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Viewing cable 06SEOUL954, KOREA TO ENHANCE CONTROL OF STRATEGIC PRODUCT

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Reference ID Created Released Classification Origin
06SEOUL954 2006-03-23 22:41 2011-08-25 00:00 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Seoul
VZCZCXRO9813
RR RUEHCN RUEHVK
DE RUEHUL #0954/01 0822241
ZNR UUUUU ZZH
R 232241Z MAR 06
FM AMEMBASSY SEOUL
TO RUEHC/SECSTATE WASHDC 6801
INFO RUEHBJ/AMEMBASSY BEIJING 0334
RUEHMO/AMEMBASSY MOSCOW 7202
RUEHKO/AMEMBASSY TOKYO 0417
RUEHCN/AMCONSUL CHENGDU 0039
RUEHHK/AMCONSUL HONG KONG 2606
RUESLE/AMCONSUL SHANGHAI 2536
RUEHSH/AMCONSUL SHENYANG 2785
RUEHVK/AMCONSUL VLADIVOSTOK 0843
RUCPDOC/DEPT OF COMMERCE WASHDC 1393
RHEBAAA/DEPT OF ENERGY WASHINGTON DC
RUEAHLC/DEPT OF HOMELAND SECURITY WASHDC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RHFJUSC/US CUSTOMS SERVICE WASHINGTON DC
RHFJUSC/US CUSTOMS SERVICE WASHINGTON DC
UNCLAS SECTION 01 OF 02 SEOUL 000954 
 
SIPDIS 
 
SIPDIS 
SENSITIVE 
 
STATE FOR ISN, EB AND EAP/K 
 
E.O. 12958: N/A 
TAGS: ETTC KSTC PARM PREL KS
SUBJECT: KOREA TO ENHANCE CONTROL OF STRATEGIC PRODUCT 
EXPORTS 
 
SUMMARY 
------- 
 
1. (SBU) According to the Ministry of Commerce, Industry and 
Energy (MOCIE), Korea plans to tighten controls over the 
export of strategic products that could be used for weapons 
development.  MOCIE's planned measures, which will go into 
effect in the latter part of 2006, call for tougher legal 
action against offenders and clarification of what products 
should not be exported.  The measure is in compliance with 
United Nation resolution 1540, which calls for a concerted 
effort to prevent the spread of strategic items that can be 
used to make weapons of mass destruction. 
 
2. (SBU) MOCIE, under the revised rules, will be able to 
prosecute offenders with maximum jail sentences of seven 
years (up from five) and fines up to five times (up from 
three times) that of the transaction value.  In addition, 
MOCIE will now be providing timely responses to export 
control inquiries and will make information on what cannot be 
sold to certain countries more freely available.  End Summary. 
 
KOREA'S EXPORT CONTROL PLANS 
---------------------------- 
 
3. (SBU) EconOff met on February 8 with Shim Soung-kun, 
Director of the Export Policy Control Division at MOCIE, to 
discuss Korean export control policy.  Shim explained that 
although Korea's export controls lag behind those of the 
United States, the EU and Australia, Korea would make great 
strides in catching up in 2006.  MOCIE expects Korea to reach 
full compliance with UN 1540 before the year's end.  Shim 
made it clear that he believes that without rigorous export 
controls, the country that will suffer the most is Korea. 
Shim stated that if Korean companies cannot fully comply with 
international export control rules, Korean companies would 
suffer sanctions which in turn would heavily damage exports, 
Korea's main economic activity. 
 
4. (SBU) Director Shim explained that MOCIE will be 
implementing a vigorous public relations campaign on export 
controls in 2006.  Shim said that in 2005, only five percent 
of Korean companies surveyed understood the rules regarding 
export controls.  By the end of 2006, MOCIE expects a minimum 
of eighty percent of all Korean companies to understand 
export controls, making it easier for them to comply. 
 
5. (SBU) MOCIE has proposed an upgrade to the Korean 
Strategic Trade Information Center (STIC), the current Korean 
government funded center in charge of implementing export 
controls, raising it to become to an agency-level government 
entity called the Strategic Material Management Agency (SMMA) 
-- with the number of employees increasing from the current 
level of thirteen to fifty full-time employees.  In addition, 
MOCIE plans to publish an Export Controls Handbook for all 
Korean government employees, and initiate systematic private 
company employee training for 10,000 people.  MOCIE's goal is 
to increase the number of Korean "International Compliance 
Companies" (ICC's) from the current four up to fifty 
companies, also within 2006.  The four companies that are 
already compliant are alll very large Korea-based 
multinational corporations.  However, this year Shim says 
MOCIE will focus more on helping small and medium-sized 
companies become ICCs. 
 
MORE RESOURCES NEEDED 
--------------------- 
 
6. (SBU) Using MOCIE's 2006 budget as a lever, Shim plans to 
spend funds to build consensus within the government and 
among private companies and the general public to make sure 
Korea can comply with global export control standards.  He 
predicted that MOCIE would compile one core database to build 
a user-friendly implementation system for both government and 
 
SEOUL 00000954  002 OF 002 
 
 
private companies.  Moreover, MOCIE will continue training 
programs for STIC employees in Korea, as well as sending 
employees to the United States, EU, Australia and Japan for 
overseas training.  Shim expects to send employees to at 
least twenty international conferences in 2006. 
 
7. (SBU) Shim also plans to increase export control 
cooperation with countries throughout the world.  Not only is 
Korea reaching out to the EU, the United States, Japan and 
Australia, but Shim, in order to strengthen overall 
cooperation on export control, also intends to pursue an 
export control MOU with China. 
 
8. (SBU) Shim cited one example of international cooperation 
of which he is particularly proud.  On December 31, 2005, the 
shipment of a Korean export company was apprehended in 
Singapore on its way to Iran.   The shipment contained 
dual-use items whose sale to Iran is prohibited under Korean 
law.  The shipment was stopped and returned to Korea, where 
the company concerned is now being prosecuted to the full 
extent of the law. 
 
COMMENT 
------- 
 
9. (SBU) Director Shim seems to have accomplished much since 
MOCIE began revamping Korea's export control regime in 2003. 
Fortunately, MOCIE and Director Shim are not satisfied with 
the results so far, but intend to continue to press forward. 
Shim's understanding of why export controls are necessary is 
commendable.  His unending drive to teach Koreans is 
impressive.  Although Shim personally appears to be the 
driving force behind the rapid improvement in Korean export 
controls -- which is no doubt linked to his own career 
ambitions -- Shim appears to have gotten his timing right, 
and has been able to convince the Korean government in 
general to get on board.  End Comment. 
 
VERSHBOW