Identifier
Created
Classification
Origin
07ROME409
2007-03-01 16:58:00
CONFIDENTIAL
Embassy Rome
Cable title:
IRAN: BANK SEPAH ROME STILL OPEN
how-toVZCZCXRO2182 OO RUEHBC RUEHDE RUEHDIR RUEHKUK DE RUEHRO #0409/01 0601658 ZNY CCCCC ZZH O 011658Z MAR 07 FM AMEMBASSY ROME TO RUEHC/SECSTATE WASHDC IMMEDIATE 7310 RUEATRS/DEPT OF TREASURY WASHDC IMMEDIATE INFO RUCNIRA/IRAN COLLECTIVE PRIORITY RUEHMIL/AMCONSUL MILAN PRIORITY 8418 RUEHNP/AMCONSUL NAPLES PRIORITY 2367 RUEHFL/AMCONSUL FLORENCE PRIORITY 2218 RUEHBS/USEU BRUSSELS PRIORITY 4491 RUEAIIA/CIA WASHDC PRIORITY RHEHNSC/NSC WASHDC PRIORITY
C O N F I D E N T I A L SECTION 01 OF 02 ROME 000409
SIPDIS
SIPDIS
DEPT OF TREASURY FOR U/S LEVEY
STATE FOR EB A/S DAN SULLIVAN; EUR/WE KATHLEEN ALLEGRONE,
ANDREW YOUNG, AND KEVIN OPSTRUP
E.O. 12958: DECL: 03/01/2017
TAGS: ECON EFIN PGOV IR IT
SUBJECT: IRAN: BANK SEPAH ROME STILL OPEN
REF: A. 06 ROME 3378
B. ROME 95
ROME 00000409 001.2 OF 002
Classified By: Economic Minister Counselor Tom Delare for
reasons 1.4 (b) and (d).
C O N F I D E N T I A L SECTION 01 OF 02 ROME 000409
SIPDIS
SIPDIS
DEPT OF TREASURY FOR U/S LEVEY
STATE FOR EB A/S DAN SULLIVAN; EUR/WE KATHLEEN ALLEGRONE,
ANDREW YOUNG, AND KEVIN OPSTRUP
E.O. 12958: DECL: 03/01/2017
TAGS: ECON EFIN PGOV IR IT
SUBJECT: IRAN: BANK SEPAH ROME STILL OPEN
REF: A. 06 ROME 3378
B. ROME 95
ROME 00000409 001.2 OF 002
Classified By: Economic Minister Counselor Tom Delare for
reasons 1.4 (b) and (d).
1. (C) Summary: EcMin discussed the status of Iranian Bank
Sepah's Rome branch with Bank of Italy (BOI) officials March
1. Bank Sepah's Rome branch will remain open, but it pledged
to the BOI to cut all ties with Aerospace Industries
Organization (AIO) and all individuals and entities
associated with AIO. The BOI officials reported that Bank
Sepah Rome will put in place internal controls to ensure
compliance with banking law, generate more commercial
activity and report regularly to the BOI. The officials
could not say when the BOI would next inspect Bank Sepah
Rome, but stated that there was "quite a change of attitude"
by Bank Sepah officials since UNSCR 1737. When EcMin
expressed doubt and stated that Sepah Rome would likely stay
open to assist weapon proliferators again, the officials
claimed that the BOI had so far done everything within its
regulatory power to deal with Bank Sepah. End summary.
BANK SEPAH ROME BRANCH STILL OPEN FOR BUSINESS
-------------- --
2. (C) BOI Director General Fabrizio Saccomanni and former
Banking Supervision Chief Giovanni Carosio (now a BOI Board
Member) reported to EcMin March 1 that Iranian Bank Sepah's
Rome branch is still open. Carosio stated that since
Treasury U/S Levey's December 21, 2006 visit (ref A),BOI
officials met with a Bank Sepah board member to discuss the
Rome branch's operations. The BOI requested that Bank Sepah
Rome cut all ties to individuals and entities linked to AIO
(ref B). Carosio reported that Bank Sepah Rome agreed and
also pledged that it would generate new commercial business
in Italy.
3. (C) Bank Sepah Rome is to report regularly to the BOI to
verify that new internal controls are in place to ensure due
diligence and compliance with Italian banking law. Sepah has
hired a former BOI Banking Supervision employee to work as a
consultant to ensure the controls are put into place. EcMin
challenged this as being potentially bad news, since the
consultant could assist Bank Sepah in working around Italian
law, rather than complying with it. Our contacts demurred
from that sceptical view and thought that Sepah had gotten
the message to put their operations in order. EcMin pressed
Carosio and Saccomanni to say when the next audit of Bank
Sepah's Rome branch might occur. Neither gave a specific
date; instead, they stated that the BOI would continue its
focus on the bank branch and put any future inspection ahead
of normal rotation in the queue.
4. (C) Saccomanni pointed out that there had been "quite a
change of attitude" by Bank Sepah officials since UNSCR 1737.
Whereas before, the bank was reluctant to do anything the
BOI requested, Sepah officials were now promising to work
with the BOI to justify having a presence in Italy. As for
Italian banks, Saccomanni reported that they were even less
willing to engage in any business with Bank Sepah since a
January BOI circular note on UNSCR 1737.
COMMENT
--------------
5. (C) When EcMin pushed back on BOI optimism that Bank
Sepah Rome would abide by its word -- stating that Bank Sepah
Rome was likely remaining open to assist AIO or other weapon
proliferators again -- Saccomanni claimed that the BOI had
done everything within its regulatory power to deal with Bank
Sepah. Anything else, he argued, was a political question
outside of BOI's mandate. We will continue to press our GOI
counterparts for more information regarding Bank Sepah Rome's
activities and its closure. However, we believe it will be
essential to augment our approaches with further high-level
USG pressure in Rome and Brussels to drive home to the
Italians the dangers of allowing Bank Sepah to continue to
operate. End comment.
ROME 00000409 002.2 OF 002
SPOGLI
SIPDIS
SIPDIS
DEPT OF TREASURY FOR U/S LEVEY
STATE FOR EB A/S DAN SULLIVAN; EUR/WE KATHLEEN ALLEGRONE,
ANDREW YOUNG, AND KEVIN OPSTRUP
E.O. 12958: DECL: 03/01/2017
TAGS: ECON EFIN PGOV IR IT
SUBJECT: IRAN: BANK SEPAH ROME STILL OPEN
REF: A. 06 ROME 3378
B. ROME 95
ROME 00000409 001.2 OF 002
Classified By: Economic Minister Counselor Tom Delare for
reasons 1.4 (b) and (d).
1. (C) Summary: EcMin discussed the status of Iranian Bank
Sepah's Rome branch with Bank of Italy (BOI) officials March
1. Bank Sepah's Rome branch will remain open, but it pledged
to the BOI to cut all ties with Aerospace Industries
Organization (AIO) and all individuals and entities
associated with AIO. The BOI officials reported that Bank
Sepah Rome will put in place internal controls to ensure
compliance with banking law, generate more commercial
activity and report regularly to the BOI. The officials
could not say when the BOI would next inspect Bank Sepah
Rome, but stated that there was "quite a change of attitude"
by Bank Sepah officials since UNSCR 1737. When EcMin
expressed doubt and stated that Sepah Rome would likely stay
open to assist weapon proliferators again, the officials
claimed that the BOI had so far done everything within its
regulatory power to deal with Bank Sepah. End summary.
BANK SEPAH ROME BRANCH STILL OPEN FOR BUSINESS
-------------- --
2. (C) BOI Director General Fabrizio Saccomanni and former
Banking Supervision Chief Giovanni Carosio (now a BOI Board
Member) reported to EcMin March 1 that Iranian Bank Sepah's
Rome branch is still open. Carosio stated that since
Treasury U/S Levey's December 21, 2006 visit (ref A),BOI
officials met with a Bank Sepah board member to discuss the
Rome branch's operations. The BOI requested that Bank Sepah
Rome cut all ties to individuals and entities linked to AIO
(ref B). Carosio reported that Bank Sepah Rome agreed and
also pledged that it would generate new commercial business
in Italy.
3. (C) Bank Sepah Rome is to report regularly to the BOI to
verify that new internal controls are in place to ensure due
diligence and compliance with Italian banking law. Sepah has
hired a former BOI Banking Supervision employee to work as a
consultant to ensure the controls are put into place. EcMin
challenged this as being potentially bad news, since the
consultant could assist Bank Sepah in working around Italian
law, rather than complying with it. Our contacts demurred
from that sceptical view and thought that Sepah had gotten
the message to put their operations in order. EcMin pressed
Carosio and Saccomanni to say when the next audit of Bank
Sepah's Rome branch might occur. Neither gave a specific
date; instead, they stated that the BOI would continue its
focus on the bank branch and put any future inspection ahead
of normal rotation in the queue.
4. (C) Saccomanni pointed out that there had been "quite a
change of attitude" by Bank Sepah officials since UNSCR 1737.
Whereas before, the bank was reluctant to do anything the
BOI requested, Sepah officials were now promising to work
with the BOI to justify having a presence in Italy. As for
Italian banks, Saccomanni reported that they were even less
willing to engage in any business with Bank Sepah since a
January BOI circular note on UNSCR 1737.
COMMENT
--------------
5. (C) When EcMin pushed back on BOI optimism that Bank
Sepah Rome would abide by its word -- stating that Bank Sepah
Rome was likely remaining open to assist AIO or other weapon
proliferators again -- Saccomanni claimed that the BOI had
done everything within its regulatory power to deal with Bank
Sepah. Anything else, he argued, was a political question
outside of BOI's mandate. We will continue to press our GOI
counterparts for more information regarding Bank Sepah Rome's
activities and its closure. However, we believe it will be
essential to augment our approaches with further high-level
USG pressure in Rome and Brussels to drive home to the
Italians the dangers of allowing Bank Sepah to continue to
operate. End comment.
ROME 00000409 002.2 OF 002
SPOGLI