WI SAYS DENUCLEARIZATION IS STILL ROKG'S TOP

C O N F I D E N T I A L SEOUL 001380 SIPDIS E.O. 12958: DECL: 08/28/2019 TAGS: PGOV PREL PINR ECON EFIN KN KS CH SUBJECT: WI SAYS DENUCLEARIZATION IS STILL ROKG'S TOP PRIORITY Classified By: POL M/C James L. Wayman. 1.4(b/d) Summary -------------- ¶1. (C) During an August 24 meeting, ROK Special Representative for Korean Peninsula Peace and Security Affairs Wi Sung-lac emphasized to Ambassador Philip Goldberg that the ROKG's top priority is still denuclearization. Wi noted that UNSCR 1874 was forcing the North Koreans to find creative ways to undermine implementation. Wi agreed that Chinese banks, increasingly worried about their reputations, were taking 1874 seriously and understood clearly the business consequences of being "named and shamed" for shady dealings with Pyongyang. While the USG supported North-South dialogue, Goldberg noted that cash is fungible; the approximately USD 36 million that the DPRK earned annually from its participation in the Mt. Kumgang tours and the Kaesong Industrial Complex could free up money for North Korea's nuclear or missile programs. In a private discussion at the end of the meeting, Wi told Goldberg that five of the North Korean entities covered in 1874 were still trying to do business in China. Wi also expressed concern about Egypt's continuing cooperation with KOMID. End summary. Where We're At -------------- ¶2. (C) During a one-hour meeting on August 24th, ROK Special Representative for Korean Peninsula Peace and Security Affairs Wi Sung-lac assured Ambassador Philip Goldberg that the ROKG's top priority is still denuclearization. Wi related that President Lee Myung-bak, in a meeting with the DPRK delegation to former President Kim Dae-jung's funeral, said that without progress on denuclearization there would be little significant improvement in North-South ties. Wi agreed with Ambassador Goldberg's observation that maintaining solidarity among China, Russia, Japan, the ROK and the United States would be key. The five parties could not waiver on denuclearization and implementation of UNSCR ¶1874. DPRK "Aware" of 1874 -------------- ¶3. (C) Responding to Ambassador Goldberg's observation that the DPRK was now "aware" of 1874, Wi said that the resolution was clearly causing concern in Pyongyang. 1874 was not yet "biting" the regime, but it was causing the North Koreans to find creative ways to undermine implementation by using, for example, foreign companies in China and foreign-flagged ships to move contraband. 1874 would also likely force Pyongyang to move more prohibited items by air, Wi said, noting that there are at least two flights weekly from Pyongyang to Tehran. Keeping China Steady -------------- ¶4. (C) Ambassador Wi said the ROKG was concerned about Chinese backsliding on 1874 implementation as the DPRK pursued its "peace offensive." Chinese cooperation has been spotty, he said, noting that the PRC is still permitting a branch of Kwangson Bank was still operating in the northeastern Chinese city of Dandong and had been involved in transactions involving entities covered by 1874. Wi added that the flights from Pyongyang to Tehran passed through PRC airspace; the Chinese could do more to "shut that door." Wi agreed, though, with Ambassador Goldberg's observation that Chinese banks, increasingly worried about their reputations, were taking 1874 seriously and understood clearly the business consequences of being "named and shamed" for shady dealings with the North Koreans. Mount Kumgang and Kaesong -------------- ¶5. (SBU) Ambassador Goldberg agreed with Wi's assessment that Hyundai Asan's Mount Kumgang tourism project likely fell outside the bounds of 1874. While the USG supported North-South dialogue and anything that reduced North-South tensions, Goldberg noted that cash is fungible; the approximately $36 million that the DPRK earned from its participation in the Mt. Kumgang tours and the Kaesong Industrial Complex could free up money for North Korea's nuclear or missile programs. Pull-Aside on Implementation Issues -------------- ¶6. (C) In a private discussion at the end of the meeting, Wi told Goldberg that that five of the North Korean entities covered in 1974 were still trying to do business in China. (Note: He gave Goldberg a list of their activities which has been passed separately to EAP/K. End note.) Wi added that a retired senior Chinese official had recently told ROKG interlocutors that PRC export controls were having an impact on the DPRK, asserting that PRC actions had forced the DPRK to give up on plans to build a fuel fabrication facility as well as 50MW and 200MW plants at Yongbyon. ¶7. (C) Wi also expressed concern about Egypt's continuing cooperation with KOMID. The ROKG had approached the Egyptians to remind them that 1874 bans also military cooperation with the DPRK. Wi said the Egyptians responded privately -- "as they always do" -- that their relationship with North Korea was "special" because the DPRK had provided fighter pilots to the Egyptian Air Force during the 1973 Yom Kippur War. ¶8. (U) This cable has been cleared by Ambassador Goldberg. TOKOLA