REPLY: UNSC 1718 COMMITTEE DESIGNATION OF DPRK

S E C R E T TOKYO 001156

SIPDIS

TREASURY TFI FOR STACK, WALLWORK, GRANT;
STATE ISN/CPI FOR JENNIFER CHALMERS AND KEVIN MCGEEHAN

E.O. 12958: DNG: CO 05/20/2019
TAGS: KNNP EFIN ETTC PREL PARM KN JA
SUBJECT: REPLY: UNSC 1718 COMMITTEE DESIGNATION OF DPRK
ENTITIES SUBJECT TO ASSET FREEZE

REF: A. SECSTATE 48525

B. TOKYO 00199

Classified By: CDA James Zumwalt for Reasons 1.4(b),(d)


1. (C) Emboffs delivered points in ref A to Japan Ministry of
Foreign Affairs (MOFA) Northeast Asia Division Deputy
Director Yutaka Kashiwabara and Ministry of Finance (MOF)
International Bureau Legal Research Office Deputy Director
Wataru Kikuchi and MOF International Bureau International
Organizations Masayoshi Chida May 19. They noted Japan has
already designated all three entities.


2. (S) Kashiwabara said MOFA had cabled a similar message to
Japanese missions in ASEAN and G-8 member countries to alert
host countries to the U.N. 1718 designations and urge them to
freeze assets. Kashiwabara also asked for more information
related to the two firms and two individuals the U.S.
designated in January for providing support to the Korea
Mining Development Trading Corporation and said the GOJ had
made inquiries through its Embassy in Washington. (NOTE:
Kashiwabara was referring to the January 16, 2009 designation
under Executive Order 13382 of Taiwan entities and
individuals Alex H.T. Tsai, Trans Merits Co. Ltd., Global
Interface Company Inc., and Lu-chi-Su. END NOTE).
Kashiwabara said the GOJ needs "specific examples" of illicit
activity in order to pursue action. Kashiwabara confirmed
this was a joint MOFA/MOF determination.


3. (S) Aasked how Japan would effectively implement UNSCR
1718 in light of the Financial Action Task Force (FATF)
Mutual Evaluation findings of 2008 (ref B) -- specifically
FATF's conclusion that "there is no obligation on financial
institutions to freeze funds and other assets in relation to
any Security Council Resolutions or to examine and give
effect to the actions initiated under the freezing mechanisms
of other jurisdictions;" the observation of "gaps in the
implementation of the UNSCRs 1267, 1373 and successor
resolutions;" and FATF's judgment that "Japan has not yet
implemented recommendation...7...on...cross-border
correspondent banking," MOFA's Kashiwabara stated he was
unfamiliar with the issue. MOF's Chida allowed there are
some gaps between FATF recommendations and UNSCR obligations,
claiming that FATF recommendations are "too complicated and
unnecessary."


4. (S) Comment: While MOFA articulated the joint need for
"dialog and pressure" on the issue of DPRK nuclear
proliferation, it is evident that MOF remains in a state of
denial regarding FATF's identification of weaknesses in
Japan,s ability to combat illicit finance effectively. End
Comment.
ZUMWALT