(C) DEMARCHE TO CHINA CONCERNING DESIGNATION OF

S E C R E T STATE 036864


SIPDIS

E.O. 12958: DECL: 04/15/2014
TAGS: UNSC PARM KN CH KNNP

SUBJECT: (C) DEMARCHE TO CHINA CONCERNING DESIGNATION OF
GOODS AND ENTITIES UNDER UNSCR 1718

Classified By: EAP DAS John Norris, for reasons 1.5 b and d


1. (U) This is an action request.


2. (C) The objectives of this demarche are to:

-- Encourage China to work together with us to facilitate
U.S.-proposed designations in the DPRK Sanctions Committee
("1718 Committee") of entities and goods tied to the DPRK's
proscribed WMD and missile-related activities in order to
meet the PRST deadline and keep this matter from returning to
the full Council for action;

-- Recall for Beijing that during the negotiations on the
Security Council's recent Presidential Statement (PRST) on
the DPRK, Chinese officials made a political commitment not
to block such designations;

-- Urge China to respond no later than Friday, April 17 with
comments on the U.S. proposal.


3. (U) BACKGROUND: On April 13, the Security Council adopted
a Presidential Statement (PRST) that condemned the April 5
launch by the Democratic People's Republic of Korea (DPRK)
and tasked the Security Council's DPRK Sanctions Committee to
"adjust" pre-existing sanctions through the designation of
entities and goods by April 24. (NOTE: Per UNSCR 1718, the
DPRK Sanctions Committee may freeze the assets of designated
entities linked to the DPRK's proscribed WMD and missile
program, as well as identify specific technical goods banned
from transfer to or from the DPRK. END NOTE). During the
negotiations on the PRST, Chinese officials committed not to
block any sanctions designation that "did not affect China's
interests directly." The United States, France and UK made
clear that our support for the PRST was predicated on the
Chinese political commitment to allow designations in the
Committee, thereby ensuring there were real consequences for
the DPRK's provocative missile launch.


4. (C) BACKGROUND (STATE OF PLAY): USUN formally submitted a
list of entities and goods to the Sanctions Committee on
April 14 (designation package at para 6). USUN shared the
technical content of this designation with the Chinese
mission on April 6. Officials from the Chinese mission,
acting on instructions, have told USUN that the information
included in the U.S. submission is inadequate and that they
need more background and justification. Department seeks a
high-level approach to Beijing to remind China of the urgency
of moving forward expeditiously with these designations.


5. (C) POST MAY DRAW UPON THE TALKING POINTS BELOW:

-- The United States appreciated China's efforts to closely
coordinate on the adoption of a UN Security Council
Presidential Statement (PRST) condemning the DPRK's April 5
launch. The clear and united statement criticizing the
launch expressed the will of the international community.
Our successful negotiation demonstrated the effectiveness of
our close bilateral cooperation. We hope we can continue
working together in that spirit.

-- During the negotiations on the recent DPRK PRST, Chinese
officials pledged not to block new designations of technical
goods and entities in the UN Security Council's DPRK
Sanctions Committee ("1718 Committee").

-- On April 6, while these negotiations were still underway,
we shared with you information about what kind of
designations we intended to seek, including:

A) New technical items that could be used to support the
DPRK's WMD and ballistic missile-related programs and
associated proliferation activities;
B) New technical items that have been included in the
Missile Technology Control Regime (MTCR) list of banned items
since 2006 (NOTE: China is not a member of the MTCR, but in
2006, China agreed to use a list identical to the MTCR list
as a basis for Security Council document S/2006/815 of goods
that are prohibited from being exported to or from the DPRK.
The MCTR Annex is regularly updated by the 34 MTCR Partners
to keep pace with advancements in technology and trends in
ballistic missile proliferation and has been modified since
the adoption of Resolution 1718 in 2006. END NOTE.)
C) Eleven entities that have been tied to the DPRK's WMD
and ballistic missile-related proliferation activities.

-- On April 14, the United States formally submitted a
request to designate these items and goods to the DPRK
Sanctions Committee, along with information justifying their
designation.
-- We appreciate your commitments not to object to these
designations.

-- This is a political issue - not a technical issue. The
proposed targets should already be familiar your experts. In
fact, we had originally proposed them in early drafts of a
possible UNSCR. For example, we have previously raised with
you our concerns about the entities involved, in particular
KOMID and Tanchon Commerical Bank.

-- Because of the tight timeframe specified in the Security
Council's PRST on the DPRK, we would like to know by Friday,
April 17 whether you anticipate significant objections to
this approach.

-- As you know, the Security Council has resolved to vote on
proposed designations by April 30 in the event the Committee
is deadlocked.

-- The Security Council's adoption of the April 13 PRST was
the product of U.S.-China bilateral
cooperation on an important issue of regional security. We
hope we can continue working together in that spirit.

-- (IF ASKED ABOUT THE FUTURE OF THE SIX-PARTY TALKS) As
called for in the PRST, North Korea should engage through the
Six-Party Talks process to fulfill its commitments in the
September 2005 Joint Statement. The DPRK,s decision to
suspend disablement and expel U.S. and IAEA monitors is a
step in the wrong direction. This move strikes at the core
aim of the Six-Party Process, which is denuclearization. The
United States remains committed to the Six-Party Talks
process and wants to consolidate the important progress we
have made so far. We need to maintain a united approach
among Six-Party partners, and we want to continue close
consultations.


6. (SBU) TEXT OF U.S. PROPOSAL TO 1718 COMMITTEE:

April 14, 2009

Dear Ambassador:

In line with the Security Council's Presidential Statement
(S/PRST/2009/7) of April 13, 2009, the United States Mission
would like to propose to the Committee established pursuant
to resolution 1718 (2006) the designation of additional
entities and goods pursuant to paragraph 8 of resolution 1718
(2006).

The United States has identified items, materials, equipment,
goods and technology (attachment 1) that should be specified
for the purpose of paragraph 8(a)(ii) of resolution 1718
(2006). We have included information specifying why these
items "could contribute to DPRK's nuclear-related, ballistic
missile-related or other weapons of mass destruction-related
programs." All of this information is publicly releasable.

The United States has also identified entities (attachment 2)
that should be subject to the measures imposed by paragraph
8(d) of resolution 1718 (2006). We have included information
specifying why these entities meet the criteria of "being
engaged in or providing support for, including through other
illicit means, DPRK's nuclear-related, other weapons of mass
destruction-related and ballistic missile-related programs,
or by persons or entities acting on their behalf or at their
direction." All of this information is publicly releasable.

The United States requests that the Committee established
pursuant to resolution 1718 (2006) consider these proposals
on a priority basis in order to meet the April 24
deadline requested by the Security Council. We suggest that
the Committee discuss this list at its next meeting,
including ways to amend or include additional information
about these goods and entities.

Please accept, Excellency, the assurances of my highest
consideration.

Sincerely,

Susan E. Rice
Ambassador

Attachment: As stated.

His Excellency
Baki Ilkin,
Chairman of the Committee established pursuant to resolution
1718 (2006),
New York, NY 10017.

Cc: Ms. Loraine Rickard-Martin,
UN Security Council Subsidiary Organs Branch,
United Nations.

ATTACHMENT 1:

Proposed Items that should be specified for
the purpose of paragraph 8(a)(i) of resolution 1718 (2006).

PART A:

-- Resolution 1718 banned the transfer of items described in
the document S/2006/815.
-- The United States proposes circulating a new document of
the Council, which will include additions and updates to this
original list.
-- At the first meeting of the Committee, the United States
will explain the nature of this subsequent document.

PART B:

-- The United States further proposes adding the additional
items as described below.
-- The acquisition of these items is especially critical for
states like the DPRK that are attempting to advance their
ballistic missile capability.

-"Nitrogen stabilized duplex stainless steel (N-DSS) having
all of the following characteristics:

a) containing at least 18 percent by weight chromium and
4.5-8.0 percent by weight nickel;

b) a ferritic-austenitic microstructure (also referred to
as a two-phase microstructure) of which at least 10 percent
is austenite by volume (according to ASTM E-1181-87 or
national equivalents); and

c) having any of the following forms:
i. ingots or bars having a size of 100 mm or more in each
dimension;
ii. sheets having a width of 600 mm or more and a thickness
of 5 mm or less; or
iii. tubes having an outer dimension of 600 mm or more and a
wall thickness of 5 mm or less."

Nitrogen stabilized duplex stainless steels very nearly
replicate the material strength requirements of titanium
stabilized duplex stainless steel, which is MTCR controlled.
This specialized steel is particularly useful in liquid
propellant missile applications given its high strength, ease
of welding and resistance to corrosive liquid propellant
oxidizers such as inhibited red fuming nitric acid (IRFNA).


-"Graphite designed or specified for use in EDM machines."
Electrical discharge machining (EDM) graphite has the ability
to significantly contribute to ballistic missile programs by
virtue of its use in EDM machines producing complex and
highly precise cuts such as required for liquid rocket engine
components. This level of machining is not required in the
manufacture of farming equipment, civilian construction
projects, or in various heavy industries not related to the
production of ballistic missiles.

-"5 mm or thinner stainless steel sheets." Stainless steel
in thin sheet form is highly sought after by some ballistic
missile programs of concern for rocket motor casings and
pressure vessels.

-"Para-aramid fiber (Kevlar and other Kevlar-like),filament
and tape." Para-aramid fibers such as Kevlar and other
Kevlar-like filaments and tapes are usable in the
fabrication of solid propellant rocket motor cases, rocket
motor nozzles and nozzle extensions, propellant tanks, nose
tips, and missile airframe and warhead structures.

-"Austenitic stainless steel." Certain austenitic steel
alloys possess the strength and corrosion resistance to be
employed in many liquid missile applications including
propellant tanks and missile interstages.

-"Aerospace-grade aluminum in bar and sheet form." Aerospace
grade aluminum alloys with high strength and corrosion
resistance are useful in liquid ballistic missile structures
and airframes.

-"Fine-grain spherical aluminum powder (500 micron and below,
with purity equal to or greater than 75 percent)." Aluminum
powder is used as a fuel substance in solid
rocket motor propellant formulations. The use of spherical
aluminum powder allows higher aluminum loading, with a
corresponding increase in propellant performance.

ATTACHMENT 2:

Proposed entities that should be subject to the measures
imposed by paragraph 8(d) of resolution 1718 (2006).

The following entities are engaged in or providing support
for, including through other illicit means, the DPRK's
nuclear-related, other weapons of mass destruction-related
and ballistic missile-related programs, or are persons or
entities acting on their behalf or at their direction:

1) KOREA MINING DEVELOPMENT TRADING CORPORATION (a.k.a.
CHANGGWANG SINYONG CORPORATION; a.k.a. EXTERNAL TECHNOLOGY
GENERAL CORPORATION; a.k.a. DPRKN MINING DEVELOPMENT TRADING
CORPORATION; a.k.a. &KOMID8). Central District, Pyongyang,
DPRK. The Korea Mining Development Trading Corporation
(KOMID) is the DPRK,s primary arms dealer and main exporter
of goods and equipment related to ballistic missiles and
conventional weapons. KOMID offices are located in multiple
countries and facilitate weapons sales while seeking new
customers for its weapons.

2) KOREA RYONBONG GENERAL CORPORATION (a.k.a. KOREA
YONBONG GENERAL CORPORATION; f.k.a. LYONGAKSAN GENERAL
TRADING CORPORATION, Pot,onggang District, Pyongyang, DPRK;
Rakwon-dong, Pothonggang District, Pyongyang, DPRK). The DPRK
defense conglomerate Korea Ryonbong General Corporation
specializes in acquisition for DPRK defense industries and
support to that country,s military-related sales. An
English-language DPRK trade journal (Foreign Trade of the
DPRK),has carried advertisements from International
Chemical, a subsidiary of Korea Ryonbong General Corporation,
offering ammonium diuranate (ADU),a processed form of
yellowcake, for sale on the international market.

3) TANCHON COMMERCIAL BANK, f.k.a. CHANGGWANG CREDIT BANK;
f.k.a., KOREA CHANGGWANG CREDIT BANK. Saemul 1-Dong
Pyongchon District, Pyongyang, DPRK. Tanchon Commercial
Bank, headquartered in Pyongyang, inherited from the Korea
Changgwang Credit Bank Corporation (KCCBC) the role as the
main DPRK financial agent for sales of conventional arms,
ballistic missiles, and good related to the assembly and
manufacture of such weapons. Since the late 1980s,
Tanchon,s predecessor, KCCBC, collected revenue from
weapons-related sales that were concentrated in a handful of
countries mainly located in the Mid-East and several African
states. These revenues provide DPRK with a significant
portion of its export earnings and financially aid DPRK,s
own development of nuclear-related, other weapons of mass
destruction-related and ballistic missile-related programs
and arms-related purchases.

4) HESONG TRADING CORPORATION. Pyongyang, DPRK. Korea
Mining Development Corporation (KOMID) is the parent company
of Hesong Trading Corporation.

5) KOREA COMPLEX EQUIPMENT IMPORT CORPORATION.
Rakwon-dong, Pothonggang District, Pyongyang, DPRK. Korea
Ryonbong General Corporation is the parent company of Korea
Complex Equipment Import Corporation.

6) KOREA INTERNATIONAL CHEMICAL JOINT VENTURE COMPANY.
a.k.a. CHOSON INTERNATIONAL CHEMICALS JOINT OPERATION
COMPANY; a.k.a. CHOSUN INTERNATIONAL CHEMICALS JOINT
OPERATION COMPANY; a.k.a. INTERNATIONAL CHEMICAL JOINT
VENTURE CORPORATION. Hamhung, South Hamgyong Province, DPRK;
Man gyongdae-kuyok, Pyongyang, DPRK; Mangyungdae-gu,
Pyongyang, DPRK. Korea Ryonbong General Corporation is the
parent company of Korea International Chemical Joint Venture
Company.

7) KOREA KWANGSONG TRADING CORPORATION. Rakwon-dong,
Pothonggang District, Pyongyang, DPRK. Korea Ryonbong
General Corporation is the parent company of Korea Kwangsong
Trading Corporation.

8) KOREA PUGANG TRADING CORPORATION. Rakwon-dong,
Pothonggang District, Pyongyang, DPRK. Korea Ryonbong
General Corporation is the parent company of Korea Pugang
Trading Corporation.

9) KOREA RYONGWANG TRADING CORPORATION. a.k.a. KOREA
RYENGWANG TRADING CORPORATION Rakwon-dong, Pothonggang
District, Pyongyang, DPRK. Korea Ryonbong General
Corporation is the parent company of Korea Ryongwang Trading
Corporation.

10) KOREA RYONHA MACHINERY JOINT VENTURE CORPORATION.
a.k.a. CHOSUN YUNHA MACHINERY JOINT OPERATION COMPANY;
a.k.a. KOREA RYENHA MACHINERY J/V CORPORATION; a.k.a. RYONHA
MACHINERY JOINT VENTURE CORPORATION. Central District,
Pyongyang, DPRK; Mangungdae-gu, Pyongyang, DPRK; Mangyongdae
District, Pyongyang, DPRK. Korea Ryonbong General
Corporation is the parent company of Korea Ryonha Machinery
Joint Venture Corporation.

11) TOSONG TECHNOLOGY TRADING CORPORATION Pyongyang, DPRK.
Korea Mining Development Corporation (KOMID) is the parent
company of Tosong Technology Trading Corporation.
CLINTON


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