*EPF503   01/20/95
(Article on 1/20/95 State Dept. background briefing)  (450)
By Jane A. Morse
USIA Staff Writer
Washington, Jan. 20 -- The State Department announced today that the United
States is easing sanctions against North Korea.

The steps are in compliance with the Agreed Framework worked out with the
Democratic People's Republic of Korea signed in October 1994 and in
response to North Korea's decision to freeze its nuclear program and

In early January this year, as part of the agreement, North Korea lifted its
sanctions against U.S. port calls and the purchase of American products.

The U.S. response is to authorize transactions related to telephone and
telecommunications connections between North Korea and the United States.
U.S. companies will be free to approach the DPRK government with offers to
establish telecommunications links, but whatever proposals result will have
to be approved by the U.S. government, State Department officials explained
in a background briefing.

Phone calls to North Korea can now be placed through third-parties and
directly as U.S. facilities are put in place, the officials said.

Certain travel to North Korea by U.S. citizens will be allowed, as will
credit cart use in connection with personal travel.  In addition the limits
on personal expenditures while in North Korea will be lifted.

U.S. journalists and news agencies will be allowed to establish offices in
North Korea, and North Korean journalists will be allowed greater access in
the United States.  But State Department officials stressed that American
treatment of North Korean journalists will depend on the access given to
American journalists in the DPRK.

"The U.S. government's intentions is to promote the exchange of
information," a State Department official said.

The U.S. government will also authorize the DPRK to use the U.S. banking
system to clear transactions not originating or terminating in the United
States.  It will also unblock frozen assets now in the United States --
estimated at up to $11 million -- for "innocent third parties" where there
is no DPRK government interest.

The U.S. will also authorize imports from the DPRK of magnesite, which is
used to coat the inside of blast furnaces in the production of steel.  This
represents about $5 to $10 million per year in trade, the U.S. officials

The DPRK has made no official response to the U.S. announcement, but State
officials said that initial North Korean press reports indicated a very
1avorable response.

U.S. officials emphasized, however, that much more progress needs to be made
by North Korea on issues such as terrorism and missile sales before further
thawing in economic relations can take place.