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Cablegate: Amroggang Development Bank,S Correspondent

VZCZCXYZ0023
OO RUEHWEB

DE RUEHC #1569 0072131
ZNR UUUUU ZZH
O 072126Z JAN 10
FM SECSTATE WASHDC
TO AMEMBASSY TOKYO IMMEDIATE 0000

UNCLAS STATE 001569

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: EFIN ETTC KNNP PINR PARM PREL XB XE ZO JA
SUBJECT: AMROGGANG DEVELOPMENT BANK,S CORRESPONDENT
RELATIONSHIP WITH THE BANK OF TOKYO-MITSUBISHI UFJ LTD

1. (U) This is an action request. Please see paragraph 3.

------------------
SUMMARY/BACKGROUND
------------------

2. (SBU) On October 23, 2009, the U.S. Department of the
Treasury designated Pyongyang-based Amroggang Development
Bank (ADB) under Executive Order (E.O.) 13382 for being owned
or controlled by North Korea's Tanchon Commercial Bank
(Tanchon), an entity designated by the United States, and by
the UN pursuant to UN Security Council Resolution (UNSCR)
1874. E.O. 13382 freezes the assets of designated
proliferators of weapons of mass destruction and their
supporters. According to the Bankers Almanac, a leading
provider of reference data on the banking industry, ADB
maintains a correspondent relationship with the Bank of
Tokyo-Mitsubishi UFJ, Ltd. Consistent with the obligation in
Operative Paragraph 18 of UNSCR 1874, Washington requests
that Post notify the Government of Japan about ADB's
correspondent relationship with the Bank of Tokyo-Mitsubishi
UFJ and urge the GOJ to take appropriate actions to freeze
any assets. If the GOJ lacks the authority to freeze assets,
Washington requests that it close any accounts linked to ADB.
In addition, Washington asks the GOJ to investigate whether
ADB holds correspondent relationships with other Japanese
financial institutions and, if appropriate, urge the GoJ to
take appropriate action against ADB under Japan's domestic
authorities.

-------------------------
OBJECTIVES/ACTION REQUEST
-------------------------

3. (U) Washington requests that Post deliver the attached
nonpaper in paragraph 4 to the Government of Japan. Post may
also draw on the press release for the designation of ADB,
which can be found at:
www.treasury.gov/press/releases/tg330.htm. Post should
pursue the following objectives:

-- Deliver the points in the nonpaper below.

-- Seek confirmation about the veracity of the Bankers
Almanac's information.

-- Urge the GOJ to freeze assets and/or close ADB's accounts
if this information is accurate.

-- Ask the GOJ to investigate whether ADB holds correspondent
relationships with other Japanese financial institutions and,
if appropriate, freeze any assets or close ADB accounts under
Japan's domestic authorities.

-- Report on the results of this discussion.

--------
NONPAPER
--------

4. (SBU) We would like to raise concerns about a possible
relationship between the North Korean Amroggang Development
Bank (ADB) and a bank in your jurisdiction.

-- The Bankers Almanac, a leading provider of reference data
on the banking industry, indicates that as of December 2009,
ADB maintains a correspondent relationship with the Bank of
Tokyo-Mitsubishi Bank UFJ Ltd.

-- ADB, which was established in 2006, is a Tanchon-related
company managed by Tanchon officials. As you know, Tanchon
is the financial arm of the U.S and UN-designated North
Korean company, Korea Mining Development Corporation (KOMID),
and plays a role in financing KOMID's ballistic missiles
sales.

-- On April 24, 2009, the UNSCR 1718 Committee designated
both Tanchon and KOMID as subject to the provisions and
measures imposed in paragraph 8(d) of UNSCR 1718 for their
links to procurement for North Korea's ballistic missile and
other weapons programs.

-- On October 23, 2009, the U.S. Department of the Treasury
designated ADB under Executive Order 13382 for being owned or
controlled by North Korea's Tanchon Commercial Bank
(Tanchon), an entity which was sanctioned on June 28 2005, at
the time of the adoption of E.O. 13382.

-- As you are aware, UNSCR 1874 calls for strong measures
against North Korea's nuclear and missile proliferation
activities and the furtherance of its nuclear and missile
programs, including freezing of assets and denial of
financial services to entities and individuals engaged in
such activities.

-- Consistent with UNSCR 1874's call to prevent the provision
of financial services that could contribute to North Korea's
nuclear-related, ballistic missile-related or other
WMD-related programs, we urge you to investigate whether ADB
does have a correspondent banking relationship with the Bank
of Tokyo-Mitsubishi UFJ Ltd.

-- If this correspondent relationship is confirmed, we urge
you to take appropriate actions under your legal authorities
to freeze assets and/or close any accounts belonging to ADB
at Bank of Tokyo-Mitsubishi UFJ Ltd.

-- We also ask you to investigate whether ADB holds
correspondent relationships with other Japanese financial
institutions and, if appropriate, take similar actions
against ADB under those domestic authorities.

-- We are interested to learn the results of this
investigation. We also look forward to continuing to work
with you on this and other related security and
counterproliferation matters, and are prepared to provide
additional assistance as appropriate.

------------------
REPORTING DEADLINE
------------------

5. (U) Post should report results within 7 business days of
receipt of this cable. Please slug replies for ISN, T,
TREASURY, INR and EAP. Please use the caption SIPDIS in all
replies.

----------------
POINT OF CONTACT
----------------

6. (U) Washington point of contact for follow-up information
is Kevin McGeehan, ISN/CPI, (202) 647-5408.

7. (U) Department thanks Post for its assistance.
CLINTON

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