TREASURY U/S LEVEY DISCUSSES UNSCR SANCTIONS ON

S E C R E T SECTION 01 OF 02 ABU DHABI 000473 SIPDIS SIPDIS TREASURY FOR U/S LEVEY, A/S POBRIEN, DAS DGLASER, AND ACURTIS STATE FOR NEA/IR, NEA/ARP TREUTER, DBAGWELL STATE FOR S/CT, EB/ESC/TFS, INL/C/CP E.O. 12958: DECL: 03/13/2017 TAGS: PREL KTFN ECON PTER IR AE SUBJECT: TREASURY U/S LEVEY DISCUSSES UNSCR SANCTIONS ON IRAN AND ACTIONS AGAINST IRGC FRONT COMPANIES WITH UAE CENTRAL BANK GOVERNOR SUWEIDI REF: A. ABU DHABI 4473 ¶B. ABU DHABI 3799 ¶C. SECSTATE 26751 Classified By: Ambassador Michele J. Sison, for reasons 1.4 b and d. ¶1. (S) Summary. On March 6, 2007 Treasury U/S Stuart Levey met with UAE Central Bank Governor Sultan Nasser al-Suweidi to discuss financial measures against Iran including UNSCR 1737 and recent USG actions against Bank Sepah and Bank Saderat. U/S Levey expressed concern that increasing European pressure on Iranian institutions would mean that more Iranian business would flow to the UAE. Under UNSCR 1737 U/S Levey urged the governor to go beyond the names on the Annex and act to freeze entities owned or controlled by the head of the Aerospace Industries Organization (AIO) and the Iranian Islamic Revolutionary Guard Corps (IRGC). U/S Levey also suggested that paragraph 6 of UNSCR 1737 creates a responsibility for the Central Bank to carefully scrutinize financial flows. Governor Suweidi explained that an internal Central Bank circular would be issued to watch for and scrutinize Iranian transactions. Levey asked whether the Central Bank had observed Banks Saderat and Sepah business going to Bank Melli, and he noted concern about continued Iranian use of cover payments. Levey also highlighted six UAE companies involved in supporting Iran's WMD program. Levey informed Suweidi of possible USG action against Human Appeal International (HAI). Suweidi reported on a recent visit from the Iraqi Central Bank Governor and the UAE's willingness to provide training to the Iraqis. End Summary. ¶2. (S) On March 6, 2007 Treasury Under Secretary for Terrorism and Financial Intelligence Stuart Levey met with UAE Central Bank Governor Sultan Nasser al-Suweidi to follow up on previous discussions about applying financial pressure to Iran. U/S Levey noted that the USG took action against Bank Saderat in September and Bank Sepah in January. He also said that the passage of UNSCR 1737 had increased the pressure on Iran, and that financial institutions around the world are stepping back from Iran. He expressed concern that as the rest of the world increases pressure on Iranian institutions that those institutions would bring more of their business to the UAE. This shift would increase the vulnerability of UAE institutions to abuse. ¶3. (S) Regarding UNSCR 1737, U/S Levey urged the Governor to consider going beyond just freezing the names listed in the Annex. He noted that the head of the AIO, Ahmad Vahid Dastjerdi, and the Commander of the IRGC, Major General Yahya Rahim Safavi, were both named in the 1737 Annex but the AIO and IRGC were not. Since Dastjerdi and Safavi are on the 1737 annex because of their positions as heads of these organizations, U/S Levey encouraged Governor Suweidi to freeze entities owned or controlled by both individuals. U/S Levey then provided a list of IRGC entities as was promised in December 2006. (Ref A; see paragraph 9 for the names provided.) U/S Levey suggested that the injunction in paragraph 6 of UNSCR 1737 to deny "financial assistance, investment ... transfer of financial resources or services" also created a responsibility for the Central Bank to carefully scrutinize financial flows. Governor Suweidi replied: "I think that is clear." ¶4. (S) Governor Suweidi then explained that the Central Bank has already discussed internally the concerns about Iran and drafted a circular that will be issued among the Central Bank examination teams instructing them to watch for and scrutinize Iranian transactions. U/S Levey suggested that Bank Melli should be scrutinized to see if Banks Saderat and Sepah are moving their business there. U/S Levey also noted that "cover payments" that hide the real beneficiary or originator of a transaction are another concern. He said that the Wolfsburg group is working with countries to urge greater financial transparency particularly in the wake of the ABN Amro case (Note. The Dubai Branch of ABN Amro was implicated along with the Mumbai India Branch for systematically deleting originator and beneficiary information in order to conceal that transactions were being conducted on behalf of Iran. The UAE Central Bank has fined the Dubai Branch. End note. Ref B.) ¶5. (S) U/S Levey also passed a list of companies in the UAE involved in Iran's Weapons of Mass Destruction proliferation ABU DHABI 00000473 002.2 OF 002 and highlighted ways they are using the UAE,s financial system to make transactions (see para 10 for the list of names). Governor Suweidi requested additional information about the entities on the list. He also expressed concern that acting too aggressively against Iranian companies that are not listed on the UNSCR without sufficient information may be interpreted as an "act of war." U/S Levey agreed to pass additional information on the entities through Post. Ambassador Sison noted that the USG was also working this issue through the Counter Proliferation Task Force (CTF) led by Brigadier General Mohammed Al Qamzi. Governor Suweidi concluded by saying that the Central Bank would look at the names from a financial standpoint. Regarding HAI Designation -------------- ¶6. (S) U/S Levey informed Governor Suweidi that the USG is likely to take action against UAE-based charitable and fund-raising NGO Human Appeal International (HAI) because of continuing concerns about its support for terrorism (Ref C). Governor Suweidi replied: "We leave that decision to you." Iraqi Central Bank Governor visits UAE -------------- ¶7. (U) Governor Suweidi mentioned that the Governor of the Central Bank of Iraq had recently visited the UAE. He said that the UAE is willing to train Iraqi banking officials in the UAE. He also expressed concern about what appears to be a separate financial intelligence unit (FIU) being set up in the Kurdish provinces in Iraq. The governor observed, correctly, that there should only be one FIU in a country. ¶8. (U) Governor Suweidi noted that there was recently a report on an Arab satellite station that Moqtada Al Sadr was receiving money from Shia civic centers in the UAE. Governor Suweidi urged the Iraqi Central Bank Governor to come talk to him first before announcing something like this on satellite TV. ¶9. (U) IRGC Companies (List as of March 5, 2007): Khatam al-Anbiya Construction Headquarters (KACH) Oriental Oil Kish Ghorb-e Karbala Sepasad Ghorb Nooh Omran Sahel Sahel Consultant Engineers Hara Gharargah Sazandegi Ghaem Shahid Rajaeia Iran Marine Services Sepacom Al Ghadir Investment Company Iran Investment Company ETKA ¶10. (S/Rel UAE) List of companies supporting Iranian WMD program passed to UAEG: Medline International LLC Next Point General Trading, LLC, Mileace General Trading LLC, Al Basir General Trading Company Persinut Rost-Und Handels GMbH. Elmstone Trading LLC. ¶11. (U) U/S Levey was accompanied at the meeting with Governor Suweidi by Ambassador; Senior Advisor Amanda Curtis; Deputy Director for Iranian Affairs, Henry Wooster; Acting Director of the Treasury Office of Intelligence and Analysis Middle East Division, Michael Madon; OFAC Attache and EconChief. ¶12. (U) U/S Levey has cleared this cable. SISON