UPDATE ON GERMAN MEASURES TO HALT BANK SEPAH

S E C R E T BERLIN 000672

SIPDIS

SIPDIS
DEPARTMENT FOR ISN, EB, EUR AND NEA

E.O. 12958: DECL: 03/30/2017
TAGS: EFIN KNNP PARM PREL IR GM
SUBJECT: UPDATE ON GERMAN MEASURES TO HALT BANK SEPAH
BANKING ACTIVITY

REF: A. STATE 40440


B. BERLIN 644

C. STATE 38553

D. 3/29 WOOSTER E-MAIL

Classified By: EMIN Robert F. Cekuta for reasons 1.4 (b) and (d)


1. (S) Global Affairs Counselor met March 30 with Karl
Wendling, Deputy Director General in the German Economic
Ministry's Directorate for Foreign Trade Law and Export
Control, to review measures Germany has taken to halt banking
activity by Bank Sepah and Bank Sepah International (Ref A).
Wendling indicated the German Government is aware of the
financial institutions located in Germany that may have had
dealings with Bank Sepah, and that German authorities are
confident that neither Bank Sepah nor Bank Sepah
International will be able to transfer funds or assets to any
of these institutions. Wendling noted that on March 28 the
German Government promulgated the national directive (Ref B)
to freeze the assets of Bank Sepah and the other entities
listed in UNSCR 1747. The directive (a German-language copy
of which was passed to us) expressly prohibits financial
transactions of any type and requires all financial
institutions operating in Germany to provide immediately any
and all information in their possession concerning accounts
held or financial transactions carried out or contemplated
with any of the listed entities, including Bank Sepah.


2. (S) Wendling added, in addition to enacting this
directive, the German Government has taken the following
additional steps: (1) a representative of the Bundesbank has
been posted to the Frankfurt offices of Bank Sepah and tasked
with monitoring the bank's operations to ensure that no
transactions are carried out; (2) the German Federal
Financial Supervisory Authority (BaFin) is assembling data
electronically on all recent transactions involving Bank
Sepah and other financial institutions known or believed to
have had dealings with Bank Sepah; and (3) BaFin is also
evaluating written records of the same set of transactions.
Wendling said his office will ultimately receive the results
from BaFin, but that the work had not yet been completed.


3. (S) Per Ref D, GA Counselor also noted our concern that
Bank Sepah might be using Bank Markazi to move funds in an
attempt to evade UN sanctions. Wendling said the German
Government had not seen any indication of such activity and,
in any event, is confident that the measures undertaken to
freeze Bank Sepah's accounts are sufficient to prevent the
Frankfurt branch of Bank Sepah from making such transfers.
KOENIG