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UNCLAS SECTION 01 OF 04 TOKYO 005308 
 
SIPDIS 
 
SIPDIS 
 
DEPT FOR E, P, EB, EAP/J, EAP/P, EAP/PD, PA 
WHITE HOUSE/NSC/NEC; JUSTICE FOR STU CHEMTOB IN ANTI-TRUST DIVISION; 
TREASURY/OASIA/IMI/JAPAN; DEPT PASS USTR/PUBLIC AFFAIRS OFFICE; 
SECDEF FOR JCS-J-5/JAPAN, 
DASD/ISA/EAPR/JAPAN; DEPT PASS ELECTRONICALLY TO USDA 
FAS/ITP FOR SCHROETER; PACOM HONOLULU FOR PUBLIC DIPLOMACY ADVISOR; 
CINCPAC FLT/PA/ COMNAVFORJAPAN/PA. 
 
E.O. 12958: N/A 
TAGS: OIIP KMDR KPAO PGOV PINR ECON ELAB JA
SUBJECT:  DAILY SUMMARY OF JAPANESE PRESS 09/14/06 
 
 
INDEX: 
 
(1) Govern to impose financial sanctions against North Korea 
possibly this month, including a ban on overseas remittances to that 
country 
 
(2) Abe plans to strengthen Kantei in two stages 
 
(3) Azadegan oil field talks to continue allowing for Japan to gain 
time for determining international situation over Iran's nuclear 
development program 
 
ARTICLES: 
 
(1) Govern to impose financial sanctions against North Korea 
possibly this month, including a ban on overseas remittances to that 
country 
 
MAINICHI (Top play) (Excerpts) 
Evening, September 14, 2006 
 
The government today set a policy direction of implementing possibly 
this month financial sanctions against North Korea that would target 
groups and individuals suspected of being connected to that 
country's development of weapons of mass destruction (WMD) by 
banning such transactions as withdrawing savings from financial 
accounts and transmitting cash remittances overseas, and by freezing 
assets. The measures will be based on the United Nations Security 
Council condemning North Korea after it launched missiles. Even 
though two months have gone by since the UNSC resolution was passed, 
North Korea has not responded to requests for dialogue, and at this 
point, there appears to be no prospect of it returning to six-party 
talks. The judgment was made that additional sanctions were 
necessary. 
 
The possibility is that the sanctions will be implemented before 
Prime Minister Koizumi leaves office on Sept. 26. 
 
The contents of the sanctions will be set under the provisions of 
the Foreign Exchange Law. The more than a dozen groups and 
individuals to be subject to the sanctions will be based on the 12 
groups and one individual that the US has already targeted, plus 
those identified by information gathered by investigative 
authorities in each country. The designated groups and individuals 
will need government permission to withdraw savings from accounts in 
domestic financial institutions and to send cash remittances 
overseas. Since it cannot be proved that the transaction would be 
unrelated with WMD development, the measure is in effect a ban.  In 
the case of overseas accounts, as well, a permission system will be 
in effect regarding remittances from Japan to those accounts. So 
again, a ban will be in effect. The 12 organizations and one 
individual that the US has made subject to financial sanctions are 
mostly North Korean trading companies and financial institutions. 
 
(2) Abe plans to strengthen Kantei in two stages 
 
MAINICHI (Page 2) (Abridged) 
September 14, 2006 
 
An outline of Chief Cabinet Secretary Shinzo Abe's plan to enhance 
the functions of the Prime Minister's Official Residence (Kantei) 
once he becomes prime minister became clear yesterday. The plan is 
chiefly designed to: (1) establish a Japanese version of the 
 
TOKYO 00005308  002 OF 004 
 
 
National Security Council; (2) increase the number of deputy chief 
cabinet secretaries; (3) enhance the role of the cabinet public 
relations secretary; and (4) expand the political appointee system 
to include senior government officials. But the presentation of 
bills for establishing the NSC and other posts would not occur until 
next year's ordinary Diet session or later, as they would require 
additional legislation or law revision. For this reason, an Abe 
government intends to strengthen the existing Kantei system in two 
stages for the time being. 
 
In his policy platform, Abe has come up with the idea of 
establishing a Kantei-led system. Ahead of this, LDP Policy Research 
Council Chairman Hidenao Nakagawa, who is close to Abe, ordered an 
LDP think tank to study specific means to strengthen the Kantei. A 
study is underway by a political power enhancement project team, 
established in August by five private-sector experts. 
 
The NSC will be modeled after America's National Security Council. 
Until an NSC establishment law is established, the administration 
would utilize the Council for Overseas Economic Cooperation chaired 
by the prime minister, which was established in April under Abe's 
lead. 
 
Abe wants to increase the number of deputy chief cabinet secretaries 
for parliamentary affairs to five, which is fixed at two under the 
current Cabinet Law. As such, Abe intends to appoint five junior 
ruling party members as prime ministerial assistants, one each 
responsible for: (1) diplomacy and security; (2) economics; (3) 
education; (4) second chances; and (5) administrative reform. Once 
the Cabinet Law is revised, three of them will be promoted to the 
post of deputy chief cabinet secretary. 
 
The LDP think-tank puts high priority on expanding the political 
appointee system. The government now automatically approves 
personnel actions above the level of director-general, which are 
subject to cabinet decisions. "We need to set the stage for giving 
senior posts to persons who share the prime minister's policies," an 
LDP source said. 
 
Abe also indents to make major changes to the role of the cabinet 
public relations secretary. He is specifically considering giving 
the public relations secretary access to the core of the government 
to let him hold regular press conferences instead of the chief 
cabinet secretary so that he can remain as a stagehand. 
 
(3) Azadegan oil field talks to continue allowing for Japan to gain 
time for determining international situation over Iran's nuclear 
development program 
 
YOMIURI (Page 9) (Almost full) 
September 14, 2006 
 
Japan's right to develop Iran's Azadegan oil field has been 
threatened because of such issues as that country's nuclear program. 
But it looks now that bilateral talks on the oil development project 
will continue. Japan has been able to narrowly hold on to its right 
to independently develop the oil field, which is seen as key to its 
energy security. Still, with US confrontation with Iran growing and 
Washington mulling possible sanctions against that country, Japan 
finds it has no choice but to give priority to international 
cooperation. It is under pressure now to make a difficult choice as 
to how to continue its strategy of securing energy supplies. 
 
 
TOKYO 00005308  003 OF 004 
 
 
Economic sanctions 
 
Both Iranian Petroleum Minister Vaziri-Hamaneh and Economy, Trade 
and Industry (METI) Minister Nikai indicated their intention to 
continue the oil field development talks even after the Sept. 15 
deadline. However, while Vaziri-Hamaneh took an optimistic view on 
talks progressing, Nikai was cautious about the possibility of 
reaching an agreement at an early date. 
 
Iran's agreement to continue the talks with Japan is a switch from 
the previous stance of brandishing the threat of transferring 
Japan's rights in the Azadegan project to some other country. Behind 
this policy change is Iran's reaction to -growing international 
criticism. The US has opposed Japan's participation in the 
development of the Azadegan oil field right from the beginning. The 
United Nations Security Council (UNSC) also is looking into the 
possibility of imposing economic sanctions on Iran. Under such 
circumstances, Iran, which wants to avoid becoming isolated in the 
international community, views Japan as a partner that can be easily 
brought into the fold. Motivated by a desire to press Japan to make 
an early decision, Vaziri-Hamaneh noted that how the talks will 
develop depended on Japan's decision. 
 
In the meantime, the Sept. 15 deadline was the worst possible timing 
due to growing international criticism of Iran. For Japan, if the 
development of the Azadegan oil field were to put on the back 
burner, it would be hopeless to expect to develop another oil field 
in the Middle East, as a senior METI official put it. Japan, 
therefore, had no other choice but to continue talks for the time 
being, while waiting for the situation in Iran to change. 
 
The US, which is increasingly at odds with Iran, will most likely 
indicate its displeasure at the continuation of the talks between 
Japan and Iran. It will most likely make a stronger call for putting 
a moratorium on the project plan. Some observers think that China 
and India, both trying to secure rights to develop oil fields all 
over the world, are now moving ahead to land the Azadegan project in 
anticipation of Japan giving up the talks. 
 
As a reason for not being able to go ahead with the development, 
Japan has cited the delay in the work of removing land mines planted 
on the project site during the Iran-Iraq war. However, 
Vaziri-Hamaneh on the 13th declared that the work to remove land 
mines "has been completed." Japan is gradually exhausting its 
excuses for postponing its decision-making. 
 
Talks to review contract 
 
Talks between INPEX, Japan's oil development company, and Iran's 
state-run oil company are also facing difficulty on conditions for 
beginning the project due to the soaring crude oil prices. 
 
According to an informed source, the contract signed between INPEX 
and Iran's state-run oil company is based on a buy-back system, in 
which INPEX receives oil as payoff for its investment in the 
project. However, as crude oil prices went up, the number of 
projects to develop oil fields have increased throughout the world. 
As a result, the shortage of such materials as mining machines has 
given rise to price increases. It is said that the estimated total 
investment amount has risen by 20-30 PERCENT  from the original 
amount of 2 billion. INPEX has asked Iran to increase the amount of 
crude oil to be supplied to Japan to cover the increased portion, 
but Iran is refusing to agree to the request. There is no prospect 
 
TOKYO 00005308  004 OF 004 
 
 
for the two companies to be able to coordinate differences in the 
views on this issue. 
 
Iranian Petroleum Minister Kazem Vaziri-Hamaneh: "A settlement will 
be reached" 
 
-- What is the present situation of the talks on the development of 
Azadegan? 
 
"I have no intention of revealing the specifics of the talks. 
However, the talks are going in a favorable direction. A settlement 
will be reached. Land mines buried on the project site have been the 
obstacle in promoting the project plan. However, they have already 
been removed as of two days ago." 
 
-- The deadline for the talks is Sept. 15. 
 
"We are determined to bring a successful end to the talks with Japan 
and implement the project. We are pinning high hopes on the 
development of the talks. Japan has rights to develop that the oil 
field. We will continue the talks even after the Sept. 15 
deadline." 
 
-- The US is opposing Japan's participation in the development of 
the Azadegan oil field. 
 
"It is up to Japan to decide what it wants to do. If Japan has no 
intention of carrying out the project, we will then end the talks." 
 
(Interview Hiroyuki Nakamura in Vienna) 
 
MEITI Minister Nikai: We will consider the issue from an overall 
perspective in hopes of reaching an amicable settlement 
 
-- Do you intend to continue the talks even after the Sept. 15 
deadline? 
 
"It is important to deal with the issue from an overall perspective 
in hopes of reaching a settlement as smoothly as possible. Iran is 
not acting in a one-man show. I fully discussed the issue with 
Iranian Foreign Minister Motaki, when he visited Japan this 
February. Iran considers Japan as an important negotiating 
partner." 
 
-- How are you going to deal with the issue amid a growing move to 
impose economic sanctions on Iran? 
 
"We cannot afford to neglect the need to cooperate with the 
international community. It is not appropriate for Japan alone to 
stand out. At the same time, Iran's role in Japan's energy policy is 
great. I have a serious interest in this matter. Since the matter 
involves an internationally delicate issue, I cannot put my cards on 
the table." 
 
SCHIEFFER