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OO RUEHAP RUEHBC RUEHDBU RUEHDT RUEHGI RUEHGR RUEHKN RUEHKR RUEHMJ
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DE RUEHC #6250/01 1762356
ZNR UUUUU ZZH
O 252333Z JUN 09
FM SECSTATE WASHDC
TO ALL DIPLOMATIC POSTS COLLECTIVE IMMEDIATE

UNCLAS SECTION 01 OF 04 STATE 066250 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ECON EFIN PARM PREL KNNP
SUBJECT: IMPLEMENTATION OF UNSCR 1874 FINANCIAL 
PROVISIONS AND INFORMATION ON U.S. ADVISORY ON NORTH 
KOREA 
 
REF: 09 STATE 62131 
 
¶1. (U) This is an action request.  Please see paragraph 
¶4. 
 
---------------------- 
SUMMARY AND BACKGROUND 
---------------------- 
 
¶2. (SBU) On June 12, 2009, the U.N. Security Council 
adopted Resolution 1874, a Chapter VII resolution 
imposing further measures on the Democratic People's 
Republic of Korea (DPRK) in response to its May 25, 
2009, nuclear test, including new financial measures 
designed to limit the ability of the DPRK to fund WMD 
and ballistic missile-related activities, as well as 
arms procurement and sales (reftel).  Given the 
continuation of DPRK proliferation activities, we 
strongly urge host governments to undertake specific 
actions to ensure immediate and robust implementation of 
the financial provisions of UNSCR 1874 in order to 
prevent North Korea from using host government 
jurisdictions to facilitate arms-related or 
proliferation-related financial transactions. 
 
¶3. (U) We also wish to provide host governments with the 
text of the June 18, 2009 Treasury Department advisory 
regarding the involvement by DPRK government agencies 
and front companies in illicit activities and request 
that host governments take specific action to mitigate 
the risks posed by North Korea's illicit activities. 
 
------------------------- 
OBJECTIVES/ACTION REQUEST 
------------------------- 
 
¶4. (U) Washington requests Posts approach appropriate 
host government officials in the foreign affairs and 
finance ministries to deliver the nonpaper in paragraph 
5 and achieve the objectives below.  The text of UNSCR 
1718 can be found at 
www.un.org/Docs/sc/unsc_resolutions06.htm under 
S/RES/1718 (2006).  The text of UNSCR 1874 can be found 
at www.un.org/Docs/sc/unsc_resolutions09.htm under 
S/RES/1874 (2009). The text of the FINCEN advisory is 
available at 
www.fincen.gov/statutes_regs/guidance/html/fi n-2009- 
a002.html. 
 
-- Note that UN Security Council Resolution 1874 
includes expanded financial measures that aim to impede 
the DPRK's ability to fund its nuclear, ballistic 
missile, other WMD-related, and conventional 
proliferation activities. 
 
-- Note that UNSCR 1718 obligations, including an asset 
freeze against designated North Korean entities and a 
ban on the sale of luxury goods to North Korea, remain 
in place. 
 
-- Request that host governments provide the Treasury 
Advisory (paragraph 5) to their financial institutions 
and urge host governments to issue advisories to their 
financial institutions informing them of the financial 
provisions in both UNSCR 1718 and UNSCR 1874, 
particularly: 
 
¶1.      the asset freeze requirements for designated DPRK 
entities; 
 
¶2.      provisions calling on states to prevent the transfer 
of funds and provision of financial services that could 
be related to DPRK nuclear-related, ballistic missile- 
related, and WMD-related activities; 
 
¶3.      obligations to prevent not only the transfer of all 
arms and related materiel to and from the DPRK (except 
for North Korean imports of small arms and light weapons 
and related materiel), but also services or assistance, 
including financial services, related to such transfers; 
and 
 
¶4.      the requirement to prevent the supply, sale, or 
transfer to the DPRK of luxury goods. 
 
-- Emphasize USG concerns that, given these new 
 
STATE 00066250  002 OF 004 
 
SUBJECT: IMPLEMENTATION OF UNSCR 1874 FINANCIAL 
PROVISIONS AND INFORMATION ON U.S. ADVISORY ON NORTH 
KOR 
financial measures, the DPRK is likely to engage in 
deceptive financial practices and increase its use of 
cash couriers to evade sanctions. 
 
-- Note that the USG remains concerned regarding North 
Korean production and distribution of high-quality 
counterfeit U.S. currency, and urge host governments to 
turnover any seized counterfeit U.S. currency to the 
USG. 
 
-- Request host governments to require that banks 
enhance due diligence regarding North Korean 
transactions and banks in light of UNSCR 1874.  In 
particular, host governments should request that their 
financial institutions: 
 
¶1.      Apply enhanced scrutiny to North Korean customers, 
transactions and banks, including correspondent accounts 
held for North Korean financial institutions, as well as 
their foreign branches and subsidiaries, to mitigate the 
risks of North Korean proliferation-related activity, 
North Korean arms sales/purchases, and North Korean 
procurement of luxury goods; 
 
¶2. Prevent the transfer of funds and the provision of 
financial services that could be linked to North Korean 
proliferation-related, ballistic-missile related and 
WMD-related activities, and illicit conduct; 
 
¶3. Prevent the provision of financial services that 
could contribute to arms sales to/from North Korea; 
 
¶4. Prevent the provision of financial services that 
could contribute to North Korea's procurement of luxury 
goods; and 
 
¶5. Remain vigilant regarding attempts by North Korean 
customers to make large cash deposits into new or 
existing accounts, as well as the associated risk of the 
passing of counterfeit currency. 
 
-- Note USG concerns that the DPRK may increase its use 
of cash couriers, urge host governments to investigate 
and intercept any North Korean cash couriers, and urge 
states to apply enhanced scrutiny to all North Korean 
individuals suspected of transporting cash across 
international borders. 
 
--------------- 
TREASURY ADVISORY 
--------------- 
 
¶5. (U) BEGIN TREASURY ADVISORY: 
 
The Financial Crimes Enforcement Network ("FinCEN") is 
issuing this advisory to supplement information 
previously provided regarding the involvement by 
Democratic People's Republic of Korea ("North Korea") 
government agencies and front companies in illicit 
activities.  The U.N. Security Council has recently 
adopted a resolution containing new provisions, 
including a call for enhanced monitoring of financial 
transactions, to prevent the financing of North Korean 
nuclear, ballistic missile, and other weapons of mass 
destruction (WMD)-related programs or activities.  The 
Security Council's action, combined with the potential 
that North Korea will attempt to evade these financial 
measures, illustrates the increased risk that North 
Korea and North Korean entities, as well as individuals 
acting on their behalf, pose to the international 
financial system and financial institutions worldwide. 
 
On June 12, 2009, the U.N. Security Council adopted 
Resolution 1874, condemning North Korea's May 25 nuclear 
test and calling upon member states to prevent the 
provision of financial services or any financial or 
other assets or resources that could contribute to North 
Korea's nuclear, ballistic missile, or other WMD-related 
programs or activities.  These provisions were adopted 
in addition to pre-existing obligations imposed by U.N. 
Security Council Resolution ("UNSCR") 1718, adopted in 
2006, to, among other things, freeze the assets of 
designated North Korean individuals and entities 
involved in nuclear, ballistic missile, and other WMD- 
related programs or activities.  UNSCR 1874 includes 
additional measures beyond the asset freeze in UNSCR 
1718 by calling upon states to prevent North Korea from 
accessing financial services to facilitate transactions 
related to its nuclear, ballistic missile, and other 
WMD-related programs or activities.  It also bans 
financial transactions related to the sales of all arms 
and related materiel, except for the export of small 
 
STATE 00066250  003 OF 004 
 
SUBJECT: IMPLEMENTATION OF UNSCR 1874 FINANCIAL 
PROVISIONS AND INFORMATION ON U.S. ADVISORY ON NORTH 
KOR 
arms and light weapons and related materiel to North 
Korea.  For example, UNSCR 1874 calls upon member states 
to prevent the provision of financial services that 
could contribute to North Korea's nuclear, ballistic 
missile, and other WMD-related programs or activities. 
In addition, UNSCR 1874 demands that North Korea 
immediately comply with UNSCR 1718, which includes a ban 
on the transfer of luxury goods to North Korea. 
 
The U.N. Security Council's adoption of specific 
financial measures to address this conduct reinforces 
long-standing Treasury Department concerns regarding 
North Korea's involvement through government agencies 
and associated front companies, in financial activities 
in furtherance of a wide range of illicit activities. 
These activities include currency counterfeiting, drug 
trafficking, and the laundering of related proceeds. 
FinCEN has previously noted such conduct, most recently 
in 2007.  The Treasury Department remains especially 
concerned about the use of deceptive financial practices 
by North Korea and North Korean entities, as well as 
individuals acting on their behalf.  Such deceptive 
practices may include North Korean clients' suppression 
of the identity and location of originators of 
transactions; their practice of arranging for funds 
transfers via third parties; repeated bank transfers 
that appear to have no legitimate purpose; and routine 
use of cash couriers to move large amounts of currency 
in the absence of any credible explanation of the origin 
or purpose for the cash transactions. 
 
In light of the financial measures in UNSCR 1718 and 
UNSCR 1874, and the use of deceptive financial practices 
by North Korea and North Korean entities, as well as 
individuals acting on their behalf, to hide illicit 
conduct, FinCEN advises all U.S. financial institutions 
to take commensurate risk mitigation measures.  FinCEN 
notes that with respect to correspondent accounts held 
for North Korean financial institutions, as well as 
their foreign branches and subsidiaries, there is now an 
increased likelihood that such vehicles may be used to 
hide illicit conduct and related financial proceeds in 
an attempt to circumvent existing sanctions.  Financial 
institutions should apply enhanced scrutiny to any such 
correspondent accounts they maintain, including with 
respect to transaction monitoring.  Financial 
institutions should also continue to ensure that they 
are not providing financial services for North Korea's 
procurement of luxury goods.  This vigilance will help 
ensure compliance with UNSCR 1718, which prohibits North 
Korea's procurement of such goods.  In order to assist 
in applying enhanced scrutiny, a list of North Korean 
banks is included below. The Treasury Department 
encourages financial institutions worldwide to take 
similar precautions. 
 
In addition, Treasury is concerned that, in an attempt 
to evade U.N. Security Council provisions, North Korea 
may increasingly rely on cash transactions.  All 
financial institutions should remain vigilant regarding 
attempts by North Korean customers to make large cash 
deposits into new or existing accounts, as well as the 
associated risk of the passing of counterfeit currency. 
The Treasury Department remains concerned about North 
Korean production and distribution of high-quality 
counterfeit U.S. currency.  The U.S. government is ready 
to assist with the investigation of North Korean 
counterfeiting of U.S. currency wherever it is detected. 
For assistance with counterfeit U.S. currency-related 
investigations, please contact your local U.S. Secret 
Service office. 
 
Consistent with the standard for reporting suspicious 
activity as provided for in 31 C.F.R. part 103, if a 
U.S. financial institution knows, suspects, or has 
reason to suspect that a transaction involves funds 
derived from illegal activity or that a customer has 
otherwise engaged in activities indicative of money 
laundering, terrorist financing, or other violation of 
federal law or regulation, the financial institution 
shall then file a Suspicious Activity Report.  FinCEN 
reminds financial institutions that Executive Order 
13382 of June 28, 2005, requires blocking of all 
property and interests in property, within the United 
States or in the possession or control of U.S. persons, 
of certain individuals and entities.  Further 
information can be obtained from the website of the 
Office of Foreign Assets Control of the U.S. Treasury 
Department. 
 
Below is a list of some North Korean banks as taken from 
public and commercially available information.  This is 
 
STATE 00066250  004 OF 004 
 
SUBJECT: IMPLEMENTATION OF UNSCR 1874 FINANCIAL 
PROVISIONS AND INFORMATION ON U.S. ADVISORY ON NORTH 
KOR 
not meant to be a comprehensive list and is provided for 
ease of reference only.  For the purposes of this 
advisory, financial institutions should take independent 
steps as necessary to ensure sufficient awareness of 
their entire exposure to North Korean financial 
transactions regardless of the financial institution 
conducting the transactions. 
 
- Amroggang Development Bank 
- Bank of East Land 
- Central Bank of the Democratic People's Republic of 
Korea 
- Credit Bank of Korea 
- Dae-Dong Credit Bank 
- First Credit Bank 
- Foreign Trade Bank of the Democratic People's Republic 
of Korea 
- Hana Banking Corporation Ltd. 
- The International Industrial Development Bank 
- Korea Joint Bank (KBJ) 
- Korea Daesong Bank 
- Korea Kwangson Bank 
- Korea United Development Bank 
- Koryo Commercial Bank Ltd. 
- Koryo Credit Development Bank 
- North East Asia Bank 
- Tanchon Commercial Bank 
 
END TREASURY ADVISORY 
 
------------------ 
REPORTING DEADLINE 
------------------ 
 
¶6. (U) Post should report results within seven business 
days of receipt of this cable.  Please slug replies for 
ISN, T, EAP, and TREASURY.  Please use the caption 
SIPDIS in all replies. 
 
---------------- 
POINT OF CONTACT 
---------------- 
 
¶7. (U) Washington point of contact for follow-up 
information is Jennifer Chalmers, ISN/CPI, (202) 647- 
¶9715. 
 
¶8. (U) Department thanks Posts for their assistance. 
CLINTON