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