Letter to the Chairman from the Secretary
of State for Foreign and Commonwealth Affairs
Thank you for your letter of 2 June regarding
investment in the Democratic People's Republic of Korea (DPRK)
and ChosunFund Pte. Ltd.
The Hong Kong-incorporated ChosunFund is not
known to UK Trade and Investment (UKTI). In terms of our policy
approach, the Government neither promotes nor prevents private
investment in the DPRK, provided that it does not contravene international
sanctions or support North Korea's WMD programmes. As the Committee
suggested in its report on Japan and Korea last year, economic
reform is an important factor in improving DPRK's relations with
the West and reducing its reliance on exports of weapons and nuclear
goods. This is why the Government does not prevent private trade
with and investment in DPRK and UKTI has no objection in principle
to companies trading with the DPRK, provided that they operate
within the law. Nevertheless, UKTI does not offer support for
trade with or investment in the DPRK and, in the current political
climate, we are not to actively promoting such links.
The Prime Minister and I have expressed our
condemnation of DPRK's recent nuclear test in the strongest terms.
The UK worked hard with UN Security Council partners to secure
a robust response. I have welcomed the new UN Security Council
Resolution (UNSCR) 1874, adopted on 12 June, which tightens
sanctions on investment in DPRK. It calls upon Member States to
prevent the provision of financial services or the transfer of
financial assets or resources that could contribute to DPRK's
WMD programs, by freezing assets associated with such programs
and enhancing monitoring to prevent such transactions. It calls
for a ban on the provision of new grants, financial assistance
or concessional loans to DPRK except for humanitarian and development
purposes, and calls on states to exercise enhanced vigilance with
a view to reducing current commitments. It also calls on Member
States not to provide public financial support for trade with
DPRK where such support could contribute to DPRK's WMD programmes.
When these measures are fully implemented, companies
like ChosunFund are likely to be unable to (i) provide financial
services which could benefit WMD programmes (ii) enter into new
commitments for grants, financial assistance or loans at concessional
rates to DPRK, or (iii) obtain any support from public funds for
trade with DPRK which could benefit WMD programmes. The effectiveness
of these measures will depend on appropriate action being taken
by the Member States which have jurisdiction over ChosunFund.
The UK is committed to act to implement such measures to the extent
that it has jurisdiction over such companies.
We do not know if the ChosunFund is working
with Korea Mining Development Trading Corporation (KOMID) but,
if so, it would be prevented from making funds available to KOMID,
which is now subject to an international assets freeze under UNSCR
1718, as part of the measures introduced in response to DPRK's
5 April satellite launch. The Government is working with
international partners to ensure that the new sanctions are implemented
as quickly and effectively as possible.
David Miliband
22 June 2009
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