Great Seal

U.S. Department of State

Daily Press Briefing

MONDAY, JULY 6, 1998

3, 5KEDO Delivery of Fuel to N. Korea per Agreement
3-4U.S. Willingness to Support KEDO in its Efforts
4-5, 6U.S. Efforts to Aid KEDO in Fulfilling its Commitment
6Asia Financial Crisis/Effect on N. Korean Compliance with Agreement
6No Linkage with Four-Party Talks

DPB # 81
MONDAY, JULY 6, 1998, 12:45 P.M.


QUESTION: On North Korea?


QUESTION: Could you enlighten us or bring us up to date on the status of shipment of heavy oil to North Korea?


QUESTION: And also where money will come from for further shipments.

MR. RUBIN: So far this year, KEDO has delivered approximately 150,000 metric tons of heavy fuel oil to North Korea. Additional shipments of approximately 66,000 metric tons are scheduled to be delivered later this month. For this year, Congress agreed to the Administration's request to appropriate $30 million for KEDO funding for administrative expenses and purchases of heavy fuel oil. A contribution from the European Union of an additional $16 million is expected to be received by KEDO shortly to help KEDO retire its debt for past oil purchases.

Under the Agreed Framework, KEDO is to provide 500,000 metric tons of heavy fuel oil to North Korea each year. We are working very hard to help KEDO raise additional funds from other countries, but so far it has not been able to raise sufficient funds for its heavy fuel oil deliveries this year. We believe this agreement is an extremely important one and we remain committed to the successful implementation of the freeze on North Korea's activities, the so-called Agreed Framework. As the President stated on June 9th, he is prepared to work with Congress to utilize certain provisions of US law to provide funds to help KEDO fulfill its commitments. We have been consulting with Congress and we have completed an initial tranche of $5 million has been discussed with Congress, which will be used to make deliveries beginning this month, and we are consulting about additional funding at this time. These consultations are not yet complete, but we would hope to be able to provide further information.

I think the point of all this is that we think this is an extremely important agreement and that we are working with the Congress and with other countries because we are sure we are going to be able to fulfill our side of the bargain and it's up to the North Koreans to ensure they fulfill theirs.

QUESTION: So as I interpret what you're saying, one way or another the US will find a way to make sure that the 500,000 metric tons -

MR. RUBIN: It's not our obligation to find a way. It's a KEDO obligation. But what I'm saying to you is that we recognize the importance of this agreement. It's an extremely important one. We are consulting with Congress. The President was prepared to indicate his willingness to use unusual authorities and we are going to continue to consult with Congress to make available what we need, but we would be looking for support from all the countries in the world that care about non-proliferation that don't want to see us go back to the situation in 1994, where we had the threat of a nuclear-armed North Korea posing a danger to the world.

QUESTION: It sounds as if you will find - you will use creative ways to find money to help KEDO meet that obligation. Is that a fair -

MR. RUBIN: We are trying to - we are going to do what we can to fulfill our part of the bargain. As I indicated, we have come up with another $5 million as a result of consultations with Congress and we're continuing to consult with Congress. And we want to see other countries do what they can as well.

QUESTION: Are the North Koreans threatening to walk out of the deal as a prominent newspaper suggested this morning?

MR. RUBIN: Well, from time to time we hear suggestions from the North Korean side, but for now we believe that North Korea is in compliance with its obligations under the Agreed Framework. The Agreed Framework requires them to freeze their nuclear reactors and related facilities, and we believe this has occurred and the International Atomic Energy Agency is monitoring that. From time to time they make statements, and they made one publicly some weeks ago, and it's our job to simply make clear that we're going to fulfill our part of the responsibilities that we believe are appropriate under the Agreed Framework and it's up to them to fulfill theirs and words are not as important here as actions.

QUESTION: Pardon me if I'm wrong, but I thought the fuel oil was the US commitment.

MR. RUBIN: Again, it's the difference between an obligation and a commitment. There are an elaborate series of commitments that people have made as to what they will do, but no one country is obligated to solve this problem. It's an international job to put the money together to make KEDO work. It's not the job of one country, but we are taking the lead here because we recognize the seriousness of it. So I would therefore distinguish between the word commitment and things we intend to do, things we want to do, and obligations.

QUESTION: I don't understand. When this deal was made, did the United States not say it would make sure North Korea had 500,000 metric tons of fuel annually?

MR. RUBIN: Let me get you the documents which you've seen before, and we can continue to have this abstruse legal argument after the briefing. What I'm trying to say to you is that we are working to fulfill our part of the arrangement. We intend to do so. As far as who is ultimately responsible for this and the specific legal commitments pursuant to the agreement, I would prefer to get into it either with a lawyer present or after the briefing.

QUESTION: If you have to lawyer your agreement with the North Koreans to understand what it says, I already think it was an abstruse legal commitment. I would say it cuts to the heart of the whole thing. Is the United States going to supply what it said it would or is it not? It's not something lawyers need to deal with. You're having trouble with Congress. Warren Christopher promised they would never have to pay more than 30 million a year. Where's it going?

MR. RUBIN: I have nothing further to add.

QUESTION: Do you know, does this government have an idea what the current fuel oil status, reserve status is, in North Korea? Is this getting to be a crisis?

MR. RUBIN: I'm not aware that there is a particular crisis here in terms of their needs. As I said, pursuant to the Agreed Framework, KEDO, the Korean Energy Development Organization, is to provide 500,000 metric tons of heavy fuel oil to North Korea each year. KEDO. And we try to help KEDO meet its obligations, and that's what we're doing in our discussions with Congress and our discussions with other countries. KEDO has delivered approximately 152,000 metric tons of heavy fuel oil to North Korea. Additional shipments of 66,000 metric tons will happen this month, and the overall requirement is to meet the difference between 218,000 metric tons and 500,000 metric tons, which we would have to do to meet the 500,000 commitment. So we are going to do what we can to meet this commitment, but it is KEDO's commitment. And hopefully that will answer questions from those of you who want to nit-pick.

QUESTION: So 66,000 metric tons are going in this month?


QUESTION: Definite? Definitely going to be delivered?

MR. RUBIN: Right, correct.

QUESTION: And who is supplying the 218,000?

MR. RUBIN: That is - 152 so far this year, plus 66, is 218.

QUESTION: And the remainder, who -

MR. RUBIN: That's something we are going to continue to work on.

QUESTION: So that's undetermined yet?

MR. RUBIN: Correct.

QUESTION: Since we're on the subject, Japan and South Korea have taken the leading - the lead in funding the light water reactors to replace the North Korean reactors that you were so worried about. Given the Asian financial crisis, is the money going forward for that, as far as you know?

MR. RUBIN: Secretary Albright, I know, had extensive discussions with the South Korean and Japanese officials on her last visit there, and they made it clear to us they intend to carry forward with their commitments pursuant to the agreement that KEDO entered into. And there is no evidence that I'm aware of that the Asian financial crisis is going to change that important commitment on their part.

QUESTION: Just to clarify the 5 million, where will it go to, the 5 million that Congress -

MR. RUBIN: Well, it's part of how we're going to fund the 66,000 metric tons scheduled to be delivered later this month.

QUESTION: And how much in addition to that have you asked for?

MR. RUBIN: As I said, we're consulting on that and we prefer not to get into details until we've completed those consultations

QUESTION: Have the North Koreans given any indication that if you move forward on this that the four-party peace process will start up again?

MR. RUBIN: I'm not aware there is a direct linkage of any kind there. This is a question of fulfilling the agreement on the nuclear freeze that is now in effect. The Four Party talks are something that would be related to reducing tensions overall in the Korean Peninsula and I'm not aware there is a direct link.

QUESTION: According to the newspaper article which mentioned it, there seems to be some concern in Congress that KEDO got itself into debt last year which, apparently, Congress was not expecting. Can you address that, and is KEDO being properly managed, in your view?

MR. RUBIN: Well, we're doing the best we can to try to make this unique organization that has never existed before function and to provide the required facility to build the light water reactors at the appropriate time and to provide the fuel oil at the appropriate time. It is working. It's not an easy proposition and we are making it work.

With respect to the concern in Congress that there are facilities other than those at the Yongbyon reactor and other places covered by the Agreed Framework, we believe that the DPRK is in compliance with its obligations under the Agreed Framework and we believe that the IAEA is in a position to monitor the freeze that is required and the North Koreans have frozen their nuclear reactors and related facilities. If evidence was uncovered that, to my knowledge doesn't now exist, that the North was conducting activities in violation of the Agreed Framework, we would obviously take that matter very seriously.


(The briefing ended at 1:35 p.m.)

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