations Appropriations Act, 1996 (Public Law 104–107), I determine and certify that:

(a) in accordance with Section 1 of the Agreed Framework, KEDO has

designated a Republic of Korea company, corporation or entity for the purpose of negotiating a prime contract to carry out construction of the light

water reactors provided for in the Agreed Framework;

(b) the Democratic People’s Republic of Korea (DPRK) is maintaining

the freeze on its nuclear facilities as required in the Agreed Framework;

and

(c) the United States is taking steps to assure that progress is made

on (1) the North-South dialogue, including efforts to reduce barriers to

trade and investment, such as removing restrictions on travel, telecommunications services and financial transactions; and (2) implementation of the

January 1, 1992, Joint Declaration on the Denuclearization of the Korean

Peninsula.

You are authorized and directed to report these determinations and certifications to the Congress and to publish them in the 

œ–

Federal Register.

THE WHITE HOUSE,

Washington, April 4, 1996.
26022 Federal Register / Vol. 61, No. 101 / Thursday, May 23, 1996 / Presidential Documents

MEMORANDUM OF JUSTIFICATION FOR DETERMINATIONS AND

CERTIFICATIONS UNDER THE HEADING ‘‘INTERNATIONAL ORGANIZATIONS AND PROGRAMS’’ IN TITLE IV OF THE FOREIGN OPERATIONS APPROPRIATIONS ACT, 1996 IN CONNECTION WITH THE

U.S. CONTRIBUTION TO THE KOREAN PENINSULA ENERGY DEVELOPMENT ORGANIZATION (KEDO)

Pursuant to the requirements set forth under the heading ‘‘International

Organizations and Programs’’ in Title IV of the Foreign Operations Appropriations Act, 1996 (P.L. 104–107), I have determined that:

(a) in accordance with Section 1 of the Agreed Framework, KEDO has

designated a Republic of Korea company, corporation or entity for the purpose of negotiating a prime contract to carry out construction of the light

water reactors provided for in the Agreed Framework; and

(b) the Democratic People’s Republic of Korea (DPRK) is maintaining

the freeze on its nuclear facilities as required in the Agreed Framework;

and

(c) the United States is taking steps to assure that progress is made

on (1) the North South dialogue, including efforts to reduce barriers to

trade and investment, such as removing restrictions on travel, telecommunications services and financial transactions; and (2) implementation of the

January 1, 1992, Joint Declaration on the Denuclearization of the Korean

Peninsula.

The justification for these determinations is set forth below.

(a)—Designation of ROK Company

In section I of the Agreed Framework between the United States of America

and the Democratic People’s Republic of Korea (DPRK), signed in Geneva

on October 21, 1994, the two parties stated that they would cooperate

in replacing the DPRK’s graphite-moderated reactors and related facilities

with light-water reactor (LWR) power plants. The U.S. further stated that

it would undertake to make arrangements for the provision of the LWR

project to the DPRK, including organizing under its leadership an international consortium to finance and supply the project. This organization,

the Korean Peninsula Energy Development Organization (KEDO), was created

on March 9, 1995, by agreement of the U.S., Japan, and the ROK. These

parties have agreed that the ROK will assume the central role in financing

and building the LWR project.

On June 13, 1995, in Kuala Lumpur, the United States and the DPRK

issued a joint statement providing that KEDO will select both the LWR

reactor model and the prime contractor to carry out the project. (These

points were confirmed in the LWR supply agreement between KEDO and

the DPRK, signed December 15, 1995 in New York City.) On the same

date as the Kuala Lumpur statement (June 13, 1995), the KEDO Executive

Board decided by Board resolution that an ROK reactor model (Ulchin

3⁄4) would be built in the DPRK by an ROK firm. The Executive Board

resolution designated the Korean Electric Power Corporation (KEPCO) as

the firm with which KEDO would begin negotiating a prime contract for

the light-water reactor project. These negotiations are under way.

(b)—DPRK Maintenance of the Freeze

Section I(3) of the U.S.-DPRK Agreed Framework provides for the immediate freeze and eventual dismantlement of all graphite-moderated reactors

and related facilities in the DPRK. Within this context, the DPRK agreed

to implement the freeze on its nuclear facilities within one month after

the signing of the Agreed Framework and to allow the International Atomic

Energy Agency (IAEA) to monitor the freeze on its facilities, with the full

cooperation of the DPRK. In addition, the U.S. and DPRK agreed to cooperate

in finding a method to store safely the spent fuel from the DPRK’s 5 MW(e)

experimental reactor during the construction of the LWR project, and to
Federal Register / Vol. 61, No. 101 / Thursday, May 23, 1996 / Presidential Documents 26023

dispose of the fuel in a safe manner that does not involve reprocessing

in the DPRK.

Since November 1994, all of North Korea’s graphite-moderated nuclear

facilities have been frozen. Specifically, this means no refueling or operation

of the 5MW research reactor; no construction on the 50 and 200 MW

reactors; no reprocessing and sealing of the reprocessing facility; no operation

of the fuel fabrication plant; and no construction of new graphite-moderated

reactors or related facilities. The IAEA has maintained a continuous presence

at the Nyongbyon nuclear facility and has continued with inspection activities related to verifying and monitoring the freeze in the DPRK according

to the terms of the Agreed Framework. In addition to IAEA monitoring

activities, the United States continues to monitor the freeze through National

Technical Means.

With the successful conclusion of the December 15, 1995 agreement on

the supply of light-water reactors (LWRs) to the DPRK, signed between

the DPRK and KEDO in New York City, the IAEA will resume ad hoc

and routine inspections under the DPRK’s safeguards agreement with the

IAEA with respect to the facilities not subject to the freeze. The IAEA

and DPRK meet periodically to discuss any outstanding safeguards issues

that arise, most recently on January 22, 1996. During this meeting, both

sides agreed to measures for safely storing the DPRK’s spent nuclear fuel

from its 5 MW(e) research reactor. When the first LWR unit is completed,

the IAEA will have oversight over the dismantlement of the DPRK’s nuclear

facilities which will be completed when the second LWR unit is completed.

In January 1995, the U.S. and DPRK agreed on the method for safely

storing the DPRK’s spent nuclear fuel as an interim step before it is shipped

out of the DPRK, as defined in the Agreed Framework. U.S. technical experts

have been in the DPRK since July 1995 preparing the fuel for canning

in a cooperative joint effort with the DPRK. Actual canning is expected

to commence soon and will last approximately three months.

(c)—North-South Dialogue and the Joint Declaration

The U.S.-DPRK Agreed Framework provides that ‘‘the DPRK will engage

in North-South dialogue.’’ Since then, the U.S. has taken steps to support

South Korean initiatives toward the North and to encourage the DPRK to

fulfill its commitment to engage in dialogue as soon as possible. In all

of our bilateral contacts with the DPRK, the U.S. has made clear that improvement in North-South relations is the key to peace and security on the

Korean peninsula, and a requirement if U.S.-DPRK bilateral relations are

to continue to move forward. Ambassador Robert L. Gallucci, during his

tenure as Chairman of the Senior Steering Committee on Korea, had frequent

occasion to raise the issue of North-South relations in his correspondence

with his North Korean counterpart, First Vice Minister of Foreign Affairs

Kang Sok Ju. Deputy Assistant Secretary of State Thomas Hubbard raised

the North-South issue repeatedly during the May-June 1995 negotiations

with the North Koreans in Kuala Lumpur on the LWR supply agreement.

Most recently, Mr. Hubbard raised this issue when he met with North

Korean Ambassador-at-Large Ho Jung in December 1995. Finally, working

level officials have repeatedly stressed to their North Korean counterparts

the importance of the DPRK improving relations with the South. Over the

last year, these points have been made at all three rounds of U.S.-DPRK

negotiations on the opening of liaison offices, and repeatedly in contacts

with officials of the DPRK Mission to the UN.

In support of ROK initiatives, we have conveyed South Korean positions—

and U.S. support for those positions—to the DPRK and others. At South

Korea’s request we have raised several particular issues with the DPRK,

sometimes with positive effect. The South Korean government has expressed

its appreciation for these U.S. efforts. During this period North and South

Korea held a series of bilateral meetings in Beijing that produced an agreement whereby the South provided 150,000 tons of rice to the North as

a grant. In December 1995, the DPRK released the crew of a South Korean
26024 Federal Register / Vol. 61, No. 101 / Thursday, May 23, 1996 / Presidential Documents

fishing vessel which strayed into North Korean waters earlier in the year,

a step which the ROK had been urging the DPRK to take.

On January 1, 1992, the Republic of Korea and the Democratic People’s

Republic of Korea issued the Joint Declaration of the Denuclearization of

the Korean Peninsula. The provisions of the Joint Declaration state that

the North and South:

—shall not test, manufacture, produce, receive, possess, store, deploy or

use nuclear weapons;

—shall use nuclear energy solely for peaceful purposes;

—shall not possess nuclear reprocessing and uranium enrichment facilities,

and;

—in order to verify the denuclearization of the Korean Peninsula, shall

conduct inspections of the objects selected by the other side and agreed

upon between the two sides, in accordance with procedures and methods

to be determined by the South-North Nuclear Control Commission which

shall be established within one month of the effectuation of this joint declaration.

The DPRK and the ROK held a series of South-North Joint Nuclear Control

Commission meetings in early 1992 as specified in the Joint Declaration,

but these were discontinued as relations between the two Korean states

worsened and the DPRK threatened to withdraw from the Nuclear NonProliferation Treaty (NPT) and refused to cooperate with the IAEA. As

a result, the absence of sustained governmental talks between the ROK

and DPRK has delayed further implementation of the Denuclearization Declaration.

The United States has, however, taken steps to encourage DPRK compliance

with the Joint Declaration by encouraging North-South dialogue and ensuring

DPRK implementation of the Agreed Framework. The Agreed Framework,

as a step towards full implementation of the Denuclearization Declaration,

has succeeded in illiciting positive DPRK movement on key provisions of

the Declaration. Specifically, North Korea’s willingness to freeze immediately

and eventually dismantle its graphite-moderated nuclear reactors and related

facilities has halted activities which would, had they not been stopped,

given the DPRK a nuclear weapons capability. Such a capability would

have been a threat to peace and security on the Korean Peninsula as well

as to Northeast Asia. The DPRK agreement to forego reprocessing under

the Agreed Framework and to replace its existing nuclear reactors with

proliferation-resistant LWRs represents a major step toward assuring the

DPRK will not test, manufacture, produce, store, deploy or possess nuclear

weapons. In addition, by agreeing to allow a continuous IAEA inspector

presence on the ground and to come into full compliance with its IAEA

safeguards obligations, including taking all steps that may be deemed necessary by the IAEA with regard to verifying the accuracy and completeness

of the DPRK’s initial report on all nuclear material in the DPRK, the DPRK

has not only gone beyond its NPT and IAEA safeguards obligations but

also is taking steps related to the inspection objectives set forth in the

Denuclearization Declaration.

MEMORANDUM OF JUSTIFICATION UNDER SECTION 614 OF THE

FOREIGN ASSISTANCE ACT TO PROVIDE U.S. CONTRIBUTIONS TO

THE KOREAN PENINSULA ENERGY DEVELOPMENT ORGANIZATION

(KEDO)

The Administration proposes that up to $22.0 million in FY 1996 International Organizations and Programs (IO&P) funds be used for a U.S. contribution to the Korean Peninsula Energy Development Organization (KEDO),

an international consortium established to implement the Agreed Framework

signed between the United States and the Democratic People’s Republic

of Korea (DPRK) on October 21, 1994. This funding level for U.S. contribu-
Federal Register / Vol. 61, No. 101 / Thursday, May 23, 1996 / Presidential Documents 26025

tions to KEDO was specified in the Administration’s congressional presentation documents for the Foreign Operations Appropriations Act, 1996 (P.L.

104–107). KEDO would be permitted to use the U.S. contribution to help

cover the FY 1996 administrative and heavy fuel oil shipment expenses.

In order to make available the funds appropriated for this contribution,

the President intends to exercise his authority under section 614(a)(1) of

the Foreign Assistance Act of 1961, as amended, to authorize the voluntary

contribution to KEDO without regard to applicable statutory restrictions

within the scope of this section, including any restrictions in sections 307,

620A, 620(f), or 530 of the Foreign Assistance Act or sections 507, 516,

523, or 527A of the Foreign Operations Appropriations Act.

The Agreed Framework addresses U.S. and international concerns about

the DPRK’s nuclear weapons program and, if fully implemented, will lead

ultimately to the complete dismantlement of North Korea’s current nuclear

program. Under the U.S.—DPRK Agreed Framework, the U.S. represented

that it would ‘‘organize under its leadership an international consortium

to finance and supply the light-water reactor (LWR) project to be provided

to the DPRK.’’ In order to meet this pledge, the U.S., South Korea (ROK)

and Japan agreed on the creation of an international organization, KEDO,

to implement the reactor project, the annual delivery of 500,000 metric

tons of heavy fuel oil delivery to North Korea and other possible projects

called for in the Agreed Framework (e.g., the transfer of spent fuel out

of the DPRK for ultimate disposition). The U.S., ROK and Japan have played

and will continue to play leading roles in KEDO.

KEDO’s purpose is to coordinate cooperation among interested parties in

the international community and to facilitate the financing and execution

of projects needed to implement the Agreed Framework. KEDO members

have agreed to cooperate in taking the steps necessary to implement the

Agreed Framework consistent with the Charter of the United Nations, the

Treaty on the Nonproliferation of Nuclear Weapons, the North-South Declaration on the Denuclearization of the Korean Peninsula, and the Statute of

the International Atomic Energy Agency. Moreover, KEDO will obtain assurances that nuclear materials, equipment, or technology transferred to the

DPRK in connection with projects undertaken by KEDO will be used exclusively for such projects, only for peaceful purposes, and in a manner that

ensures the safe use of nuclear energy. The continued funding of KEDO

is critical to the success of the specific objectives of the Agreed Framework,

the general goals of international nuclear nonproliferation, and the aim

of maintaining peace and security on the Korean Peninsula.

KEDO is located in New York and is directed by an Executive Board consisting of representatives of the original member countries—the U.S., Japan,

and the ROK. Other members may participate in its activities by serving

on advisory committees covering the organization’s projects, attending the

KEDO General Conference, participating in ad hoc technical meetings relating

to KEDO projects and, in some cases, sending technical experts to serve

in the KEDO secretariat. The day-to-day operations of KEDO are directed

by Executive Director Stephen Bosworth, former U.S. Ambassador to the

Philippines, assisted by two Deputy Executive Directors (one from Japan

and one from the ROK). KEDO is seeking to contract with private firms

for the bulk of the legal, technical, and financial expertise required to

oversee the LWR project and other projects. It will have a secretariat consisting of approximately 30 people to carry out its functions.

The U.S. contribution to KEDO will help fund: 1) KEDO’s FY 1996 costs

for office space, office supplies, communications, consulting costs and legal

services, and employee remuneration for a staff of thirty people, including

the Executive Director, the two Deputy Directors, and support personnel;

and 2) a portion of the estimated $50 million worth of heavy fuel oil

due to be shipped in 1996. These funds are essential to KEDO’s ability

to meet the terms of the U.S.-DPRK Agreed Framework regarding the provision of heavy fuel oil. Should KEDO fail to meet these deliveries, the
26026 Federal Register / Vol. 61, No. 101 / Thursday, May 23, 1996 / Presidential Documents

DPRK might renege on its Agreed Framework obligations, including possibly

breaking the freeze on its nuclear program. Hence, early transfer of these

funds is essential to meeting our nonproliferation objectives in the DPRK. [FR Doc. 96–12937

Filed 5–22–96; 8:45 am]

Billing code 4710–10–M