IRAN: SANCTIONS IMPLEMENTATION DECREE STUCK IN

C O N F I D E N T I A L MOSCOW 001535

SIPDIS

SIPDIS

TREASURY FOR A/S O'BRIEN/EDDY

E.O. 12958: DECL: 03/31/2017
TAGS: PREL PARM EFIN ETTC IR RS
SUBJECT: IRAN: SANCTIONS IMPLEMENTATION DECREE STUCK IN
INTERAGENCY PROCESS

REF: A. STATE 38553

B. STATE 377801

C. MOSCOW 1414

D. MOSCOW 1262

E. MOSCOW 1249

F. MOSCOW 754

Classified By: Ambassador William J. Burns. Reasons: 1.4(B/D).


1. (C) We raised implementation of UNSCR 1747 Sanctions
against Iran with Petr Illichev, Senior Counselor of the
MFA's International Organizations Department. Illichev
reconfirmed that Russia intended to move ahead to comply with
the provisions of UNSCR 1747 using existing legal
authorities, but acknowledged that a formal presidential
decree implementing the resolution would await resolution in
the GOR interagency process of questions about GOR legal
authority.


2. (C) Illichev (please protect) explained that the draft
decree to implement the earlier Iran sanctions resolution
(UNSCR 1737) remained stuck in the interagency process. (See
refs c and d). There was an ongoing dispute between the
Foreign Ministry and the Central Bank over whether the law on
special economic measures enacted on January 10 provided the
GOR with the legal authority to freeze proliferation-related
assets. MFA favored a broader interpretation and had
suggested that existing Russian legislation making UN
Security Council resolutions legally binding was sufficient
to provide the necessary legal authority to proceed against
suspect accounts. According to Illichev, the Central Bank
was digging in its heels, arguing that additional legislation
the Duma would need to enact to address the issue of
proliferation-related asset seizures. He speculated that the
Central Bank was concerned with the possibility that Russian
firms that do legitimate business with Iran might have
problems with their accounts and could bring legal actions
against the Central Bank (arguing that the Bank lacked legal
authority to take such steps.)


3. (C) As reported ref (e),Central Bank officials told
visiting Treasury Assistant Secretary O'Brien that current
anti-money laundering and counter-terrorism financing laws do
not furnish a basis for freezing financial assets. A
presidential decree enacting UNSCR 1737, according to the
Central Bank, would not give sufficient authority to freeze
assets.


4. (C) Illichev provided a separate update on the
presidential decree implementing the North Korean sanctions
resolution (UNSCR 1718). The draft decree had moved out of
the interagency process and was with the Prime Minister's
office being reviewed by its lawyers. When pressed to
explain the difference in treatment between the resolutions,
Illichev candidly admitted that in addition to the timing
factor (UNSCR 1718 was adopted in October 2006),the Central
Bank was not as concerned about possible legal actions
against it because of the low level of business deals with
the DPRK compared to Iran. He would not speculate on when
Putin might sign any of the decrees, but said it was likely
that there would be a single decree on Iran incorporating the
provisions of UNSCR 1737 and 1747.
BURNS