U.S. AGENCY CONCERNED OVER N. KOREAN 'DRUG TRAFFICKING'

WASHINGTON, -- A U.S. research agency has expressed
concern over alleged state sponsorship of drug production and
trafficking by North Korea in a report recently prepared for Congress.

The Congressional Research Service said allegations of large-scale
drug production and trafficking by North Korea raise concern for
Congress, the administration and U.S. allies in combating
international drug trafficking.

''The challenge to policy-makers is how to pursue an effective
counter-drug policy and comply with U.S. law which may require cutting
off aid to North Korea while pursuing other high priority U.S. foreign
policy objectives'' such as limiting possession and output of weapons
of mass destruction, the report said.

The report also said another concern is the degree to which profits
from any North Korean drug trafficking, counterfeiting and other
crime-for-profit enterprises may be used directly to finance North
Korea's alleged nuclear programs.

Since 1976, North Korea has been linked to more than 30 incidents
involving drug seizures in at least 13 countries, the report said.
These cases have involved the arrest or detention of North Korean
diplomats or officials, it said.

The report said farmers in certain areas in North Korea are reportedly
ordered to grow opium poppy, with a cultivation estimate of 7,000
hectares for 1995.

Current production, however, is believed to be below the 1995 level
because of heavy rains and the broad decline of agricultural output
due to poor policies and insufficient fertilizer and insecticides, it
said.

''Looking at all available estimates, a cultivation estimate of 3,000
to 4,000 hectares for 1998 would appear reasonable,'' the report said,
noting such estimates are based on indirect and fragmented
information.

U.S. government investigative agency sources estimate North Korea's
raw opium production capacity at 50 tons annually, with 40 tons
reportedly produced in 1995, the report said.

It also said methamphetamine production in North Korea is reported to
have started in 1996 after heavy rains decreased income from poppy
production. Markets for methamphetamine are dramatically expanding in
Asia, especially in Thailand, Japan and the Philippines.

North Korea's maximum methamphetamine production capacity is estimated
to be 10- 15 tons of the highest quality product for export, it said.

Conservative estimates suggest North Korean criminal activity in 1997
generated 71 million dollars from drugs and 15 million dollars from
counterfeiting, it said.