Identifier
Created
Classification
Origin
07SHENYANG178
2007-09-14 11:06:00
CONFIDENTIAL
Consulate Shenyang
Cable title:  

PRC/DPRK: NEW NK BORDER FENCING; INSPECTIONS AND

Tags:  PREL PINR ECON PREF KN KS CH 
pdf how-to read a cable
VZCZCXRO7602
PP RUEHCN RUEHGH RUEHVC
DE RUEHSH #0178/01 2571106
ZNY CCCCC ZZH
P 141106Z SEP 07
FM AMCONSUL SHENYANG
TO RUEHC/SECSTATE WASHDC PRIORITY 8190
INFO RUEHOO/CHINA POSTS COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 7918
RUEHUL/AMEMBASSY SEOUL 1763
RUEAIIA/CIA WASHDC 0059
RUEKJCS/DIA WASHDC 0041
RHHJJAA/JICPAC PEARL HARBOR HI 0011
RUCGEVC/JOINT STAFF WASHDC 0024
RUEAHLC/HOMELAND SECURITY CENTER WASHINGTON DC
RHEHAAA/NSC WASHDC
RUEKJCS/SECDEF WASHDC 0068
RUCNDT/USMISSION USUN NEW YORK 0015
C O N F I D E N T I A L SECTION 01 OF 03 SHENYANG 000178 

SIPDIS

SIPDIS

STATE PASS TO DOE FOR NNSA
STATE PASS TO DHS FOR CBP, ICE

E.O. 12958: DECL: TEN YEARS AFTER KOREAN UNIFICATION
TAGS: PREL PINR ECON PREF KN KS CH
SUBJECT: PRC/DPRK: NEW NK BORDER FENCING; INSPECTIONS AND
FLOOD AID; SMUGGLING AND BORDER SECURITY; BANKING

REF: SHENYANG 128

Classified By: CONSUL GENERAL STEPHEN B. WICKMAN.
REASONS: 1.4(b)/(d).

C O N F I D E N T I A L SECTION 01 OF 03 SHENYANG 000178

SIPDIS

SIPDIS

STATE PASS TO DOE FOR NNSA
STATE PASS TO DHS FOR CBP, ICE

E.O. 12958: DECL: TEN YEARS AFTER KOREAN UNIFICATION
TAGS: PREL PINR ECON PREF KN KS CH
SUBJECT: PRC/DPRK: NEW NK BORDER FENCING; INSPECTIONS AND
FLOOD AID; SMUGGLING AND BORDER SECURITY; BANKING

REF: SHENYANG 128

Classified By: CONSUL GENERAL STEPHEN B. WICKMAN.
REASONS: 1.4(b)/(d).


1. (C) SUMMARY: Recent PRC inspections of cross-border PRC-
DPRK traffic through Dandong show no change. One Western
NGO recently shipping flood-related medical aid to North
Korea encountered rather "strict" PRC customs requirements
that slowed the shipment by several days. North Korea has
started to fence several kilometers of its border near
Dandong, but the activity is actually part of a larger
project that began two years ago, according to local
residents, who also report that both sides of the border
have tightened in recent months. Evident now in Dandong
are indirect signs of an official acknowledgement of the
cross-border smuggling that persists in the area. On the
financial front, the status of previous PRC prohibitions--
at least nominal--on cross-border banking with North Korea
has become less clear during the second half 2007. END
SUMMARY.


2. (C) Poloff traveled along the southern end of the PRC-
DPRK border September 11-12, including to Dandong, a
strategic thoroughfare opposite Sinuiju, North Korea;
Donggang, a county-level port city roughly 40-45 kilometers
south of Dandong; and Hushan, a small locality along the
Yalu River approximately 20 kilometers north of downtown
Dandong.

CROSS-BORDER TRAFFIC: INSPECTIONS, MILITARY EXPORTS?
-------------- --------------

3. (C) Dandong Land Port had--compared to previous
observations over the past year during the same time of day
and time interval--a somewhat sluggish feel to it on the
morning of September 11 during a ninety-minute observation.
Between 1000 and 1040, Poloff observed approximately 30-40
large, closed-container PRC trucks depart China for
Sinuiju; the vast majority, whose cabs many drivers had
stuffed with bags of clothing, sported pre-clearance tags

and were subject to no visible inspections as they
processed out. Customs officers appeared to enhance their
vigilance as inbound traffic from Sinuiju entered Dandong.
Between 1040-1130, Poloff observed PRC customs officers
stare into the cargo holds of many (and climb into the cabs
of some) of the 50-60 mostly large, empty North Korean
container trucks--mostly newer Japanese models--that
entered the land port. Chinese business partners greeted
many of the incoming North Korean drivers, passing them
cell phones while shouting directions.


4. (C) Parked, queued next to the customs warehouse within
the land port were eight army-green Jiefang-model First
Auto Works (FAW) military cargo/utility trucks. Rounded,
army-green tarpaulins enclosed the rears of seven of the
two-ton vehicles, all of which appeared to have been
somewhat dated but newly refurbished. Poloff observed that
what was likely a decal/logo on the drivers' doors had been
painted over. None of the vehicles bore plates, nor were
any visibly marked for export, as Poloff had seen in the
past with military vehicles similarly queued for eventual
passage into North Korea.

INSPECTIONS AND FLOOD AID: ONE ANECDOTE
--------------

5. (C) A staffer at the Dandong branch of the Spiritual
Awakening Mission (SAM),a Christian medical NGO focused on
North Korea and China, on September 11 told Poloff of his
recent experience with PRC customs inspections during the
process of sending the DPRK humanitarian aid--in the form
of medical supplies--in response to the recent flooding.
Three weeks ago, SAM received a formal request from DPRK
authorities, after which the group promptly assembled
10,000 small medical kits packed with basic medicines and
first-aid supplies. DPRK authorities claimed that the
country had roughly 5000 clinics nationwide, to which SAM
targeted two kits each. (Each kit, SAM hopes, will last
several months.)

SHENYANG 00000178 002 OF 003




6. (C) The SAM staffer reported that PRC customs was quite
"strict." Even though the PRC authorities had been invited
to observe the packing process at SAM's base, they required
the shipment to be deposited at a warehouse at Dandong's
rail station for a period of three days, during which the
goods would be inspected before being transported by rail
to the DPRK. The staffer complained, moreover, that the
PRC authorities would only permit SAM to send Chinese-made
supplies, even though the quality is inferior to that of
Western medicines. Chinese customs officers, he said,
opened some of the kits to verify that the contents were,
in fact, Chinese-made. North Korean customs officers are
equally strict in certain respects, the staffer also noted:
they will accept Chinese or, preferably, U.S. medical
products, but absolutely no such South Korean products. He
recounted, for instance, one experience in which SAM had
donated South Korean-made vitamins and other high-quality
ROK medical products as humanitarian aid, only to have them
refused at the North Korean border because of their origin.


NEW NORTH KOREAN BORDER FENCING: SOME PERSPECTIVE
-------------- --------------

7. (C) North Korea has started fencing several kilometers
of its border near Hushan, outside of Dandong proper. The
fencing thus far is limited to several kilometers, mostly
around the perimeter of Yuchi Island--a small DPRK-held
island in the Yalu River that abuts Hushan--and consists of
roughly six-foot-tall vertical concrete posts (not "T"
shaped as on the Chinese side) strung with wire. Poloff on
September 12 observed at least 25-30 North Korean soldiers,
in shirtsleeves and small groups, ploddingly stringing wire
between the fence posts. Very little wire at present has
been strung on any of the posts, and even after the task is
completed, the porous border will continue to be easily
traversable just a short distance away in either direction
from where the fencing ends.


8. (C) Four Hushan locals who regularly interact and have
traded with the nearby DPRK border guards offered some
perspective on the fencing. The North Korean side started
erecting the fence posts a month ago, the riverside
residents confirmed. But they told Poloff that the
project--visible quite literally from their "backyards"--
actually started two years ago. It initially focused on
building a concrete or cement retaining wall/dam, onto
which the fence posts were recently installed. The North
Korean soldiers involved with this project, the locals
said, are engineering troops, and they plan to fence nearly
all of Yuchi Island.

THE BORDER TIGHTENING?
--------------

9. (C) Security along the border has become "more strict"
on both sides of the border in recent months, according to
the same locals. Until recently, for instance, North
Korean border guards posted just across the Yalu River
would regularly interact with these same Hushan residents
(albeit cautiously),even within view of their superiors.
Now the nearby North Korean border guards "won't dare" if
their superiors are around, locals told Poloff, citing the
recent example of a North Korean border guard-"friend"
whose superior officer locked him in his guard post after
he caught him interacting with Chinese across the river.
On the Chinese side of the border, Poloff continued--at
least anecdotally--to encounter an increasingly more
visible People's Armed Police (PAP) presence. On September
12 alone, Poloff spotted at least seven PAP patrols, mostly
in jeeps containing 3-4 soldiers, roving the border both
north and south of Dandong (though not in the city proper).


10. (C) Not-so-subtle signs of official acknowledgement of
the cross-border smuggling occurring in/around Dandong is
now evident in downtown Dandong for the first time in a
year of Poloff's regular visits to the area. On a number
of the docks that dot Dandong's riverside promenade were
strung red banners calling for an end to various and sundry

SHENYANG 00000178 003 OF 003


"illegal activities." Summing up the exhortations most
comprehensively was one which read: "Strictly combat
smuggling, alien smuggling (toudu),drug smuggling, cross-
border fishing and other illegal activities." Other
banners focused solely on drugs, while still others
specifically mentioned the use of riverfront boats in
illegal activities. A similar sort of publicity drive was
evident in Donggang several months ago (see reftel),but
few signs of the campaign remained when Poloff visited
again on September 12. On a number of boathouse walls on
the road between Dandong and Donggang, Poloff still saw a
few tattered, handwritten posters that called for an end to
alien smuggling and other types of similar illegal
activities that are typically conducted using the many
riverside boats in this area.

BANKING WITH THE DPRK VIA DANDONG
--------------

11. (C) The status of previous--at least nominal--official
PRC prohibitions in Dandong on renminbi-denominated
financial transactions involving North Korea has become
less clear in recent months. Staff at the Bank of China's
Dandong branch told us on September 11 that they still
would not process remittances for North Korea because of
"sanctions." But one staffer also said that such
transactions could now be processed at the Dandong branch of
the Industrial and Commercial Bank of China (ICBC) through
an account held there by the DPRK Guangxiang Financial Co.,
Ltd. (Chaoxian Guangxiang Jinrong Shehui in Chinese). When
asked about this arrangement, staff at Dandong's ICBC
initially denied the account, but told us when pressed that
one needed to ask one's North Korean business partner since
"they would know what to do." (NOTE: Online reports
suggest that Guangxiang may be an arm of the DPRK's Korean
Trade Bank (Chaoxian Maoyi Yinhang). Its listed address is
1602 Huiyou Garden, Dandong Development Zone; its phone
( 86)0415-3127485. END NOTE.)


12. (C) The Bank of China's Shenyang branch confirmed by
telephone on September 14 that prohibitions on business
with the DPRK remain in place. The international business
department of ICBC's Shenyang branch, however, told us the
same day that it could process a transfer of funds to the
DPRK, though only via Hong Kong and not in renminbi. By
contrast, the Shenyang branch of China's Merchant's Bank
told us that it, like the Bank of China, cannot process
remittances for North Korea because of "U.S. sanctions."
WICKMAN