VZCZCXYZ0000
OO RUEHWEB

DE RUEHUL #2278/01 3310721
ZNR UUUUU ZZH
O 260721Z NOV 08
FM AMEMBASSY SEOUL
TO RUEHC/SECSTATE WASHDC IMMEDIATE 2440
INFO RUEATRS/DEPT OF TREASURY WASHINGTON DC PRIORITY

UNCLAS SEOUL 002278 
 
SIPDIS 
 
STATE FOR ISN, EAP, T, TREASURY, NEA, INR, EEB, S/CT, INL 
 
E.O. 12958: N/A 
TAGS: EFIN KNNP PREL PARM KS IR
SUBJECT: FOLLOW UP WITH ROKG ON FATF STATEMENT ON IRAN 
 
REF: A. STATE 121356 
     ¶B. STATE 115523 
 
¶1.  (U)  This is an action request.  Please see paragraph 6. 
 
¶2.  (SBU)  On November 18 econoff called on Lee Sang Soo, 
First Secretary in MOFAT's Disarmament and Nonproliferation 
Division, to deliver demarche (Ref A).  Lee pledged to 
deliver the demarche to KoFIU and was pleased to hear tha 
econoff would be meeting with KoFIU directly.  Lee added that 
he had delivered to Korea's Financial Intelligence Unit 
(KoFIU) the previous nonpaper (Ref B) concerning the FATF 
statement on Iran's anti-money laundering and 
counter-terrorist finance (AML/CFT) regime and 1803 
implementation guidance but had received no response.  He 
noted Korea's interest in working together on Iran but 
emphasized KoFIU's and the Ministry of Strategy and Finance's 
(MOSF) responsibility for the issue 
 
¶3.  (SBU)  Deputy EconCouns and econoff followed up with a 
call on KoFIU, visiting Director Lee Young Jick and Deputy 
Director Lee Kwi Woong in the Planning & Administration 
Office on November 24.  Both men were interested in the U.S. 
position and listened attentively to the demarche.  Director 
Lee stated that KoFIU had already taken appropriate measures 
in response to the October 16 FATF statement on Iran.  KoFIU 
had translated the statement and sent it to Korean financial 
institutions, asking that they enhance due diligence for the 
six countries cited in the statement.  Deputy Director Lee 
also noted that Korea seeks to implement all FATF guidelines. 
 He further noted that the ROKG currently has observer status 
within FATF and will receive the first draft report on its 
potential membership from FATF in February 2009.  KoFIU 
expects to receive a final decision on its status in June. 
Director Lee said that it is KoFIU's principle to comply with 
global AML/CFT standards and that MOSF had already sanctioned 
Iranian banks in Korea.  He noted that this was not a trivial 
accomplishment given South Korea's continuing commercial 
relationship with Iran. 
 
¶4.  (SBU)  Referencing FATF's recent guidance on UNSCR 1803 
implementation, Deputy Director Lee disclosed that KoFIU has 
limited authority with regard to AML/CFT implementation but 
implementation of UNSCR 1803 and proliferation of WMD is 
currently beyond KoFIU authority because KoFIU is statutorily 
focused on money laundering and counterterror finance. 
Consequently, KoFIU is in consultations with MOSF and the 
Ministry of Legislation to determine the scope of KoFIU's 
authorities and the extent to which it can take action. 
Director Lee repeated that KoFIU had acted in response to the 
FATF statement on Iran but will consider if there are other 
appropriate measures to take.  Director Lee raised the 
following questions: 
 
-- Does the United States' Finance Center have the authority 
with regard to WMD and chemical/biological weapons cases? 
 
-- Given UNSCR 1803 recommendations, why did the U.S. allow 
Iran to have a U-turn general license prior to November 6? 
 
-- What specific actions does the USG want Korea to take with 
respect to specific Iranian activities? 
 
¶5.  (SBU)  Post will pursue the issue with MOSF's Foreign 
Exchange Policy Division. 
 
¶6.  (U)  ACTION REQUEST:  Post requests Department guidance 
with respect to the three questions contained in paragraph 4. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
STEPHENS