O 071913Z NOV 08
FM SECSTATE WASHDC
TO AMEMBASSY SEOUL IMMEDIATE

S E C R E T STATE 119006 
 
 
E.O. 12958: DECL: 10/27/2032 
TAGS: KR MNUC MTCRE PARM PREL
 
SUBJECT: IRAN, NORTH KOREA, AND SYRIA NONPROLIFERATION 
ACT -- RESPONSE TO SOUTH KOREAN AUTHORITIES 
 
REF: A. A. SEOUL 2076 
     ¶B. B.STATE 111822 
     ¶C. C. 06STATE 187236 
     ¶D. D. 06SEOUL 3993 
     ¶E. E. 06SEOUL 4166 
 
Classified By: VCI DAS STEPHEN A. ELLIOTT FOR REASONS 1.4 (B), 
(D), AND (H) 
 
¶1. (U) This is an action request.  Post please see para 6. 
 
¶2. (S) This message responds to questions raised by MOFAT 
officials in response to the October 22 notification of the 
imposition of sanctions on Yolin Tech, Inc, Ltd. under the 
Iran, North Korea, and Syria Nonproliferation Act (INKSNA) 
(Refs A-B).  Please draw from the talking points in paragraph 
six. Talking points may be left as a non-paper. 
 
¶3. (S) Background.  The sanctions imposed on Yolin Tech 
derive from the May 2006 event (ref C) and do not reflect any other 
activity by Yolin.  The circumstances of the May 2006 event, the 
subsequent exchanges between the U.S. and Korean Governments 
about the event, and the actions taken by the Korean Government 
against Yolin (refs C-E) were considered during the sanctions 
decision process. INKSNA is both comprehensive in that it covers 
many varieties of exports (missile, chemical, biological, 
conventional) and global in scope.  The volume of cases and 
attendant classification issues account for the delayed decision 
process. 
 
¶4. (S) Background (cont,d).  Termination of sanctions imposed under 
INKSNA is possible.  The Department,s goal in agreeing to 
terminate sanctions is to secure concrete assurances that there 
will be no recurrence of any activity sanctionable under INKSNA. 
INKSNA allows a determination to exempt foreign persons from 
sanctions if "the government with primary jurisdiction over the 
person has imposed meaningful penalties on that person on account 
of the transfer of goods, services, or technology..." covered by 
INKSNA.  There is no definition of meaningful penalties in INKSNA 
but the Department assesses that penalties should be such that 
there will be no recurrence of any sanctionable activity. 
With regards to this case, ROKG reported that it took criminal 
action against Yolin Tech (a small, one-man front company operation), 
convicted the company owner, but suspended the sentence imposed.  The 
lack of a "meaningful penalty" in this case was considered in the 
sanctions decision. 
 
¶5. (S) Background (cont,d).  INKSNA sanctions have been terminated 
early under certain circumstances.  In a recent case, after 
an extended negotiation directly with a sanctioned entity, the Department 
established a high standard to justify termination of sanctions that 
consists of four elements: 1) cessation of all dealings with 
Iran, North Korea, and Syria, including the provision of goods, services, 
and technology (including the supply of technical assistance and 
spare parts for items already transferred) and a pledge of no 
future dealings  with these countries in violation of U.S. laws and 
regulations; 2) accounting to the USG of all transfers in the previous 
five years of any good, service, or technology to Iran, North Korea, and 
Syria; 3) a commitment to comply with all reasonable future requests by 
the USG relating to the transfer of goods, services, or technology to Iran, 
North Korea, and Syria in the prior five year period;  4) an 
acknowledgement that failure to abide by these commitments may 
result in re-imposition of sanctions.  The Department stands 
ready to work with the ROKG to establish these conditions for Yolin 
Tech as a prerequisite for terminating sanctions. 
 
¶6.    (S/REL South Korea)  Suggested Talking Points 
 
-- We are responding to questions raised in our October 22 
meeting in which sanctions against the firm Yolin Technology were 
notified to the Republic of Korea. 
 
-- The provisions of the Iran, North Korea, and Syria Nonproliferation 
Act (INKSNA) are global in scope and comprehensive in the 
range of exports that are covered (missile, chemical, biological, and 
conventional weapons).  This complexity accounts for the 
delay in determinations under the law. 
 
-- The U.S. determination of sanctions against Yolin Technology 
derives solely from the May 2006 event and subsequent actions 
relevant to that event, which we previously raised with your 
government. 
 
-- The sanctions imposed only apply to Yolin Technology, its 
successors, subunits, and subsidiaries, not to Korea or 
Korean authorities, and have no effect on Korean entities that do 
business with Yolin. 
 
-- Under INKSNA, determination to exempt foreign persons from 
sanctions may be made if "the government with primary 
jurisdiction over the person has imposed meaningful penalties on that 
person on account of the transfer of goods, services, or technology..." 
covered by the law. 
 
-- There is no definition of meaningful penalties in INKSNA 
but the Department assesses that penalties should be such that there 
will be no recurrence of any activity sanctionable under INKSNA. 
 
-- In this case, you reported that you took criminal action 
against Yolin Tech, convicted the company owner, but suspended the sentence 
imposed. 
 
--  While we appreciate your government,s rapid action in 
this matter, we also expressed concern regarding the penalty imposed 
against Yolin Tech and remain concerned that this was not a sufficient 
deterrent to prevent Yolin Tech from again exporting controlled items to 
Iran, North Korea or Syria. 
 
-- Early termination of sanctions imposed under INKSNA is 
possible. The goal of the United States Government in agreeing to a 
termination of sanctions is to secure concrete assurances that there will 
be no recurrence of any activity sanctionable under INKSNA. 
 
-- In a recent case, after an extended negotiation directly 
with a sanctioned entity, the Department established a high standard 
to justify termination of sanctions that consisted of four elements. 
 
-- First, the firm must cease all dealings with Iran, North 
Korea, and Syria, including the provision of goods, services, and 
technology (including the supply of technical assistance and spare parts 
for items already transferred) and a pledge of no future dealings with 
these countries in violation of U.S. laws and regulations. 
 
-- Second, the firm must agree to provide an accounting of 
all transfers in the previous five years of any good, service, or 
technology to Iran, North Korea, and Syria to the USG. 
 
-- Third, the firm must commit to comply with all reasonable 
future requests for information from the USG relating to the 
transfer of goods, services, or technology to Iran, North Korea, and 
Syria in the prior five year period. 
 
-- Fourth, the firm must acknowledge that failure to abide by 
these commitments may result in re-imposition of sanctions. 
 
-- In addition, the U.S. would appreciate information on 
whether Yolin Tech continues to operate as a business.  If so, we would 
appreciate knowing what additional steps the ROKG has taken beyond 
prosecuting the director of Yolin Tech to ensure that no 
additional transfers of controlled items occur by Yolin Tech to 
destinations of proliferation concern. 
 
-- We are ready to work further with you, or, if appropriate, 
directly with Yolin Tech, to establish these conditions for Yolin Tech as a 
prerequisite for terminating sanctions before the two-year period expires. 
 
-- We continue to value our strong and close nonproliferation 
cooperation. 
 
End Talking Points. 
RICE 
 
 
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