ROKG PRESS FOR UPGRADE IN STATUS IN FOREIGN

C O N F I D E N T I A L SEOUL 000327 SIPDIS SIPDIS E.O. 12958: DECL: 04/21/2014 TAGS: KS PARM PREL SUBJECT: ROKG PRESS FOR UPGRADE IN STATUS IN FOREIGN MILITARY SALES Classified By: A/DCM Joseph Y. Yun. Reasons 1.4 (b,d). ¶1. (C) On January 25, poloff accompanied the OSD Senior Country Desk Director LTC Michael Finnegan and EAP/K Andrew Hyde to a meeting with MOFAT NAD III Director MIN Kyoung-ho seeking clarification on ROKG's Foreign Military Sales (FMS) discussions on the sidelines of the Strategic Partnership Dialogue held last week in Washington, between FM Ban Ki-Moon and the Secretary. Min emphasized that even though the ROK is the third largest buyer of U.S. arms, ROK was not receiving favorable conditions for purchasing U.S. arms compared to NATO, Japan, Australia, or New Zealand due to restraints posed by the Arms Export Control Act (AECA) and the Foreign Assistance Act (FAA). Min continued that the review period by Congress for significant military equipment purchases by the ROK is usually around 30 to 50 days compared to 15 days for Japan. He also mentioned that administrative costs (i.e. non-recurring costs and constant administrative costs) were significantly higher than those charged to NATO. Thirdly, Min stated that certain training information was inaccessible to the ROK on the equipment purchased by the ROK while Japan and other favorable groups had access. ¶2. (C) OSD Finnegan informed Min that the ROK is in the second most favorable price group for military training. Should the ROK insist on parity with NATO, Australia, New Zealand, and Japan in the FAA and AECA, Seoul could risk losing this discount as it would be required to pay prices more commensurate with higher rates charged to NATO allies. Finnegan further explained that the process to upgrade the ROK's standing in the FAA and the AECA will be long and require coordination with DOD, DOS, and the Congress. With respect to administrative costs, Finnegan stated that the ROK always requests a waiver and so does not pay the nonrecurring costs and receives training on purchased military equipment at cost without additional markup. ¶3. (C) Min appreciated the update, promised to consider the training cost implications but repeated the hope that the USG will seriously consider ROK's request to be placed in the same preferential group with Japan regarding FMS. Finnegan and Hyde undertook to pass the ROK's request to relevant DOD and DOS offices in Washington. VERSHBOW