VIETNAMESE RESPOND FAVORABLY TO U.S. REQUEST FOR

S E C R E T HANOI 001949 SIPDIS SIPDIS E.O. 12958: DECL: 08/01/2016 TAGS: EFIN CTERR ECON IO PREL KN VN SUBJECT: VIETNAMESE RESPOND FAVORABLY TO U.S. REQUEST FOR INTERDICTION OF NORTH KOREAN BANKING ACTIVITY REF: A. REF A) SECSTATE 105317 ¶B. REF B) HANOI 1594 ¶C. REF C) HANOI 1595 Classified By: Ambassador Michael W. Marine, Reasons 1.4 (b/d) ¶1. (S) Summary and Comment: In a July 19 meeting with Ministry of Foreign Affairs (MFA) Director General for the Asia I Department Nguyen Ba Cu, Treasury Under Secretary Stuart Levey and the Ambassador raised U.S. concerns over North Korean banking activity in Vietnam. This was following up on previous demarches delivered to Vietnam regarding the potential engagement of Tanchon Commercial Bank and KOMID in Vietnam. Cu assured Levey that Vietnam puts U.S. concerns over those of North Korea and that Vietnam will do its best to respond to the U.S. request. Cu made clear that while the Government of Vietnam (GVN) does not wish to publicly condemn or disavow its relationship with North Korea, it is willing to cooperate discreetly on matters of high priority for the United States such as this. End Summary and Comment. ¶2. (S) The Under Secretary began by noting the United States, very strong interest in seeing Vietnam continue to grow and succeed, and highlighted the growing cooperation between our two countries. Levey added that as a country,s development is tied to the health of its financial system, it is important that Vietnam,s financial system not be tainted by dealings with disreputable companies and banks. The U.S. concerns shared on June 28 (ref A) about North Korean banking are part of a larger effort to block North Korea from financing its illegal activities, including WMD proliferation. It is very important, urged Levey, for Vietnam to take appropriate action to ensure that Vietnam not be exploited by North Korean firms to facilitate their illicit activities. He noted that, particularly given the recent DPRK missile launches and subsequent U.N. Security Council Resolution, these activities need to be shut out of Vietnam completely and any accounts found need to be frozen. Levey emphasized that the United States is not interested in any public or political statements of Vietnam,s actions, but simply to ensure this business was stopped. ¶3. (S) Cu assured the Under Secretary that Vietnam clearly understands the U.S. concerns and considers its relationship with the U.S. a high priority. Vietnam does not want to risk harming its relationship with the United States over a matter like this. Vietnam has very &small8 relations with North Korea and believes that recent North Korean activity, including the July 4 missile tests, do little to help the peace and stability of the region. In fact, Cu admitted that Vietnam does not really understand North Korean thinking at all and has only a &traditional8 relationship with the country. Vietnam is aware, said Cu, of the implications of UN Security Council Resolutions 1540 and 1673, especially as they relate to financial transactions with North Korea. Cu stressed that Vietnam will not allow its banks to trade with terrorist actors and will take strong actions if they detect any such activity. ¶4. (S) The Ambassador reiterated the significance and importance of this matter to the United States and urged DG Cu to pass specific information back to the United States on Vietnam,s efforts to stop North Korean financial activity. The Under Secretary,s visit is evidence of how highly the United State prioritizes this issue. He added that there are certain steps the United States will have to take if we are not able to clearly see that the Vietnam-North Korea banking relationship is over. Cu assured the Ambassador that Vietnam,s banks &have already been warned8 of the risks of DPRK facilitation and that he clearly understands U.S. concerns about this matter. ¶5. (U) This message was cleared by Treasury staff. MARINE MARINE