KOREA TO ENHANCE CONTROL OF STRATEGIC PRODUCT

UNCLAS SECTION 01 OF 02 SEOUL 000954 SIPDIS SIPDIS SENSITIVE STATE FOR ISN, EB AND EAP/K E.O. 12958: N/A TAGS: ETTC KSTC PARM PREL KS SUBJECT: KOREA TO ENHANCE CONTROL OF STRATEGIC PRODUCT EXPORTS SUMMARY -------------- ¶1. (SBU) According to the Ministry of Commerce, Industry and Energy (MOCIE),Korea plans to tighten controls over the export of strategic products that could be used for weapons development. MOCIE's planned measures, which will go into effect in the latter part of 2006, call for tougher legal action against offenders and clarification of what products should not be exported. The measure is in compliance with United Nation resolution 1540, which calls for a concerted effort to prevent the spread of strategic items that can be used to make weapons of mass destruction. ¶2. (SBU) MOCIE, under the revised rules, will be able to prosecute offenders with maximum jail sentences of seven years (up from five) and fines up to five times (up from three times) that of the transaction value. In addition, MOCIE will now be providing timely responses to export control inquiries and will make information on what cannot be sold to certain countries more freely available. End Summary. KOREA'S EXPORT CONTROL PLANS -------------- ¶3. (SBU) EconOff met on February 8 with Shim Soung-kun, Director of the Export Policy Control Division at MOCIE, to discuss Korean export control policy. Shim explained that although Korea's export controls lag behind those of the United States, the EU and Australia, Korea would make great strides in catching up in 2006. MOCIE expects Korea to reach full compliance with UN 1540 before the year's end. Shim made it clear that he believes that without rigorous export controls, the country that will suffer the most is Korea. Shim stated that if Korean companies cannot fully comply with international export control rules, Korean companies would suffer sanctions which in turn would heavily damage exports, Korea's main economic activity. ¶4. (SBU) Director Shim explained that MOCIE will be implementing a vigorous public relations campaign on export controls in 2006. Shim said that in 2005, only five percent of Korean companies surveyed understood the rules regarding export controls. By the end of 2006, MOCIE expects a minimum of eighty percent of all Korean companies to understand export controls, making it easier for them to comply. ¶5. (SBU) MOCIE has proposed an upgrade to the Korean Strategic Trade Information Center (STIC),the current Korean government funded center in charge of implementing export controls, raising it to become to an agency-level government entity called the Strategic Material Management Agency (SMMA) -- with the number of employees increasing from the current level of thirteen to fifty full-time employees. In addition, MOCIE plans to publish an Export Controls Handbook for all Korean government employees, and initiate systematic private company employee training for 10,000 people. MOCIE's goal is to increase the number of Korean "International Compliance Companies" (ICC's) from the current four up to fifty companies, also within 2006. The four companies that are already compliant are alll very large Korea-based multinational corporations. However, this year Shim says MOCIE will focus more on helping small and medium-sized companies become ICCs. MORE RESOURCES NEEDED -------------- ¶6. (SBU) Using MOCIE's 2006 budget as a lever, Shim plans to spend funds to build consensus within the government and among private companies and the general public to make sure Korea can comply with global export control standards. He predicted that MOCIE would compile one core database to build a user-friendly implementation system for both government and SEOUL 00000954 002 OF 002 private companies. Moreover, MOCIE will continue training programs for STIC employees in Korea, as well as sending employees to the United States, EU, Australia and Japan for overseas training. Shim expects to send employees to at least twenty international conferences in 2006. ¶7. (SBU) Shim also plans to increase export control cooperation with countries throughout the world. Not only is Korea reaching out to the EU, the United States, Japan and Australia, but Shim, in order to strengthen overall cooperation on export control, also intends to pursue an export control MOU with China. ¶8. (SBU) Shim cited one example of international cooperation of which he is particularly proud. On December 31, 2005, the shipment of a Korean export company was apprehended in Singapore on its way to Iran. The shipment contained dual-use items whose sale to Iran is prohibited under Korean law. The shipment was stopped and returned to Korea, where the company concerned is now being prosecuted to the full extent of the law. COMMENT -------------- ¶9. (SBU) Director Shim seems to have accomplished much since MOCIE began revamping Korea's export control regime in 2003. Fortunately, MOCIE and Director Shim are not satisfied with the results so far, but intend to continue to press forward. Shim's understanding of why export controls are necessary is commendable. His unending drive to teach Koreans is impressive. Although Shim personally appears to be the driving force behind the rapid improvement in Korean export controls -- which is no doubt linked to his own career ambitions -- Shim appears to have gotten his timing right, and has been able to convince the Korean government in general to get on board. End Comment. VERSHBOW