VZCZCXYZ0000
OO RUEHWEB

DE RUEHRL #3505 3481708
ZNY SSSSS ZZH
O 141708Z DEC 06
FM AMEMBASSY BERLIN
TO RUEHC/SECSTATE WASHDC IMMEDIATE 6420
INFO RHEHNSC/NSC WASHDC IMMEDIATE
RUEHBJ/AMEMBASSY BEIJING PRIORITY 0841

S E C R E T BERLIN 003505 
 
SIPDIS 
 
STATE FOR EAP/K, EUR/PRA, AND ISN/CPI 
SIPDIS 
 
E.O. 12958: DECL: UPON KOREAN UNIFICATION 
TAGS: EFIN PARM KNNP PREL PGOV KNAR GM CH
SUBJECT: GERMAN REQUEST CONCERNING KOMID FINANCIAL 
ACTIVITIES IN GERMANY 
 
REF: A. BERLIN 3259 
     ¶B. STATE 182889 
 
Classified By: Minister-Counselor for Economic Affairs Robert F. Cekuta 
, for reasons 1.4 (b) and (d). 
 
¶1. (S) Global Affairs officer met Christian Mayer, deputy 
director of the German Finance Ministry's Division for 
Monetary Transactions and Prevention of Money Laundering and 
Terrorism Financing, November 24 to follow up ref B demarche 
and the Germans' interim reply (ref A).  Mayer said relevant 
German Government offices had discussed the points in the 
demarche and are sympathetic to our concerns.  However, he 
said they are unable to act due to legal constraints and the 
need to provide further information to Germany's Deutsche 
Bank. 
 
¶2. (S) First, Mayer said, it may not be apparent to Deutsche 
Bank that the ultimate beneficiary in this case is the DPRK's 
Korea Mining Development Trading Company (KOMID), since 
payment for the transaction was first to be made through an 
account held by China Merchants Bank.  Second, Deutsche Bank 
would have no legal obligation to freeze KOMID's assets, 
because KOMID is not yet listed on UNSCR 1718's annex of 
targeted entities.  Nor is it on the EU's list of targeted 
entities.  Third, because payment for the transaction is to 
occur when the China Merchants Bank pays KOMID in Beijing, 
Germany has no jurisdiction.  Mayer said that if the China 
Merchants Bank had legally established the account at 
Deutsche Bank and the customer wanted to withdraw funds from 
it, the German Government could not prevent the German bank 
from transferring the funds. 
 
¶2. (S) Mayer suggested the best way to approach the issue 
would be to disclose the U.S. information to Deutsche Bank. 
He said that Deutsche Bank is mindful of the provisions of 
U.S. Executive Order 13382 and would wish to avoid U.S. 
actions against it.  However, Deutsche Bank needs to know 
that KOMID is the beneficiary of the financial transactions 
in question.  Mayer requested that the USG provide the 
necessary information on KOMID in a message releasable to 
Deutsche Bank. 
 
¶3. (S) While providing additional information to Deutsche 
Bank as requested by Mayer remains an option, post is 
unconvinced that the German Government cannot weigh in with 
the bank.  Indeed, our understanding is that there is 
precedent for the German Government -- the Finance Ministry 
and other ministries -- to advise informally German financial 
institutions about potentially improper transactions.  Post 
will accordingly continue to press the German Government to 
act against KOMID and raise the issue with higher levels in 
the German Finance Ministry. 
TIMKEN JR