GERMANY ISSUES NEW REGULATIONS REGARDING THE

C O N F I D E N T I A L BERLIN 001792 SIPDIS SIPDIS STATE FOR ISN, EAP, AND EUR TREASURY FOR TFI E.O. 12958: DECL: 09/20/2017 TAGS: KNNP MNUC KSAC PARM PREL KH GM SUBJECT: GERMANY ISSUES NEW REGULATIONS REGARDING THE EXPORT OF CURRENCY PRODUCTION EQUIPMENT TO NORTH KOREA REF: A. BERLIN 963 ¶B. STATE 61051 ¶C. BERLIN 484 ¶D. BERLIN 354 ¶E. BERLIN 318 ¶F. STATE 18308 ¶G. 2006 BERLIN 2224 ¶H. 2006 STATE 118598 ¶I. 2006 BERLIN 1876 ¶J. RUGGIERO/CONWAY EMAIL JUNE 21 2006 Classified By: Global Affairs Counselor Donald R. Shemanski for reasons 1.4 (b) and (d). ¶1. (C) Global Affairs Counselor received a letter September 17 from German MFA Export Control Division Director Cyril Nunn reporting the German Government has issued new export control regulations regarding the export of currency production equipment to North Korea. The new regulations, which went into effect July 25, 2007, require companies to apply for a license to export any currency production equipment to North Korea. In a follow-up discussion with Global Affairs officer September 21, Export Control Division Desk Officer Ulrike Wolf said the new regulations provide a "comprehensive tool" that permits German authorities to block the export of any currency production equipment to North Korea if there is a significant risk that the equipment will be used to counterfeit foreign currency. ¶2. (C) According to Wolf, the legal basis for denying an export license in such cases is a clause in the German Foreign Trade and Payments Act (FTPA) that allows the German Government to restrict legal transactions and acts in foreign trade in order to "guarantee the vital security interests of the Federal Republic of Germany." (FTPA, Section 7 -- see ref A) Nunn's letter states -- and Wolf confirmed -- that Drent Goebel, a German manufacturer of intaglio printing presses, has been notified of the new regulation. Para 3 contains an informal Embassy translation of the new regulation. Para 4 contains an informal Embassy translation of Nunn's letter. ¶3. (U) The July 25 revisions add a subsection (Subsection 6) to Paragraph 69(n) of the FTPA Implementing Regulation, which states (informal Embassy translation): "The export of equipment for the production of banknotes, stamps, and special paper for banknotes and stamps requires the permission of the German Federal Office of Economics and Export Controls (BAFA),when the end user is located in North Korea or the country of destination is North Korea." ¶4. (SBU) Begin text of informal Embassy translation of MFA letter: Your government expressed concern about the possible export of a banknote printing press by the firm Drent Goebel to North Korea. I would like to inform you that on July 25, 2007 the 80th regulatory revision of the Regulation Implementing the (German) Foreign Trade and Payments Act went into effect. Henceforth the export of equipment for the production of banknotes, stamps, and special paper for banknotes and stamps requires the permission of the German Federal Office of Economics and Export Controls (BAFA) when the end user is located in North Korea or the country of destination is North Korea. The firm Drent Goebel has been informed of this regulatory change. The new Paragraph 69(n) of the above mentioned regulation represents an effective and comprehensive export control regulation for currency production machinery to North Korea. Therefore, German authorities can and will stop the export of this type of equipment if a significant risk of counterfeiting foreign currency by North Korea exists. End text of informal Embassy translation of MFA letter. TIMKEN JR