DEMARCHE DELIVERED: FATF STATEMENT AND GUIDANCE ON

C O N F I D E N T I A L CARACAS 002203 SIPDIS SIPDIS FOR T ISN/CPI FOR MNEW HQ SOUTHCOM ALSO FOR POLAD TREASURY FOR MMALLOY AND LARCHIN TREASURY/FINCEN FOR MPASTORA NSC FOR JCARDENAS AND JSHRIER COMMERCE FOR 4431/MAC/WH/MCAMERON E.O. 12958: DECL: 11/14/2017 TAGS: PARM PREL MNUC ECON EFIN VE SUBJECT: DEMARCHE DELIVERED: FATF STATEMENT AND GUIDANCE ON IRAN REF: A. STATE 149648 ¶B. CARACAS 1867 ¶C. BOWEN-PASTORA E-MAIL 11/15 Classified By: Economic Counselor Andrew N. Bowen for reasons 1.4 (b) a nd (d). ¶1. (C) Emboffs delivered Ref A demarche on the recent Financial Action Task Force (FATF) decisions concerning Iran to Yaneth Arocha, Director of the MFA's Office of North American Affairs, and, separately, to Francisco Canela, Director of the Financial Intelligence Unit (UNIF) at the Superintendecy of Banks (SUDEBAN) in the Ministry of Finance. In reply, Arocha noted the BRV,s long-standing position that Iran has a right to develop a peaceful nuclear energy program and that Iran,s nuclear program was not a proper matter for the UN Security Council to discuss. She said that she would raise the content of the demarche with her counterpart in the MFA's Office of Multilateral Affairs. ¶2. (C) Canela emphasized that Venezuela had laws and regulations to counter money laundering and terrorist financing which all financial institutions had to comply with. He said that the Iranian bank authorized by SUDEBAN to operate in Venezuela (ref B) had not yet opened because it had yet to complete all the required paperwork. Canela assured econoffs that the bank, should it open, would be subject to all of the BRV's laws and regulations. He noted that Venezuela was a member of the Egmont group and would not want to jeopardize its standing by not following its principles. Finally, Canela stressed that UNIF's work was not political ("it knows no flags") and that UNIF would welcome any opportunities for anti-money laundering training that the USG might be able to provide. Econoffs emphasized the heightened risks associated with transactions related to Iran, noting that the Treasury Department had issued a specific alert to that effect. Canela observed that UNIF was aware that transactions "related to countries that are sources of terrorism such as Palestine and Iraq" required a heightened level of due diligence. He added separately that UNIF hoped to sign a "bilateral cooperation" MOU with FINCEN in the next 15 days (ref C). ¶3. (C) Comment: Arocha's and Canela's replies were what we expected given Chavez' determination to develop a strategic relationship with Iran. Arocha spoke from a more political perspective, reiterating the BRV's policy on Iran's nuclear program. Canela spoke from a technical perspective, attempting to reassure econoffs that the BRV's laws and regulations against money laundering and terrorism finance were comprehensive and would be implemented objectively and in accordance with its international obligations. Despite repeated mention by econoffs of the heightened risks posed by Iran, however, Canela did not show any inclination to develop special guidance on Iran-related transactions. End comment. DUDDY