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In October 1994, the United States and the Democratic People's Republic of Korea (DPRK, or North Korea) signed the Agreed Framework, under which the DPRK agreed to freeze and ultimately dismantle its nuclear program. The Agreed Framework sought to resolve comprehensively the issues arising from the DPRK nuclear program. The DPRK facilities subject to the freeze included an operational 5 MWe experimental graphite-moderated reactor, a partially complete reprocessing facility, and a 50 MWe power reactor under construction, all at the Yongbyon Nuclear Research Center, as well as a 200 MWe power reactor under construction at Taechon, DPRK.

In return for the DPRK agreeing to freeze and ultimately dismantle its nuclear program, the United States agreed to:
  1. finance and construct in the DPRK two light-water reactors (LWR) of the Korean Standard Nuclear Power Plant model and, in so doing;

  2. provide the DPRK with an alternative source of energy in the form of 500,000 metric tons of heavy fuel oil each year for heating and electricity production until the first of those reactors is completed.

  3. conduct its activities in a manner that meets or exceeds international standards of nuclear safety and environmental protection; and

  4. provide for the implementation of any other measures deemed necessary to accomplish the foregoing or otherwise to carry out the objective of the Agreed Framework.
In support of these goals, KEDO was established on March 9, 1995, when Japan, the Republic of Korea (ROK), and the United States expressed their common desire to implement the key provisions of the Agreed Framework and signed the Agreement on the Establishment of the Korean Peninsula Energy Development Organization (KEDO). As KEDO's founding members, these three countries constituted the Organization's Executive Board. However, KEDO's charter allowed for additional states and international organizations that support the purposes of the Organization and offer assistance, such as providing funds, goods, or services, to also become members of the Organization. Furthermore, the Establishment Agreement also allowed for expansion of the Executive Board on the basis of substantial and sustained support to the Organization.

In 1995, New Zealand, Australia and Canada joined KEDO by accepting the principles of the Organization's charter. In 1996 Indonesia, Chile, and Argentina also joined the Organization. On September 19, 1997, the European Union (EU) joined KEDO with representation on KEDO's Executive Board for a term to coincide with its substantial and sustained support. Later in 1997 Poland also joined. In December 2001, the EU extended its membership in KEDO for another five years and increased its annual contribution from 15 to 20 million Euros. The Czech Republic and Uzbekistan became members in 1999 and 2000, respectively. In addition to its member states, KEDO received material and financial support from nineteen other non-member, contributing states.

Recent Events (2002-Present)
In November 2002, following reports that the DPRK was engaged in an undeclared program to enrich uranium, KEDO's Executive Board decided to suspend the supply of heavy fuel oil to the DPRK starting in December of that year. Subsequently, the DPRK expelled inspectors from the International Atomic Energy Agency (IAEA) from Yongbyon (a nuclear facility that had been frozen under the Agreed Framework).at the end of December 2002; announced its withdrawal from the Treaty on the Non-Proliferation of Nuclear Weapons on January 10, 2003; and resumed operations at the Yongbyon facility.

Several diplomatic initiatives emerged seeking to resolve these nuclear issues. The most notable of these were the U.S.-DPRK-China three-party talks in April 2003, and at three rounds of six-party talks in August 2003, February 2004, and June 2004 that, in addition to the abovementioned countries, included Japan, the Republic of Korea and the Russian Federation.

Throughout 2003, KEDO's Executive Board members held meetings to assess the implications of these events for the ongoing construction of the LWR project. At these meetings, Executive Board members reviewed key operational questions, including the pace of construction and the size of the workforce at the site. During this period, KEDO maintained communications with the DPRK through working-level contacts at the LWR construction site at Kumho, DPRK, and KEDO continued to send teams of experts to the site.

On November 21, KEDO announced that because the DPRK had not met the conditions necessary for continuing the LWR project, KEDO was suspending the construction of the LWRs in the DPRK for a period of one year, beginning December 1. The Board said that it would assess and decide upon the future of the project before the expiration of the suspension period. It noted that the suspension process would require preservation and maintenance both on-site and off-site. Such activities would focus on preventing any deterioration of the existing structures and components at the LWR construction site or at manufacturing facilities. It also noted that suspension implied that KEDO and the DPRK would continue to observe the agreements and protocols concluded between them.

On November 26, 2004, KEDO's Executive Board decided to continue the suspension of the Light Water Reactor (LWR) Project in the DPRK for another year, beginning December 1, 2004. In November 2005, KEDO's Executive Board members began serious discussions regarding termination of the LWR project, the details of which are still being worked out. On January 8, 2006, KEDO completed the withdrawal of all workers from the LWR project site in Kumho, DPRK.

The Executive Board of KEDO decided on May 31, 2006 to terminate the LWR project. This decision was taken based on the continued and extended failure of the Democratic People’s Republic of Korea (DPRK) to perform the steps that were required in the KEDO-DPRK Supply Agreement for the provision of the LWR project.

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