ITALIAN OFFICIALS AGREE TO MONITOR NEW IRANIAN

S E C R E T ROME 002095 SIPDIS SIPDIS E.O. 12958: DECL: 09/26/2017 TAGS: PREL EFIN ECON UNSC KNNP PTER IR IT SUBJECT: ITALIAN OFFICIALS AGREE TO MONITOR NEW IRANIAN BANK ACCOUNTS, DISCUSS FATF ACTION AND DELISTING REF: A. SECSTATE 132904 ¶B. ROME 2032 ¶C. SECSTATE 125081 Classified By: Econ Counselor William R. Meara for reasons 1.4 (b. and d.) ¶1. (S) Summary: A senior Italian Ministry of Finance official agreed to carry out increased vigilance over new Iranian Central Bank (Bank Markazi) accounts in Italy (Ref A). The official told us that he has not met with the Iranian Embassy in Washington to discuss possible Financial Action Task Force (FATF) sanctions. The Italians said they will likely support the removal of Nasreddin from the 1267 (al-Qaida/Taliban) Consolidated Sanctions list (Ref C). End summary. ¶2. (S) On September 26, Economic Counselor delivered to Giuseppe Maresca, Director General of the Ministry of Finance's Office for the Prevention of Financial Crimes the Ref A demarche regarding newly opened Iranian Central Bank (Bank Markazi) accounts at UBAE Arab Italian Bank. Stating that he is fully committed to following UNSC sanctions resolutions, Maresca agreed to carry out the requested increased vigilance of the accounts. Maresca pointed to instruments used to monitor Bank Sepa as an example of Italian compliance with UN resolutions -- he said inspectors were placed in Bank Sepa and, if necessary, will be placed in the UBAE Arab Italian bank. ¶3. (C) Maresca explained that while Italy has commercial interests in Iran, these interests do not affect Italy's foreign policy objective of ensuring that Iran does not procure WMD related material. Marseca said that Italy would comply with its obligations under UN resolutions. ¶4. (C) ECONCOUNS asked if Maresca had met with the Italian Ambassador in Rome about looming FATF actions against the Iranian financial system. (U.S. Treasury officials had been concerned that such a meeting might turn into a coaching session on how Iran might avoid FATF action, see Ref B.) Maresca said that he had not met with the Iranians in Rome. (Comment: While Marseca said he has not met with the Iranian Ambassador in Rome, we cannot be sure that the kind of coaching feared by U.S. Treasury hasn't taken place via other channels.) ¶5. (S) Separately, Poloff delivered Ref A points to PM Prodi's Diplomatic Advisor on the Middle East, Marco Carnelos, who had just returned from Tehran. Carnelos said he had not heard of Bank Markazi, but said he would take note. He added that while he does not generally believe sanctions are the most effective diplomatic tool, he thinks banking sanctions can really work when applied across the board. With respect to Iran he voiced concern that Dubai is becoming Iran's city of choice for banking and that unless the sanctions are applied in Dubai, U.S. and European actions will have little impact. ¶6. (C) Regarding the delisting of Italian national Nasreddin from the 1267 Consolidated List (Ref C),Maresca said the Italians have a special tribunal reviewing the case. He predicted that a magistrate will make a decision next week on delisting, but he believed the case was very weak and that the Italians were likely to support delisting. SPOGLI