AUSTRIA: GOA URGES BANKS TO CLOSE SEPAH ACCOUNTS

S E C R E T VIENNA 000882 SIPDIS SIPDIS E.O. 12958: DECL: 04/02/2017 TAGS: EFIN KNNP PARM AU IR SUBJECT: AUSTRIA: GOA URGES BANKS TO CLOSE SEPAH ACCOUNTS REF: A) STATE 40440 B) VIENNA 856 C)VIENNA 853 Classified By: Economic-Political Counselor Gregory E. Phillips for reasons 1.4 (b) and (d). ¶1. (S) EconUnit Chief conveyed ref A points on March 30 to Birgit Ertl, Assistant to the Ministry of Finance's Director General, and to Elisabeth Ottawa, the MoF's Terrorist Finance Coordinator. In a separate meeting (ref C) on March 30 with the MFA's Director for the Middle East and Africa, EconPol Counselor had urged the GoA to implement UNSCR 1747 quickly. During an April 2 follow-up meeting with EconUnit Chief, Ertl said she had contacted Bank-Austria Creditanstalt (BA/CA) and Raiffeisen Zentralbank (RZB) immediately on March 30 to inquire about any Bank Sepah accounts and to urge the banks to close any accounts immediately. Both BA/CA and RZB reiterated what they had told visiting Treasury A/S O'Brien on March 14 (ref B): neither bank would take on any new Iranian business, but they would not freeze any Sepah Euro accounts from existing business. According to Ertl, the objective of both banks is to "wind down their business with Sepah as soon as possible." ¶2. (S) EconUnit Chief urged the GoA to freeze or close the accounts immediately, in view of the fact that UNSCR 1747 imposed sanctions on Sepah. Ottawa noted that the GoA would have to await the implementation of UNSCR 1747 via an EU Regulation, before it could take legal action against Sepah. When EconUnit Chief inquired about domestic authority to freeze such accounts, Ertl said that the domestic process to freeze an account in such a case would be as lengthy as the EU process. McCaw