UNSC 1718 COMMITTEE DESIGNATION OF DPRK ENTITIES SUBJECT TO ASSET FREEZE

S E C R E T SECTION 01 OF 06 STATE 048525



SIPDIS

NOFORN



E.O. 12958: DECL: 04/26/2019

TAGS: EFIN, ETTC, KNNP, PREL, PARM, XE, ZO, KN

SUBJECT: UNSC 1718 COMMITTEE DESIGNATION OF DPRK

ENTITIES SUBJECT TO ASSET FREEZE



REFS: A) 06 STATE 055463

B) 08 ABU DHABI 000325

C) 08 STATE 30247

D) 08 SEOUL 650

E) 08 SEOUL 1207

F) 06 STATE 180512

G) 07 STATE 064579

H) 07 ABU DHABI 873

I) 07 STATE 162279

J) 09 STATE 19783

K) 08 STATE 123035

L) 06 STATE 43354

M) 06 SINGAPORE 3187

N) 06 MOSCOW 12396

O) 06 BERLIN 1285





Classified by: ISN Acting A/S C.S. Eliot Kang for

reasons 1.4 (b) and (d).





1. (U) This is an action request. Please see paragraph

3.



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SUMMARY/BACKGROUND

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2. (SBU) In response to the April 5, 2009 launch of a

Taepo Dong-2 (TD-2) ballistic missile by the Democratic

People's Republic of Korea (DPRK),the UN Security

Council issued a Presidential Statement (PRST) on April

13, 2009. The PRST stated that the TD-2 launch was in

contravention of UN Security Council Resolution (UNSCR)

1718 and indicated the Security Council's agreement to

adjust the sanctions measures imposed by paragraph 8 of

the resolution through the designation of entities and

goods. If the UNSCR 1718 Sanctions Committee did not

act by April 24, the PRST indicated that the Security

Council itself would do so by April 30. On April 24,

the Sanctions Committee designated three DPRK entities

to be subject to the asset freeze provisions in

paragraph 8 (d) of UNSCR 1718. These entities are:

Korea Mining Development Trading Corporation (KOMID),

the Korea Ryonbong General Corporation (Ryonbong),and

Tanchon Commercial Bank. The United States wants to

provide background and identifier information to all

States on the newly designated entities and their

affiliates, and urge States to implement immediately the

asset freeze obligations of UNSCR 1718 to prevent

further proliferation-related activities by the DPRK.

Under paragraph 8(d) of UNSCR 1718, the asset freeze

provisions also apply to funds, financial assets, and

economic resources that are owned or controlled directly

or indirectly by designated entities, and to persons and

entities acting on behalf of or at the direction of the

designated entities.



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OBJECTIVES/ACTION REQUEST

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3. (S/NF) All posts are requested to deliver the

nonpaper in paragraph 4 to relevant host government

officials in the foreign affairs and finance ministries.

Embassies Abu Dhabi, Berlin, Bern, Cairo, Copenhagen,

London, Moscow, New Delhi, Sanaa, Seoul, Singapore, and

Stockholm are requested to deliver additional classified

points in paragraph 5 as appropriate. Embassies

Beijing, Kuala Lumpur, and Consulate Hong Kong are

requested not to deliver this demarche. Washington is

preparing a targeted demarche to these three posts with

additional classified information that will be provided

at a later date. The text of UNSCR 1718 can be found at

www.un.org/Docs/sc/unsc_resolutions06.htm under

S/RES/1718 (2006). The text of the Presidential

Statement (PRST) can be found at

www.un.org/Docs/sc/unsc_pres_statements09.htm under

S/PRST/2009/7 of 13 April 2009. The text of the

Security Council determination of items and entities

subject to measures imposed in Resolution 1718 can be

found at:

www.un.org/News/Press/Docs//2009/sc9642.doc.h tm.

Posts should pursue the following objectives:



-- Note the new designations of Tanchon Commercial Bank,

KOMID, and Ryonbong and provide host governments with



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background and identifier information on these entities

and their affiliates.



-- Urge host government officials to investigate whether

these entities have a presence in their jurisdiction

and, if so, request that they immediately freeze the

assets of the three designees, as well as any funds,

other financial assets or economic resources that are

owned or controlled, directly or indirectly, by the

designated entities and those of persons or entities

acting on the behalf of or at the direction of

designated entities, per UNSCR 1718.



-- Recommend host government officials also take steps

to prevent their nationals or persons or entities within

their territories from engaging in transactions with

those designated entities, per UNSCR 1718.



FOR Embassies Abu Dhabi, Berlin, Bern, Cairo,

Copenhagen, London, Moscow, New Delhi, Seoul, Singapore,

and Stockholm:



-- Urge host government officials to investigate whether

financial institutions within their jurisdiction

maintain correspondent relationships with Tanchon

Commercial Bank, and ensure that any Tanchon

correspondent accounts are frozen.



For Embassies Abu Dhabi and Sanaa:



-- Request host governments to refrain from engaging in

any cooperation with KOMID.



4. (SBU) BEGIN TEXT OF SENSITIVE BUT UNCLASSIFIED

NONPAPER



-- In response to the April 5, 2009 launch of a Taepo

Dong-2 (TD-2) missile by the Democratic People's

Republic of Korea (DPRK),the UN Security Council issued

a Presidential Statement (PRST) on April 13, 2009. The

PRST stated that the TD-2 launch was in contravention of

UNSCR 1718 and indicated the Security Council's

agreement to adjust the sanctions measures imposed by

that resolution. If the UNSCR 1718 Sanctions Committee

did not act by April 24, the Security Council indicated

that it would do so itself. On April 24, the Sanctions

Committee designated three DPRK entities to be subject

to the asset freeze provisions in paragraph 8 (d) of

UNSCR 1718. These entities are: Korea Mining

Development Trading Corporation (KOMID),the Korea

Ryonbong General Corporation (Ryonbong),and Tanchon

Commercial Bank.



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IMPLEMENTATION OF UNSCR 1718

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-- The United States is urging immediate enforcement of

the sanctions in paragraph 8(d) of UNSCR 1718 against

the newly designated entities. Paragraph 8(d) of UNSCR

1718 instructs Member States to "freeze immediately the

funds, other financial assets and economic resources

which are on their territories at the date of the

adoption of this resolution or at any time thereafter,

that are owned or controlled, directly or indirectly, by

the persons or entities designated by the Committee or

by the Security Council... or by persons or entities

acting on their behalf or at their direction." Member

States must also "ensure that any funds, financial

assets or economic resources are prevented from being

made available [to the designated entities] by their

nationals or by any persons or entities within their

territories, to or for the benefit of such persons or

entities."



-- With the designation of these three DPRK entities

pursuant to UNSCR 1718, it is each State's

responsibility to ensure that the requirements of

paragraph 8(d) are implemented immediately with respect

to these entities and persons and entities acting on

their behalf or at their direction.



-- We urge you to investigate whether there are any

assets belonging to these entities in your jurisdiction,

and ensure that they are immediately frozen.



-- We also urge you to take steps to prevent nationals

or persons or entities within your territory from

engaging in transactions with those designated entities

unless approved as an allowable exemption.



-- We specifically request that you investigate whether



STATE 00048525 003 OF 006





financial institutions in your jurisdiction maintain

correspondent relationships with Tanchon Commercial

Bank, and ensure that any Tanchon correspondent accounts

are frozen.



-- The newly designated North Korean entities are vital

to the progress of the DPRK's ballistic missile and

other weapons programs.



-- In addition to implementing the asset freeze pursuant

to Resolution 1718, we ask you remain vigilant and

ensure that no North Korean proliferation-related

activities and transactions whatsoever take place in

your jurisdiction.



-- We look forward to working with your government to

ensure full implementation of UNSCR 1718, as well as the

additional measures described above.



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KOREA MINING DEVELOPMENT TRADING CORPORATION (KOMID)

-------------- --------------



-- The Korea Mining Development Trading Corporation

(KOMID) is North Korea'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. The United States

has repeatedly applied sanctions to the KOMID

organization over the past ten years for trading in

missile technology.



-- In June 2005, KOMID was designated by the President

in the Annex to U.S. Executive Order (E.O.) 13382,

"Blocking Property of Weapons of Mass Destruction

Proliferators and Their Supporters," for material

contributions to the proliferation of weapons of mass

destruction or their means of delivery.



-- E.O. 13382, issued on June 28, 2005, blocks the

assets under U.S. jurisdiction of foreign persons and

entities named in the Executive Order or subsequently

designated by the U.S. Departments of Treasury or State

for materially contributing to (or for posing a risk of

materially contributing to) the proliferation of weapons

of mass destruction; for providing or attempting to

provide financial or other support to such proliferation

activities; or for being owned or controlled by, or

acting for or on behalf of, another designee. In

addition to the asset freeze, E.O. 13382 prohibits all

transactions between any U.S. person and the designated

persons and entities.



-- Identifier information for KOMID is as follows:

a.k.a. Changgwang Sinyong Corporation; a.k.a External

Technology Trading Corporation; a.k.a. North Korean

Mining Development Trading Corporation; a.k.a. KOMID,

Central District, Pyongyang, North Korea.



-- In October 2005, two KOMID subsidiaries, Hesong

Trading Corporation and Tosong Technology Trading

Corporation, were also designated under E.O. 13382.

Both Hesong and Tosong are located in Pyongyang, North

Korea.



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TANCHON COMMERCIAL BANK

--------------



-- Tanchon Commercial Bank, headquartered in Pyongyang,

assumed from Korea Changgwang Credit Bank Corporation

(KCCBC) the role as the main DPRK financial agent for

sales of conventional arms, ballistic missiles, and

goods related to the assembly and manufacture of such

weapons. Since the late 1980s, Tanchon Commercial Bank

and its predecessor, KCCBC, have collected revenue from

weapons-related sales that were concentrated in a

handful of countries mainly located in the Middle East

and several African states. These revenues provide the

DPRK with a significant portion of its export earnings

and financially aid the DPRK's own development of

nuclear-related, other weapons of mass destruction-

related, and ballistic missile-related programs and

arms-related purchases.



-- Tanchon has been involved in financing ballistic

missile sales from KOMID to Iran's Shahid Hemmat

Industrial Group (SHIG). SHIG is the Iranian

organization charged with developing Iran's liquid-

fueled ballistic missile program and is designated under

UNSCR 1737 for an asset freeze similar to that in UNSCR



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1718.



-- Since 2005, Tanchon has maintained an active

relationship with Iran's Bank Sepah, which is linked to

the provision of extensive financial services to Iran's

ballistic missile program and was also designated by the

UN Security Council in the annex of UNSCR 1747 for an

asset freeze.



-- Tanchon was also designated by the President of the

United States in the annex to E.O. 13382.



-- Identifier information for Tanchon Commercial Bank is

as follows: f.k.a. Changgwang Credit Bank; f.k.a. Korea

Changgwang Credit Bank, Saemul 1-Dong Pyonchon District,

Pyongyang, North Korea.



--------------

KOREA RYONBONG GENERAL TRADING CORPORATION

--------------



-- 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 Trading Corporation, offering ammonium

diuranate (ADU),a processed form of yellowcake, for

sale on the international market.



-- Identifier information for Korea Ryonbong General

Trading Corporation is as follows: a.k.a. Korea Yonbong

General Corporation; f.k.a. Lyongaksan General Trading

Corporation, Pot'onggang District, Pyongyang, North

Korea; Rakwon-dong, Pothonggang District, Pyongyang,

North Korea.



-- Korea Ryonbong General Trading Corporation was also

designated by the President in the annex to E.O. 13382.

On October 21, 2005, six DPRK entities that are

subsidiaries of Korea Ryonbong, were were also

designated under E.O. 13382. These entities are:



- Korea International Chemical Joint Venture Company.

a.k.a. Chosun International Chemicals Joint Operation

Company; a.k.a. International Chemical Joint Venture

Corporation; a.k.a. Choson International Chemicals Joint

Operation Company, Hamhung, South Hangyong Province,

North Korea; Mangyongdae-kuyok, Pyongyang, North Korea;

Mangyungdae-gu, Pyongyang, North Korea. Korea

International Chemical Joint Venture Company is a

subsidiary company of Korea Ryonbong General

Corporation.



- Korea Ryonha Machinery Joint Venture Corporation.

a.k.a.

Korea Ryenha Machinery J/V Corporation; a.k.a. Chosun

Yunha Machinery Joint Operation Company; a.k.a. Ryonha

Machinery Joint Venture Corporation),Central District,

Pyongyang,North Korea; Mangungdae-gu, Pyongyang, North

Korea; Mangyongdae District, Pyongyang, North Korea.

Korea Ryonha Machinery Joint Venture Corporation is a

subsidiary company of Korea Ryonbong General

Corporation.



- Korea Complex Equipment Import Corporation, Rakwon-

dong,

Pothonggang District, Pyongyang, North Korea. Korea

Complex Equipment Import Corporation is a subsidiary

company of Korea Ryonbong General Corporation.



- Korea Kwangsong Trading Corporation, Rakwon-dong,

Porhonggang District, Pyongyang, North Korea. Korea

Kwangsong Trading Corporation is a subsidiary company

of Korea Ryonbong General Corporation.



- Korea Pugang Trading Corporation, Rakwon-dong,

Pothonggang District, Pyongyang, North Korea. Korea

Pugang Trading Corporation is a subsidiary company of

Korea Ryonbong General Corporation.



- Korea Ryongwang Trading Corporation. a.k.a. Korea

Ryengwang Trading Corporation),Rakwon-dong, Pothonggang

District, Pyongyang, North Korea. Korea Ryongwang

Trading Corporation is a subsidiary company of Korea

Ryonbong General Corporation.



END SENSITIVE BUT UNCLASSIFIED NONPAPER



5. (S/REL UAE, SWITZERLAND, SWEDEN, EGYPT, DENMARK,

UNITED KINGDOM, RUSSIA, INDIA, YEMEN, SOUTH KOREA,



STATE 00048525 005 OF 006





SINGAPORE) BEGIN SECRET POINTS



FOR UAE, SWITZERLAND, SWEDEN, EGYPT, DENMARK, UNITED

KINGDOM, RUSSIA, INDIA, SOUTH KOREA, SINGAPORE:

-- In 2006 (REF A, L),we noted our concern that Tanchon

maintained one or more correspondent accounts in your

jurisdiction.



-- Given the continuation of DPRK proliferation

activities and the designation of these three entities

to be subject to the measures in paragraph 8(d) of UNSCR

1718, we strongly reiterate our request that you use the

following information to take action to close such an

account, in order to prevent North Korea from using your

jurisdiction to facilitate proliferation-related

financial transactions.



FOR DENMARK ONLY:

-- We previously raised with you in March 2006 our

concern (REF L) that Tanchon Commercial Bank maintained

a correspondent account with Den Danske Bank AS-

Copenhagen. According to April 2009 Bankers Almanac

information, Tanchon still maintains that account.



FOR SWEDEN ONLY:

-- We previously raised with you in March 2006 our

concern (REF L) that Tanchon Commercial Bank maintained

a correspondent account with Nordea Bank Sweden-

Stockholm, Skandinaviska Enskilda Banken-Stockholm, and

Svenska Handelsbanken-Stockholm. According to April

2009 Bankers Almanac information, Tanchon still

maintains all three accounts.



FOR SWITZERLAND ONLY:

-- We previously raised with you in March 2006 our

concern (REF L) that Tanchon Commercial Bank maintained

a correspondent account with Lloyds TSB Bank-Geneva.

According to April 2009 Bankers Almanac information,

Tanchon still maintains that account.



FOR UNITED KINGDOM ONLY:

-- We previously raised with you in March 2006 our

concern (REF L) that Tanchon Commercial Bank has

correspondent accounts with Bank of China International-

London, British Arab Commercial Bank-London, Havin Bank-

London, HSBC Bank Plc.-London, Lloyds TSB Bank-London,

Moscow Narodny Bank-London, and National Bank of Egypt

International-London. According to April 2009 Bankers

Almanac information, Tanchon still maintains those

accounts.



FOR EGYPT ONLY:

-- We previously raised with you in April 2006 our

concern (REF A) that Tanchon Commercial Bank maintains a

correspondent account with National Bank of Egypt;

Cairo, Egypt. According to April 2009 Bankers Almanac

information, Tanchon still maintains that account.



-- We strongly urge Egypt to refrain from engaging in

any cooperation with KOMID, particularly in light of

this UN designation under UNSCR 1718.



FOR INDIA ONLY:

-- We previously raised with you in April 2006 our

concern (REF A) that Tanchon Commercial Bank maintains a

correspondent account with State Bank of India; Mumbai,

India. According to April 2009 Bankers Almanac

information, Tanchon still maintains that account.



FOR SINGAPORE ONLY:

-- We previously raised with you in 2006 our concern

that Tanchon Commercial Bank maintains correspondent

accounts with Deutsche Bank AG; Singapore (REF A) and

United Overseas Bank Limited; Singapore (REF M). You

reported to us (Ref M) that the Tanchon account at UOB

had been closed, but according to April 2009 Bankers

Almanac information, Tanchon still maintains accounts at

Overseas Bank Limited and Deutsche Bank.



-- We are requesting confirmation that this account

remains closed, and request that you ensure that any

Tanchon correspondent accounts in your jurisdiction are

frozen.



FOR GERMANY ONLY:

-- We previously raised with you in April 2006 our

concern (REF A) that Tanchon Commercial Bank maintains a

correspondent banking account with Deutsche Bank AG-

Singapore branch. You informed us in May 2006 that that

account had been closed (REF O),but the April 2009

Bankers Almanac information indicates that Tanchon still

maintains that account.



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-- We are requesting confirmation that this account

remains closed, and request that you ensure that any

Tanchon correspondent accounts in your jurisdiction are

frozen.



FOR UAE ONLY:

-- In March 2008 (REF B, G, H, I),you told us that

Tanchon Commercial Bank was not licensed to operate in

the UAE and that the Central Bank had frozen its

accounts in the UAE based on a U.S. request. We want to

ensure that this is still the case and that Tanchon has

not tried to renew its presence in UAE jurisdiction.



-- We also have recently raised with you our concerns

regarding recent KOMID activities in the UAE and urge

you to refrain from engaging in any cooperation with

KOMID, particularly in light of KOMID's UNSC designation

(REF K) under UNSCR 1718.



FOR YEMEN ONLY:

-- We have recently raised with you our concerns

regarding information that KOMID may be involved in a

Scud missile-related project in Yemen. We strongly urge

the ROYG to refrain from engaging in any cooperation

with KOMID, particularly in light of KOMID's UNSC

designation (REF J) under UNSCR 1718.



FOR ROK ONLY:

-- We have on numerous occasions discussed (REF C, D, E)

the proliferation activities of Bank Mellat Seoul with

you. We wish to highlight a point we previously raised

(REF C),specifically that Hong Kong Electronics, almost

certainly a front company for Tanchon Commercial Bank,

has been involved in proliferation-related transactions

with Bank Mellat Seoul.



-- We note that the ROK's obligations under Resolution

1718 require it to freeze the assets of entities acting

on the behalf of or at the direction of designated

entities. We believe Hong Kong Electronics meets this

criterion based on its demonstrated link to Tanchon, and

we urge you to extend the asset freeze requirements of

UNSCR 1718 to both Hong Kong Electronics and Bank Mellat

Seoul.



FOR RUSSIA ONLY:

-- We previously raised with you in April 2006 our

concern (REF A) that Tanchon Commercial Bank maintains a

correspondent banking relationship with Bank for Foreign

Trade (Vneshtorgbank) and Moscow Narodny bank-Singapore

branch.



-- You reported to us (REF N) that the Tanchon

correspondent account at VTB had been closed and we are

requesting confirmation that this account remains

closed, and that any Tanchon correspondent accounts in

your jurisdiction are blocked.



END SECRET POINTS



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REPORTING DEADLINE

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6. (U) Post should report results within seven business

days of receipt of this cable. Please slug replies for

ISN, T, EAP, and TREASURY. Please use the caption

SIPDIS in all replies.



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POINT OF CONTACT

--------------



7. (U) Washington point of contact for follow-up

information is Jennifer Chalmers, ISN/CPI, (202) 647-

9715 or Kevin McGeehan, ISN/CPI, (202) 647-5408.



8. (U) Department thanks Posts for their assistance.

CLINTON