Identifier
Created
Classification
Origin
07MANAMA802
2007-08-22 14:51:00
SECRET
Embassy Manama
Cable title:
TREASURY U/S LEVEY CAUTIONS BAHRAIN CENTRAL BANK
how-toVZCZCXRO7212 PP RUEHDE RUEHDIR DE RUEHMK #0802/01 2341451 ZNY SSSSS ZZH P 221451Z AUG 07 FM AMEMBASSY MANAMA TO RUEHC/SECSTATE WASHDC PRIORITY 7163 RUEATRS/DEPT OF TREASURY WASHDC PRIORITY INFO RUEHZM/GULF COOPERATION COUNCIL COLLECTIVE PRIORITY RUEHEG/AMEMBASSY CAIRO PRIORITY 0965 RUEHUNV/USMISSION UNVIE VIENNA PRIORITY 0013 RUCNDT/USMISSION USUN NEW YORK PRIORITY 0100
S E C R E T SECTION 01 OF 02 MANAMA 000802
SIPDIS
SIPDIS
PASS TO ISN/CPI, T, EEB/ESC/TFS, NEA/ARP, S/CT
TREASURY FOR KHECHT AND U/S LEVEY
CAIRO FOR CSEVERENS
E.O. 12958: DECL: 08/20/2017
TAGS: KNNP PREL PARM MNUC ECON IR BA REGION
SUBJECT: TREASURY U/S LEVEY CAUTIONS BAHRAIN CENTRAL BANK
GOVERNOR ON IRANIAN FINANCIAL TACTICS
REF: MANAMA 747
Classified By: Charge D'Affaires Christopher Henzel, reasons 1.4 (b) an
d (d).
-------
SUMMARY
-------
S E C R E T SECTION 01 OF 02 MANAMA 000802
SIPDIS
SIPDIS
PASS TO ISN/CPI, T, EEB/ESC/TFS, NEA/ARP, S/CT
TREASURY FOR KHECHT AND U/S LEVEY
CAIRO FOR CSEVERENS
E.O. 12958: DECL: 08/20/2017
TAGS: KNNP PREL PARM MNUC ECON IR BA REGION
SUBJECT: TREASURY U/S LEVEY CAUTIONS BAHRAIN CENTRAL BANK
GOVERNOR ON IRANIAN FINANCIAL TACTICS
REF: MANAMA 747
Classified By: Charge D'Affaires Christopher Henzel, reasons 1.4 (b) an
d (d).
--------------
SUMMARY
--------------
1. (S) Treasury Undersecretary Stuart Levey and Policy
Advisor Kristen Hecht met August 8 with Central Bank of
Bahrain (CBB) Governor Al Miraj to emphasize U.S. concerns
that Iran may be seeking to develop means to evade the
financial sanctions imposed under UNSCRs 1737 and 1747. U/S
Levey cautioned that financial institutions in Bahrain
would need to exercise heightened scrutiny of all
Iran-related transactions to ensure that Iran could not
exploit Bahrain's financial sector. Governor Al Miraj
pledged Bahrain's complete enforcement of any UN sanctions
directed against Iran. End Summary.
--------------
GUARDING AGAINST IRANIAN ABUSE
--------------
2. (S) Treasury U/S Stuart Levey and Policy Advisor Kristen
Hecht, accompanied by the Charge and Econoff August 8
emphasized to CBB Governor Rashid Al Miraj and Deputy
Governor Anwar Khalifa Al Sadah U.S. concerns that Iran may
be seeking to develop means to evade the financial sanctions
already imposed under UNSCRs 1737 and 1747. He said that as
the UN began imposing sanctions against named state-owned
Iranian entities, the Central Bank of Iran (CBI) and Iranian
commercial banks started providing alternative financial
accommodation. For example, immediately prior to being
designated under UNSCR 1737, Bank Sepah transferred large
sums to CBI and Iranian commercial accounts. In some
instances, these funds had been successfully frozen.
Governor Al Miraj inquired whether maintaining deposits or
bank accounts for the CBI could be problematic for Bahrain.
U/S Levey urged the Governor to exercise heightened vigilance
of the CBI's accounts, and asked Al Miraj to examine these
accounts for UNSCR sanctions evasion, specifically on behalf
of Bank Sepah.
3. (C) U/S Levey acknowledged that Bahrain had thus far
cultivated a reputation as a highly respected financial
jurisdiction and had displayed regional leadership in the
field of financial regulatory enforcement. As an important
and growing financial center in the region, it was critical
for financial institutions operating in Bahrain to exercise
heightened scrutiny of all Iran-related transactions to
ensure that Iran could not successfully take advantage of
Bahrain's financial sector.
4. (C) Governor Al Miraj responded that the CBB was very much
aware of the concerns surrounding Iranian state-owned
banking institutions and the need for vigilance in
maintaining the integrity of Bahrain's financial reputation
in the face of any possible abuse, Iranian or otherwise. He
said that CBB officials had vowed in the press to ensure
complete enforcement of any UN sanctions directed against
Iran. He added that, even prior to implementation of these
sanctions, Bahrain had always been cautious of any financial
dealings with Iran. Al Miraj asked to be kept apprised of
any future developments or concerns.
--------------
OFAC SCRUTINY OF AIC
--------------
5. (C) On the Arab Investment Company (AIC),U/S Levey
informed the Governor that the AIC had been working with
Treasury's Office of Foreign Assets Control (OFAC) to review
transactions that passed through the U.S. financial system,
violating the USG's sanctions against Sudan. The current
political dynamic in the U.S. regarding Sudan could garner
significant negative attention to the AIC if OFAC imposes
sanctions on them. He pointed out that the AIC is one of the
few significant financial institutions in the world engaged
in a substantial volume of financial transactions with the
Government of Sudan.
6. (U) This message was cleared by U/S Levey's office.
MANAMA 00000802 002 OF 002
********************************************* ********
Visit Embassy Manama's Classified Website:
http://www.state.sgov.gov/p/nea/manama/
********************************************* ********
HENZEL
SIPDIS
SIPDIS
PASS TO ISN/CPI, T, EEB/ESC/TFS, NEA/ARP, S/CT
TREASURY FOR KHECHT AND U/S LEVEY
CAIRO FOR CSEVERENS
E.O. 12958: DECL: 08/20/2017
TAGS: KNNP PREL PARM MNUC ECON IR BA REGION
SUBJECT: TREASURY U/S LEVEY CAUTIONS BAHRAIN CENTRAL BANK
GOVERNOR ON IRANIAN FINANCIAL TACTICS
REF: MANAMA 747
Classified By: Charge D'Affaires Christopher Henzel, reasons 1.4 (b) an
d (d).
--------------
SUMMARY
--------------
1. (S) Treasury Undersecretary Stuart Levey and Policy
Advisor Kristen Hecht met August 8 with Central Bank of
Bahrain (CBB) Governor Al Miraj to emphasize U.S. concerns
that Iran may be seeking to develop means to evade the
financial sanctions imposed under UNSCRs 1737 and 1747. U/S
Levey cautioned that financial institutions in Bahrain
would need to exercise heightened scrutiny of all
Iran-related transactions to ensure that Iran could not
exploit Bahrain's financial sector. Governor Al Miraj
pledged Bahrain's complete enforcement of any UN sanctions
directed against Iran. End Summary.
--------------
GUARDING AGAINST IRANIAN ABUSE
--------------
2. (S) Treasury U/S Stuart Levey and Policy Advisor Kristen
Hecht, accompanied by the Charge and Econoff August 8
emphasized to CBB Governor Rashid Al Miraj and Deputy
Governor Anwar Khalifa Al Sadah U.S. concerns that Iran may
be seeking to develop means to evade the financial sanctions
already imposed under UNSCRs 1737 and 1747. He said that as
the UN began imposing sanctions against named state-owned
Iranian entities, the Central Bank of Iran (CBI) and Iranian
commercial banks started providing alternative financial
accommodation. For example, immediately prior to being
designated under UNSCR 1737, Bank Sepah transferred large
sums to CBI and Iranian commercial accounts. In some
instances, these funds had been successfully frozen.
Governor Al Miraj inquired whether maintaining deposits or
bank accounts for the CBI could be problematic for Bahrain.
U/S Levey urged the Governor to exercise heightened vigilance
of the CBI's accounts, and asked Al Miraj to examine these
accounts for UNSCR sanctions evasion, specifically on behalf
of Bank Sepah.
3. (C) U/S Levey acknowledged that Bahrain had thus far
cultivated a reputation as a highly respected financial
jurisdiction and had displayed regional leadership in the
field of financial regulatory enforcement. As an important
and growing financial center in the region, it was critical
for financial institutions operating in Bahrain to exercise
heightened scrutiny of all Iran-related transactions to
ensure that Iran could not successfully take advantage of
Bahrain's financial sector.
4. (C) Governor Al Miraj responded that the CBB was very much
aware of the concerns surrounding Iranian state-owned
banking institutions and the need for vigilance in
maintaining the integrity of Bahrain's financial reputation
in the face of any possible abuse, Iranian or otherwise. He
said that CBB officials had vowed in the press to ensure
complete enforcement of any UN sanctions directed against
Iran. He added that, even prior to implementation of these
sanctions, Bahrain had always been cautious of any financial
dealings with Iran. Al Miraj asked to be kept apprised of
any future developments or concerns.
--------------
OFAC SCRUTINY OF AIC
--------------
5. (C) On the Arab Investment Company (AIC),U/S Levey
informed the Governor that the AIC had been working with
Treasury's Office of Foreign Assets Control (OFAC) to review
transactions that passed through the U.S. financial system,
violating the USG's sanctions against Sudan. The current
political dynamic in the U.S. regarding Sudan could garner
significant negative attention to the AIC if OFAC imposes
sanctions on them. He pointed out that the AIC is one of the
few significant financial institutions in the world engaged
in a substantial volume of financial transactions with the
Government of Sudan.
6. (U) This message was cleared by U/S Levey's office.
MANAMA 00000802 002 OF 002
********************************************* ********
Visit Embassy Manama's Classified Website:
http://www.state.sgov.gov/p/nea/manama/
********************************************* ********
HENZEL