DPRK GOLD CROSSING THE DMZ

C O N F I D E N T I A L SEOUL 004341 SIPDIS SIPDIS LCC SEOUL SEOUL KOREA PLEASE PASS TO J2, J5 AND SCJS E.O. 12958: DECL: 12/05/2016 TAGS: PARM PREL KS KN SUBJECT: DPRK GOLD CROSSING THE DMZ REF: SEOUL 4165 Classified By: POL M/C Joseph Y. Yun. Reasons 1.4 (b,d). ¶1. (C) There have been seven scheduled shipments of gold bars across the Demilitarized Zone (DMZ) since the end of August. Only three of the shipments occurred, the most recent on December 14. All three shipments passed through the western Transportation Corridor (TC West),which is primarily used to transport raw materials, goods, and personnel to and from the 16,000-acre Kaesong Industrial Complex (KIC) (reftel). As part of the Military Demarcation Line crossing process, the United Nations Command Military Armistice Commission (UNCMAC) received manifests for the shipments that list the origin of the gold bars as the DPRK Central Bank. There is no indication of how the bars traveled from Pyongyang to the KIC. ¶2. (C) The South Korean importing company Hasong, purchased the gold bars totaling 102 kilograms with an estimated value of USD 1.36 million. It is unknown how the payments for the shipments are handled. UNCMAC has not observed additional cash shipments through TC West to the DPRK beyond routine shipments designated for payment of KIC employee wages. The Hasong company sells the gold bars to a company called Sein, in Hong Kong, purportedly a non-ferrous metal trader that sells the gold for use by jewelry-making companies. Sein, has expressed interest in purchasing sand from the DPRK as well, but there have been no shipments through TC West to date. Neither company is listed on the internet and the nature and scale of their operations is unknown. ¶3. (C) On December 18, Pol M/C asked MOFAT DG Cho Tae-yong whether he was aware of these gold shipments. Cho said that he had not been aware, expressing some surprise that such a commodity was moving across the DMZ. Pol M/C requested that the ROKG conduct a thorough review of all movement of goods and personnel between North and South Korea through the DMZ, as well as by sea and air. Cho said he would contact the Ministry of Unification and other relevant agencies to gather more information. VERSHBOW