(S) GERMAN ASSURANCES REGARDING BUNDESBANK'S

S E C R E T BERLIN 001159 SIPDIS STATE FOR ISN, T, NEA, IO, AND EUR/AGS SIPDIS E.O. 12958: DECL: 06/08/2017 TAGS: PARM IR GM SUBJECT: (S) GERMAN ASSURANCES REGARDING BUNDESBANK'S TRANSFER OF FUNDS TO BANK SEPAH FRANKFURT REF: STATE 78136 Classified By: Minister-Counselor for Economic Affairs Robert F. Cekuta , for reasons 1.4 (b) and (d). ¶1. (S) EMIN deployed the demarche points in ref with Michael Witter, MFA Deputy Director General for Economic Affairs, June 7. He and Global Affairs Officer met with Witter and MFA Director for Financial Policy Ingo Karsten June 8 to follow-up on the previous day's discussion. ¶2. (S) Witter said the MFA had looked into the situation following discussion with EMIN and the meeting between the Treasury and the German DCM in Washington. The money had been transferred to the Bundesbank for eventual transfer to Bank Sepah Frankfurt in the time before the EU had passed its Regulation to implement UNSCR 1737. Those funds are now blocked and Witter repeatedly stated the Bundesbank controls them. Bank Sepah Frankfurt could ask the Bundesbank to allow the funds to be used to cover certain costs to prevent the German branch of the bank from failing to cover basic operating expenses or to make payments due under contracts entered into prior to the effective date of the UNSCR 1737 sanctions. Since the funds are blocked and given the requirements of the UN Security Council Resolution, Witter continued, if the Bundesbank were to find that it would be necessary/appropriate to allow funds for Bank Sepah Frankfurt's basic expenses to be transferred, the German Government would need first to notify the UN Sanctions Committee in accordance with UNSCR 1737 stipulations. TIMKEN JR