N.Korean Arms Payments 'Passed Through Seoul'

      January 18, 2011 09:42

      Iran paid North Korea US$2.5 million for arms purchases in 2008 through the South Korean branch of Bank Mellat, U.S. diplomatic cables unveiled by WikiLeaks suggest. They also say that China exported to North Korea dual-use products that could be transformed into parts for Scud missiles.

      ◆ Bank Mellat in Seoul

      The cables say that North Korea received the arms payments through the Seoul branch of Iran's Bank Mellat and that the U.S. government urged the South Korean government to investigate the matter.

      According to a cable dated March 24, 2008, a company in Iran called Hong Kong Electronics wired $2.5 million in three separate payments from Parsian Bank in Iran to the Seoul branch of Bank Mellat in November of 2007. Hong Kong Electronics is a paper company owned by North Korea's Tanchon Commercial Bank. The money was wired entirely in euros, and $1.5 million worth of the payment was then wired to accounts in China and Russia.

      Following a U.S. request to investigate, the South Korean government probed the Bank Mellat branch in December 2008 but did not take any punitive measures. Washington then demanded that the branch's assets be frozen, according to a cable dated May 12, 2009.

      The Seoul branch of Bank Mellat

      ◆ China 'Exported Scud Parts'

      The U.S. State Department in cables from the embassies in London, Paris and Canberra in January of 2008 expressed concern that Chinese companies had for years been exporting metals and raw materials that could be used to manufacture ballistic missiles to Iran, Pakistan and North Korea.

      The cables say China sold dual-use parts that could be used to manufacture Scud missiles to North Korea through Dandong. The parts are included in a list of items prohibited for export to North Korea according to the Missile Technology Control Regime, an informal association of countries which share the goals of non-proliferation.

      The cables say a Chinese trading company called Shenyang Huali Economic Trading Company was involved in North Korea's missile development program in Syria through a North Korean intermediary.

      ◆ Hyundai-Kia Exports

      According to a cable dated May 15, 2009, a Turkish company called Ak Makina imported various computer numerically controlled (CNC) machining tools manufactured by the Hyundai-Kia Automotive Group and attempted to supply them to an Iranian company called Ardalan Machineries Company.

      Ardalan is in turn linked to Shahid Hemmat Industrial Group, an Iranian business that develops solid-fuel-propelled intercontinental ballistic missiles. There was a concern that Ardalan posed as the end user instead of SHIG. The CNC machining tools could be used by SHIG to manufacture engines for solid-fuel-powered missiles.

      Seoul confirmed that the deal pointed out by the U.S. in April 2009 took place in December 2008. It informed Washington that the products Hyundai-Kia exported to AK Makina did not violate international or domestic laws governing non-proliferation and that the transaction was legal. But after repeated requests by Washington to cooperate, Seoul finally canceled the export deal, according to a cable dated Dec. 3, 2009.

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