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.

--------------
SUMMARY/BACKGROUND
--------------

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 <br />--------------

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.

--------------
IMPLEMENTATION OF UNSCR 1718
--------------

-- 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.

-------------- --------------
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.

--------------
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.

STATE 00048525 006 OF 006



-- 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

--------------
REPORTING DEADLINE
--------------

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.

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