$1.9 billion compensation demanded of North Korea
17 January 2007
As the resumption of negotiations over its nuclear arms approaches, North Korea faces demands for compensation from the Korean Peninsula Energy Development Organization (Kedo) over a failed nuclear power project.
Kedo has reportedly demanded that North Korea pay some $1.9 billion in compensation for a scrapped project to construct two light-water nuclear power reactors. As part of an agreed framework that aimed to prevent North Korea developing nuclear weapons in exchange for economic support from the USA, the project would have seen a consortium of Japan, South Korea, the European Union and the USA finance and construct modern nuclear power units (Korean Standard Nuclear Plants) before North Korean authorities took over operation of the plant.
Kedo terminated the project in 2005 after suspending the deal in 2002 when the USA accused North Korea of reneging on its part of the pact by launching an illegal program to enrich uranium for weapons production. The Kedo board has since sent several letters to North Korean leaders asking for the money.
The lead negotiators from North Korea and the USA, Kim Kye Gwan and Christopher Hill, met in Berlin on 16 January to discuss the next round of negotiations on Pyongyang's nuclear program, which have been effectively stalled for over a year.
The meeting would "set the groundwork for the next round of six-party talks, to ensure those talks would be productive," according to US State Department spokesman Tom Casey. The six parties are China, Japan, Russia, South Korea and the USA as well as North Korea.
North Korea conducted its first, partially successful, nuclear weapons test in October 2006 and has threatened to conduct a second.
Further information
Korean Peninsula Energy Development Organization