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DE RUEHC #3703 3342225
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O P 302218Z NOV 06
FM SECSTATE WASHDC
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S E C R E T STATE 193703 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: DECL: UPON KOREAN REUNIFICATION 
TAGS: PARM KNNP PREL PGOV KN
SUBJECT: E.O. 13382 ENTITIES -- EXAMPLES OF PROLIFERATION 
 
REF: A. WELLINGTON 834 
     ¶B. WELLINGTON 814 
     ¶C. RICCI-NEW EMAILS 
     ¶D. SAINT-ANDRE-NEW EMAILS 
     ¶E. BERN 001998 
 
Classified By: ISN PDAS PATRICIA A. MCNERNEY, REASONS: 1.4(B/D) 
 
¶1.  (U) Action request: Department requests that Post deliver 
the text in paragraph 3 and/or 4, as appropriate, to 
appropriate host-country officials.  The text in paragraph 3 
and/or 4 should be left as a non-paper.  End action request. 
 
¶2.  (U) Background:  Washington would like to provide 
examples of proliferation activities by DPRK-related entities 
designated under Executive Order 13382 (Blocking Property of 
Weapons of Mass Destruction Proliferators and Their 
Supporters), which allows the United States to block or 
"freeze" the property and assets subject to U.S. jurisdiction 
of weapons of mass destruction (WMD) proliferators and their 
supporters and prohibit all U.S. persons from doing business 
with them.  Addressee host governments have indicated a 
willingness to consider applying sanctions to these entities, 
consistent with national authorities and as a means of 
furthering the objectives of UNSCR 1718, which outlines 
targeted sanctions related to North Korea's WMD and missile 
programs and proliferation (reftels A-E). Information 
provided in this demarche is intended to assist host 
country's review process.  This information is similar to 
information provided to Japan and Australia before their 
designation of these DPRK entities on Septem 
ber 19, 2006. End background. 
 
¶3.  (S/REL CANADA, FRANCE, UK, GERMANY, ITALY, SWITZERLAND, 
NEW ZEALAND) Begin talking points/non-paper for Canada, 
France, UK, Germany, Italy: 
 
-- The United States appreciates our joint efforts to address 
financial and other support networks that facilitate 
proliferation, including our cooperation to stop North 
Korea's use of the international financial system to 
facilitate proliferation activities and your government's 
commitment to implementing the provisions of UNSCR 1718. 
 
-- In our effort to share with you any information we have 
available, we would like to provide you with specific 
examples of proliferation activities by the entities the 
United States has designated under Executive Order 13382 
(Blocking Property of Weapons of Mass Destruction 
Proliferators and Their Supporters) for North Korean 
proliferation activities, which allows the United States to 
block or "freeze" the property and assets subject to U.S. 
jurisdiction of weapons of mass destruction (WMD) 
proliferators and their supporters, and prohibit all U.S. 
persons from doing business with them. 
 
-- The United States continues to encourage countries to take 
steps in accordance with their national legal authorities and 
international law to address proliferation financing, 
including by adopting measures similar to E.O. 13382. 
 
-- To that end, Washington urges your government to consider 
taking action, consistent with your national authorities, 
against these entities to help stop proliferation financing 
and as a means of furthering the objectives of UNSCR 1718, 
which outlines targeted sanctions related to North Korea's 
WMD and missile programs and proliferation. 
 
-- For your information, the United States also intends to 
propose that the 1718 Committee designate and list the 12 
entities and 1 individual which the U.S. has designated under 
E.O, 13382 for their involvement in DPRK-related 
proliferation of weapons of mass destruction or their 
delivery systems. 
 
-- (INSERT PARAGRAPH 4 AS APPROPRIATE) 
 
¶4.  (S/REL CANADA, FRANCE, UK, GERMANY, ITALY, SWITZERLAND 
AND NEW ZEALAND) Begin points/non-paper for Canada, France, 
UK, Germany, Italy, Switzerland and New Zealand: 
 
E.O. 13382 ENTITIES: EXAMPLES OF PROLIFERATION 
--------------------------------------------- - 
 
KOMID 
----- 
 
-- (S/REL CANADA, FRANCE, UK, GERMANY, ITALY, SWITZERLAND AND 
NEW ZEALAND) Korea Mining Development Corporation (KOMID) has 
dealt in the past with Iran's Shahid Hemmat Industrial Group 
(SHIG), an entity also designated under E.O. 13382, which is 
responsible for Iran's liquid-fueled missile development. 
 
-- (U) KOMID is a North Korean arms dealer involved in the 
sale of missiles and advanced conventional weapons. 
 
HESONG TRADING CORPORATION 
-------------------------- 
 
-- (S/REL CANADA, FRANCE, UK, GERMANY, ITALY, SWITZERLAND AND 
NEW ZEALAND) North Korea's Hesong Trading Corporation is 
associated with KOMID and maintained a bank account at 
Tanchon Commercial Bank in late June 2005. 
 
-- (S/REL CANADA, FRANCE, UK, GERMANY, ITALY, SWITZERLAND AND 
NEW ZEALAND) In early January 2004, Iran's P.C. Company, an 
Iranian government controlled entity, directed that a payment 
of approximately $9.5 million be made to North Korea's Hesong 
Trading Corporation.  The funds were deposited in an account 
held by Tanchon and were probably related to North Korean 
weapons sales to Iran. 
 
TOSONG TECHNOLOGY TRADING CORPORATION 
------------------------------------- 
 
-- (S/REL CANADA, FRANCE, UK, GERMANY, ITALY, SWITZERLAND AND 
NEW ZEALAND) The North Korean weapons trading firm Changgwang 
Sinyong Corporation ("KOMID"), using the name Tosong 
Technology Trading Corp., contracted with a Taiwan firm in 
March 2000 for likely dual-use precision machine tools. 
Tosong and the Taiwan firm have worked together since June 
1999 to provide precision machine tools to North Korea. 
 
FOR SWITZERLAND AND NEW ZEALAND ONLY: 
 
-- (S/REL SWZ and NZL) Pyongyang's Changgwang Credit Bank 
(another name for Tanchon Commercial Bank) instructed Sanaa's 
Yemen Commercial Bank (YCB) in late January 2003 to make 
several payments to KOMID representatives in Yemen.  These 
payments are almost certainly related to a string of possibly 
missile-related payments from Yemen to North Korea occurring 
around the same time frame.  All three payments were made by 
Tanchon on behalf of Korea Tosong Technology Corporation, 
which is part of KOMID. 
 
FOR CANADA, FRANCE, UK, GERMANY AND ITALY ONLY: 
 
-- (S/REL CAN, FR, UK, GER, ITALY) Korea Tosong Technology 
Trading Corporation probably acted on behalf of KOMID related 
to a string of possibly missile-related payments from Yemen 
to North Korea in late January 2003. 
 
FOR ALL ADDRESSEE POSTS: 
 
TANCHON COMMERCIAL BANK 
----------------------- 
 
-- (U) Tanchon Commercial Bank provides financial services 
for KOMID and other entities designated under E.O. 13382. 
Please refer to the examples provided in this non-paper for 
Hesong Trading Corporation, Tosong Technology Trading 
Corporation, and Korea Complex Equipment Import Corporation 
for specific transactions. 
 
KOREA RYONBONG GENERAL CORPORATION 
and HYOKSIN TRADING CORPORATION 
---------------------------------- 
 
-- (S/REL CANADA, FRANCE, UK, GERMANY, ITALY, SWITZERLAND AND 
NEW ZEALAND) North Korea's Hyoksin Trading Corporation 
urgently sought carboxyl-terminated polybutadiene (CTPB), a 
solid propellant-related chemical, from North Korea's Korea 
Ryonbong General Corporation office in Russia.  The CTPB 
requested was of sufficient quality and quantity to test as a 
solid rocket propellant.  According to the Missile Technology 
Control Regime (MTCR) Annex, CTPB has applications as a 
binder in solid propellants and is restricted under Category 
II, Item 4(e).  CTPB also has applications in the production 
of smaller solid rocket motors used to launch unmanned aerial 
vehicles (UAVs) and cruise missiles. 
 
-- (S/REL CANADA, FRANCE, UK, GERMANY, ITALY, SWITZERLAND AND 
NEW ZEALAND) Also in mid-March and early April, North Korea's 
Hyoksin Trading Corp urgently sought "butyral film (bonding 
agent)" from North Korea's Ryonbong office in Russia. 
According to the MTCR Annex, bonding agents are used to 
polymerize propellants (bond the oxidizer) for solid rocket 
motors.  Some bonding agents can be used also as curing 
agents or crosslinkers with CTPB. 
 
KOREA COMPLEX EQUIPMENT IMPORT CORPORATION 
------------------------------------------ 
 
-- (S/REL CANADA, FRANCE, UK, GERMANY, ITALY, SWITZERLAND AND 
NEW ZEALAND) North Korea's Changgwang Credit Bank (another 
name for Tanchon Commercial Bank) opened a letter of credit 
on behalf of Korea Complex Equipment Import Corporation 
(KCEIC) on April 12, 2001, for the benefit of 
Rosoboronexport, Russia's primary arms exporter.  The letter 
of credit was opened for the North Korean purchase of 
probably military aviation-related equipment dealing with 
North Korean production of the 9-13L, a variant of the 
MIG-29, and the supply of tooling for production. 
 
KOREA KWANGSONG TRADING CORPORATION 
----------------------------------- 
 
-- (S/REL CANADA, FRANCE, UK, GERMANY, ITALY, SWITZERLAND AND 
NEW ZEALAND) The Korea Kwangsong Trading Corporation 
purchased the dual-use Australia Group-controlled chemical 
sodium fluoride (NaF) in April 2003 from a Chinese company. 
In addition to its commercial uses, sodium fluoride can be 
used to form G-series nerve agents and in the purification of 
uranium hexafluoride (UF6). Korea Kwangsong was interested in 
acquiring magnesium fluoride, aluminum fluoride, carbon 
block, powdered cryolite, anode material, and wire rope. 
 
-- (U) Korea Kwangsong Trading Corporation is a subsidiary of 
Korea Ryonbong General Corporation. 
 
KOREA PUGANG TRADING CORPORATION ("PUGANG") 
------------------------------------------- 
 
-- (S/REL CANADA, FRANCE, UK, GERMANY, ITALY, SWITZERLAND AND 
NEW ZEALAND) Pyongyang's Koryo Commercial Bank paid 
approximately $570,000 to Korea Pugang Trading Corporation 
via the Pof Wah Cantt branch of Habib Bank Ltd in late 
December 2001.  The payment was to be made to Koryo's account 
with Banco Delta Asia, Macau. 
 
-- (U) Pugang is subordinate to Korea Ryonbong Corporation. 
The North Korean defense conglomerate Korea Ryonbong General 
Corporation specializes in acquisition for North Korean 
defense industries and support to Pyongyang's 
military-related sales. 
 
KOREA RYONHA TRADING CORPORATION 
(a.k.a. KOREA RYENGWANG TRADING CORPORATION) 
and KOREA RYONGWANG MACHINERY JOINT VENTURE CORPORATION 
--------------------------------------------- ------- 
 
-- (S/REL CANADA, FRANCE, UK, GERMANY, ITALY, SWITZERLAND AND 
NEW ZEALAND) The North Korean-flagged cargo vessel "Dae Song 
126" loaded machine tools and accessories in Taiwan for 
delivery to North Korea's Ryonha Machinery Joint Venture 
Corporation in mid-May 2004. 
 
-- (U) Ryonha is a subsidiary of the Korea Ryonbong General 
Corporation.  Ryonbong is a North Korean defense conglomerate 
specializing in acquisition for North Korea's defense 
industries and support to Pyongyang's military sales. 
 
KOREA INTERNATIONAL CHEMICAL JOINT VENTURE COMPANY 
--------------------------------------------- ----- 
 
-- (U) This North Korean entity was designated because it is 
a subsidiary company of Korea Ryonbong General Corporation, 
named in the annex of E.O. 13382.  Please see the Nuclear 
Threat Initiative's Profile of North Korea's nuclear 
facilities at www.nti.org/e research/ 
profiles/NK/45 522.html for information linking this entity 
to North Korea's nuclear program. 
 
KOHAS AG and JAKOB STEIGER 
-------------------------- 
 
-- (U) Kohas AG is an industrial supply wholesaler located in 
Switzerland.  Kohas and Jakob Steiger, the president of 
Kohas, were designated under E.O. 13382 as a result of Kohas' 
ties to Korea Ryonbong General Corporation.  Please refer to 
the previous examples of Ryonbong's activities. 
 
End points/non-paper for Canada, France, UK, Germany, Italy, 
Switzerland and New Zealand 
 
¶5. (U) ISN appreciates Posts' assistance.  Please slug 
responses for ISN/CPI, EAP/K and the appropriate Desks. 
RICE