Identifier
Created
Classification
Origin
08STATE119006
2008-11-07 19:13:00
SECRET
Secretary of State
Cable title:  

IRAN, NORTH KOREA, AND SYRIA NONPROLIFERATION

Tags:  KR MNUC MTCRE PARM PREL 
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O 071913Z NOV 08
FM SECSTATE WASHDC
TO AMEMBASSY SEOUL IMMEDIATE
S E C R E T STATE 119006 


E.O. 12958: DECL: 10/27/2032
TAGS: KR MNUC MTCRE PARM PREL

SUBJECT: IRAN, NORTH KOREA, AND SYRIA NONPROLIFERATION
ACT -- RESPONSE TO SOUTH KOREAN AUTHORITIES

REF: A. A. SEOUL 2076

B. B.STATE 111822

C. C. 06STATE 187236

D. D. 06SEOUL 3993

E. E. 06SEOUL 4166

Classified By: VCI DAS STEPHEN A. ELLIOTT FOR REASONS 1.4 (B),
(D),AND (H)

S E C R E T STATE 119006


E.O. 12958: DECL: 10/27/2032
TAGS: KR MNUC MTCRE PARM PREL

SUBJECT: IRAN, NORTH KOREA, AND SYRIA NONPROLIFERATION
ACT -- RESPONSE TO SOUTH KOREAN AUTHORITIES

REF: A. A. SEOUL 2076

B. B.STATE 111822

C. C. 06STATE 187236

D. D. 06SEOUL 3993

E. E. 06SEOUL 4166

Classified By: VCI DAS STEPHEN A. ELLIOTT FOR REASONS 1.4 (B),
(D),AND (H)


1. (U) This is an action request. Post please see para 6.


2. (S) This message responds to questions raised by MOFAT
officials in response to the October 22 notification of the
imposition of sanctions on Yolin Tech, Inc, Ltd. under the
Iran, North Korea, and Syria Nonproliferation Act (INKSNA)
(Refs A-B). Please draw from the talking points in paragraph
six. Talking points may be left as a non-paper.


3. (S) Background. The sanctions imposed on Yolin Tech
derive from the May 2006 event (ref C) and do not reflect any other
activity by Yolin. The circumstances of the May 2006 event, the
subsequent exchanges between the U.S. and Korean Governments
about the event, and the actions taken by the Korean Government
against Yolin (refs C-E) were considered during the sanctions
decision process. INKSNA is both comprehensive in that it covers
many varieties of exports (missile, chemical, biological,
conventional) and global in scope. The volume of cases and
attendant classification issues account for the delayed decision
process.


4. (S) Background (cont,d). Termination of sanctions imposed under
INKSNA is possible. The Department,s goal in agreeing to
terminate sanctions is to secure concrete assurances that there
will be no recurrence of any activity sanctionable under INKSNA.
INKSNA allows a determination to exempt foreign persons from
sanctions if "the government with primary jurisdiction over the
person has imposed meaningful penalties on that person on account
of the transfer of goods, services, or technology..." covered by
INKSNA. There is no definition of meaningful penalties in INKSNA
but the Department assesses that penalties should be such that
there will be no recurrence of any sanctionable activity.
With regards to this case, ROKG reported that it took criminal
action against Yolin Tech (a small, one-man front company operation),
convicted the company owner, but suspended the sentence imposed. The

lack of a "meaningful penalty" in this case was considered in the
sanctions decision.


5. (S) Background (cont,d). INKSNA sanctions have been terminated
early under certain circumstances. In a recent case, after
an extended negotiation directly with a sanctioned entity, the Department
established a high standard to justify termination of sanctions that
consists of four elements: 1) cessation of all dealings with
Iran, North Korea, and Syria, including the provision of goods, services,
and technology (including the supply of technical assistance and
spare parts for items already transferred) and a pledge of no
future dealings with these countries in violation of U.S. laws and
regulations; 2) accounting to the USG of all transfers in the previous
five years of any good, service, or technology to Iran, North Korea, and
Syria; 3) a commitment to comply with all reasonable future requests by
the USG relating to the transfer of goods, services, or technology to Iran,
North Korea, and Syria in the prior five year period; 4) an
acknowledgement that failure to abide by these commitments may
result in re-imposition of sanctions. The Department stands
ready to work with the ROKG to establish these conditions for Yolin
Tech as a prerequisite for terminating sanctions.


6. (S/REL South Korea) Suggested Talking Points

-- We are responding to questions raised in our October 22
meeting in which sanctions against the firm Yolin Technology were
notified to the Republic of Korea.

-- The provisions of the Iran, North Korea, and Syria Nonproliferation
Act (INKSNA) are global in scope and comprehensive in the
range of exports that are covered (missile, chemical, biological, and
conventional weapons). This complexity accounts for the
delay in determinations under the law.

-- The U.S. determination of sanctions against Yolin Technology
derives solely from the May 2006 event and subsequent actions
relevant to that event, which we previously raised with your
government.

-- The sanctions imposed only apply to Yolin Technology, its
successors, subunits, and subsidiaries, not to Korea or
Korean authorities, and have no effect on Korean entities that do
business with Yolin.

-- Under INKSNA, determination to exempt foreign persons from
sanctions may be made if "the government with primary
jurisdiction over the person has imposed meaningful penalties on that
person on account of the transfer of goods, services, or technology..."
covered by the law.

-- There is no definition of meaningful penalties in INKSNA
but the Department assesses that penalties should be such that there
will be no recurrence of any activity sanctionable under INKSNA.

-- In this case, you reported that you took criminal action
against Yolin Tech, convicted the company owner, but suspended the sentence
imposed.

-- While we appreciate your government,s rapid action in
this matter, we also expressed concern regarding the penalty imposed
against Yolin Tech and remain concerned that this was not a sufficient
deterrent to prevent Yolin Tech from again exporting controlled items to
Iran, North Korea or Syria.

-- Early termination of sanctions imposed under INKSNA is
possible. The goal of the United States Government in agreeing to a
termination of sanctions is to secure concrete assurances that there will
be no recurrence of any activity sanctionable under INKSNA.

-- In a recent case, after an extended negotiation directly
with a sanctioned entity, the Department established a high standard
to justify termination of sanctions that consisted of four elements.

-- First, the firm must cease all dealings with Iran, North
Korea, and Syria, including the provision of goods, services, and
technology (including the supply of technical assistance and spare parts
for items already transferred) and a pledge of no future dealings with
these countries in violation of U.S. laws and regulations.

-- Second, the firm must agree to provide an accounting of
all transfers in the previous five years of any good, service, or
technology to Iran, North Korea, and Syria to the USG.

-- Third, the firm must commit to comply with all reasonable
future requests for information from the USG relating to the
transfer of goods, services, or technology to Iran, North Korea, and
Syria in the prior five year period.

-- Fourth, the firm must acknowledge that failure to abide by
these commitments may result in re-imposition of sanctions.

-- In addition, the U.S. would appreciate information on
whether Yolin Tech continues to operate as a business. If so, we would
appreciate knowing what additional steps the ROKG has taken beyond
prosecuting the director of Yolin Tech to ensure that no
additional transfers of controlled items occur by Yolin Tech to
destinations of proliferation concern.

-- We are ready to work further with you, or, if appropriate,
directly with Yolin Tech, to establish these conditions for Yolin Tech as a
prerequisite for terminating sanctions before the two-year period expires.

-- We continue to value our strong and close nonproliferation
cooperation.

End Talking Points.
RICE


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End Cable Text