U.S. DESIGNATION OF NAMCHONGANG TRADING

UNCLAS STATE 067384

SIPDIS, SENSITIVE

C O R R E C T E D C O P Y (CLEARANCE)


E.O. 12958: N/A
TAGS: EFIN ECON PREL PARM KNNP
SUBJECT: U.S. DESIGNATION OF NAMCHONGANG TRADING
CORPORATION AND HONG KONG ELECTRONICS

REF: CHALMERS-HARRIS EMAIL, JUNE 29, 2009.


1. (U) This is an action request. Please see paragraph 3.


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REPEAT GREEN LIVE MSG
SUMMARY AND BACKGROUND
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2. (SBU) The United States will designate two North
Korean entities under E.O. 13382 (Blocking the Property
of Weapons of Mass Destruction Proliferators and their
Supporters) on June 30, 2009 at 12:00 P.M. The
designations are consistent with the aims of UNSCRs 1718
and 1874 and add to continuing U.S. efforts to prevent
North Korean entities of proliferation concern from
accessing financial and commercial markets that could
aid the regimes efforts to develop nuclear weapons and
the missiles capable of delivering them. USUN should
provide P5+2 counterparts with advance notice of these
actions no earlier than 9:00 AM on June 30 and no later
than 12:00 PM. Both entities (Namchongang Trading
Corporation and Hong Kong Electronics) were included in
the package of designations submitted by the United
States on June 19 to the UNSCR 1718 Sanctions Committee
for designation pursuant to UNSCR 1874.

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ACTION REQUEST/OBJECTIVES
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3. (SBU) USUN is requested to pursue the objectives
listed below. A Department Media Note and a Department
of the Treasury Media Note on the designations will be
released simultaneously with the designation at 12:00PM,
June 30, 2009. USUN may draw on the final version of
the media notes (reftel) and the press guidance and
additional background in paragraph 4.

-- Inform P5+2 officials of the U.S. designations under
E.O. 13382 and draw from the following background,
including identifier information:


1. NCG is a North Korean nuclear-related company in
Pyongyang that has been involved in the purchase of
aluminum tubes and other equipment specifically suitable
for a uranium enrichment program since the late 1990s.
Identifier information is as follows: Namchongang
Trading Corporation, (a.k.a. NCG, a.k.a. Namchongang
Trading, a.k.a. Nam Chon Gang Corporation, a.k.a.
Nomchongang Trading Co.),Pyongyang, North Korea.


2. Hong Kong Electronics, located in Kish Island, Iran,
has provided support to North Koreas Tanchon Commercial
Bank and Korea Mining Development Trading Corporation,
which were both designated by the UNSCR 1718 Sanctions
Committee. Identifier information is as follows: HONG
KONG ELECTRONICS (a.k.a. Hong Kong Electronics Kish Co),
Sanaee St., Kish Island, Iran [NPWMD]

-- Note that the designations are consistent with the
aims of UNSCRs 1718 and 1874 and add to continuing U.S.
efforts to prevent North Korean entities of
proliferation concern from accessing financial and
commercial markets that could aid North Koreas efforts
to develop nuclear weapons and the missiles capable of
delivering them.

-- Remind P5+2 officials that entities designated under
E.O. 13382 are prohibited from engaging in all
transactions with any U.S. person and are subject to a
U.S. asset freeze.

-- Urge P5+2 officials to investigate whether these
entities have a presence in their jurisdiction and, if
so, request that they take steps to prevent asset flight
and ensure that persons or entities within their
territory do not engage in transactions with these
entities.

-- If asked whether these designations mean that the two
top U.S. priorities under UNSCR 1874 for designations in
the 1718 Committee are Namchongang Trading Corporation
and Hong Kong Electronics, note that a) the U.S.
believes it is important that the 1718 Committee
designate these two entities given their role in North
Koreas WMD programs, b) stress that our domestic
designations are conducted on a parallel track, and that
c) we expect to designate additional entities as well.
We want to continue our discussions in the 1718
Committee to reach agreement on the designation of
additional individuals, entities and goods before the
July 12 deadline.


4. (U) ISN Press Guidance. June 30, 2009.

Designation of Two Additional North Korean Entities
Pursuant to Executive Order 13382

Q: What is the significance of these designations and
why now?

A: These designations target two key elements of North
Koreas nuclear and missile network and will help to
disrupt North Koreas ability to procure, develop, and
proliferate WMD capabilities.

A: The United States is sending a clear message, in
conjunction with our efforts at the United Nations, that
North Koreas nuclear and missile tests and
proliferation activities are unacceptable and that there
are consequences for these actions.

Q: Will these designations have any impact?

A: These measures will highlight the proliferation-
related activities in which these firms are engaged and
reduce their ability to engage in business activities
worldwide. Namchongang Trading Corporation and Hong
Kong Electronics will be placed on the U.S. Department
of Treasurys Specially Designated Nationals and Blocked
Persons List maintained by the Treasury Departments
Office of Foreign Assets Control (OFAC),which is used
by financial institutions worldwide to screen
transactions. The ultimate result will be limiting
their access to the international financial system.

Q: Will these designations impact ordinary North Korean
people?

A: No, these measures are targeted at entities involved
in WMD proliferation.

Q: Will the U.S. propose that these entities also be
designated under UNSCR 1874?

A: UNSCR 1874 tasked the Security Councils DPRK
Sanctions Committee (the 1718 Committee) with
designating new individuals, entities, and goods within
thirty days of the resolutions adoption (i.e., by July
12). Committee deliberations are ongoing. We hope the
1718 Committee will approve a robust package of
designations before the deadline set by the Security
Council.

IF PRESSED: Committee deliberations are strictly
confidential (and ongoing). We will not discuss what
names have been proposed by the United States or other
committee members.


Q. Will the U.S. designate the additional entities?

A: The U.S. has an ongoing process in place to continue
to identify entities and individuals of proliferation
concern for designation under E.O. 13382.

IF ASKED:
Q: Do we think North Korea is transferring WMD to
Burma?

A: We do not comment on intelligence matters or military
operations.

If pressed: the United States will enforce UNSCR 1874.
We expect that other UN member states will do the same.

Additional Background: On Tuesday, June 30, the
Department of State will designate North Koreas
Namchongang Trading Corporation under Executive Order
13382 for its support to North Koreas nuclear program.
At the same time, the Department of Treasury will be
designating Hong Kong Electronics (located in Kish
Island, Iran) under E.O. 13382 for its support to the
Korea Mining Development Trading Corporation (KOMID) and
Tanchon Commercial Bank, two previously designated North
Korean entities.

E.O. 13382 was signed by the president on June 29, 2005.
It is an authority aimed at freezing the assets of
proliferators of weapons of mass destruction and their
supporters. Designations under E.O. 13382 prohibit all
transactions between the designees and any U.S. person
and freeze any assets of the designees that are in the
United States or in the possession or control of U.S.
persons.

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REPORTING DEADLINE
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5. (U) Please report any response within seven days of
receipt of this cable. Please slug replies for ISN, T,
TREASURY, and EAP/K. Please use SIPDIS caption on all
responses.

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POINT OF CONTACT
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6. (U) Questions may be directed to ISN/CPI Jennifer
Chalmers, 202-647-9715.


7. (U) Department thanks USUN for its assistance.
CLINTON