ROKG RESPONSE TO TEMPORARY DENIAL ORDER ON

S E C R E T SEOUL 000573 SIPDIS NOFORN SIPDIS STATE FOR EEB/ESC/TFS, ISN/CPI, EEB/OTF, EAP/K NSC FOR PAN AND CHANG TREASURY FOR OFAC COMMERCE FOR OEE E.O. 12958: DECL: 03/20/2017 TAGS: KNNP MNUC PARM IR KS SUBJECT: ROKG RESPONSE TO TEMPORARY DENIAL ORDER ON TRANSFER OF BOEING 747 AIRCRAFT TO MAHAN AIR REF: A. STATE 18255 ¶B. SEOUL 363 ¶C. STATE 21134 ¶D. SEOUL 422 ¶E. STATE 29431 Classified By: DCM Bill Stanton, reasons 1.4 (b,d). ¶1. (S/NF) Emboffs delivered reftel demarche to the Ministry of Foreign Affairs and Trade's (MOFAT) Disarmament and Nonproliferation Division Director Lee Jang-keun on March 21. Director Lee said he would urge the relevant ROK authorities and business interests to cooperate with this request and fully comply with the temporary denial order (TDO). He seemed confident that an ROKG interagency meeting later the same day would yield positive interim solutions to keep the aircraft on the ground. (Note: Lee repeatedly stressed the "interim" nature of ROKG actions, because he believes final disposition of the case lies in the hands of the Balli Group, a UK-based company. End note.) ¶2. (S/NF) Lee asked Emboffs to convey to Washington the ROKG's concerns about the economic consequences of the TDO on Korean businesses that have largely completed their contractual obligations to service two of the three aircraft. Lee stressed that these companies may incur contractual penalties for halting work and additional business costs associated with the storage of the aircraft. Lee anticipated that the firms could complain about their exclusive shouldering of these costs and may therefore request compensation from the ROKG. In light of this prospect, Lee asked Emboffs to keep in close contact with his office regarding any fast-breaking developments. ¶3. (S/NF) To facilitate MOFAT's ongoing interagency discussions with the Ministry of Construction and Transportation and the National Intelligence Service, Director Lee requested that the USG make its best effort to provide no later than March 27 (before their next interagency meeting): --A read-out of our London consultations on this issue. --U.S. advice on whether Korean businesses can accept payments due to them contractually for services rendered to date. --U.S. guidance in the event Balli Group requests permission to fly to the United States, the United Kingdom, or other Allied Coalition destination. ¶4. (S/NF) In closing, Lee advised that MOFAT will likely call in the UK mission in Seoul for consultations on this case in the near future. VERSHBOW