E.O. 13382 DESIGNATIONS OF TWO SWISS ENTITIES

S E C R E T STATE 047923 SIPDIS E.O. 12958: DECL: 03/21/16 TAGS: PARM PREL ETTC EFIN PGOV MNUC SUBJECT: E.O. 13382 DESIGNATIONS OF TWO SWISS ENTITIES REF: 05 STATE 120771 CLASSIFIED BY ISN FRANCIS C. RECORD, ACTING, REASONS: 1.4 (B),(C),AND (D). ¶1. (U) This is an action request. Embassy Bern and US Mission to the EU please see paragraph 3. Embassies Beijing, Moscow, Seoul, and Tokyo, please see paragraph 5. ¶2. (U) Background: On June 28, 2005 the President issued Executive Order (E.O.) 13382 allowing the U.S. to block or "freeze" the assets of weapons of mass destruction (WMD) proliferators and their supporters (reftel). The E.O. authorizes the Secretary of the Treasury, in consultation with the Secretary of State and the Attorney General, and other relevant agencies to designate individuals or entities determined to be owned or controlled by, or acting or purporting to act for or on behalf of, directly or indirectly, those entities or individuals identified in the Annex of the E.O. or subsequently designated pursuant to the E.O. In addition, the E.O. authorizes the Secretary of the Treasury, in consultation with the SIPDIS Secretary of State, the Attorney General, and other SIPDIS relevant agencies to designate individuals or entities determined to have provided, or attempted to provide, financial, material, technological or other support for, or goods and services in support of, individuals or entities identified in the Annex to the E.O. or subsequently designated pursuant to the E.O. Persons that are designated under the Order are denied access to U.S. financial and commercial systems, and U.S. persons, wherever located, are prohibited from engaging in transactions with them. Two entities that are located in Switzerland are being designated as a result of their relationship with Korea Ryonbong General Corporation, which is identified in the E.O. Annex. The designations will be published on OFAC's List of Specially Designated Nationals and Blocked Persons (SDN List)on March 28, 2006. ¶3. (U) Action Request for Embassy Bern and US Mission to EU. Washington requests Posts deliver the Points in paragraph 4 on Tuesday, March 28 two hours prior (local time) to 10:30am EST. Washington requests the US Mission to the EU to use the points with Ambassadors from all EU countries and the EU leadership. Points in paragraph 4 may be left as a non-paper. ¶4. (S/Rel Switzerland,EU) Begin Talking Points for Switzerland and EU Member States -- In the spirit of olr security cooperation, we are informing you that the U.S. Department of the Treasury will be announcing the designation of two Swiss entities under Executive Order 13382 (E.O. 13382),thereby blocking their assets and property within U.S. jurisdiction and prohibiting U.S. persons from engaging in transactions with them. These designations will be published on the Office of Foreign Assets Control's (OFAC) consolidated List of Specially Designated Nationals and Blocked Persons (SDN List) on March 28, 2006 and subsequently published in the Federal Register. The SDN List can be found at www.treas.gov/offices/enforcement/ofac/sdn. -- In June 2005, President Bush signed Executive Order 13382 (Blocking Property of Weapons of Mass Destruction Proliferators and Their Supporters). -- The Order allows the U.S. to block or "freeze" the property and assets subject to U.S. jurisdiction of weapons of mass destruction (WMD) proliferators and their supporters. Persons that are designated under the Order are denied access to U.S. financial and commercial systems, and U.S. persons, wherever located, are prohibited from engaging in transactions with them. -- We would like to notify you in advance that the U.S. Government will designate the following two entities pursuant to on March 28, 2006. 1) Kohas AG, which acts as a technology broker in Europe for the North Korean military and has procured goods with weapons-related applications. 2) Jakob Steiger, as President of Kohas AG, acts or purports to act for or on behalf of Korea Ryonbong General Corporation. Jakob Steiger has been involved in activities of proliferation concern on behalf of North Korea since his company's founding in the late 1980s. -- The Korea Ryonbong General Corporation was named in June 2005 in the Annex to E.O. 13382 and the Korea Ryengwang Trading Corporation was designated on October 21, 2005 because it is owned or controlled by, or acts or purports to act for or on behalf of the Korea Ryonbong General Corporation. -- As a subsidiary of the Korea Ryonbong General Corporation, the Korea Ryengwang Trading Corporation owns nearly half of the shares of Kohas AG and Jakob Steiger owns the remaining half. -- These designations are part of the ongoing effort by the U.S. government to combat WMD trafficking by blocking the property of entities and individuals that engage in proliferation activities and their support networks. -- The Executive Order is not targeted specifically at any state or region, but at entities and individuals around the world that are engaged in WMD proliferation and/or in providing support or services for such proliferation activities. -- USEU Only: -- Designation of these Swiss entities is the first such action directed against entities outside of Iran, North Korea, and Syria under the provisions in E.O. 13382.1 -- The United States will continue to take the actions necessary to disrupt and dismantle the networks that support proliferation and expose proliferators' activities to the international community such that others can take similar action, pursuant to their own legal authorities, to deny them access to their financial systems. -- We request that you not make public this action until after its official USG release scheduled for local time corresponding to 1030 EST. For Switzerland only -- Beginning as early as 2001, the U.S. raised concerns with your government about Kohas AG serving as a proliferation-related broker for the North Korean military. Additionally, we were informed by your Economic Ministry that the activities of Kohas AG and its owner were well known and should have been shut down years ago. -- Your government investigated Kohas AG and told us that they had not exported goods to North Korea that required export licenses. Again, we reiterated our concerns in 2002 that, while not requiring export licenses, proliferation-related items were shipped that should have been addressed by your catch-all export controls. -- To enhance further our bilateral security cooperation, we urge your government to take strong and immediate action against proliferators such as Kohas AG. End Talking Points for Switzerland and EU Nations ¶5. (U) Action request for Embassies Beijing, Moscow, Seoul, and Tokyo. Washington requests that Posts deliver the points in paragraph 6 to appropriate host country government officials on Tuesday, March 28 two hours prior (local time) to 10:30am EST. The points in paragraph 6 may be left as a non-paper. ¶6. (S/REL China, South Korea, Japan, Russia) Begin Talking Points for Six Party Talks Nations -- Because of our close cooperation on stopping WMD proliferation networks and our shared objectives in the Six-Party Talks, we wish to inform you of an announcement related to such efforts that will be made in Washington on March 28, 2006. -- In June 2005, President Bush signed Executive Order 13382 (Blocking Property of Weapons of Mass Destruction Proliferators and Their Supporters). -- The Order allows the U.S. to block or "freeze" the property and assets of weapons of mass destruction (WMD) proliferators and their supporters, which come within U.S. jurisdiction. Persons that are designated under the Order are denied access to the U.S. financial and commercial systems, and U.S. persons, wherever located, are prohibited from engaging in transactions with them. -- We would like to notify you that the U.S. will designate the following two entities on March 28, 2006 pursuant to E.O. 13382: 1) Kohas AG, which acts as a technology broker in Europe for the North Korean military and has procured goods with weapons-related applications. 2) Jakob Steiger, as President of Kohas AG, acts or purports to act for or on behalf of Korea Ryonbong General Corporation. Jakob Steiger has been involved in activities of proliferation concern on behalf of North Korea since his company's founding in the late 1980s. -- The Korea Ryonbong General Corporation was named in June 2005 in the Annex to the E.O. and the Korea Ryengwang Trading Corporation was designated on October 21, 2005 because it is owned or controlled by, or acts or purports to act for or on behalf of the Korea Ryonbong General Corporation. -- As a subsidiary of the Korea Ryonbong General Corporation, the Korea Ryengwang Trading Corporation owns nearly half of the shares of Kohas AG and Jakob Steiger owns the remaining half. -- The designations will be published on the Office of Foreign Assets Control's (OFAC) consolidated List of Specially Designated Nationals and Blocked Persons (SDN List) on March 28, 2006 and subsequently published in the Federal Register. The SDN List can be found at www.treas.gov/offices/enforcement/ofac/sdn. -- These designations are part of the ongoing effort by the U.S. government to combat WMD trafficking by blocking the property of entities and individuals that engage in proliferation activities and their support networks. -- The Executive Order is not targeted specifically at any state or region, but on entities around the world that are engaged in WMD proliferation and/or in providing support or services for such proliferation activities. -- Designation of these Swiss entities is the first such action directed against entities outside of Iran, North Korea, and Syria under the provisions in E.O. 13382. -- The United States will continue to take the actions necessary to disrupt and dismantle the networks that support proliferation and expose proliferators' activities to the international community such that others can take similar action, pursuant to their own legal authorities, to deny them access to their financial systems. -- We encourage your public support for this effort and also hope that you will continue to expand your national authorities to take steps against similar proliferation- related entities. -- We request that you not make public this action until after its official USG release scheduled for local time corresponding to 1030 EST. If asked about impact on the Six Party Talks: -- The Executive Order is not targeted specifically at North Korea, but on entities around the world that are engaged in WMD proliferation and/or in providing support or services for such proliferation activities. North Korean proliferation entities and their supporters fall into this category. -- As such, designations under the Order are a necessary step for dealing with the global proliferation threat and are also complementary to the objectives of the Six Party Talks. End Talking Points for Six Party Talks Nations. RICE NNNN