MALAYSIA RESPONSE TO ADDITIONAL TANCHON COMMERCIAL

C O N F I D E N T I A L KUALA LUMPUR 000750

SIPDIS

SIPDIS

STATE FOR T, EAP, ISN
STATE PLEAE PASS TO NSC (STEPHENS)
TREASURY PLEASE PASS TO FINCEN

E.O. 12958: DECL: 04/25/2016
TAGS: EFIN KJUS KTFN KNNP MNUC PARM PREL MY
SUBJECT: MALAYSIA RESPONSE TO ADDITIONAL TANCHON COMMERCIAL
BANK ACCOUNTS

REF: SECSTATE 55463

Classified By: Economic Counselor Colin Helmer. Reason 1.4(d)


1. (C) Summary: On April 25, Econoff delivered talking
points and non-paper detailing additional information on
Tanchon Commercial Bank to Koid Swee Lian, Director of the
Financial Intelligence Unit (FIU) at Bank Negara Malaysia,
the central bank. Koid responded the next day that neither
Malayan Banking Berhad (Maybank) nor Bank Negara had been
able to find any data linking Tanchon to the bank's Singapore
branch. Koid requested further details on the alleged
relationship so that Bank Negara may pursue it and confirm
whether it in fact exists. Koid also requested information
on the process for correcting USG records of suspicious
transactions. If Bank Negara confirms that there is no
relationship between Maybank and Tanchon, she would like to
ask that this allegation be expunged from the record. There
is an action request in paragraph 4. End Summary.


2. (U) On April 25, Econoff delivered talking points and
non-paper detailing additional information on Tanchon
Commercial Bank to Koid Swee Lian, Director of the Financial
Intelligence Unit (FIU) at Bank Negara Malaysia, the central
bank. Koid thanked Econoff and explained that the FIU would
send out the data to its constituent banks that day. She
stated clearly that she took the information about Tanchon
and Maybank very seriously and would follow up immediately.


3. (C) Koid contacted Econoff the next morning, explaining
that Bank Negara had called both Maybank headquarters in
Kuala Lumpur and Maybank's Singapore branch. Both denied any
connection to the North Korean bank. They checked both their
trade finance division and remittances and could find no
record of Tanchon. Koid said Maybank employs an
identification system that should reject any transactions
from Tanchon. (Note: Koid mentioned that this software is
called SIDE OFAC. It is a traffic filtering solution with
all of the names listed by OFAC entered into its database
that automatically blocks transactions from those
institutions and individuals. Tanchon is included in its
database. End Note.) Bank Negara asked Maybank to look
again to be sure, and specifically requested that Maybank
look for an indirect transaction, such as currency exchange,
where Tanchon might have originated an action through one or
more intermediate banks.


4. (C) Action Requested: Koid requested further data on the
alleged link between Tanchon and Maybank so that Bank Negara
can confirm whether such a relationship exists. Koid also
requested information on the process for correcting USG
records of suspicious transactions. If Bank Negara confirms
that there is no relationship between Maybank and Tanchon,
she would like to ask that this allegation be expunged from
the record. In view of our close working relationship with
the FIU, and the importance of this relationship for our
counterterrorism finance cooperation with Malaysia, post
requests Washington guidance for responding to Koid's
request. If a complete response will require more than a few
days, post requests an interim response that will allow us to
assure FIU staff that we are taking this matter seriously.
LAFLEUR