The Members of the North Korea Advisory Group would like to extend a special thanks to the many talented analysts and investigators of the General Accounting Office (GAO) and the Congressional Research Service (CRS) who have contributed to this report, and specifically: Eugene E. Aloise, Assistant Director, Resources, Community & Development Division, GAO; Victor Sgobba, Evaluator, Resources, Community & Development Division, GAO; Phillip J. Thomas, Assistant Director, National Security and International Affairs Division, GAO; Ned George, Senior Evaluator, National Security and International Affairs Division, GAO; Christian Hougen, Evaluator, National Security and International Affairs Division, GAO; Dick Nanto, Specialist in Industry and Trade, CRS; Larry Niksch, Specialist in Asian Affairs, CRS; Robert Shuey, Specialist in U.S. Foreign Policy and National Defense, CRS; Zachary Davis, Specialist in International Nuclear Policy, CRS; Steve Bowman, Specialist in National Defense, CRS; Raphael Perl, Specialist in International Affairs, CRS; and Rinn S. Shinn, Foreign Affairs Analyst, CRS.

The Honorable J. Dennis Hastert
Speaker
U.S. House of Representatives
Washington, D.C. 20515

Dear Mr. Speaker:

    We are pleased to transmit to you our report, which answers the question: Does North Korea pose a greater threat to U.S. national security than it did five years ago? In sum, we found that the comprehensive threat posed by North Korea to our national security has increased since 1994. Our report contains an executive summary.

    We were not asked to make specific recommendations as part of our report, and remained within the confines of our mandate. It is our unanimous view, however, that the findings of our report identify a number of serious weaknesses concerning current U.S. policy toward North Korea that urgently require the attention of the foreign policy and national security committees of Congress. We strongly suggest that you direct the relevant committees to review the following issues and report back to you with their specific legislation for congressional action by a date certain.

    Among the issues that need to be addressed are the following:

• Current U.S. policy is not effectively addressing the threat posed by North Korean weapons of mass destruction, missiles and their proliferation.

• U.S. assistance sustains a repressive and authoritarian regime, and is not effectively monitored.

 
• Current U.S. policy does not effectively address the issues posed by international criminal activity of the North Korean government, such as narcotics trafficking, support for international terrorism and counterfeiting.

 
• Current U.S. policy does not effectively advance internationally-recognized standards of human rights in North Korea, including liberating political prisoners and abolishing prisons for hungry children.

 
• Current U.S. policy does not effectively encourage the political and economic liberalization of North Korea.

                                                            Sincerely,
 
 

                                                            BENJAMIN A. GILMAN
                                                            Chairman
 
 
 

DOUG BEREUTER CHRISTOPHER COX PORTER J. GOSS FLOYD SPENCE

SONNY CALLAHAN TILLIE K. FOWLER JOE KNOLLENBERG CURT WELDON

    In August 1998, North Korea alarmed the world by successfully launching a multi-stage missile over Japan and into the Pacific Ocean. Nearly a year later, reports from the Korean peninsula indicated that North Korea was ready to launch an improved version of the missile, one capable of striking the continental United States. It became clear for the first time that North Korea could deliver a weapon of mass destruction not just to Seoul, but also to Seattle.

    Responding to this crisis, House Speaker J. Dennis Hastert asked nine senior Members of Congress to form the North Korea Advisory Group and report to him on the North Korean threat to the United States and our allies.

    The Speaker asked the Advisory Group to answer the question: "Does North Korea pose a greater threat to U.S. interests today than it did five years ago?"

    A number of changes in the U.S. approach to North Korea have taken place over the past five years. In 1994, the Agreed Framework called for North Korea to halt its nuclear weapons development activity in exchange for two light-water nuclear reactors to be provided by an international consortium led by the United States, Japan and South Korea. Since then, North Korea has suffered from continuing economic decline, a three-year famine, the death of Kim Il Sung, and the accession to power of his son, Kim Jong Il.

    The Advisory Group faced a number of hurdles in developing this report. North Korea is the most closed society in the world today. As the 1998 State Department Human Rights Report notes, "The Government prohibits freedom of speech, press, assembly, and association, and all forms of cultural and media activities are under the tight control of the party."

    The Advisory Group relied on information already developed by the U.S. government and international agencies as well as new information supplied specifically for the Advisory Group by the Congressional Research Service (CRS) and the General Accounting Office (GAO), both of which are agencies of the legislative branch.

    The Advisory Group held a number of briefings with administration officials, intelligence analysts and non-government experts on North Korea. Information from seven CRS reports and two GAO reports were incorporated into this final report. The group has also drawn on the considerable expertise of several congressional staff members.

    Today, even though North Korea appears to be on the edge of economic and political collapse, it threatens American and allied interests. Under current policy, North Korea has become the largest recipient of United States foreign aid in Asia.

    The Congress observed the growing gap between North Korea's threatening actions and the administration's representations that North Korea's behavior was accommodating key American interests. Accordingly, on October 19, 1998, the Congress passed H. R. 4328, the Fiscal Year 1999 Omnibus Appropriations Act (PL 105-277), mandating "a full and complete interagency review of United States policy toward North Korea." Section 582 (e) of that Act stated, "Not later than January 1, 1999, the President shall name a 'North Korea Policy Coordinator,' who shall conduct a full and complete interagency review of United States policy toward North Korea, shall provide policy direction for negotiations with North Korea related to nuclear weapons, ballistic missiles, and other security related issues, and shall also provide leadership for United States participation in KEDO." The President named former Secretary of Defense Dr. William Perry to that position. The creation of the position of "North Korea Policy Coordinator" was done at the insistence and instigation of the Congress.

    This report to the Speaker of the House of Representatives analyzes key elements of North Korea's behavior since 1994 when the administration signed the Agreed Framework with North Korea. How North Korea has performed under the 1994 Agreed Framework is of great importance to the United States pursuant to the terms of the agreement itself, the United States and its allies are mandated to provide light water reactors to North Korea only if they are satisfied with North Korea's performance under the Agreed Framework.
 
 

I.    Do the North Korean weapons of mass destruction (WMD) programs pose a greater threat to U.S. security than five years ago?

    North Korea's WMD programs pose a major threat to the United States and its allies. This threat has advanced considerably over the past five years, particularly with the enhancement of North Korea's missile capabilities. There is significant evidence that undeclared nuclear weapons development activity continues, including efforts to acquire uranium enrichment technologies and recent nuclear-related high explosive tests. This means that the United States cannot discount the possibility that North Korea could produce additional nuclear weapons outside of the constraints imposed by the 1994 Agreed Framework.

    In the last five years, North Korea's missile capabilities have improved dramatically. North Korea has produced, deployed and exported missiles to Iran and Pakistan, launched a three-stage missile (Taepo Dong 1), and continues to develop a larger and more powerful missile (Taepo Dong 2). Unlike five years ago, North Korea can now strike the United States with a missile that could deliver high explosive, chemical, biological, or possibly nuclear weapons. Currently, the United States is unable to defend against this threat.

    The progress that North Korea has made over the past five years in improving its missile capabilities, its record as a major proliferator of ballistic missiles and missile technology, combined with its development activities on nuclear, biological and chemical weapons, ranks North Korea with Russia and China as one of the greatest missile proliferation threats in the world.

II.    Do North Korean conventional forces pose a greater threat to peace on the Korean peninsula than five years ago?

    North Korea is less capable of successfully invading and occupying South Korea today than it was five years ago, due to issues of readiness, sustainability, and modernization. It has, however, built an advantage in long-range artillery, short-range ballistic missiles, and special operations forces. This development, along with its chemical and biological weapons capability and forward-deployed forces, gives North Korea the ability to inflict significant casualties on U.S. and South Korean forces and civilians in the earliest stages of any conflict.

III.    Does North Korea pose a greater threat to international stability than five years ago?

    The Democratic People's Republic of Korea (DPRK) is a greater threat to international stability primarily in Asia and secondarily in the Middle East. North Korea is arguably the largest proliferator of missiles and enabling technology in the world, with its primary markets being South Asia and the Middle East. Its proliferation activities pose an increasing threat to American and allied interests globally. Pyongyang continues to harbor terrorists, produce and traffic in narcotics, counterfeit U.S. currency, and infiltrate agents into South Korea and Japan.

IV.    Does U.S. assistance sustain the North Korean government?

    The United States has replaced the Soviet Union as a primary benefactor of North Korea. The United States now feeds more than one-third of all North Koreans, and the U.S.-supported KEDO program supplies almost half of its HFO needs. This aid frees other resources for North Korea to divert to its WMD and conventional military programs.

    U.S. aid to North Korea has grown from zero to more than $270 million annually, totaling $645 million over the last five years. Based on current trends, that total will likely exceed $1 billion next year. During that same time, North Korea developed missiles capable of striking the United States and became a major drug trafficking and currency counterfeiting nation.

    Despite assurances from the administration, U.S. food and fuel assistance is not adequately monitored. At least $11 million in HFO assistance has been diverted. In contravention of stated U.S. policy, food has been distributed in places where monitors are denied access. One U.S. aid worker in North Korea recently called the monitoring system a "scam." More than 90% of food aid distribution sites in North Korea have never been visited by a food aid monitor. The North Koreans have never divulged a complete list of where aid is distributed.

    North Korea has the longest sustained U.N. food emergency program in history. There are no significant efforts to support or compel agricultural and economic reforms needed for North Korea to feed itself. North Korea will likely continue to refuse to reform, instead relying on brinkmanship to exact further aid from the United States and other members of the international community.

V.    Do the policies of the North Korean government undermine the political and/or economic rights of its people more so than five years ago?

    The condition of the North Korean people, both physically and politically, is worse than at any time in the history of their government. U.N. nutritional studies and other research have shown that at least one million North Koreans have starved to death since 1994, while many others face starvation. North Korea's medical system has collapsed with its economy, transforming common diseases into death sentences for many. North Korean hospitals largely function as hospices.

    North Korea has the worst human rights record of any government in the world. The DPRK formally categorizes its citizens into 51 classes. Seven million citizens, one-third of the population, are regarded as members of the "hostile" class. North Korea has established prisons for hungry children, and is the only place on earth where a hungry child wandering away from home is imprisoned. North Korea is also unique in being the only country that has attempted to withdraw from a key human rights treaty.

    The regime of Kim Jong Il depends on maintaining high levels of fear to oppress its people. The perpetual state of crisis that the regime generates with the international community ensures internal discipline and demands absolute support for the regime. This policy requires the regime to keep the North Korean people isolated and ill-informed on developments in the outside world.

Chapter I:             North Korean Weapons of Mass Destruction (WMD) Programs............... 1

                                           A. Nuclear Weapons Programs.......................................................... 2

                                            B. Chemical and Biological Weapons Programs............................... 9

                                            C. Missile Programs........................................................................... 13
 

Chapter II:           North Korean Conventional Forces................................................................. 23
 

Chapter III:         North Korean Threat to International Stability.............................................. 33

                                        A. Proliferation of WMD and Related Technology.............................. 33

                                        B. Proliferation of Missiles and Related Technology.......................... 33

                                        C. Infiltration and Subversion............................................................... 36

                                        D. Illegal Substances and State-Sponsored International Crime....... 38
 

Chapter IV:        Sustaining the North Korean Government...................................................... 49

                                        A. Sustaining the North Korean Government..................................... 50

                                        B. Promoting Critical Reforms............................................................. 56

                                        C. Effects of Declining Economy......................................................... 59
 
 

Chapter V:        Human Rights and the North Korean People.................................................. 63

                                        A. Physical and Political Conditions of Population............................. 64

                                        B. Government Reforms..................................................................... 74
 

APPENDIX: Glossary

APPENDIX: Footnotes

1.1 Potential North Korean Long Range Missile Capabilities 3

1.2 North Korea's Ballistic Missile Capacity 15

1.3 North Korean Short and Medium Range Missile Capabilities 18

1.4 North Korea's Ballistic Missiles 22

2.1 KPA Soldiers on Patrol at the DMZ 24

2.2 North Korean Guards 28

2.3 DPRK/ROK Armies 29

2.4 DPRK/ROK Navies 30

2.5 DPRK/ROK Air Forces 31

3.1 Ranges of Potential North Korean and Iranian Derivative Missiles from Iran 35

3.2 Major Incidents of Drug Trafficking 42

4.1 Kim Jong Gun 57

4.2 Alternative Food 60

5.1 Kim Jong Il 65

5.2 Juche Monument 66

5.3 North Korean Bodies on Shores of Tumen River 69

5.4 Kim Uen Bok 71

    North Korea's WMD programs pose a major threat to the United States and its allies. This threat has advanced considerably over the past five years, particularly with the enhancement of North Korea's missile capabilities. There is significant evidence that undeclared nuclear weapons development activity continues, including efforts to acquire uranium enrichment technologies and recent nuclear-related high explosive tests. This means that the United States cannot discount the possibility that North Korea could produce additional nuclear weapons outside of the constraints imposed by the 1994 Agreed Framework.

    In the last five years, North Korea's missile capabilities have improved dramatically. North Korea has produced, deployed and exported missiles to Iran and Pakistan, launched a three-stage missile (Taepo Dong 1), and continues to develop a larger and more powerful missile (Taepo Dong 2). Unlike five years ago, North Korea can now strike the United States with a missile that could deliver high explosive, chemical, biological, or possibly nuclear weapons. The United States currently is unable to defend against this threat.

    The progress that North Korea has made over the past five years in improving its missile capabilities, its record as a major proliferator of ballistic missiles and missile technology, combined with its development activities on nuclear, biological and chemical weapons, ranks North Korea with Russia and China as one of the greatest missile proliferation threats in the world.
 

A.    Does the North Korean nuclear weapons program pose a greater threat to U.S. security than five years ago?

        While North Korea's nuclear program at its Yongbyon and Taechon facilities appears to be frozen under the 1994
         Agreed Framework, there is significant evidence that other nuclear weapons development activity is continuing.

KEY FINDINGS

• North Korea has at least enough plutonium for one to two nuclear weapons. There is little reason to believe that North Korea has not or could not make a nuclear explosive device capable of producing a significant nuclear yield. North Korea's ongoing nuclear program activity raises the possibility that it could produce additional nuclear weapons.

• Since 1994, North Korea has sought external assistance for its nuclear program. It has sold missiles and missile production equipment to Pakistan, as well as engaged in extensive contacts with Russia's nuclear establishment, and attempted to acquire nuclear and dual-use equipment from Europe and Japan.

 
• It appears that the 1994 Agreed Framework has resulted in a freeze of Pyongyang's nuclear activities at Yongbyon and Taechon.

 
• Although the 1994 Agreed Framework was essentially aimed at eliminating North Korea's ability to make nuclear weapons, there is significant evidence that nuclear weapons development is continuing, including its efforts to acquire uranium enrichment technologies and its nuclear-related high explosive tests.

 
• North Korea is not meeting its obligations under the 1994 Agreed Framework to "consistently take steps to implement" the 1992 Joint Declaration on Denuclearization of the Korean Peninsula. There has been no progress in establishing the agreement's bilateral inspection regime to verify the denuclearization of the peninsula. In addition, evidence that North Korea is seeking to obtain uranium enrichment technologies suggests that, far from coming into compliance, North Korea is actually moving toward increased violation of the 1992 Joint Declaration. The FY98, FY99, and FY00 Foreign Operations Acts include conditions on the distribution of funds to the Korean Peninsula Economic Development Organization (KEDO) regarding the 1992 Joint Declaration. Under these conditions, the President must certify to Congress that the parties to the 1994 Agreed Framework have taken demonstrative steps to implement the 1992 Joint Declaration.

 
• Through the provision of two light water reactors (LWRs) under the 1994 Agreed Framework, the United States, through KEDO, will provide North Korea with the capacity to produce annually enough fissile material for nearly 100 nuclear bombs, should the Democratic People's Republic of Korea (DPRK) decide to violate the Nonproliferation Treaty (NPT).

Background and Status

    North Korea started its nuclear program in the early 1950s when North Korean scientists began cooperating with the Soviet and Chinese nuclear programs. Pyongyang acquired its initial nuclear facilities in the 1960s, mostly from the Soviet Union, and built a significant nuclear complex in the 1970s and 1980s. Most experts believe that the main purpose of North Korea's nuclear program has been to acquire nuclear weapons.⁽¹⁾

    Plutonium and Uranium: The Soviet-supplied, 25 megawatt (MW) reactor at Yongbyon is well-suited to the production of plutonium for weapons. North Korea probably produced and separated in the range of six to twelve kilograms (kg) of plutonium before the reactor was shut down in 1994 in connection with the 1994 Agreed Framework with the United States.⁽²⁾ The status and location of Pyongyang's undeclared plutonium remains a mystery, perhaps hidden inside one of the 8,000 underground structures estimated to exist throughout North Korea. The Department of Energy states that about six kg of plutonium is enough to make a nuclear explosive device.⁽³⁾ These estimates are consistent with the U.S. government's statements that North Korea probably has enough plutonium for one or two nuclear weapons. The Rumsfeld Commission concluded that North Korea's ongoing nuclear program activity raises the possibility that it could produce additional nuclear weapons.⁽⁴⁾

    Before Yongbyon's 25 MW reactor was shut down, North Korea removed fuel rods from the core of the reactor containing as much as 25-30 kilograms of plutonium -- enough for four or five additional bombs if it were extracted from the spent fuel. Pyongyang agreed, as part of the 1994 Agreed Framework, to allow the United States to package the fuel rods in sealed cans pending final disposal, although the ultimate disposal of the fuel remains unsettled. North Korea has an industrial-scale reprocessing plant (used to extract plutonium from used reactor fuel) and various laboratories and research centers, and was constructing two much larger reactors capable of producing even more plutonium if completed and operated.⁽⁵⁾ North Korea also has uranium deposits (it maintains mines with four million tons of exploitable high-quality uranium) and uranium mining, milling, and fabrication capabilities. It has the natural resources to build large-scale uranium enrichment capabilities that would be necessary to enrich uranium for fission weapons.⁽⁶⁾

    Nuclear Weapons: Based upon North Korea's efforts to acquire plutonium, most experts conclude that Pyongyang set out to build first-generation, implosion-type plutonium bombs comparable to the "Fat Man" bomb that the United States dropped on Nagasaki in 1945. "Fat Man" used 6.2 kilograms of plutonium and produced an explosive yield of 23 kilotons. It took the United States about four years to produce the first-ever plutonium bomb.⁽⁷⁾ By comparison, North Korea has had decades to work on a bomb and has had ample opportunity to exploit large amounts of declassified information on U.S. and other countries' nuclear weapons programs.

    With respect to weapon design, North Korea reportedly has produced and tested explosive triggers for detonating nuclear weapons as recently as November 1998.⁽⁸⁾ There is, however, very little open-source information on North Korea's efforts to weaponize its plutonium into a deliverable weapon.

    As a general rule, however, the biggest hurdle for a would-be nuclear power is the acquisition of fissile material -- enriched uranium or plutonium. While it is not certain that North Korea has the technology to weaponize these materials, it is reasonable to assume that North Korea has made or could make a nuclear explosive device capable of producing a significant nuclear yield.⁽⁹⁾ While such a device might not compare favorably to the most modern weapons possessed by the five de jure nuclear weapons states in terms of size, weight, reliability, efficiency, or deliverability, even a few kilotons of yield could approach the level of destruction experienced at Hiroshima or Nagasaki.⁽¹⁰⁾

    Little, if anything, is known about North Korean nuclear strategy, doctrine, or war plans, except that North Korea's collaborations with Soviet and Chinese military and nuclear programs probably influenced Pyongyang's approach toward nuclear weapons development and policy. It is also likely that North Korea has studied U.S. nuclear doctrine.⁽¹¹⁾

    Treaties and Agreements: North Korea signed the Nonproliferation Treaty (NPT) in 1985, but did not allow inspections until 1990. The initial inspections by the International Atomic Energy Agency (IAEA) found evidence of undeclared nuclear activity related to plutonium production.⁽¹²⁾ The IAEA's request for access to additional sites sparked a stand-off over inspections that continues today.

    The 1994 Agreed Framework froze North Korea's declared nuclear program, but the status of undeclared activities remains a mystery. The administration maintains that North Korea has not violated the 1994 Agreed Framework.⁽¹³⁾ However, discovery of undeclared nuclear activity, such as underground nuclear facilities, weaponization, or enrichment activities would be inconsistent with the 1994 Agreed Framework. The 1994 Agreed Framework obligates North Korea to remain a party to the NPT and to eventually come into full compliance with its safeguards agreement.

    In 1991, North Korea signed a declaration with the Republic of Korea (ROK) to ban nuclear weapons, reprocessing or enrichment in either country. The 1992 Joint Declaration on the Denuclearization of the Korean Peninsula called for a bilateral inspection regime to verify the denuclearization of the peninsula. The 1992 Joint Declaration states that the two sides "shall not test, manufacture, produce, receive, possess, store, deploy or use nuclear weapons," and that they "shall not possess nuclear reprocessing and uranium enrichment facilities."⁽¹⁴⁾ The 1992 Joint Declaration was never implemented, although North Korea agreed to "consistently take steps to implement" the 1992 Joint Declaration in the 1994 Agreed Framework.⁽¹⁵⁾ There has been no progress achieved toward the establishment of an inspection regime, as required in the 1992 Joint Declaration, and there has been no known meaningful dialogue between the South and the North on this accord since 1992.

    The FY98, FY99, and FY00 Foreign Operations Acts include conditions on the distribution of funds to KEDO regarding the 1992 Joint Declaration. Under these conditions, the President must certify to Congress that the parties to the 1994 Agreed Framework have taken demonstrative steps to implement the 1992 Joint Declaration. The President made the required certifications for FY98 and FY99.

External Assistance

    North Korea acquired most of its nuclear infrastructure from the Soviet Union, but also has received equipment and know-how from China. Pyongyang has also attempted to acquire nuclear and dual-use equipment from Europe and Japan, both legally and through its extensive illegal smuggling operations.⁽¹⁶⁾ North Korea continues to operate an extensive global smuggling network.

    North Korea's sales of missiles and missile production equipment to Pakistan have raised concerns that North Korea could acquire nuclear expertise, information, equipment, or materials from Islamabad, perhaps in trade for missiles or missile assistance.⁽¹⁷⁾ Pakistan operates uranium enrichment facilities that reportedly produce fissile material for its nuclear weapons program, and which could be of interest to North Korea. Pakistan is reportedly now producing plutonium at a newly completed Chinese-supplied reactor at Khushab.⁽¹⁸⁾

    North Korea's extensive contacts with Russia's nuclear establishment raise the possibility of Russian nuclear assistance to the DPRK.⁽¹⁹⁾ There have been reports that North Korea expressed interest in acquiring nuclear materials from Russia.⁽²⁰⁾ The administration has often acknowledged the dangers associated with weak security for nuclear weapons, materials, and expertise in Russia and other countries of the Former Soviet Union (FSU). Kazakhstan, for example, possesses extensive nuclear assets and recently sold MiG 21 jets to North Korea.⁽²¹⁾ North Korea may be one of the countries most interested and best able to exploit those weaknesses.

    External assistance from any of these sources could significantly advance North Korea's nuclear capabilities.

Indigenous Capabilities

    Uranium Enrichment: Among the many mysteries surrounding North Korea's nuclear program are its extensive uranium mining and milling activities. North Korea's interest in uranium dates back several decades, and North Korea is known to have attempted to acquire uranium enrichment equipment.⁽²²⁾ The capability to enrich uranium to weapons-grade would provide North Korea with a second path to nuclear weapons and, if realized, could add a dangerous new dimension to Pyongyang's nuclear weapons development activities.

    Undeclared Plutonium or Uranium: The IAEA was unable to verify the operating records of North Korea's research reactors, and the extent of North Korea's nuclear dealings with Moscow and Beijing are not well documented. If North Korea received unreported fuel shipments from the Soviet Union or China, it could have irradiated the fuel to produce additional plutonium, or extracted weapons-grade uranium from the fuel. Pyongyang is capable of extracting plutonium or uranium from fresh or spent nuclear fuel.

    Radiological Weapons: Regardless of North Korea's ability to build and deliver a nuclear weapon, North Korea could also attempt to construct a radiological weapon from various nuclear materials, including non-weapons-grade uranium, plutonium, or other materials, such as cobalt. This weapon uses conventional explosives to disperse radioactive materials, exposing troops and civilians to harmful radiation. However, a radiological device would not necessarily cause dangerous exposures, and is unlikely to constitute a militarily significant weapon, although it might incite terror and mass disruption, and could possibly undermine confidence in civil authority.

Future Possibilities

    Spent Fuel from the Yongbyon Reactor: The fate of the 8,000 spent fuel rods from the 25 MW reactor at Yongbyon that are being stored in canisters remains unresolved. The 1994 Agreed Framework prohibits reprocessing of the fuel rods, but does not specify where they ultimately will be disposed. The rods contain about 25-30 kilograms of plutonium, enough for four to five bombs if North Korea decides to take action to reprocess them.

    Spent Fuel from the Two Light Water Reactors: If the 1994 Agreed Framework is implemented and two LWRs are eventually built and operated in North Korea, the reactors could produce close to 500 kilograms of plutonium in spent reactor fuel each year; enough for nearly 100 bombs annually if North Korea decides to break its obligations and reprocess the material.⁽²³⁾ Such plutonium, while not weapons-grade, can be used to produce nuclear weapons and does not present an overwhelming barrier to those pursuing a dedicated nuclear weapons program.

    As the quantity of plutonium in spent fuel North Korea could accumulate from these sources is so enormous, North Korea must provide transparency to ensure that diversion does not occur. Given its poor record of adherence to international agreements and to allowing foreign monitoring of its nuclear programs, there is little reason to believe that North Korea would not eventually use this plutonium for the production of nuclear programs.

    While the United States could theoretically cripple the reactors by suspending the provision of reactor fuel, the DPRK could circumvent this problem by illicitly acquiring reactor fuel from Russia or China. Russia is already supplying the Iranians with reactor fuel, and given the potential for further political and economic disintegration within Russia, the incentives for covertly assisting the DPRK may be increasing at the same time that the ability to control illicit sales is decreasing. China, meanwhile, remains committed to the survival of the North Korean regime, and may be willing to support the DPRK's reactor fuel needs in the event of a cut-off of reactor fuel by the United States and its allies.

    B.    Do the North Korean chemical and biological weapons (CBW) programs pose a greater threat to U.S. security than five years ago?

    The recent increase in the North Korean CBW threat is derived from its assumed efforts to develop CBW
    warheads for its long-range ballistic missiles, now capable of striking the continental United States.

KEY FINDINGS

• North Korea possesses biological weapons production and dispensing technology, including the capability to deploy chemical or biological weapons on missiles.

• The DPRK is generally credited with possessing a full range of chemical warfare agents, including nerve, blister, choking and blood agents. The South Korean government believes that the DPRK followed the Russian pattern of developing chemical warfare (CW) weapons for a wide range of weapons systems, including artillery above 82 millimeter (mm), multiple rocket launchers, Soviet-derived FROGs (Free Rocket Over Ground), SCUD missiles, aerial bombs and spray tanks.

 
• The DPRK biological weapons (BW) effort is believed to focus on traditional agents: plague, typhoid, cholera, anthrax, smallpox, yellow fever, botulinum toxin, and hemorrhagic fevers. It is generally assumed that, to the extent capable, the DPRK would seek to provide BW munitions for the same range of weapons as it does with chemical munitions.

    While most of the attention regarding North Korea's CBW weapons has been focused on technological capabilities or stockpiles, an equally important element in considering the DPRK CBW threat is trying to understand how North Korea views the strategic utility of these weapons, and the consequences of using them.

    The concept of international abhorrence regarding CBW carries little weight with the DPRK.⁽²⁴⁾ This could be attributed to North Korea's apparent belief that the United States and South Korea would use CBW in a conflict, international agreements notwithstanding. This belief is reflected in North Korean propaganda, but more significantly in the extensive CBW defense preparations undertaken not only for its military forces, but also for its civilian population. It is also frequently argued that the DPRK would consider any military conflict as a fight for its survival as a nation, and hence would adopt an "Armageddon" attitude, unconstrained by international law.

    Reflecting Soviet military doctrine, the DPRK has traditionally viewed chemical weapons as an integral part of any military offensive. There are no indications this view has altered since the end of the Cold War. The most obvious tactical use of chemical weapons by the DPRK would be to terrorize South Korean civilians. Seoul lies within easy striking distance of North Korea's artillery and rocket systems and, today, the South Korean civilian population has no protection against CW attack.

    Since the Aum Shin Rykio nerve agent attack in the Tokyo subway, the possibility of unconventional or terrorist CBW use by North Korea could be a real danger. Such an attack might play a role in an invasion scenario. North Korea might also use CW against Japanese facilities, in addition to ROK and U.S. facilities in South Korea, to discourage or impede Japanese cooperation with U.S. and South Korean armed forces.

    Biological weapons can present significantly different considerations. For example, highly infectious diseases, e.g., smallpox, have the obvious potential to affect one's own forces or population if used in close proximity. Hence their more likely use would be strategic, i.e., as a threat against the United States or Japan. The less infectious diseases, e.g., anthrax, could be used as a destabilizing tactic or to interdict passage through certain areas in an invasion scenario. Outside of an invasion scenario, unconventional terrorist use of BW is a possibility, particularly of naturally-occurring diseases, which would make attribution difficult.

Background and Status of the DPRK Chemical and Biological Weapons Programs

    The U.S. government has released no specific details on North Korean CBW capabilities, but the Department of Defense has stated that the DPRK has a "sizeable stockpile of chemical weapons," and "has pursued research and development related to biological warfare capabilities."⁽²⁵⁾

Chemical Weapons

    North Korea's CW program is generally assumed to have started in the mid-1950s with heavy dependence upon Russian and Chinese assistance. Development of an offensive capability appears to have been a lengthy process, with early detectable efforts concentrating on defensive preparations. An oft-quoted estimate of the DPRK CW stockpile in 1989 was about 180-250 metric tons.⁽²⁶⁾ By 1997, estimates placed the DPRK CW stockpile at about 5,000 metric tons.⁽²⁷⁾

    The DPRK is generally credited with possessing a full-range of chemical warfare agents, including nerve, blister, choking, and blood agents. The North Koreans have recently emphasized their work on nerve agents. It is also believed that the DPRK is interested in developing binary nerve agents.⁽²⁸⁾

    Estimates of the number of DPRK production, research, and storage facilities have remained stable over the last decade, with the ROK government estimating current peacetime annual production capability (if not actual production) at 4.5 tons, with the likelihood of a surge capacity.⁽²⁹⁾ A 1993 report estimates that the DPRK was operating eight CW and BW production plants, and that there were six storage facilities in the country, and three research institutes.⁽³⁰⁾

    The ROK government believes that the DPRK followed the Russian pattern of developing CW munitions for a wide range of weapons systems, including artillery above 82 mm, multiple rocket launchers, Soviet-derived FROGs, SCUD missiles, aerial bombs and spray tanks. Unconventional delivery means, e.g., clandestine aerosols and balloons, are also suspected.⁽³¹⁾

    In terms of recent increases in the DPRK CW threat, it is not the types of agents or stockpile levels that have attracted the most attention, but rather the assumed efforts to develop CW warheads for its No Dong and Taepo Dong ballistic missiles. The ROK government assesses the No Dong as CW capable.

    Even more unsettling, however, is the prospect of the coupling of a CW weapon with the Taepo Dong 1 or 2 intercontinental ballistic missiles (ICBMs) under development, with the capability to strike Japan and virtually all U.S. military installations in East Asia, including Guam.⁽³²⁾ While testing of the Taepo Dong 2 has been suspended per the Berlin Agreement with the United States, a three-stage Taepo Dong 2 could strike the United States with a chemical or biological warhead.⁽³³⁾

    The efficient and accurate dispersal of chemical agents by a ballistic missile presents a number of technical challenges.

Biological Weapons (BW)

    The North Korean BW program is thought to have begun in the 1960s, but did not attract attention until the 1980s. It appears to have developed slowly, owing to the poor state of biotechnology in the DPRK. Japanese officials, however, point out that DPRK scientists have recently won international recognition for the development of a new Hepatitis-B vaccine -- an event that could indicate a more sophisticated biotech capability than previously thought.⁽³⁴⁾ The DPRK BW effort is believed to have focused on the traditional agents: plague, typhoid, cholera, anthrax, smallpox, yellow fever, botulinum toxin, and hemorrhagic fevers.⁽³⁵⁾ There is no publicly available evidence that the DPRK has undertaken development of genetically-engineered BW agents. However, given that the U.S. Department of Defense (DoD) was openly discussing interest in such agents 30 years ago, it seems reasonable to assume that the DPRK would explore this avenue to the extent possible.⁽³⁶⁾ There are no reliable public estimates of the DPRK's BW agent or munitions stockpile. It is generally assumed that, to the extent capable, the DPRK would seek to provide BW munitions for the same range of weapons as it does with chemical munitions, i.e., artillery, rockets, bombs, and missiles.

    As with CW, any recent increase in the BW threat profile can be attributed to the DPRK's ballistic missile programs, and the assumption that BW warheads will be forthcoming. Long-range missiles are particularly attractive for biological warfare because they remove or reduce the chance of affecting one's own forces or population. However, even more than CW agents, BW agents present significant technological challenges for effective delivery by a missile warhead. Nevertheless, North Korea possesses biological weapons production and dispensing technology, including the capability to deploy chemical or biological weapons on missiles.⁽³⁷⁾ This is primarily because BW agents are live organisms and must be able to survive the stresses of missile flight and impact. As with CW, however, the psychological effect of BW strikes are likely to be so great that accuracy and efficient dispersal are not necessarily critical to having political or military consequences.

    C.    Does the North Korean missile program pose a greater threat to U.S. security than five years ago?

    Today, North Korea ranks with Russia and China as one of the greatest missile threats in the world due to: the
    progress made over the past five years in improving its missile capabilities; its record as a leading proliferator of
    ballistic missiles and missile technology; and its development of high explosive, chemical, biological, and possibly
    nuclear weapons.

KEY FINDINGS

• Unlike five years ago, North Korea can now strike the United States with a missile that could deliver high explosive, chemical, biological, or possibly nuclear weapons. The United States currently is unable to defend against this threat.

 
• According to the 1999 ballistic missile National Intelligence Estimate (NIE), "the proliferation of medium-range ballistic missiles - driven primarily by North Korean No Dong sales - has created an immediate, serious and growing threat to U.S. forces, interests, and allies, and has significantly altered the strategic balances in the Middle East and Africa."⁽³⁸⁾North Korean No Dong transfers have all occurred within the last five years.

 
• In the last five years, North Korea has made significant progress in improving its missile capabilities. It has produced, deployed and exported missiles to Iran and Pakistan, launched a three-stage missile (Taepo Dong 1), and continues to develop a larger and more powerful longer-range missile (Taepo Dong 2).

• North Korea is one of the world's leading suppliers of ballistic missiles and missile technology, and has developed, produced, deployed and exported a broad range of missiles (see Fig. 1.1). By selling complete missile systems, components, and missile technologies to Iran, Syria, Egypt, and Pakistan, North Korea undermined regional stability in the Middle East and South Asia.

 
• It is probable that North Korea will also export the longer-range missiles it is developing to countries such as Pakistan, Iran, Syria, and perhaps Libya, if political or economic developments do not intervene.

• North Korea attempted to orbit a small satellite using the Taepo Dong 1 in August 1998, but the third stage failed during powered flight; other aspects of the flight, including stage separation, appear to have been successful.

 
• If it had an operable third-stage and a reentry vehicle capable of surviving ICBM flight, North Korea could now strike the continental United States with a Taepo Dong 1. In such a case, about two-thirds of the payload mass would be required for the reentry vehicle structure. The remaining mass is probably too light for an early generation nuclear weapon, but could strike a target in the United States with a biological or chemical warhead.

• A two-stage Taepo Dong 2 could deliver a payload of several hundred kilograms (enough for an early generation nuclear weapon) to Alaska or Hawaii, and could deliver a lighter weapon to the western half of the continental United States.

• A three-stage Taepo Dong 2 could deliver a payload of several hundred kilograms, an early generation nuclear weapon, anywhere in the United States.

• North Korea's development of ballistic missiles specifically threatens the United States and its allies because it is developing, or may have developed, nuclear, chemical, and biological weapons which could be delivered by these missiles.

North Korean Missile Threat: Today

    North Korean missiles, coupled with nuclear, chemical, or biological weapons, now can strike U.S. troops and our allies throughout Northeast Asia, and could hit the United States. North Korea's SCUD B can reach most of the heavily populated portions of South Korea, and the SCUD C is capable of reaching the majority of South Korea. North Korea has the capability to use SCUD missiles to strike targets throughout Seoul, as well as South Korean airbases, logistic facilities, and the 37,000 U.S. troops stationed in South Korea. The No Dong missile, with a range of 1,300 km (800 miles), can strike targets throughout most of Japan. Referring to the Taepo Dong 1 and Taepo Dong 2, then-Director of the Central Intelligence Agency James Woolsey stated that the missiles could "put at risk all of North-East Asia, South-East Asia and the Pacific area."⁽⁴⁰⁾ The August 31, 1998, launch of a Taepo Dong 1 with a third stage indicates North Korea may now be able to bring the United States within range of its missiles to attack targets as far away as 5,600 km (3,500 miles), including Hawaii and parts of Alaska.

    The U.S. territory of Guam and its population of 150,000 would be within striking distance of the North Korean Taepo Dong 1 or 2, if it successfully flies near a range of 3,500 km (2,175 miles).⁽⁴¹⁾ More than 14,000 U.S. military personnel are deployed on Guam, with the majority stationed at Agana Naval Station and Andersen Air Force Base.⁽⁴²⁾

North Korean Missile Threat: Future

    This report specifically addresses the threat North Korea poses to the United States security over the past five years. Given the extraordinary progress made by North Korea in enhancing its missile capabilities in that time-frame, it is reasonable to conclude that the missile threat facing the United States will only increase, and probably dramatically so, over the next five to ten years, absent effective policy.

    This is particularly true if one considers those factors which were heavily discounted in the 1995 NIE regarding the ballistic missile threat facing the United States.

    Specifically, the 1995 NIE was criticized, among other reasons, for: basing its assessment on the vulnerability of only the United States' 48 contiguous states; for underestimating the time it would take a rogue nation to develop a long-range ballistic missile; for downplaying the impact of foreign assistance on the missile programs; for undervaluing the effect of space launch vehicle (SLV) development on missile proliferation; for being unrealistic about the potential sale of SLVs, and for dismissing the threat of an accidental or unauthorized ballistic missile launch.⁽⁴³⁾ Each of these factors has particular relevance for North Korea's missile programs.

    The Rumsfeld Commission, formally know as the Commission to Assess the Ballistic Missile Threat to the United States, more fully analyzed these factors. The Commission also made recommendations for the Intelligence Community to consider as it prepared to issue its next ballistic missile threat assessment (the 1999 NIE, which was released in September 1999).⁽⁴⁴⁾

BACKGROUND ON NORTH KOREAN MISSILE DEVELOPMENT

Early Developments

    North Korea's ballistic missile program dates back to the early 1970s when it tried to procure SCUD missiles from the Soviet Union. When this effort failed, North Korea began reverse engineering the USSR's FROG rockets and, in the mid-1970s, began a program of missile cooperation with the People's Republic of China (PRC). The two countries worked on the development of the DF-61 missile which would have had an estimated range of 600 km (370 miles) and a payload of 1,000 kg (2,200 pounds).⁽⁴⁵⁾ Although the DF-61 program was canceled due to the removal of its supporters in the Chinese regime, it provided North Korea with certain ballistic missile technology and served as a basis for its missile development.

SCUDS

    In 1981, Egypt provided North Korea with a small number of Soviet SCUD B missiles, which Pyongyang reverse-engineered to gain knowledge needed for a self-sufficient missile program.⁽⁴⁶⁾By 1984, North Korea had developed a variant of the Soviet SCUD B missile, known as the SCUD A. The SCUD A had an estimated range of 280-300 km (174-186 miles) and a payload of 1,000 kg (2,200 pounds). North Korea tested the SCUD A at least three times over the Sea of Japan between April and September 1984. Despite these flight tests, it is believed that North Korea has not deployed the SCUD A.⁽⁴⁷⁾

    In 1985, with financial assistance from Iran, North Korea developed its own SCUD B, an upgraded version of the SCUD A.⁽⁴⁸⁾ The SCUD B has an estimated range of 300 km (186 miles) and a payload of 1,000 kg (2,200 pounds). In 1989, North Korea developed the SCUD C as an elongated version of the SCUD B with a reduced warhead, thereby allowing it to carry more fuel and travel a greater distance. The SCUD C has an estimated range of 500 km (310 miles) with a payload of 700-800 kg (1,540-1,760 pounds) and entered full-scale production in 1991. The Department of Defense estimates that the North Korean Armed Forces have several hundred SCUD-like missiles and have exported many to other countries.⁽⁴⁹⁾

NO DONG

    During the 1980s, North Korea developed the No Dong, which has an estimated range of 1,300 km (800 miles) and a payload of 1200 kg (2640 pounds). The No Dong uses an expanded model of the SCUD C missile motor, giving it added thrust and longer range with a heavier warhead. In July 1998, Secretary of Defense William Cohen confirmed that North Korea had completed its development of the No Dong.⁽⁵⁰⁾ The Rumsfeld Commission reported in July 1998 that North Korea deployed the No Dong after just one successful test and long before the United States government knew.⁽⁵¹⁾ During late 1998 and early 1999, a series of articles reported that North Korea had deployed six, then ten, then 30 No Dong missiles at more than ten bases, with at least five underground launch sites.⁽⁵²⁾ One author estimates that North Korea will have produced 50-100 No Dong missiles by the end of 1999, and that it exported one or two dozen and used another 15 in testing and training, leaving about 25-75 in the North Korean inventory.⁽⁵³⁾

TAEPO DONG 1

    North Korea is in the process of developing longer-range ballistic missiles. The two-stage Taepo Dong 1 has a range of 1,500-2,000 km (930-1,240 miles) and at one point was expected to enter production in 1995. On August 31, 1998, North Korea used a Taepo Dong 1 with an additional solid-fuel third stage in an attempt to place a small satellite into orbit. Apparently, the first stage (based on the No Dong missile motor) and the second stage (based on the SCUD C motor) operated as planned, and the third stage separated and carried the payload a distance before becoming disabled. The test demonstrated North Korea's ability to integrate numerous components in building a multi-stage missile, building a guidance package, and using both liquid and solid fuel. The test did not demonstrate a capability to construct a reentry vehicle that could survive atmospheric reentry at the speed of an ICBM, nor did it show the capacity to build a fully operational solid-fuel third stage.⁽⁵⁴⁾

    DoD estimated that the Taepo Dong 1, with a properly functioning third stage, could have a range of 3,850-5,600 km (2,400-3,500 miles), enough to reach Alaska and Hawaii. One expert predicted that the Taepo Dong 1 with a third stage could reach Alaska and Hawaii with a small nuclear warhead, and could reach much of the continental United States with a lighter warhead, such as a biological or chemical weapon.⁽⁵⁵⁾ The 1999 National Intelligence Council estimate indicated that if the Taepo Dong 1 had a properly functioning third stage and a survivable reentry vehicle, it could strike targets in the United States with sufficient size for a chemical or biological weapon, but not for an early-generation nuclear weapon.⁽⁵⁶⁾

    It is not known where North Korea acquired the solid fuel third stage for the August 1998 test, but there are several possibilities. David Wright of the Massachusetts Institute of Technology (MIT) said the solid fuel motor could have been acquired from Pakistan, which may have copied it from a French missile motor, or North Korea may have used, or copied, one stage of the Chinese M-11 short-range ballistic missile. Pakistan reportedly received M-11 missiles, components, and production technology from China. Iran received solid missile technology from Russia, and perhaps China, and may have passed it to North Korea in return for SCUD and No Dong missiles and technology. Another possibility is that North Korea might have modified a motor from an SA-2 surface-to-air missile, which North Korea reportedly produces as the HJ-2, or may have used an engine from an SS-21 SCARAB, which North Korea reportedly acquired for reverse engineering.⁽⁵⁷⁾

TAEPO DONG 2

    The Taepo Dong 2's range would enable North Korea to strike portions of Alaska and Hawaii with a payload of several hundred kilograms (enough for an early generation nuclear weapon), and could deliver a lighter weapon to the western half of the United States. Some analysts even suggest that the size of the Taepo Dong 2 allows space for enough liquid fuel to carry a missile almost 10,000 kilometers (6,200 miles) if the construction materials and warhead were sufficiently light.⁽⁵⁸⁾ With such range, the missile could reach most of the United States. Multiple-stage technology would enable the missile to travel further or to carry a larger payload. It is estimated that a three-stage Taepo Dong 2 could deliver a payload of several hundred kilograms, equivalent to a first generation nuclear weapon, anywhere in the United States.⁽⁵⁹⁾

UNITED STATES THEATER AND NATIONAL MISSILE DEFENSE

    U.S. security planners have placed new emphasis on theater missile defense, largely due to the theater missile and WMD threats emerging in the Middle East and North Korea. They have also placed increased emphasis on national missile defense largely due to the current inability of the United States to defend itself from the emerging North Korean threat. Contributing to the new policy emphasis are: continuing Russian and Chinese missile capabilities; the aspirations of numerous developing countries to develop long-range missiles; and the maturing missile defense technologies of the United States.

    North Korea's missile capabilities have deeply concerned Japan. The 1994 Japanese Defense Ministry white paper, Defense of Japan, described the No Dong as a "main destabilizing factor."⁽⁶⁰⁾ The risk posed by the No Dong has already prompted Japan to proceed with theater missile defense cooperation with the United States, including the purchase of United States Patriot air defense systems and participation in the development of Navy Theater Wide missile defense. Some have speculated the military threat from North Korea might even prompt Japan to rethink its non-nuclear status.⁽⁶¹⁾

    North Korea is less capable of successfully invading and occupying South Korea today than it was five years ago, due to issues of readiness, sustainability, and modernization. It has, however, built an advantage in long-range artillery, short-range ballistic missiles, and special operations forces. This development, along with its chemical and biological weapons capability and forward-deployed forces, gives North Korea the ability to inflict significant casualties on U. S. and South Korean forces and civilians in the earliest stages of any conflict.
 
 

KEY FINDINGS
 
 

• North Korea has the fifth largest armed force in the world with nearly 1.1 million active-duty personnel and five million in reserve.

• The DPRK has developed an advantage over U.S.-ROK forces in short-range ballistic missiles, artillery, and special operations forces.

 
• The failing North Korean economy has undermined the readiness, modernization, and sustainability of DPRK conventional forces, thereby degrading Pyongyang's ability to successfully invade South Korea. However, the sheer size and firepower of North Korea's armed forces enables it to inflict great destruction and loss of life during hostilities.

 
• U.S. aid to North Korea indirectly sustains the military capability of North Korean forces.

    While world attention since 1994 has primarily focused on North Korea's nuclear weapons

and long-range missile programs, there is a significant and ongoing threat posed by North Korea's conventional forces. The DPRK is generally regarded as the greatest threat to peace in East Asia, and remains the country most likely to involve the United States in a large-scale conventional war or major theater war (MTW) over the near term. The DPRK maintains a force of nearly 1.1 million active duty personnel, with an additional five million in the reserves (of a population of 23 million). This makes North Korea the fifth largest armed force in the world and gives the misnamed demilitarized zone (DMZ) the dubious honor of the being the most heavily militarized place on earth.

    Armed Forces: The DPRK is unquestionably the world's most militarized state, and the Korean People's Army (KPA) serves as the main source of power in that society. The majority of North Korean forces are forward-deployed and located within 40 miles of the DMZ. The KPA would likely use chemical and biological weapons during a conflict. The DPRK has developed a significant advantage in the fields of theater ballistic missiles, special operations forces, and heavy artillery. It is widely estimated Pyongyang commits roughly 25 to 30 percent of its gross domestic product (GDP) to military spending.

    The primary objective of DPRK military policy is the fielding of a military force capable of conducting an offensive operation into the ROK in order to unify the peninsula under Pyongyang's control within 30 days of the commencement of hostilities.⁽⁶²⁾ A second objective is the defense of North Korea. For these purposes, North Korea has a ground force with roughly 900,000 active-duty troops organized into 32 active infantry divisions. The North Korean army fields nearly 5,000 tanks, 2,000 armored personnel carriers (APC), almost 13,000 artillery pieces, and 2,400 multiple rocket launchers. The most capable ground units are forward-deployed and capable of initiating hostilities with little advanced warning. The most significant development in recent years has been the continued deployment of long-range artillery systems, including 240 mm multiple rocket launchers and 170 mm self-propelled artillery guns near the DMZ and within range of Seoul.

    The 46,000-member North Korean navy is primarily a coastal defense force consisting of missile, torpedo, patrol craft, and submarines. The navy's numerous amphibious craft, attack and midget submarines assist in the insertion and extraction of special operations forces into South Korea and Japan. A number of these operations have been detected in recent years off of South Korea and Japan.

    The 82,000 personnel and over 1,000 aircraft of the North Korean Air Force (NKAF) have four primary missions: air defense; strategic bombing; transport of special operations forces; and air support to ground forces. North Korea has historically put a high emphasis on air defense, placing military industries, aircraft hangars, repair facilities, ammunition, fuel, and even air defense missiles underground or in hardened shelters - the lessons of DESERT STORM not being lost on Pyongyang. Ground-based assets bear the primary responsibility for air defense. The DPRK has created one of the world's most dense air defense networks with nearly 11,000 anti-aircraft artillery guns and over 50 surface-to-air missile (SAM) sites, including the SA-2 GUIDELINE, SA-3 GOA, and the long-range SA-5 GAMMON. North Korea also fields 15,000 man-portable air defense systems.

    In addition to its burgeoning medium and long-range missile programs, which are able to threaten Japan, the continental United States, Alaska, Hawaii, and U.S. territories, North Korea deploys a significant short-range surface-to-surface ballistic arsenal capable of reaching all of South Korea.

    North Korea maintains a large, highly-trained special operations force of 100,000. These forces have the basic missions of conducting operations in the enemy's rear area, reconnaissance, infantry operations, and protecting North Korea's rear areas.⁽⁶³⁾ All in all, North Korea presents a formidable military force capable of inflicting serious damage in times of war in South Korea and to U.S. forces stationed there. However, like any military force today, maintaining a modern, well-equipped, and ready armed force is a challenge.

Challenges

    The major hurdle faced by the DPRK in maintaining its forces is the failing state of its economy. To this end, a range of public evidence points to a serious deterioration in North Korea's conventional arms war fighting capability, particularly in such critical areas as unit readiness, modernization, sustainability, and defense industrial capacity supporting conventional arms.

    A recent example of probable North Korean deficiencies was demonstrated in June 1999 when a North Korean naval squadron was defeated by South Korean naval vessels in the Yellow Sea during a controversy over the North Limit Line of the DMZ. The South Korean navy's modern fire control systems and well-trained crews readily outgunned the vintage 1960-70s North Korean ships, and as a result, several North Korean naval vessels were lost.⁽⁶⁴⁾

    Modernization: Modernization has presented a significant challenge to the North Korean armed forces. In fact, it is reported that North Korea has only imported $156 million worth of weaponry since 1995.⁽⁶⁵⁾ A comparative study of the 1985-1986 and 1998-1999 editions of the authoritative publication, The Military Balance, reveals that after nearly 15 years, there have been few changes in the models of weaponry in the North Korean army and air force.⁽⁶⁶⁾ This absence of modernization is especially noticeable in the offensive weaponry which would ultimately spearhead an invasion of South Korea. The Military Balance indicates that North Korea has tank corps comprised of 1940s and 1950s-vintage T-34, T-54, T-55, and T-59 light and medium tanks, and early 1970s-vintage T-62 main battle tanks. They also reveal that North Korea has doubled the number of their armored personnel carriers, but there are no new models.

    The majority of North Korea's combat aircraft consists of about 700 Soviet-era MiG-15 FAGOT, MiG-17 FRESCO, MiG-19 FARMER, MiG-21 FISHBED, Su-7 FITTER, and MiG-23 FLOGGER aircraft from the 1950s to 1970s. North Korea has added 30 modern Russian MIG-29 FULCRUMs in the 1990s, along with about 50 Su-25 FROGFOOT ground attack aircraft. The MiG-29 is equipped with the advanced AA-10 ALAMO air-to-air missile (with beyond-visual-range capability) and provides Pyongyang with an improved air defense posture. Still, overall modernization has been modest at best. In the event of war, North Korea would quickly be dependent upon obsolete aircraft.

    Readiness: The unit readiness of the North Korean forces is also questionable. To maintain readiness to carry out its assigned mission in wartime, a military must train. A severe fuel shortage has limited North Korea's ability to conduct military training exercises. For instance, by 1996, it had become evident that fuel shortages were hampering the daily operations of the NKAF. North Korean combat pilots are believed to fly only 20 percent of the time that South Korean and U.S. pilots spend in the air.⁽⁶⁷⁾ Recent reports indicate an even further decline in pilot flight training.⁽⁶⁸⁾ A lack of appropriate training greatly affects pilot proficiency and combat effectiveness.

    Readiness is also undermined by the reported decline in the scope and duration of North Korean army exercises in the 1990s. U.S. and South Korean military officials noticed as early as 1992 that the North Korean military was cutting back large unit, division, and corps-level military exercises.⁽⁶⁹⁾ Most recently, South Korean military officials have focused on fuel shortages as a principal cause for the decline in major North Korean military exercises. North Korea's annual winter exercise period, involving ground and air components, has been inferior in scope and duration than in the past. South Korean Defense Minister Chun Yong-taek reported that the December 1998-March 1999 winter exercise was 50 percent smaller than the previous year's exercise. He attributed this to shortages of both fuel and food.⁽⁷⁰⁾ According to the South Korean Defense Ministry, the North Korea military is substituting command post exercises for field training.⁽⁷¹⁾

    Sustainability: One estimate, based upon the amount of light oil that could be extracted from North Korea's imports of 1.0 to 1.5 million tons of crude oil annually, indicated that North Korea would have 300,000 tons of light oil to produce gasoline, diesel oil, and aircraft fuel for both civilian and military uses. By contrast, Japan's Self Defense Forces, 20 percent the size of North Korea's armed forces, use about 1.3 million tons of light oil annually.⁽⁷²⁾ The lack of fuel is a key factor in North Korea's inability to sustain military operations, especially offensive operations.

    In the 1990s, the North Korean defense industrial base supporting conventional arms, much like its civilian industrial sector, has fallen victim to the economic crisis. The pervasive lack of fuel, raw materials, transportation infrastructure, and even food for workers, has resulted in a decline in production at defense plants. This has compromised the DPRK's ability to produce material for military operations, as well as new conventional weaponry. Further indicating the deterioration of the defense industry, North Korea's exports of conventional arms declined from an estimated $700 million in 1994 to under $100 million in 1998.⁽⁷³⁾

    Foodstuffs are also critical to sustaining military operations. It has been reported that North Korea has a military stockpile of food for wartime purposes probably sufficient for 30 days of offensive operations. South Korea estimates the size of the stockpile to be in the range of 1.2- 1.5 million tons.⁽⁷⁴⁾ It is uncertain whether North Korea has drawn down this stockpile in recent years to meet chronic food shortages. As the North Korean famine intensified after 1995, military personnel were allocated 700-900 grams of food daily versus 100-200 grams for civilians.⁽⁷⁵⁾ Intake of 700-900 grams daily is only slightly above the 450 grams daily that the United Nations cites as the minimum amount of daily food intake for survival.⁽⁷⁶⁾ This situation has a deleterious effect on the health, morale, discipline, and combat effectiveness of North Korean armed forces, and on Pyongyang's ability to conduct sustained military operations.
    In 1997, Lieutenant General Patrick Hughes, Director of the Defense Intelligence Agency (DIA), testified before the Senate Select Committee on Intelligence that "North Korea's capability to conduct large-scale combat operations continues to deteriorate as worsening internal economic conditions undermine training, readiness and sustainment."⁽⁷⁷⁾ In response to a question, he later asserted: "The progressive weakening of Pyongyang's military decreases the likelihood that it could successfully attack and hold territory in the South."⁽⁷⁸⁾

    However, one should not underestimate North Korea's fundamental military might. The very size of the North Korean war machine is a prime indicator of Pyongyang's "readiness" for conflict. Despite the current degraded state of readiness, modernization, sustainability, and defense industrial capacity due to the ongoing economic crisis and the loss of host states, e.g., the Soviet Union, North Korea maintains a potent armed force capable of undertaking a large-scale invasion of the ROK. North Korea's large conventional force and advantages make it capable of inflicting great destruction and loss of life for South Korea and the American forces that serve there. It is likely that North Korea will use any offsets from international aid to improve the readiness, modernization, force structure, and sustainablity of the KPA.

    The DPRK poses an increased threat to international stability primarily in Asia and secondarily in the Middle East. North Korea is arguably the largest proliferator of missiles and enabling technology in the world, with its primary markets being South Asia and the Middle East. Its proliferation activities amount to an increasing threat to American interests globally. Pyongyang continues to harbor terrorists, produce and traffic in narcotics, counterfeit U.S. currency, and infiltrate agents into South Korea and Japan.
 

    A.    Does Pyongyang proliferate weapons of mass destruction or related technologies to countries of concern to
            the extent that it has resulted in an increased threat to the United States and/or our allies as compared with
            five years ago?

    There is no publicly available information that North Korea has transferred weapons of mass destruction or the
    technology to produce them to other nations, but there is legitimate concern that Pyongyang may do so in the
    future.

    B.    Does North Korea proliferate missiles and related technology to countries of concern more than five years
            ago?

    North Korea's missile proliferation activities have evolved from the transfer of the shorter-range SCUD missiles
    to the sale of the medium-range No Dong ballistic missiles during the past five years.

KEY FINDINGS

• North Korean No Dong sales are central to the Iranian and Pakistani missile programs. Sales to other nations, such as Syria or Libya, threaten to alter the balance of power against the United States in a number of regions.

 
• If North Korea sells its longer-range Taepo Dong missiles to its current customers, it would bring U.S. forces and our allies within range of Iran and other rogue nations. This would be the first time that Iran or other nations would be capable of delivering a weapon of mass destruction against Israel or North Atlantic Treaty Organization (NATO) countries.

 
• If North Korea promises not to test missiles from its soil, it still remains capable of conducting its missile development programs from the territory of its primary customers, most likely Iran or Pakistan.

    In April 1998, Pakistan test-fired a Ghauri missile. This was either one of 10-12 No Dong medium-range missiles transferred from North Korea, or a Pakistani version of that type. In July, Iran test-fired the Shahab-3, which is reportedly based upon the same North Korean No Dong technology. Iran is also working on several longer-range missiles with the help of North Korean missile experts.

    Iran has helped finance North Korean missile development since the mid-1980s, and it bought 100 SCUD B missiles from North Korea in 1987 which it used during its War of the Cities with Iraq. North Korea also sold Iran production technology

and equipment to manufacture SCUD B missiles. Iran probably received 100 of the longer-range North Korean SCUD C missiles and conducted a test launch of one in May 1991. With this missile, Iran could hit targets throughout northern sections of Saudi Arabia and all of Kuwait, Qatar, Bahrain, and the United Arab Emirates. North Korea reportedly delivered a few No Dong missiles to Iran in 1994, possibly for testing, with the data to be shared by both countries. If Iran acquires North Korean No Dong missiles, it will be able to strike Jordan, Syria, and Saudi Arabia.

    Syria acquired SCUD B and C missiles and missile-production technology from North Korea. These weapons have sufficient range to reach all of Israel, most of the Sinai Peninsula, and much of the territory of Turkey, a member of NATO. If Syria were to acquire No Dong missiles, it would be able to reach any part of Turkey.

    If North Korea sold Taepo Dong 2 missiles with a 4,000 km range to Iran and Syria, those weapons would be able to reach most of Europe. A 6,000 km Taepo Dong 2 in Iran or Syria could reach all of Europe, and portions of Russia, China, and India. Libya has also discussed purchasing missiles from North Korea.⁽⁸¹⁾ Egypt has cooperated with North Korea in missile development and reportedly is able to produce a version of the SCUD B missile.

    In combination with their WMD programs, Medium-range missiles in Iran, Syria and Libya, could be particularly dangerous. These countries of concern could develop the ability to produce hundreds of additional missiles for their inventories, to modify and improve missiles, and to export missiles to other countries or even subnational groups. If Iran, Syria, or Libya developed the ability to launch even a few missiles in a short time period, they might be able to overwhelm future U.S. and allied theater missile defense systems to achieve a significant political effect. They might even be able to achieve a significant military effect, particularly if they improve the accuracy of the missiles, or if some of the missiles carried weapons of mass destruction. The missile development, test and production facilities of North Korea undermine American counter-proliferation efforts and increase the chance that the United States and its allies could face missile attacks in future conflicts outside of Asia.

    C.    Does Pyongyang continue to infiltrate intelligence agents and provocateurs in an attempt to destabilize U.S. allies, such as South Korea and Japan?

    North Korea continues to infiltrate agents and reconnaissance teams into South Korea and Japan in an effort to
    gain intelligence on U.S., ROK, and Japanese military targets and resupply agents located there.

KEY FINDINGS

• North Korea regularly attempts to infiltrate agents into South Korea and Japan, triggering armed conflicts both at sea and on land.

 
• North Korea also supports terrorist organizations, such as the Japanese Red Army, with diplomatic passports, counterfeit U.S. currency, and safe-haven in the DPRK.

    Most observers believe that destabilization of, not coexistence with, South Korea has long been Pyongyang's objective. To that end, North Korea has tried to disrupt Seoul's political stability, to develop within South Korea an underground network of pro-DPRK activists and radical followers, to drive a wedge between Seoul and Washington, and to seek the withdrawal of U.S. troops from South Korea.

    North Korea's long-term goal to undermine the South Korean government requires that the U.S. military leave the peninsula. This is part of a long-standing policy aimed at changing what Pyongyang views as the uneven correlation of power between the two Koreas. Such a prospect, North Koreans believe, would allow the DPRK to overcome its perennial insecurity while at the same time achieving parity with, or gaining advantage over, South Korea. The North Korean leadership seems confident that South Korea, without its U.S. "protectors," will eventually become vulnerable to Pyongyang's political maneuvers or even military might.

    The media has reported a range of provocative North Korean actions, such as sending assassins to Seoul in 1968 and 1974 to kill then-South Korean President Park Chung Hee; deploying agents to Rangoon, Burma, in 1983, to assassinate visiting President Chun Doo Hwan; and dispatching terrorists to the Middle East in 1987 to blow up a South Korean airliner on its return flight to Seoul. Other actions have included border violations, infiltration of armed saboteurs and spies, hijacking, kidnaping, and terrorism (assassination, bombing and threat/intimidation against media personnel and institutions). In spite of these terrorist actions, Pyongyang has tried since 1990 to distance itself from terrorism and demanded that it be removed from the United States' list of countries supporting terrorism.

    North Korea uses counterfeit currency to support terrorism. For instance, it provides diplomatic protection and asylum to Yoshimi Tanaka, a Japanese Red Army faction hijacker who, while under North Korean diplomatic protection, was arrested by Cambodian authorities in 1996. Tanaka had 1,238 counterfeit U.S. $100 bills and a North Korean diplomatic passport in his possession at the time of his arrest.⁽⁸³⁾ Despite such incidents, the DPRK has asserted that it condemns all forms of terrorism.

    Pyongyang does not limit its operations to South Korea. North Korea has also been known to send agents to attempt to infiltrate Japan.⁽⁸⁴⁾ These infiltrators probably establish liaison with the pro-Pyongyang General Association of Korean Residents in Japan and spy on Japan's coastal defenses and U.S. and Japanese defense installations. There are many reports of drug trafficking by North Korean agents involved with organized criminal gangs in Japan.⁽⁸⁵⁾ In March 1999, two North Korean "fishing trawlers" entered Japanese territorial waters. The "fishing trawlers" probably carried North Korean infiltration agents destined for Japan. The ships eventually led a small armada of Japanese coastal guard and naval ships on a chase through the Japanese waters before fleeing into a North Korean port. This incident led to the decision by the Japanese government to authorize the use of force to chase the North Korean vessels from its waters.⁽⁸⁶⁾
 

    D.    Is Pyongyang involved in state-sponsored international crime?

    North Korea produces and traffics in narcotics, and counterfeits and distributes U.S. currency.

KEY FINDINGS

• North Korea has become a major drug producing and trafficking nation, using diplomatic channels to market heroin, opium, and methamphetamine.

 
• North Korea is also a counterfeiting nation, undermining confidence in U.S. currency abroad.

    At least 34 documented incidents,⁽⁸⁷⁾ many involving arrest or detention of North Korean diplomats, directly link the North Korean government to drug production and trafficking. Such events provide credible allegations of state-sponsorship of drug production and trafficking.⁽⁸⁸⁾

    Reports that North Korea may be limiting food crop production in favor of drug crop production are particularly disturbing.⁽⁸⁹⁾ Another issue of growing concern is the degree to which profits from any North Korean drug trafficking, counterfeiting, and other crime-for-profit enterprises may be used to directly or indirectly underwrite the costs of maintaining or expanding North Korean WMD programs and conventional forces.

    The Foreign Assistance Act of 1961 requires annual drug reporting and certification procedures for countries known to cultivate 1,000 hectares or more of illicit opium poppy. The Act also provides that certain aid be withheld and discretionary trade sanctions be imposed unless the President determines that: (1) the country has "cooperated fully" with the United States or taken "adequate steps" on its own to curb drug trafficking and production; or (2) "vital national interests" require provision of assistance.⁽⁹⁰⁾ Also prohibited is assistance to "any individual or entity that the President knows or has reason to believe . . . has been a knowing assistor, abettor, conspirator, or colluder in the illicit trafficking in any such [controlled] substance." Notably, the Act permits exceptions to restrictions on furnishing assistance when the President determines that providing assistance is "important to the security interests of the United States."

    The Foreign Assistance Act further requires that the drug trafficking in question must significantly impact our nation before a country is added to the annual major's list requiring later annual certification. There is no evidence to date that North Korean illicit drugs are reaching our shores in any significant amount, however the situation needs to be carefully monitored by our law enforcement and intelligence community, particularly since the North Koreans are abusing diplomatic privileges in support of trafficking in illicit narcotics.

    The Department of State's March 1, 1998, International Narcotics Control Strategy Report (INCSR)⁽⁹¹⁾ includes information on North Korean money laundering which reads in part as follows: "The most profitable lines of state-supported illegal businesses remain drug trafficking, gold smuggling, illegal sale and distribution of endangered species, trafficking of counterfeit U.S. currency, and rare earth metals . . . North Korean officials appear to be increasing their involvement in financial crimes as a means to generate operational funds and support their country's anemic economy." The 1999 INCSR reads in part, "as the reports (on DPRK drug activity) multiply and the incidents cumulate it seems more likely than not that the state itself is involved in criminal activity. For example, alleged large scale opium cultivation could likely not be undertaken without the explicit knowledge of the North Korean government. The same could be said of large scale imports of ephedrine, a known precursor chemical for methamphetamine."⁽⁹²⁾

    The 1997 Report of the International Narcotics Control Board (INCB) noted "disquieting reports on the drug control situation in the Democratic People's Republic of Korea," and expressed dismay that the DPRK had not accepted the Board's request, originally made in 1995, to send a mission to that country to study and clarify drug control issues.⁽⁹³⁾

    United States Drug Enforcement Administration (DEA) data and a myriad of domestic and foreign press reports portray an ongoing pattern of drug trafficking, counterfeiting of U.S. currency,⁽⁹⁴⁾ and other smuggling-for-profit activities by North Korean diplomats over the past 24 years. Since 1976, North Korea has been linked to more than 34 reported incidents involving drug seizures in at least 14 countries. A significant number of these cases has involved the arrest or detention of North Korean diplomats or officials. All but four of these incidents transpired in the 1990s, with 10 incidents occurring from January 1998 to September 1999. In 1999, substantial seizures of North Korean methamphetamine occurred in Japan, South Korea, and Taiwan. ⁽⁹⁵⁾

    Press reports citing North Korean defectors indicate that North Korea created an office specifically to bring in foreign currency. This so-called "Bureau No. 39" functions under the ruling Korean Worker's Party, which is headed by North Korean Leader Kim Jong Il. ⁽⁹⁶⁾ The office is in charge of drug trafficking and other criminal activity including: smuggling; counterfeiting; opium production and trafficking; and methamphetamine production and trafficking. Drugs are reportedly exported through China and Russia to Asia and Europe via government trading companies, diplomatic pouches, and commercial cargo. The money earned is used to: fund costs of overseas diplomatic missions; buy loyalty to Leader Kim Jong Il from Party elites and military leaders; and finance military activity -- particularly technology and electronic purchases for intelligence and military purposes.⁽⁹⁷⁾

    Farmers in certain areas reportedly are ordered to grow opium poppy. Cultivation estimates were 4,000 hectares for the early 1990s and 7,000 hectares for 1995. Current production, however, is believed to have fallen below the 1995 figures, due to heavy rains and the broad decline of agricultural output as a consequence of poor policies and insufficient fertilizer and insecticides. Considering all available estimates, a cultivation estimate of 3,000-4,000 hectares for 1998 would appear reasonable.

    The United States Government sources estimate North Korean raw opium production capacity to be 50 tons annually, with 40 tons reportedly produced in 1995. North Korean government pharmaceutical labs reportedly have the capacity to process 100 tons of raw opium per year.⁽⁹⁸⁾

    Methamphetamine production in North Korea is reported to have started in 1996 after heavy rains decreased poppy production. This coincides with a time when markets for methamphetamine were dramatically expanding in Asia, especially in Thailand, Japan, and the Philippines.⁽⁹⁹⁾ North Korea's maximum methamphetamine production capacity is estimated to be 10-15 tons of the highest quality product for export. According to the INCB, North Korean legitimate pharmaceutical needs for ephedrine (a traditional precursor for methamphetamine) are 2.5 tons per year, one ton higher than U.S. investigative agency sources estimate. INCB officials confirm the receipt of allegations of North Korean involvement in a diversion of 20 tons of ephedrine.⁽¹⁰⁰⁾ Moreover, the DPRK may be bypassing the highly-regulated market for ephedrine in favor of an alternate technology for a benzine-based product (which can be refined from heavy fuel oil), raising speculation that U.S. and allied petroleum assistance to North Korea may be used to sustain illicit drug production. Central to the policy debate on these criminal activities is the need for additional evidentiary information, such as satellite imagery to confirm the extent of reported opium poppy cultivation in North Korea.

Counterfeiting

    North Korea is a state-sponsored counterfeiting nation. While the State Department reports that North Korea's most profitable operation involves counterfeiting U.S. currency,⁽¹⁰¹⁾ government-controlled operations also counterfeit a range of other countries' currencies and other trademarked products.⁽¹⁰²⁾

    North Korean counterfeit currency has turned up in at least nine countries.⁽¹⁰³⁾ Officials have been arrested with counterfeit currency in Russia, Macao and Cambodia.⁽¹⁰⁴⁾ North Korea reportedly bought state-of-the-art European printing and counterfeit detection equipment with training courses included.⁽¹⁰⁵⁾ The quality of the North Korean counterfeit notes may have added to the reasons the United States Treasury decided to redesign U.S. currency.

    Conservative estimates suggest that North Korean criminal activity, carefully targeted to meet specific needs, generated about $85 million in 1997: $71 million from drugs and $15 million from counterfeiting.⁽¹⁰⁶⁾ However, there are strong indications that the figures are considerably higher: "$500 million to $1 billion annually from criminal activities."⁽¹⁰⁷⁾

    Enhancing law enforcement focus and intelligence cooperation on targeting, reporting, and tracking North Korean opium/heroin and methamphetamine trafficking and production is another option which warrants consideration.
 

Fig. 3.1 MAJOR INCIDENTS OF DRUG TRAFFICKING BY NORTH KOREANS(108)

May 1976: Egyptian police seized 400 kilograms of hashish, concealed in a North Korean diplomatic pouch.

January 1977: Venezuelan law enforcement officials arrested three North Korean diplomats on charges of smuggling drugs and seized 174 kilograms of opium.

May 1977: Indian police detained Kim Il-Soo, secretary to the North Korean ambassador to India, for attempting to import 15 kilograms of marijuana into India.

November 1979: Lao police arrested a North Korean diplomat for attempting to smuggle 15 kilograms of heroin through the Laotian airport.

February 1980: Egyptian law enforcement officials arrested two North Korean diplomats and seized 400 grams of heroin in a diplomatic pouch.

October 1985: East German police arrested and deported a North Korean diplomat for attempting to smuggle 150 bags of heroin and 150 kilograms of morphine into the country.

March 1987: Nepal police seized vehicles of North Korean diplomats and charged them with being involved in a smuggling case that was tied to an Indian national and the seizure of 75 grams of cocaine.

March 1990: Indonesian authorities seized marijuana from the North Korean-registered  vessel, Aeun Chung Ryon.

September 1990: Japanese police arrested two North Korean resident aliens and a Japanese national for possession of 1.5 kilograms of ephedrine and 11 kilograms of morphine mixtures. The individual had visited North Korea on several occasions and Japanese authorities suspected that the narcotics were smuggled into Japan from North Korea. The case was unusual because the morphine was canned and smuggled into Japan from North Korea, circa 1985 or 1986. This was the first recorded case of drugs being smuggled into Japan from North Korea.

Late 1990: Two North Korean lumberjacks from Hamhung City assigned to the 11th  Lumbering Station, North Korean Forestry Mission, allegedly sold one kilogram of opium to a Russian.

March 1991: Swedish law enforcement officials arrested a North Korean diplomat assigned to the Czech Republic on charges of smuggling two kilograms of heroin into Sweden.

December 1991: Japanese authorities arrested three North Korean Intelligence Officers for possession of 13.3 kilograms of morphine and 10 kilograms of opium. Japanese police suspect the narcotics were smuggled into Japan aboard the DPRK merchant ship, the Mankyongpong-Ho.

June 1994: Russian police in Vladisvostok, Siberia, arrested two North Koreans as they attempted to sell 8.25 kilograms of heroin for US$250,000 on the Russian-Korean border near Khasan. The North Koreans reportedly had access to metric ton quantities of the drug. One of the arrestees was a member of North Korea's Social Security Ministry. The smugglers worked for a Russian-Korean joint venture, Monolit, and had unlimited travel between Russia and Korea. During the investigation, one of the arrestees introduced himself as the son of a high-ranking North Korean official.

July 1994: Russian Customs officials arrested a North Korean and seized 200 grams of opium. The opium was concealed in the sole of the defendant's shoes.

July 1994: Public Security Bureau Agents in Shanghai, China, arrested an employee of the Maebong Trading Company and an accountant at the Shanghai branch of the Amur River National Development General Bureau on charges of smuggling 6 kilograms of North Korean-produced opium through the North Korean embassy in China.

August 1994: Russian law enforcement officials in the Russian Far East arrested a North Korean intelligence agent for attempting to sell heroin to the Russian Mafia. According to Russian investigators, North Korea is suspected of being involved in systematic narcotics dealings.

During 1994: Chinese law enforcement officials reported that State Security Department agents attempted to sell North Korean opium and other drugs to visiting South Koreans and Koreans residing in China.

January 1995: Chinese officials in Shanghai, China arrested two North Koreans and seized 6 kilograms of opium. One of the men carried a diplomatic passport and was identified as an executive of a Macao-based trading house run by the North Korean Ministry of the People's Armed Forces.

February 1995: Russian law enforcement officials in Vladivostok operating under cover arrested two North Koreans, who were not diplomats, and seized 8 kilograms of heroin. This shipment was the first installment of what was to be a total shipment of 2.2-tons of heroin.

July 1995: Zambian police arrested a North Korean diplomat and seized 2.4 kilograms of cocaine.

July 1995: China's Public Security Ministry officials arrested several North Koreans at the Yonkil Airport and seized 500 grams of heroin.

August 1995: Ethiopian law enforcement officials arrested a North Korean for smuggling cocaine.

August 1995: Chinese law enforcement officers in Macao arrested an official of the North Korean trading company, Eunhong, for attempting to import North Korean opium.

During 1995: Chinese authorities in Jilin Province, China, neighboring North Korea, uncovered 10 incidents of North Korean opium smuggling.

August 1995: Intelligence reports indicated that about 20-tons of ephedrine was ordered and possibly imported from Germany through a Chinese company to North Korea. Allegedly, about 1.5 tons of ephedrine is to be used for medical reasons and the remainder will be used for the production of illicit methamphetamine.

March 1996: South Korean police in Pusan seized 6.3 kilograms of crystal methamphetamine on board the merchant vessel, Choyang Land. South Korean authorities believed that this smuggling operation was directed by the DPRK to obtain hard currency.

November 1996: Vladivostok law enforcement officials arrested a North Korean diplomat and seized 22 kilograms of opium.

April 1997: The National Police Agency of Japan arrested three subjects and seized about 60 kilograms of methamphetamine at the port of Hosojima in Hyga City, Japan. The methamphetamine was transported from Nampo port in North Korea to Japan by the North Korean flagged freighter Ji Song No.2. The methamphetamine was concealed in cans of honey commingled with legitimate cargo. The subsequent investigation by the Osaka police revealed that two of the subjects were ethnic Korean residents of Osaka, Japan. They also operated the Osaka-based trading company that consigned for the honey. In addition, the two subjects were also suspected of being Japanese Yakusa members. A fourth subject, the captain of the vessel, was detained and later deported.

May 1997: Lao police arrested a North Korean diplomat for smuggling drugs.

May 1997: Chinese police in Koning Province, China arrested eight North Korean nationals for smuggling 900 grams of heroin.

August 1997: Laotian law enforcement officials arrested a North Korean and deported him for smuggling drugs and currency.

September 1997: Russian police arrested a North Korean and seized 45 grams of opium at Partizansk (100 kilometers east of Vladivostok). He arrived in Russia from North Korea via Khasan. The town of Khasan is between Primorye, Russia and North Korea.

January 1998: Russian law enforcement officials arrested two North Korean diplomats and seized 35 kilograms of cocaine transiting the Sheremetevo International Airport in Moscow via Mexico. The seizure followed growing concerns by Russian law enforcement agencies that the North Korean government is actively involved in smuggling drugs into Russia and elsewhere. They suspected that this drug trafficking activity was prompted by North Korea's desperate need for hard currency.

January 1998: Egyptian police arrested a North Korean diplomat who was serving in Syria as he attempted to smuggle 500,000 tablets of rohypnol, the so-called "date rape drug," into Egypt. This is believed to be the largest rohypnol seizure ever.

August 1998: Japanese officials off Kochi Prefecture arrested two members of a Japanese Yakusa criminal group, and a Korean resident of China, and seized 200 kilograms of a 300 kilogram shipment of methamphetamine believed to have been produced in North Korea. The drugs were transported on a North Korean vessel from the North Korea port of Hungnam, then transferred at sea to the Japanese fishing vessel, Tamu Maru.

September 1998: South Korean authorities arrested nine South Koreans and seized 218 grams of raw opium produced in North Korea.

October 1998: German police in Berlin arrested a North Korean deputy ambassador and seized heroin believed to be manufactured in North Korea. Besides drugs, the diplomat is suspected of supplying illegal weapons to a smuggling ring.

December 1998: Chinese Public Security Bureau officials in Shenyang arrested a North Korean Consulate employee and seized 9 kilograms of opium produced in North Korea. Also arrested was his accomplice, who he had hired to sell the opium.

February 1999: South Korean officials in Seoul arrested two people for smuggling 600 grams of methamphetamine from North Korea.

April 1999: Japanese law enforcement officials arrested thirteen individuals and seized 100 kilograms of methamphetamine (source believed to be North Korea) on board the Chinese flagged cargo vessel, Lin Yan Leng 2, at Sakaiminato City, Tottori Prefecture. Subsequently, three other defendants were arrested pursuant to this joint investigation conducted between Tottori, Prefectural Police, Sakai Maritime Safety Agency, and the Kobe Customs.

May 1999: Agents from Taiwan's Ministry of Justice Investigation Bureau arrested four individuals and seized approximately 157 kilograms of amphetamine produced in North Korea and exported to Taiwan on board the fishing vessel, Pei Dao 1. The subsequent investigation revealed that one of the defendants made arrangements to have the vessel sail to North Korea, pick up the drug pursuant to an arranged purchase from unidentified persons in North Korea, then have the vessel sail back to Taiwan. The purchase price for the amphetamine was NTD (Taiwan) $150,000.00 (US$4545.00) per kilogram and an additional NTD $70,000.00 (US$2121.00) per kilogram to cover the shipping costs from North Korea to Taiwan. The defendant allegedly arranged to sell the amphetamine in Taiwan through another individual for NTD $330,000.00 (US$10,000.00) per kilogram.

    The United States has replaced the Soviet Union as a primary benefactor of North Korea. The United States now feeds more than one-third of all North Koreans, and the U.S.-supported KEDO program supplies almost half of its HFO needs. This aid frees other resources for North Korea to divert to its WMD and conventional military programs.

    U.S. aid to North Korea has grown from zero to more than $270 million annually, totaling $645 million over the last five years. Based on current trends, that total will likely exceed $1 billion next year. During that same time, North Korea developed missiles capable of striking the United States and became a major drug trafficking and currency counterfeiting nation.

    Despite assurances from the administration, U.S. food and fuel assistance is not adequately monitored. At least $11 million in HFO assistance has been diverted. In contravention of stated U.S. policy, food has been distributed in places where monitors are denied access. One U.S. aid worker in North Korea recently called the monitoring system a "scam."⁽¹⁰⁹⁾ More than 90% of food aid distribution sites in North Korea have never been visited by a food aid monitor. The North Koreans have never divulged a complete list of where aid is distributed.

    North Korea has the longest sustained U.N. food emergency program in history. There are no significant efforts to support or compel agricultural and economic reforms needed for North Korea to feed itself. North Korea will likely continue to refuse to reform, instead relying on brinkmanship to exact further aid from the United States and other members of the international community.

    A.    Does U.S. assistance directly or indirectly sustain the North Korean government?

    U.S. assistance helps to sustain the North Korean government, and current accounting systems are not capable
    of tracking aid to ensure its proper use.

KEY FINDINGS

• North Korea is the largest recipient of U.S. foreign aid in Northeast Asia. American assistance feeds one-third of all North Koreans and KEDO, largely funded by the United States, provides 45% of its heavy fuel oil needs.

• Current food aid monitoring programs by the United Nations World Food Program (WFP) and the Private Voluntary Organization Consortium (PVOC) face a difficult environment and cannot ensure that U.S. assistance reaches those in need. There are continuing and credible reports of diversion of food aid to the military, closed regions, and unintended recipients. Food aid has been distributed in areas closed to international monitors in contravention of stated administration policy.

 
• A number of other donors and international relief organizations, such as the European Union (EU) and Medicins Sans Frontiers (MSF) have cut back or ended their programs in North Korea due to diversions and the DPRK's refusal to permit them to monitor assistance programs.

 
• The fuel monitoring system suffers from inherent limits, including dependence upon the North Korean electric power system. Flow meters and other monitoring equipment are routinely inoperable. Furthermore, KEDO has no arrangements with North Korea for monitoring the large quantities of heavy fuel oil in storage or in transit to the plants consuming the heavy fuel oil.

 
• During a power outage which left the monitoring system inoperable from January- April 1999, the North Koreans consumed record amounts of unmonitored fuel. This case represents an example of diversion.

 
• The State Department admitted to the General Accounting Office (GAO) that "insignificant" amounts of fuel have been diverted since this program started. When asked what would be a "significant" diversion, a State Department representative told GAO "you could drive a truck through our definition of a 'significant diversion.'" State Department representatives later admitted that North Korea has probably diverted at least $11 million worth of U.S. supplied fuel.

    There are reports that the North Korean government diverts both international food and fuel aid from their intended recipients. Initial reports came from North Koreans who fled to China. They relate personal accounts of food aid being distributed to the communist cadre or to the military.⁽¹¹⁰⁾ A U.S. House of Representatives staff delegation that visited North Korea in 1998 also saw donated food in the possession of the KPA.⁽¹¹¹⁾

    Cans of food from a private aid organization were found on a North Korean submarine that ran aground off South Korea in 1997. In a more recent case, the Seattle-based aid group, World Concern, suspended its relief work in North Korea after discovering that 689 boxes of food, intended for hospitals and orphanages, had vanished.⁽¹¹²⁾

    Since 1995, the United States has donated over $360 million worth of food to North Korea.⁽¹¹³⁾ Most food aid is channeled through the WFP, where the United States accounts for 87% of all donations. In addition, the United States also established a bilateral food aid program run by the PVOC, led by CARE. The combined programs attempt to feed one-third of North Korea's population, approximately 6.5 million people out of a population of 23 million, whose lives are placed at risk by food shortages.⁽¹¹⁴⁾ A nutritional study conducted by U.N. agencies, the European Union, and Save the Children Fund/UK in September-October of 1998 showed acute life-threatening malnutrition affecting 18 percent, with 62 percent of children having stunted growth.⁽¹¹⁵⁾ While there are reports that the food situation in North Korea is improving, there is clearly a need for continued food aid, provided that delivery systems can ensure that the people in need are served.

    U.S. policy is that food aid will not be provided to North Korea if it cannot be monitored.⁽¹¹⁶⁾ WFP has a total of 46 people employed in North Korea, including 19 full-time food monitors.⁽¹¹⁷⁾ The PVOC also has a staff of five. In contrast to most other recipient nations, international monitors in North Korea must schedule their visits in advance and must be escorted at all times. They are denied access to 48 of the DPRK's 211 counties. All paperwork and account statements are handled by North Korean authorities.⁽¹¹⁸⁾ The North Koreans do n