RESPONSE TO JAPANESE REQUEST FOR INFORMATION ON

S E C R E T STATE 098429 SIPDIS SIPDIS E.O. 12958: DECL: 07/16/2017 TAGS: PARM PREL KNNP MNUC KN JA SUBJECT: RESPONSE TO JAPANESE REQUEST FOR INFORMATION ON DPRK PROCUREMENT OF CURRENCY PRODUCTION EQUIPMENT REF: A. TOKYO 002852 ¶B. TOKYO 002787 ¶C. SECSTATE 71148 ¶D. STATE 061051 ¶E. BERLIN 000963 ¶F. BERN 00543 Classified By: EAP KATHLEEN STEPHENS, ACTING, REASONS: 1.4 B/D. ¶1. (U) Action Request: Washington agencies request Embassy Tokyo to deliver the nonpaper in para 4 to Japanese MFA, METI, MOF, and NPA officials. Agencies would also appreciate embassy's efforts to follow up on NPA's offer to obtain information from Komori (ref A) and to reiterate our request (ref C) that Japanese officials use their influence to prevent the sale of high-end currency production equipment to North Korea. End action request. ¶2. (S) Objectives: -- Provide Japanese government officials with nonpaper describing our outreach efforts to Drent Goebel officials in Germany. -- Obtain additional information from NPA or other Japanese authorities on counterfeit U.S. currency found in Japan as well as any approach to Komori by the DPRK. -- Reiterate our request that Japanese government officials remain vigilant and use their influence to preclude any sale of currency production equipment, technology, or supplies to the DPRK either directly or through an intermediary state or party. End objectives. ¶3. (S) Background: Embassy officials in Tokyo recently held a series of meetings with the Japanese Ministry of Economy, Trade, and Industry (METI) to convince the GOJ to prevent the sale of advanced currency printing equipment to the DPRK. METI noted that while it can approach the manufacturer and request that the company refuse to sell to the DPRK, the equipment in question is not part of Japan's export control regime. As a result, the GOJ cannot explicitly prevent the sale or export of this equipment. METI officials requested information on whether the U.S. Government has worked with other countries that manufacture currency production equipment. If the USG had worked with these countries and related companies, the GOJ would like to know in what way the contact had been made (ref A). ¶4. (SBU) Begin Nonpaper -- In late 2005, the German National Police - Bundeskriminalamt (BKA) contacted the United States Secret Service regarding the scheduled sale of an offset/intaglio web-press by the German press company, Drent Goebel. The BKA advised that Drent Goebel was scheduled to sell the web-press to the DPRK on April 1, 2006. -- In January, 2006, the Secret Service had the first of several meetings with Drent Goebel. During this meeting, the Secret Service presented unclassified evidence of the DPRK's SIPDIS involvement in the production and distribution of "Supernotes" and provided them with a copy of the Interpol "Orange Alert" on the DPRK's efforts to acquire printing supplies that could facilitate the counterfeiting of U.S. currency. -- The Secret Service requested Drent Goebel cancel the pending sale; however, Drent Gobel instead offered assurances that the press could be modified to prevent its misuse. -- In March 2006, the Secret Service hosted a meeting attended by representatives from the United States Bureau of Engraving and Printing, the U.S. Attorney's Office, and Drent Goebel's Managing Director and Vice President, who provided technical information regarding the proposed safeguards for the intaglio press. -- The consensus reached by the U.S. representatives was that the proposed modifications to the press would be insufficient to prevent the production of counterfeit currency. They also believed that this press would provide the DPRK with enhanced capacity and capabilities to continue the production of counterfeit U.S. currency. -- On 4, May 2007, the State Department and Secret Service met with the German Embassy in Washington, DC to reiterate Washington's continued concerns that Drent Goebel may go ahead with the sale of currency production equipment, including an intaglio web-press to North Korea. -- The German Embassy reiterated that the German Government could ultimately block the export of the printing press on foreign policy/national security grounds in the event Drent Goebel tried to go forward with the deal and pledged that Germany would deny the shipment if the company moved forward with the sale. -- The United States asks that Japan remain vigilant for any approaches to Japanese suppliers of currency production equipment, technology, or supplies by the DPRK, either directly or through an intermediary state or party. We would appreciate assurances that Japan will use its influence to preclude transfer of such technology, given the potential threat to national interests of both our countries. -- We would also appreciate information that Japan develops concerning any approach to Japanese suppliers of such technology by the DPRK as well as counterfeit U.S. currency found in Japan. End nonpaper. ¶5. (U) Washington point of contact for follow-up information is Kevin McGeehan, ISN/CPI, (202) 647-5408, McGeehanKJ@state.sgov.gov. ¶6. (U) Please slug all responses for ISN, EAP, EUR,INL and Treasury. Please include SIPDIS in any response. Washington appreciates Post's assistance. RICE