DEMARCHE ON DESIGNATION OF IRANIAN ENTITIES

C O N F I D E N T I A L BEIJING 006863 SIPDIS SIPDIS DEPT FOR ISN, T, TREAS, EAP, EUR, NEA E.O. 12958: DECL: 10/26/2027 TAGS: PREL PARM MNUC EFIN KNNP CH IR SUBJECT: DEMARCHE ON DESIGNATION OF IRANIAN ENTITIES DELIVERED; PRC DOUBTFUL SANCTIONS CAN WORK REF: STATE 148605 Classified By: Deputy Chief of Mission Daniel Piccuta, for reasons 1.4 (b, d). ¶1. (SBU) Per reftel request, Embassy on October 25 notified MFA in advance of the designation of Iranian entities. ¶2. (C) DCM Daniel Piccuta emphasized to MFA North American and Oceanian Affairs Department Director General Liu Jieyi October 26 that the new measures announced by Secretaries Rice and Paulson October 25 represent a furtherance of implementation of Iran's obligations under UNSC resolutions. He noted that we are asking the EU to take similar measures, and urged China to consider doing so as well. ¶3. (C) In offering his initial reaction to the new designations, Liu responded that China does not believe that sanctions will be effective in persuading Iran to negotiate a deal over its nuclear activities. Liu stressed that China has "legitimate commercial interests" in Iran, particularly in the energy sector, and these should not be compromised by sanctions, "unilateral or multilateral." Liu added that such moves can also impact the "humanitarian situation" in Iran. He reiterated that China and the United States share the same strategic objective on Iran's nuclear ambitions, adding that he appreciated our efforts to ensure that China was informed of the measures in a timely manner. He also noted that he believes the United States and China have been cooperating very effectively on the issue, although there are sometimes differences in "nuances, specific approaches and timing." ¶3. (C) The DCM urged the PRC to instruct MFA Arms Control and Disarmament Department Director General Zhang Yan to engage actively in the upcoming P5-plus-1 talks on Iran in London. Randt