INDIA PREFERS QUIET APPROACH ON FATF STATEMENT AND

UNCLAS NEW DELHI 004902 SIPDIS SIPDIS STATE FOR SCA/INS AND SCA/RA STATE FOR NEA/IR STATE FOR ISN/CPI MICHELLE NEW STATE FOR EEB/ESC/TFS JAY JALLORINA AND LYNNE LAMBERT STATE FOR T PASS TO TREASURY/TFFC LADAN ARCHIN PASS TO TREASURY ANDY BAUKOL, PAUL DERGARABEDIAN, JEAN PAUL DUVIVIER E.O. 12958: N/A TAGS: PARM PREL MNUC ECON KTFN EFIN PTER ETTC IN SUBJECT: INDIA PREFERS QUIET APPROACH ON FATF STATEMENT AND GUIDANCE ON IRAN REF: A. SECSTATE 149648 ¶B. NEW DELHI 4515 ¶C. NEW DELHI 3616 ¶1. (SBU) Econoff and Poloff delivered the demarche and background paper (reftel A) to the Department of Economic Affairs (DEA) Director Anand Bajaj at the Ministry of Finance on November 7 and to Joint Secretary (Americas) Gaitri Kumar at the Ministry of External Affairs on November 2, respectively. Poloff stressed to Kumar the threats that Iran poses to the international financial system in terms of money laundering, terrorist financing, and WMD proliferation. Kumar agreed to follow up on FATF actions with relevant ministries. ¶2. (SBU) Bajaj, who participated in the three person GOI delegation to the October FATF Plenary led by Finance Joint Secretary (Revenue) Mukul Singhal, recalled well the working SIPDIS group on Iran. He participated in the FATF discussions that concluded in taking distinct steps towards addressing concerns about Iran's AML/CFT regime. Bajaj was careful not to provide any explicit support towards taking immediate actions against Iranian financial institutions, saying that any policy concerning Iran is "politically sensitive." Instead, he suggested a "quiet approach" and "keeping (this issue) low key." Bajaj explained that since DEA takes the lead on FATF and terrorism financing issues, the Ministry of Finance will advise other GOI ministries to take appropriate "FATF mandated" actions to address Iran financial concerns. ¶3. (SBU) Bajaj further asked if FATF has issued an official communique on final outcomes, agreed minutes, or necessary actions to take in regards to concerns about Iranian AML/CFT regime. Econoff reviewed the FATF website with Bajaj and pointed to the last plenary's summary documents and also promised to follow up with Washington for any additional materials outlining official FATF announcements on Iran. ¶4. (SBU) He also noted that India, which is currently a FATF observer, is eager to join FATF as a full member and wants to take appropriate actions to demonstrate its commitment to the international body. Bajaj then commented on how some countries who are partially compliant to FATF's core recommendations are still admitted into the organization for "geopolitical reasons," referring to China, but that India is "proactively" implementing appropriate policies to meet FATF mandated benchmarks. Bajaj, along with Additional Director Vivek Wadekar of the Financial Intelligence Unit (FIU),plans to attend the next FATF meeting in late November where he will make a "thorough" presentation on India's progress on meeting FATF's six core recommendations. Econoff asked for an advance copy of the presentation to share with Treasury colleagues and other USG representatives to the FATF meeting. WHITE