Nuclear Nonproliferation: Difficulties in Accomplishing IAEA's Activities
in North Korea (Letter Report, 07/07/98, GAO/RCED-98-210).

Pursuant to a congressional request, GAO reviewed issues related to the
Agreed Framework between the United States and North Korea, focusing on
the status of the International Atomic Energy Agency's (IAEA): (1)
nuclear-freeze-monitoring activities; (2) inspections of facilities not
subject to the freeze; and (3) plans to verify the accuracy and
completeness of North Korea's 1992 declaration of the amount of nuclear
material in its possession.

GAO noted that: (1) the Agreed Framework requires North Korea to freeze
operations and construction at five of its nuclear-related facilities
and to permit IAEA to monitor the freeze; (2) in accordance with the
arrangements under the Agreed Framework, IAEA began monitoring the
freeze at the five facilities in late November 1994; (3) the five
facilities, collectively, have the potential to produce nuclear material
for creating nuclear weapons; (4) while IAEA is confident that
operations and construction at these facilities have been frozen, IAEA
identified several problems affecting its ability to determine whether
North Korea is complying fully with other aspects of the nuclear freeze;
(5) according to IAEA, safeguard measures on the liquid nuclear waste
tanks at North Korea's reprocessing facility are needed to ensure that
the nuclear waste is not being removed or altered; (6) North Korea says
that it is cooperating fully with IAEA's freeze-monitoring measures; (7)
the Agreed Framework allows North Korea to continue operating certain
nuclear facilities not covered by the freeze; (8) IAEA resumed its
inspections of these facilities in March 1996 and inspects most of them
several times a year; (9) on the other hand, North Korea still refuses
to accept activities, such as environmental sampling, at these
facilities; (10) IAEA will need to perform a wide variety of complex and
time-consuming activities to verify the accuracy and completeness of:
(a) North Korea's initial declaration of nuclear facilities; and (b) the
amount of nuclear material in its possession; (11) these activities are
linked in the Agreed Framework to certain stages in a reactor's
construction; if the reactor project suffers delays, IAEA's activities
could be correspondingly delayed; (12) since 1995, IAEA has repeatedly
stressed that unless IAEA and North Korea reach an early agreement on:
(a) obtaining the information needed to verify the declaration; and (b)
the measures required to preserve such information, any future
possibility of verifying North Korea's nuclear declaration might be
lost; and (13) North Korea has neither provided the information nor
agreed to all of IAEA's proposed interim measures for preserving it
because, in North Korea's view, IAEA's requirements are excessive and
premature in relation to the timeframes established in the Agreed
Framework.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  RCED-98-210
     TITLE:  Nuclear Nonproliferation: Difficulties in Accomplishing 
             IAEA's Activities in North Korea
      DATE:  07/07/98
   SUBJECT:  Arms control agreements
             Atomic energy defense activities
             International cooperation
             Nuclear proliferation
             Nuclear reactors
             Technology transfer
             Nuclear weapons
             Nuclear waste disposal
             Inspection
             Nuclear facilities
IDENTIFIER:  North Korea
             
******************************************************************
** This file contains an ASCII representation of the text of a  **
** GAO report.  Delineations within the text indicating chapter **
** titles, headings, and bullets are preserved.  Major          **
** divisions and subdivisions of the text, such as Chapters,    **
** Sections, and Appendixes, are identified by double and       **
** single lines.  The numbers on the right end of these lines   **
** indicate the position of each of the subsections in the      **
** document outline.  These numbers do NOT correspond with the  **
** page numbers of the printed product.                         **
**                                                              **
** No attempt has been made to display graphic images, although **
** figure captions are reproduced.  Tables are included, but    **
** may not resemble those in the printed version.               **
**                                                              **
** Please see the PDF (Portable Document Format) file, when     **
** available, for a complete electronic file of the printed     **
** document's contents.                                         **
**                                                              **
** A printed copy of this report may be obtained from the GAO   **
** Document Distribution Center.  For further details, please   **
** send an e-mail message to:                                   **
**                                                              **
**                                            **
**                                                              **
** with the message 'info' in the body.                         **
******************************************************************


Cover
================================================================ COVER


Report to the Chairman, Committee on Energy and Natural Resources,
U.S.  Senate

July 1998

NUCLEAR NONPROLIFERATION -
DIFFICULTIES IN ACCOMPLISHING
IAEA'S ACTIVITIES IN NORTH KOREA

GAO/RCED-98-210

IAEA's Activities in North Korea

(141196)


Abbreviations
=============================================================== ABBREV

  ACDA - Arms Control and Disarmament Agency
  DOE - Department of Energy
  IAEA - International Atomic Energy Agency
  KEDO - Korean Peninsula Energy Development Organization

Letter
=============================================================== LETTER


B-280085

July 7, 1998

The Honorable Frank H.  Murkowski
Chairman, Committee on
 Energy and Natural Resources
United States Senate

Dear Mr.  Chairman: 

North Korea is a party to the Treaty on the Non-Proliferation of
Nuclear Weapons and, as required by the treaty, signed an agreement
for safeguarding its nuclear materials with the International Atomic
Energy Agency (IAEA).  Inspections conducted by IAEA in 1992 and 1993
uncovered numerous discrepancies in North Korea's declaration of the
amount of nuclear material in its possession.  North Korea's refusal
to resolve the discrepancies, its termination of IAEA's inspections,
and its subsequent announcement that it intended to withdraw from the
treaty raised widespread concern that North Korea may have diverted
some of its nuclear material to produce nuclear weapons. 

On October 21, 1994, the United States and North Korea concluded a
separate, bilateral arrangement known as the Agreed Framework to
address the North Korean nuclear issue.\1 Under the Agreed Framework,
the United States is helping North Korea to acquire two light-water
nuclear power reactors to produce electricity in exchange for, among
other things, a "freeze" (stoppage) of operations and construction at
North Korea's existing graphite-moderated reactors and related
facilities and North Korea's commitment to eventually dismantle the
facilities.  While North Korea's safeguards agreement with IAEA
remains in effect, the Agreed Framework defers certain IAEA
safeguards activities, including the resolution of IAEA's questions
about North Korea's past production of nuclear material.\2 In the
meantime, North Korea must cooperate with IAEA in its conduct of
other activities specified in the Agreed Framework. 

This is our third report in response to your request that we review
issues related to the Agreed Framework's implementation.\3 This
report discusses the status of IAEA's activities under the Agreed
Framework, including IAEA's (1) nuclear-freeze-monitoring activities,
(2) inspections of facilities not subject to the freeze, and (3)
plans to verify the accuracy and completeness of North Korea's 1992
declaration of the amount of nuclear material in its possession. 


--------------------
\1 The agreement's full title is the "Agreed Framework Between the
United States of America and the Democratic People's Republic of
Korea." The Democratic People's Republic of Korea is commonly known
as North Korea. 

\2 According to U.S.  administration sources, the light-water
reactors are more proliferation-resistant than North Korea's existing
graphite-moderated reactors. 

\3 Our two earlier reports are entitled Nuclear Nonproliferation: 
Implications of the U.S./North Korean Agreement on Nuclear Issues
(GAO/RCED/NSIAD-97-8, Oct.  1, 1996) and Nuclear Nonproliferation: 
Implementation of the U.S./North Korean Agreed Framework on Nuclear
Issues (GAO/RCED/NSIAD-97-165, June 2, 1997). 


   RESULTS IN BRIEF
------------------------------------------------------------ Letter :1

The Agreed Framework requires North Korea to freeze operations and
construction at five of its nuclear-related facilities and to permit
IAEA to monitor the freeze.  In accordance with the arrangements
under the Agreed Framework, IAEA began monitoring the freeze at the
five facilities in late November 1994--about 1 month after the
agreement was concluded.  The five facilities, collectively, have the
potential to produce nuclear material for creating nuclear weapons. 
While IAEA is confident that operations and construction at these
facilities have been frozen, IAEA identified several problems
affecting its ability to determine whether North Korea is complying
fully with other aspects of the nuclear freeze.  For example,
although activities affecting North Korea's reprocessing facility are
prohibited, North Korea has not allowed IAEA to implement safeguards
measures on the liquid nuclear waste tanks at the facility. 
According to IAEA, the measures are needed to ensure that the nuclear
waste is not being removed or altered.  This is particularly
important because removing or altering the nuclear waste could damage
critical evidence about the history of North Korea's nuclear program. 
North Korea says that it is cooperating fully with IAEA's
freeze-monitoring measures because, in its view, issues such as
IAEA's monitoring of the nuclear waste relate to IAEA's future
verification of the accuracy and completeness of its 1992 nuclear
declaration, which, under the terms of the Agreed Framework, need not
be resolved until much later in the agreement's implementation. 

The Agreed Framework allows North Korea to continue operating certain
nuclear facilities not covered by the freeze.  According to IAEA,
these facilities are smaller and generally less significant to North
Korea's nuclear program than the facilities under the freeze.  IAEA
resumed its inspections of these facilities in March 1996 and
inspects most of them several times a year.  According to IAEA, North
Korea is cooperating with the inspections.  For example, in contrast
to the limitations placed by North Korea on IAEA at the five
facilities that are subject to the freeze, North Korea permits IAEA
to take measurements of nuclear materials at facilities that were not
placed under the freeze and has provided reports on the amount of
nuclear material at the facilities for IAEA's examination.  On the
other hand, North Korea still refuses to accept activities, such as
environmental sampling, at these facilities. 

IAEA will need to perform a wide variety of complex and
time-consuming activities to verify the accuracy and completeness of
(1) North Korea's initial declaration of nuclear facilities and (2)
the amount of nuclear material in its possession.  These activities
are linked in the Agreed Framework to certain stages in a reactor's
construction; if the reactor project suffers delays, IAEA's
activities could be correspondingly delayed.  Since 1995, IAEA has
repeatedly stressed that unless IAEA and North Korea reach an early
agreement on (1) obtaining the information needed to verify the
declaration and (2) the measures required to preserve such
information, any future possibility of verifying North Korea's
nuclear declaration "might be lost." According to IAEA, this issue is
one of the most significant problems that it faces under the Agreed
Framework.  Nevertheless, North Korea has neither provided the
information nor agreed to all of IAEA's proposed interim measures for
preserving it because, in North Korea's view, IAEA's requirements are
excessive and premature in relation to the time frames established in
the Agreed Framework.  The absence of an agreement on the timing of
specific measures needed to address the preservation issue causes
concern within IAEA that the necessary information may not be
available later.  This is particularly significant with respect to
IAEA's determination of the operating history of a graphite-moderated
reactor.  IAEA believes that certain fuel rods discharged from the
reactor before 1994 may hold critical evidence on the operating
history of the reactor.  As early as September 1995, IAEA reported
that delaying measurements of these early discharged fuel rods over
the next several years would result in some (unspecified)
"limitations in accuracy." The situation is far worse now because the
measurements are not likely to occur in the near future and,
therefore, will be even more difficult and expensive to perform. 
IAEA is investigating methods for analyzing the early discharged fuel
rods along with other evidence to permit the reconstruction of the
reactor's operating history, which is part of the verification of the
correctness and completeness of North Korea's initial declaration. 


   BACKGROUND
------------------------------------------------------------ Letter :2

North Korea has five nuclear facilities that, collectively, have the
potential to produce nuclear material for creating nuclear weapons. 
The installations are (1) a graphite-moderated, 5-megawatt electric
(MW(e)) power reactor, (2) a plutonium-reprocessing facility, (3) a
fuel rod fabrication facility, and (4) two unfinished
graphite-moderated reactors--a 50-MW(e) reactor and a 200-MW(e)
reactor--that were under construction before the Agreed Framework was
signed.  Most of the facilities are located in Yongbyon, 60 miles
north of Pyongyang.\4

The Treaty on the Non-Proliferation of Nuclear Weapons prohibits
nonnuclear weapons states from acquiring nuclear weapons.  North
Korea became a party to the treaty in 1985 and, in 1992, concluded an
agreement with IAEA for safeguarding its nuclear material.  The
agreement with IAEA--the United Nations-affiliated organization
responsible for implementing safeguards requirements under the
treaty--requires North Korea to declare all of its nuclear material
and to allow IAEA to perform inspections and other safeguards
measures at North Korea's nuclear facilities.  The purpose of these
measures is to ensure that nuclear material is not diverted to
nuclear weapons. 

IAEA uses several measures to ensure compliance with its safeguards
agreements.  Material-accounting measures verify the quantity of
nuclear material declared to IAEA and any changes in the quantity
over time.  Containment measures utilize physical barriers, such as
walls and seals, to control the access to and movement of nuclear
material, while surveillance and other monitoring devices detect the
movements of nuclear materials and any tampering with IAEA's
containment measures.  Finally, IAEA uses on-site inspections, among
other things, to help ensure that all of the material has been
declared and placed under IAEA's control. 

According to unverified public accounts, North Korea reported to IAEA
in May 1992 that it had about 90 grams of plutonium subject to IAEA's
safeguards from a one-time reprocessing of defective fuel rods. 
Shortly thereafter, IAEA began implementing safeguards, including
inspections, to verify the accuracy and completeness of North Korea's
declaration of the amount of nuclear material in its possession.  The
inspections identified discrepancies suggesting that North Korea had
not declared all of its nuclear material.  For example, contrary to
North Korea's claim that it conducted a one-time reprocessing of
damaged fuel rods, IAEA concluded that North Korea had reprocessed
fuel on several occasions since 1989.  North Korea refused to allow
IAEA to resolve the discrepancies, limited IAEA's inspections,
refused the implementation of IAEA's "special inspections"\5 at two
sites, and announced its intention to withdraw from the Treaty on the
Non-Proliferation of Nuclear Weapons.  These and other perceived
provocations led to concerns about the possibility of war if North
Korea continued to pursue its existing graphite-moderated nuclear
program. 

The Agreed Framework defused tensions on the Korean Peninsula and
resulted in various trade-offs between North Korea and the United
States.  For its part, North Korea committed, among other things, to
(1) remain a party to the treaty; (2) freeze the operation and
construction of its graphite-moderated reactors and related
facilities and, later, to dismantle them; (3) safely store and, at a
later time, transfer its spent fuel from North Korea for ultimate
disposal; and (4) resolve IAEA's questions about the accuracy and
completeness of North Korea's 1992 nuclear declaration.  In return,
the United States agreed, among other things, to create an
international consortium of member countries to replace North Korea's
graphite-moderated reactors with two light-water reactors by a target
date of 2003.\6 The resulting consortium--established in March
1995--is called the Korean Peninsula Energy Development Organization
(KEDO).  In August 1997, groundbreaking for the reactors occurred in
the Kumho district of Sinpo--a port city on North Korea's east coast. 
(See fig.  1 for a map identifying Sinpo and other relevant North
Korean sites.)

   Figure 1:  Sinpo and Other
   Relevant North Korean Sites

   (See figure in printed
   edition.)

While groundbreaking has occurred, no formal delivery schedule has
been established for the reactor project.  In the meantime, the
Agreed Framework envisions specific functions for IAEA, notably that
IAEA (1) monitor the freeze at five North Korean nuclear facilities
and (2) resume inspections at other nuclear facilities not subject to
the freeze.  The Agreed Framework also calls upon North Korea to take
"all steps that may be deemed necessary" for IAEA to verify the
accuracy and completeness of North Korea's 1992 report on nuclear
facilities and the amount of nuclear material in its possession. 


--------------------
\4 The 200-MW(e) reactor was under construction in Taechon. 

\5 IAEA's safeguards agreements with North Korea and others also
authorize IAEA to perform special inspections to investigate
undeclared nuclear materials and installations. 

\6 According to State Department officials, North Korea must meet its
commitments under the agreement before the export of the key nuclear
components of the light-water reactors can take place. 


   DESPITE PROBLEMS, FREEZE IS IN
   PLACE
------------------------------------------------------------ Letter :3

IAEA began monitoring the five North Korean nuclear facilities
subject to the freeze in late November 1994--about 1 month after the
Agreed Framework was concluded.  While IAEA's monitoring activities
provide assurance that operations and construction at these
facilities have ceased, several monitoring problems affect IAEA's
ability to ensure that North Korea is complying fully with certain
aspects of the nuclear freeze.  For example, although activities
affecting North Korea's reprocessing facility are prohibited, North
Korea has not allowed IAEA to implement required safeguards measures
on the liquid nuclear waste tanks at the facility.  According to
IAEA, the measures are needed to ensure that the nuclear waste is not
being removed or altered.  This is particularly important because
removing or altering the nuclear waste could damage critical evidence
about the history of North Korea's nuclear program. 


      THE AGREED FRAMEWORK
      REQUIRES NORTH KOREA TO
      FREEZE OPERATIONS AND
      CONSTRUCTION AT FIVE NUCLEAR
      FACILITIES
---------------------------------------------------------- Letter :3.1

The Agreed Framework specifies that the freeze on North Korea's
graphite-moderated reactors and related facilities was to be fully
implemented within 1 month of the agreement's signing on October 21,
1994.  According to IAEA's documents and the "supply agreement"--a
document that sets forth the conditions for the delivery of the
light-water reactors to North Korea under the Agreed Framework\7
--the freeze prohibits North Korea from (1) operating the 5-MW(e)
reactor, the fuel rod fabrication plant, and the reprocessing plant
and (2) continuing or beginning construction work on such existing
facilities as the unfinished 50-MW(e) and 200-MW(e) reactors or on
related facilities.  Furthermore, the spent fuel from the 5-MW(e)
reactor must be stored and disposed of in a manner that does not
involve the fuel's reprocessing in North Korea.  The Agreed Framework
specifies that North Korea must provide "full cooperation" to IAEA in
its monitoring of the freeze. 

IAEA is not a signatory to the Agreed Framework.  However, in
November 1994, the United Nations Security Council requested that
IAEA take all steps deemed necessary to monitor the freeze.  IAEA's
Board of Governors approved the request.  Shortly thereafter, IAEA
and North Korea began negotiating arrangements for IAEA's monitoring
of the freeze, which among other things, resulted in the
identification of critical buildings at each facility site that would
be subject to IAEA's monitoring measures.  According to officials
from the State Department and the Arms Control and Disarmament Agency
(ACDA), IAEA and North Korea also reached an understanding on the
definition of the freeze that, according to IAEA's documentation,
provides that any movements of nuclear material or equipment within
the facilities under the freeze, any maintenance work by the
operator, and any transfers of nuclear materials out of the
facilities must be carried out under IAEA's observation or under
other IAEA arrangements.  Finally, any nuclear equipment and
components related to the freeze, including items manufactured for
the two reactors under construction, must be monitored by IAEA. 


--------------------
\7 The supply agreement, concluded on December 15, 1995, is between
North Korea and KEDO. 


      IAEA INSPECTORS PERFORM
      VARIOUS MONITORING
      ACTIVITIES
---------------------------------------------------------- Letter :3.2

IAEA inspectors visited the North Korean facilities subject to the
freeze from November 23 to November 28, 1994, and confirmed that the
three operating facilities had been shut down and that construction
on the two incomplete reactors had stopped.  IAEA maintains a
continuous presence in North Korea to monitor the facilities and to
ensure that they remain under the freeze.  According to IAEA, its
monitoring activities provide assurance that operations and
construction at the five facilities are frozen. 

IAEA inspectors regularly monitor the 5-MW(e) reactor, the fuel
fabrication plant, and the reprocessing plant.  IAEA uses all
technical means available to monitor the freeze at these facilities,
such as using seals that can indicate instances of tampering, using
video cameras, and making short-notice inspections.\8 The particular
method(s) used depends on the circumstances at each of the three
facilities.  The primary monitoring method is the use and frequent
verification of tamper-indicating seals on equipment and
installations throughout the "frozen" nuclear facilities.  Video
cameras are also used for surveillance.  Finally, short-notice
inspections are used to monitor certain equipment and areas in the
frozen facilities that have not been allowed to be sealed.  IAEA
inspectors also monitor activities related to the canning and storage
of spent fuel from the 5-MW(e) reactor and have, through qualitative
measurements of the fuel rods (spent fuel), verified whether the rods
are, in fact, irradiated (spent) fuel rods.\9

IAEA also monitors activities at the two unfinished reactors.  As
with the three other nuclear facilities under the freeze, IAEA
established an initial photographic baseline to document the status
of each facility's construction.  Since then, IAEA inspectors have
visited the 50-MW(e) graphite-moderated nuclear reactor in Yongbyon
and the 200-MW(e) graphite-moderated nuclear reactor in Taechon a few
times a year.  During their visits, the inspectors observe the
facilities, take updated pictures, and compare the photos to ensure
that construction has not resumed at the facilities. 


--------------------
\8 Short-notice inspections involve advance notice of about 20
minutes to 1 hour. 

\9 As discussed later, North Korea has not yet permitted IAEA to
measure the amount of plutonium in the spent fuel rods. 


      IAEA IDENTIFIED MONITORING
      PROBLEMS
---------------------------------------------------------- Letter :3.3

While IAEA is confident that operations and construction at the five
nuclear facilities have ceased, IAEA identified several problems
affecting its ability to determine if North Korea is complying fully
with certain aspects of the nuclear freeze.  First, despite repeated
requests, North Korea has not provided IAEA with adequate information
about the amount and location of nuclear equipment and components
that it may have produced for its two unfinished reactors.  As
previously discussed, the nuclear equipment and components for the
facilities under the freeze, such as the graphite blocks manufactured
for the 50-MW(e) and the 200-MW(e) reactors under construction,\10
are subject to monitoring by IAEA.  According to congressional
testimony by the former Secretary of Defense in January 1995, North
Korea's 50-MW(e) reactor was expected to be completed in 1995. 
Because of this schedule, all of the reactor's equipment and
components, including the reactor's graphite blocks and fuel-handling
machines, should have been available for inclusion in the reactor's
building.  Instead, North Korea informed IAEA that it had
manufactured only about 50 percent of the graphite blocks needed for
the 50-MW(e) reactor and none of the graphite blocks needed for the
200-MW(e) reactor, which, according to the former Secretary of
Defense, was expected to be completed in 1996.  According to IAEA,
North Korea explained that there was no reason for it to continue
manufacturing equipment and components for the two reactors after
July 1993, since it had begun discussions with the United States
about replacing the graphite-moderated reactors with light-water
reactors.  However, North Korea's explanation is insufficient for
IAEA to rule out whether any additional nuclear equipment and
components exist. 

The second problem involves the "mixer settlers," which are part of a
system that separates plutonium from uranium and fission products in
the reprocessing facility.  According to IAEA, North Korea informed
IAEA that the mixers need to be maintained frequently to ensure that
they operate in case the Agreed Framework collapses and North Korea
chooses to resume its nuclear program.  As a result, IAEA has not
precluded access to the area or equipment and has allowed North Korea
to operate the mixers for a brief time each month for maintenance
purposes under inspectors' observation.  While IAEA periodically
performs short-notice inspections of the mixer area, IAEA cannot be
sure that North Korea is operating the mixers within the permissible
limit.  IAEA wants to monitor the mixers on a continuous basis and,
in January 1996, secured North Korea's agreement to demonstrate
relevant equipment containing sensors that would detect instances
when the mixers are operating.\11 The sensors would permit IAEA to
determine whether North Korea's use of the mixers is compatible with
both (1) the equipment's maintenance needs and (2) North Korea's
commitment to operate the mixers for only a brief interval each
month.  IAEA expects to install the equipment in North Korea in
mid-1998. 

Third, IAEA has not been allowed to implement safeguards measures on
the liquid nuclear waste tanks with instruments that would ensure
that North Korea is not removing or altering the composition of the
waste at the reprocessing facility.  This issue is particularly
important because, in addition to the monitoring issue, the tanks
hold critical evidence about the history of North Korea's nuclear
program.  IAEA has asked North Korea for permission to install
instruments for monitoring the volume and composition (level and
density) of the liquid in the nuclear waste tanks.\12 According to an
IAEA official, these safeguards measures are needed because seals and
surveillance do not provide the required assurance--the tanks are
connected to a complex and inaccessible piping system that, if
operating, would permit the waste to be removed and/or altered. 
While North Korea maintains that the system's valves are closed, IAEA
is concerned that the valves' status is not verifiable and that North
Korea could be using these or other valves and pumps to tamper with
the tanks' contents.  Such an activity would change the composition
of the waste (i.e., alter its nuclear "fingerprint" and affect its
subsequent analysis), thus violating the terms of the Agreed
Framework.  However, according to IAEA, whether this is occurring
will not be known until North Korea agrees to allow the monitoring
instruments to be installed.  Thus far, North Korea has denied IAEA's
repeated requests to install the instruments.\13 North Korea has also
denied IAEA's request to take environmental "swipe" samples\14 at the
facility and other types of analytical samples. 

Last, although IAEA has access to all critical nuclear facilities
under the freeze, it has experienced difficulties in gaining regular
access to some technical buildings at the frozen facilities. 
IAEA--as a matter of normal practice in carrying out its safeguards
inspections--wants to obtain periodic access to all the technical
buildings to ensure that they are not being used for unauthorized
purposes.  According to State Department and ACDA officials,
negotiations between IAEA and North Korea in late 1994 and early 1995
resulted in, among other things, the identification of technical
buildings at a facility site that would be subject to IAEA's
monitoring measures under the freeze.  According to IAEA, the
procedures agreed to with North Korea envision IAEA's periodic visits
to technical support buildings for which North Korea has stated that
the buildings' scope of operations has changed.  IAEA stated that,
without such visits, the monitoring of the freeze would be limited to
only certain buildings where IAEA's safeguards measures, including
inspections, are already applied.  However, according to IAEA, North
Korea now says that while it agreed to freeze technical buildings
that are directly related to its nuclear program, it did not agree to
freeze those that are indirectly related to the program.  Therefore,
North Korea will consider IAEA's access for visits by inspectors only
on a case-by-case basis.  According to IAEA, the issue remains
unresolved.\15

According to information supplied by the State Department, the United
States is "deeply concerned" about the "continued lack" of North
Korean cooperation with IAEA's freeze-monitoring activities,
including IAEA's efforts to monitor the liquid nuclear waste tanks
and to help ensure that other information about North Korea's nuclear
program is preserved.  State Department guidance in 1996, for
example, instructed U.S.  delegates to IAEA to remind North Korea
that the Agreed Framework requires North Korea to cooperate fully
with IAEA in monitoring the freeze and that, "by definition," full
cooperation includes the preservation of information and data that
might speak to the history of North Korea's nuclear program. 

While the Agreed Framework requires North Korea to cooperate fully
with IAEA's freeze-monitoring activities, neither the Agreed
Framework nor its subsequent implementing agreements, including the
agreement for supplying the reactors, "define" or otherwise discuss
North Korea's cooperation with IAEA on activities related to the
preservation of information during the monitoring phase.  Officials
from the State Department and ACDA concurred with our understanding
of the agreement.  They explained that the guidance reflected an
understanding of what is "implicit" in the Agreed Framework--namely,
that the preservation of information will be essential in
demonstrating North Korea's compliance with its safeguards agreement
with IAEA. 

According to IAEA, the freeze-monitoring issues are unresolved, in
part, because of a fundamental difference in view between IAEA and
North Korea.  Specifically, IAEA contends that its safeguards
agreement with North Korea is valid and in effect and, as a result,
that IAEA's activities in North Korea--including its monitoring
activities--arise from its safeguards agreement with North Korea. 
According to IAEA, North Korea disagrees and says that its safeguards
agreement with IAEA is currently invalid for the facilities subject
to the freeze and, consequently, that its acceptance of IAEA's
freeze-monitoring measures derives solely from the Agreed Framework. 
Furthermore, according to IAEA, North Korea asserts that it is
cooperating fully with IAEA's freeze-monitoring measures because such
outstanding issues as IAEA's monitoring of the liquid nuclear waste
tanks relate to the verification of North Korea's 1992 nuclear
declaration and, as a result, need not be resolved until much later
in the Agreed Framework's implementation.  (Activities related to
IAEA's verification of North Korea's nuclear declaration and the
timing of these activities are discussed in more detail later in this
report.)


--------------------
\10 The graphite blocks, which would surround the fuel rods in the
two graphite-moderated reactors under construction, are used to
facilitate a nuclear reaction. 

\11 The sensors detect vibrations and magnetic signals given off by
the motors that operate the mixers.  The sensors and accompanying
data collection equipment are called an Integrated Monitoring System. 

\12 The instruments are called electromanometers. 

\13 According to State Department and ACDA officials, the State
Department continues to urge North Korea to allow IAEA to install the
monitoring instruments. 

\14 A swipe is a sampling technique using material, such as filter
paper, that is wiped over a surface and analyzed to detect the
presence of radioactive particles. 

\15 According to State Department and ACDA officials, there is no
evidence to suggest that the technical buildings are being used for
unauthorized purposes.  Instead, they said that IAEA is concerned
that North Korea's access restrictions establish an undesirable
precedent that could be used later to block IAEA's access to critical
North Korean nuclear sites.  According to the officials, the State
Department has told North Korea that it shares IAEA's concern. 


   NORTH KOREA IS GENERALLY
   COOPERATING WITH IAEA'S
   INSPECTIONS OF FACILITIES NOT
   SUBJECT TO THE FREEZE
------------------------------------------------------------ Letter :4

As part of the Agreed Framework, North Korea agreed to allow IAEA to
resume certain types of facility inspections upon the conclusion of
the agreement for supplying the two light-water reactors.\16 IAEA had
been inspecting North Korea's declared nuclear facilities in the
years preceding the Agreed Framework.  However, North Korea
terminated the inspections after IAEA uncovered evidence suggesting
that North Korea had not declared all of its nuclear material.  Under
the terms of the Agreed Framework, IAEA's inspections (as opposed to
monitoring activities) need resume only at the facilities not subject
to the freeze.  The applicable facilities are (1) an experimental
8-megawatt thermal reactor (MW(t))--a research reactor for isotope
production and research in Yongbyon, (2) a nuclear fuel rod storage
facility in Yongbyon, (3) about 30 locations scattered throughout
North Korea that have small quantities of nuclear material, and (4)
two other facilities that were identified as a "critical assembly"
for isotope production in Yongbyon and a "subcritical assembly" in
Pyongyang.  These facilities are smaller and generally less
significant to North Korea's nuclear program than the facilities
under the freeze. 

Following the conclusion of the light-water reactor supply agreement
in December 1995, IAEA continued inspections at facilities not
subject to the freeze in March 1996 and resumed inspections at the
locations with small quantities of nuclear material scattered
throughout North Korea.  IAEA inspects most of the facilities a few
times a year.  The fuel rod storage facility is inspected more
frequently because the facility is of greater importance to North
Korea's nuclear program.  Finally, through the end of February 1998,
IAEA had also inspected a number of the approximately 30 locations
scattered throughout North Korea.  State Department and ACDA
officials described North Korea's agreement to resume IAEA's
inspections at these facilities as a "significant symbolic move"
because it represents the beginning of North Korea's gradual return
to the international safeguards system. 

According to IAEA, North Korea is cooperating with IAEA's inspection
activities at facilities not subject to the freeze with some
limitations.  Specifically, North Korea has permitted IAEA to take
measurements of nuclear material at these facilities and has provided
reports on the amount of nuclear material at them for IAEA's
examination.  But North Korea has not allowed IAEA to take
environmental "swipe" samples, which is a routine safeguards measure
applied at similar facilities throughout the world. 


--------------------
\16 The Agreed Framework refers to "ad hoc" and "routine" IAEA
inspections.  IAEA uses these inspections to, among other things, (1)
verify information contained in a country's initial report on the
amount of nuclear material in its possession, (2) determine whether
the country's nuclear records are consistent with reports provided to
IAEA, and (3) verify the location, identity, quantity, and
composition of material subject to IAEA's safeguards.  As discussed
earlier, IAEA's safeguards agreements with North Korea also authorize
IAEA to perform special inspections.  However, the Agreed Framework
does not require North Korea to accept special inspections at this
time. 


   THE POTENTIAL FOR DELAY IN
   VERIFYING NORTH KOREA'S NUCLEAR
   DECLARATION CREATES THE
   POSSIBILITY OF FUTURE PROBLEMS
------------------------------------------------------------ Letter :5

IAEA will need to perform a wide variety of complex and
time-consuming activities to verify the accuracy and completeness of
North Korea's 1992 declaration of the amount of nuclear material in
North Korea's possession.  Given the time frames established in the
Agreed Framework and the absence of an agreed-upon reactor
construction schedule, these activities could suffer delays.  Since
1995, IAEA has repeatedly stressed that unless it and North Korea
reach an early agreement on obtaining the information needed for
verifying North Korea's declaration and on the measures required to
preserve such information, any future possibility of verifying North
Korea's nuclear declaration "might be lost." Thus far, North Korea
has neither provided the information nor agreed to any of IAEA's
proposed interim measures for preserving it, raising concern within
IAEA that the necessary information may not be available later. 


      THE AGREED FRAMEWORK
      PROVIDES FOR THE FUTURE
      VERIFICATION OF NORTH
      KOREA'S NUCLEAR DECLARATION
---------------------------------------------------------- Letter :5.1

The Agreed Framework requires North Korea to resolve IAEA's questions
about the accuracy and completeness of its 1992 nuclear declaration
and thereby come into full compliance with both its safeguards
agreement and the Treaty on the Non-Proliferation of Nuclear
Weapons.\17 Under the terms of the Agreed Framework, this is to occur
when a "significant portion" of the reactor project has been
completed but before the delivery of the key nuclear components.\18
According to the agreement for supplying the reactors, a significant
portion of the reactors will be completed when the first reactor's
containment structure, turbine, and other auxiliary buildings have
been completed--but before the reactor's major systems are introduced
into the structure.\19

The Agreed Framework does not specify definitive milestones for
constructing the reactors because, according to the principal U.S. 
negotiator for the agreement, the United States did not want to
commit itself to a specific schedule for delivering the reactors. 
However, shortly after the Agreed Framework was concluded, U.S. 
government officials estimated that IAEA's verification of the
accuracy and completeness of North Korea's nuclear declaration would
begin in about 1999--4 years before the reactors' projected delivery
date in the agreement.  Although site preparation work has begun, the
full reactor delivery schedule will not be known until the conclusion
of a contract between KEDO and the Korea Electric Power
Corporation--the prime contractor for the reactor project--and a
"delivery schedule protocol" soon to be negotiated between KEDO and
North Korea.  Consequently, the time when IAEA's verification
activities may actually begin is uncertain. 

The delay in IAEA's verification of North Korea's nuclear declaration
has been the subject of considerable disagreement.  At the time when
the Agreed Framework was signed, for example, opponents of the Agreed
Framework argued that delaying IAEA's verification activities created
a disturbing precedent that not only undermined IAEA's credibility
and authority but also rewarded North Korea for its treaty
transgressions.  Critics also expressed concern that the Agreed
Framework essentially allowed North Korea to renegotiate its treaty
obligations so that--unlike other treaty members--North Korea need
not provide information about its past activities for many years.  In
addition, critics expressed concern that North Korea may exploit the
ambiguities in the Agreed Framework, including the absence of
specific time frames for IAEA's determination of the accuracy and
completeness of North Korea's nuclear declaration. 

However, according to official U.S.  policy, as articulated by State
Department and other U.S.  government officials, the Agreed Framework
did not undermine IAEA's credibility or authority.  Instead, they
said that the Agreed Framework demonstrates the United States'
commitment to ensure that the issues identified by IAEA will be
resolved.  Furthermore, while U.S.  government officials acknowledged
that delaying IAEA's verification of North Korea's nuclear
declaration was not preferable, they said that the trade-off was
necessary because North Korea was intractable on this point during
the negotiations on the Agreed Framework.\20 According to them, the
United States negotiated the best deal possible, given the
circumstances at that time.  They explained that North Korea's
commitments under the Agreed Framework go far beyond North Korea's
obligations under the treaty.\21

Furthermore, they said that delaying IAEA's verification of North
Korea's nuclear declaration did not compromise U.S.  security
interests because, according to them, the Agreed Framework ensures
that the United States is not disadvantaged in any significant way if
North Korea reneges on its commitments.  For example, if North Korea
backed out of the Agreed Framework in the early years, U.S. 
officials said that North Korea would have gained very little except
modest amounts of heavy fuel oil\22 and some technical assistance
related to the safe storage of its spent fuel.  Furthermore, if it
reneges on its commitment to provide IAEA with information, North
Korea will be left with only the "empty shells" of two light-water
reactors.  In the meantime, the officials said that the United States
will have benefitted because North Korea's nuclear program will have
been frozen in the intervening years. 


--------------------
\17 According to IAEA, North Korea will not be in full compliance
with its safeguards agreement and the treaty until IAEA verifies
North Korea's nuclear declaration and determines, with sufficient
assurance, that North Korea has not diverted any of its nuclear
material. 

\18 According to the supply agreement, "key nuclear components" are
those items that are controlled under the Export Trigger List of the
Nuclear Suppliers Group.  Such components include the nuclear steam
supply system--the combination of equipment needed to produce the
steam that drives a reactor's turbine generator for the production of
electricity. 

\19 Under the Agreed Framework, North Korea must take all the steps
deemed necessary by IAEA to verify the accuracy and completeness of
North Korea's nuclear declaration.  The Agreed Framework does not
specifically discuss "special inspections" to investigate undeclared
nuclear materials and installations.  However, according to senior
U.S.  administration officials, including the former Secretaries of
State and Defense, North Korea must accept these inspections if IAEA
considers them necessary. 

\20 According to U.S.  officials familiar with the negotiations on
the Agreed Framework, North Korea views the delay as leverage for
ensuring that the United States will follow though on its commitments
under the Agreed Framework. 

\21 The treaty permits signatory states to build and operate any type
of nuclear facility and to separate and stockpile plutonium under
IAEA's safeguards.  Under the Agreed Framework, however, North Korea
agreed not to reprocess its spent fuel and to eventually dismantle
its reprocessing facility.  According to the U.S.  officials, these
and other North Korean commitments exceed the country's obligations
under the treaty. 

\22 In the Agreed Framework, the United States agreed to arrange for
the delivery of heavy fuel oil to North Korea to offset the energy
forgone as a result of the freeze of its graphite-moderated reactors
and existing facilities, pending completion of the first light-water
reactor. 


      A WIDE VARIETY OF ACTIVITIES
      ARE NEEDED TO VERIFY NORTH
      KOREA'S NUCLEAR DECLARATION
---------------------------------------------------------- Letter :5.2

IAEA will need to accomplish a wide variety of complex and
time-consuming activities to verify the accuracy and completeness of
North Korea's nuclear declaration.  For example, IAEA needs to
determine the operating history of the 5-MW(e) reactor, as well as
the amount of plutonium in the irradiated (spent) fuel rods from the
reactor and the composition of the liquid nuclear waste at the
reprocessing plant.  IAEA will also need to inspect certain waste
sites, including waste sites where undeclared nuclear materials are
suspected to be present, which were the subject of an IAEA request
for special inspections in 1983.  These inspections will be
time-consuming because one of the suspect sites has been completely
camouflaged with dirt and landscaping.  Furthermore, IAEA will need
to establish whether North Korea has additional nuclear equipment and
components for the two incomplete reactors and, if so, where the
items are located.  Finally, IAEA will need to translate, analyze,
and authenticate the documentation on North Korea's nuclear program
and to investigate any leads that IAEA may obtain about the program. 


      POSSIBLE DELAYS IN
      VERIFICATION ACTIVITIES
      RAISE QUESTIONS ABOUT
      WHETHER NEEDED INFORMATION
      WILL BE AVAILABLE
---------------------------------------------------------- Letter :5.3

In September 1995, IAEA apprised North Korea of the information that
IAEA must obtain to verify North Korea's 1992 nuclear declaration and
thereby determine whether North Korea is in compliance with its
safeguards agreement and the Treaty on the Non-Proliferation of
Nuclear Weapons.  Since 1995, IAEA has repeatedly stressed that
unless the parties reach an early agreement on obtaining information
about North Korea's nuclear program and on the measures required to
preserve it, any future possibility of verifying North Korea's
nuclear statement "might be lost." According to IAEA, this issue is
one of the most significant problems that IAEA faces under the Agreed
Framework.  Nevertheless, in 1996, North Korea informed IAEA that it
would not allow IAEA to begin its verification activities until a
significant portion of the light-water reactor project is
completed--an event whose timing depends on further negotiations. 

North Korea's position is consistent with the time frames established
in the Agreed Framework.  In congressional hearings held shortly
after the Agreed Framework's conclusion, senior administration
officials, including the former Secretary of State, stressed that
delaying IAEA's verification activities--while not preferable--did
not jeopardize U.S.  security interests.  Unfortunately, North Korea
has neither provided the information nor agreed to any of IAEA's
proposed interim measures for preserving it, and as a result, IAEA
has reported that it has no assurance that the necessary information
will be available later.  According to IAEA officials, North Korea
views IAEA's preservation requirements as excessive and premature in
relation to the time frames established in the Agreed Framework. 
Furthermore, according to the officials, North Korea says that since
it intends to make the information available to IAEA when the time
comes, it is cooperating with both IAEA and the terms of the Agreed
Framework.\23


--------------------
\23 According to IAEA officials, North Korea's statement that it will
eventually provide the information is neither a sufficient nor an
acceptable guarantee. 


      A DELAY IN DETERMINING THE
      REACTOR'S OPERATING HISTORY
      IS A MAJOR
      PRESERVATION-RELATED PROBLEM
---------------------------------------------------------- Letter :5.4

A delay in determining the operating history of the 5-MW(e) reactor
may be the most troublesome, complex, and costly preservation-related
problem that IAEA faces under the Agreed Framework.  As discussed, in
the early 1990s, IAEA's inspections identified discrepancies
suggesting, in IAEA's view, that North Korea had not declared all of
its nuclear material.  Specifically, contrary to North Korea's claim
that it conducted a one-time reprocessing of damaged fuel rods, IAEA
concluded that North Korea had reprocessed fuel on several occasions
since 1989.  Determining whether or not North Korea has diverted fuel
from the reactor's core requires, among other things, measurements of
(1) the total amount of plutonium in North Korea's spent fuel and (2)
certain fission products in the discharged fuel.  According to
Department of Energy (DOE) officials, the amount of plutonium can be
determined whenever North Korea permits IAEA to measure the fuel. 
However, measurements of the fission products become increasingly
difficult over time because of their short-lived nature.  IAEA had
envisioned taking these measurements when the spent fuel was
transferred into canisters for storage.\24 However, according to
IAEA, North Korea refused because, in its view, it was premature to
perform the measurements. 

According to IAEA, it lost valuable information about the reactor's
core in May 1994.  This occurred because, while discharging the
reactor, North Korea failed to accept IAEA's proposals to select,
segregate, and secure fuel rods for IAEA's later measurement.\25

Shortly thereafter, IAEA reported that the "situation resulting from
the core discharge was irreversible and had seriously eroded" IAEA's
ability to ascertain whether North Korea had declared all of its
plutonium. 

As early as September 1995, IAEA reported that delaying the
measurements over the next several years would result in some
(unspecified) "limitations in accuracy" and "significant additional
cost" if the containers need to be opened.  Furthermore, over time it
will no longer be possible to determine the rods' operating
(irradiation) history using nondestructive methods.  This is because
the radioactive isotopes needed for the analysis are "dying out." In
addition, analyzing the aged and corroding fuel rods by "destructive"
methods is far more complex and expensive than using nondestructive
methods.\26

IAEA is investigating a variety of methods that might be used to
verify the accuracy and completeness of North Korea's nuclear
declaration.  State Department and ACDA officials stressed, however,
that the accuracy and timeliness of any of these methods will depend
critically on (1) North Korea's willingness to permit measurements
and samples to be taken at relevant sites and (2) the amount of money
that the United States and other interested parties are willing to
spend to perform the work. 


--------------------
\24 DOE, with North Korea's cooperation, has been transferring the
spent fuel into canisters for storage since April 1996.  According to
DOE officials, about 95 percent of the fuel was stored by the end of
January 1998.  The remaining rods were expected to be stored by the
spring of 1998. 

\25 IAEA normally preselects rods to obtain a representative sample
of rods from a reactor's core.  The samples are then measured and
used to estimate the amount of plutonium produced in the core. 

\26 Nondestructive analytical methods involve less handling than
destructive methods, since the sample or specimen is normally neither
disassembled nor altered.  Nondestructive analysis can be done
remotely, reducing the cost and complexity of protecting workers from
radiation and facilities from contamination.  Destructive analytical
methods, on the other hand, necessitate the disassembly and/or
alteration of the sample and thus involve additional steps and
increased handling of the item to be sampled.  In the case of North
Korea's spent fuel rods, destructive analytical methods would likely
include removing the rods from storage, packing and shipping them out
of North Korea, and unpacking, disassembling, and analyzing them. 
Each of these steps results in additional cost and complexities
because of the necessity of safeguarding workers and facilities from
radiation and contamination. 


      THE UNITED STATES IS
      CONCERNED ABOUT THE
      PRESERVATION ISSUE
---------------------------------------------------------- Letter :5.5

According to information supplied by the State Department, the United
States is "deeply concerned" about the absence of tangible North
Korean steps to preserve information about the country's past nuclear
activities.  A December 1996 State Department cable, for example,
expressed deep concern about whether North Korea will fulfill this
critical component of the Agreed Framework.  The cable instructs U.S. 
delegates to IAEA to remind North Korea that if the Agreed Framework
is to be fully realized, North Korea must take appropriate steps to
resolve IAEA's concerns in this area.  Similarly, a March 1997 cable
instructs U.S.  delegates to remind North Korea that, although it
will be several years before the key reactor components are expected
to be delivered, North Korea must prepare now so that IAEA's
verification work can proceed smoothly and expeditiously.\27

While the United States is concerned about the extent of North
Korea's cooperation thus far, State Department officials stressed
that North Korea will not receive the key nuclear components until it
has complied fully with its safeguards agreement. 

In November 1997, a senior State Department official told us that the
United States and IAEA continually stress to North Korea the
importance of the preservation issue.  The official distinguished
between the preservation issue and IAEA's work in monitoring the
freeze.  Specifically, according to the official, while North Korea's
reluctance to cooperate on the preservation of historically relevant
information poses a long-term problem for the project, in the short
term, there is "no real problem" and "no alarming consequences" in
monitoring the freeze.  However, the official said that the United
States has made clear to North Korea that its failure to preserve the
needed information now may cause a work stoppage on the reactor
project later. 


--------------------
\27 Assuming the full implementation of the Agreed Framework, IAEA
officials estimated that the key nuclear components would not be
delivered for at least the next 4 years.  The reactors cannot
function without these components. 


   OBSERVATIONS
------------------------------------------------------------ Letter :6

The Agreed Framework commits the United States to facilitate the
delivery of two light-water reactors to North Korea by a target date
of 2003.  The specific timing of interim milestones--such as the
completion of a significant portion of the first reactor's
construction--is, by design, ambiguous and highly dependent on the
actions of parties involved in implementing the Agreed Framework. 
The Agreed Framework's ambiguity about the timing of the project's
interim milestones and its linkages to reciprocal actions by North
Korea, creates the basis for North Korea's position that it is
premature to resolve matters related to the preservation of vital
information needed for IAEA's verification work. 

When the Agreed Framework was signed, the United States estimated
that IAEA's verification work would begin in about 1999.  Although
site preparation work has begun for the reactor project, the
reactor's construction schedule awaits the negotiation of two
important instruments--a contract between KEDO and its prime
contractor and a "delivery schedule protocol" with North Korea.  If
the conclusion of these activities were delayed, then IAEA's
verification activities could be correspondingly delayed.  Schedule
delays increase the cost and difficulty of verifying North Korea's
nuclear declaration and lessen the likelihood that IAEA will be able
to make a definitive assessment about the accuracy and completeness
of North Korea's nuclear declaration.  Any protracted delays are
likely to exacerbate these problems and could eventually result in
the collapse of the Agreed Framework if IAEA cannot verify, with
sufficient assurance, North Korea's nuclear declaration. 


   AGENCY COMMENTS AND OUR
   EVALUATION
------------------------------------------------------------ Letter :7

We provided the State Department, ACDA, DOE, and IAEA with a draft of
this report for their review and comment.  We met with State
Department and ACDA officials, including representatives of the
Department's Bureaus of East Asian and Pacific Affairs, Political and
Military Affairs, and Intelligence and Research, and representatives
of ACDA's Bureau of Nonproliferation and Regional Arms Control. 
While State Department and ACDA officials generally agreed with the
report's conclusions, they provided detailed comments to emphasize
and clarify various points in the report.  For example, the officials
acknowledged that IAEA has experienced problems associated with its
monitoring of North Korea's nuclear freeze.  However, they stressed
that since North Korea's nuclear program remains frozen, the
monitoring problems are not central to the implementation of the
Agreed Framework and therefore have not jeopardized the agreement. 
Instead, the primary problem has been securing North Korea's
cooperation in preserving information about its past nuclear
activities.  The State Department and ACDA agreed that verifying
North Korea's initial nuclear declaration will be a difficult task. 
IAEA and DOE officials, including the Director of DOE's International
Safeguards Division, also provided comments to improve the technical
accuracy of the report.  We incorporated the agencies' comments, as
appropriate. 


   SCOPE AND METHODOLOGY
------------------------------------------------------------ Letter :8

To obtain information for this report, we reviewed and analyzed the
provisions of the Agreed Framework and subsequent implementing
agreements, congressional hearings, the safeguards agreement between
IAEA and North Korea, and IAEA reports and other documentation
describing the scope and status of IAEA's activities in North Korea. 
We also discussed IAEA's activities under the Agreed Framework with
cognizant officials from IAEA and ACDA as well as the Departments of
State and Energy.  Finally, we reviewed State Department cables made
available to us through November 1997.  The State Department denied
our access to eight cables because they either "contain[ed] details
of intelligence sources and methods as well as information provided
by third countries" or dealt with a "highly sensitive" matter that,
at the time, was under "active negotiation." Furthermore, describing
our request as "openended," on March 12, 1998, the State Department
denied our December 8, 1997, request for monthly updates on the
cables.  Given our past difficulties in obtaining North Korea's
views, we did not attempt to contact officials from North Korea.  We
conducted our review from July 1997 through March 1998 in accordance
with generally accepted government auditing standards. 


---------------------------------------------------------- Letter :8.1

As agreed with your office, we plan no further distribution of this
report until 5 days after the date of this letter.  At that time, we
will send copies to the appropriate congressional committees, the
Secretaries of State and Energy, the Director of ACDA, the Director
General of IAEA, and other interested parties. 

If you have any questions, please call me at (202) 512-3841.  Major
contributors to this report are listed in appendix I. 

Sincerely yours,

(Ms.) Gary L.  Jones
Associate Director,
Energy, Resources, and Science Issues


MAJOR CONTRIBUTORS TO THIS REPORT
=========================================================== Appendix I


   RESOURCES, COMMUNITY, AND
   ECONOMIC DEVELOPMENT DIVISION,
   WASHINGTON, D.C. 
--------------------------------------------------------- Appendix I:1

Gene Aloise, Assistant Director
Kathleen Turner, Evaluator-in-Charge
Victor J.  Sgobba, Senior Evaluator
Duane G.  Fitzgerald, Nuclear Engineer


*** End of document. ***