(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 NNNN End Cable Text