South Korea and North Korea on Wednesday put into effect agreements they signed three years ago to reduce the risk and cost for Southern firms opening businesses in the communist state.

The agreements, signed in December 2000, call for the two sides to protect each others' investments, avoid double taxation, open a direct route for financial transactions and establish a panel to settle trade disputes.

On Wednesday, both sides notified each other that they had completed procedures to put the agreements into effect, South Korea's Unification Ministry said in a press release.

South Korean officials hope the four agreements will boost trade and other economic exchanges across the divided peninsula.

The trade volume between North and South Korea totaled $641.7 million in 2002.

Tension on the Korean Peninsula remain high over North Korea's suspected development of nuclear weapons.

Representatives from the United States, China, Russia, Japan and the Koreas are scheduled to meet for talks in Beijing on Aug. 27-29 to attempt to ease the nuclear tension.

The Koreas were divided in 1945, and share a heavily fortified border following the 1950-53 Korean War that ended in a cease-fire.