CARETAKER STATUS PRECLUDES AUSTRALIA FROM ACTING

C O N F I D E N T I A L CANBERRA 001581 SIPDIS NOFORN SIPDIS STATE FOR ISN/CPI A.RUGGIERO, EAP/ANP AND EB E.O. 12958: DECL: 10/29/2017 TAGS: KNNP PTER PREL PARM EFIN IR AS SUBJECT: CARETAKER STATUS PRECLUDES AUSTRALIA FROM ACTING ON IRANIAN DESIGNATIONS AND FATF STEPS REF: A. STATE 148605 ¶B. STATE 149648 ¶C. CROWLEY-RUGGIERO E-MAIL OF 10/25/07 (NOTAL) ¶D. RUGGIERO-CROWLEY E-MAIL OF 10/27/07 (NOTAL) Classified By: Political Counselor James F. Cole for reasons 1.4 (b),(d ). ¶1. (U) We presented Ref A and B demarches to Paul Foley, Assistant Secretary for the Middle East and Africa, Department of Foreign Affairs and Trade (DFAT) on October 29. (Australia had been inadvertently omitted as an action addressee on Ref A, per Ref D, thus the delayed delivery.) Foley, who was joined by Octavia Borthwick, Director of the Middle East Section, and Michael Opie, Executive Officer for Iran, said the Australian Embassy in Washington also had sent him a comprehensive report on the Rice-Paulson announcement about the designations, and the actions of the Financial Action Task Force. He undertook to share our points with his colleagues working on counterproliferation and counterterrorism. ¶2. (SBU) In prelimary comments, Foley said any Australian action on the U.S. designation of Iranian entities and persons, including approaches to Australian government financial institutions, would be a matter for the incoming government following Australia's federal election scheduled for November 24. (Note: The Australian government has been in caretaker mode since the dissolution of Parliament on October 17, and cannot take any policy decisions or actions that would bind the next government. End Note.) ¶3. (C) Foley said the GOA supported further action in the context of the United Nations Security Council and international efforts to pressure Iran to curb its nuclear ambitions. For any action against Iran to be effective outside the UN Security Council, the EU and Japan would need to be involved. He was heartened that the EU was talking seriously about the need for further actions, either bilaterally or through the UNSC. ¶4. (C) In preparing the Iran brief for the incoming Australian government, Foley said DFAT would draw attention to the prospect that Iran might retaliate against the latest strictures. In that event, Australia would be concerned about the safety of its Embassy staff in Tehran. To prevent the likelihood of retaliation and to effectively counter it, it would be best to have as large a group as possible on board with the U.S. measures, he advised. ¶5. (C) Borthwick raised some practical considerations with shutting down transactions with Iranian banks, namely, how to facilitate other desired exchanges with Iran, such as student exchanges, in which remittances would need to pass through Iranian financial institutions. Another question dealt with the mechanics of paying Australian Embassy local staff in Tehran. ¶6. (SBU) We will report further comments, including reaction from the Department of the Treasury, septel. MCCALLUM