ARMENIA SLOW TO IMPLEMENT BANK SEPAH ASSET FREEZE

S E C R E T YEREVAN 000603

SIPDIS

SIPDIS

DEPT FOR EUR/CARC, NEA, AND ISN - JCHALMERS, ARUGGIERO

E.O. 12958: DECL: 05/11/2017
TAGS: EFIN PARM KNNP IR AM
SUBJECT: ARMENIA SLOW TO IMPLEMENT BANK SEPAH ASSET FREEZE

REF: A) STATE 60238 B) YEREVAN 383

Classified By: Econ Off E. Pelletreau for reasons 1.4 (b,d).


1. (S) Per ref A, on May 8 we met with Financial
Intelligence Unit (FIU) Head at the Armenian Central Bank
Nerses Yeritsyan to discuss what steps Armenia had taken to
implement UNSCR 1747 and specific actions taken against Sepah
Bank. Yeritsyan confirmed that Sepah Bank maintains
correspondent accounts with Mellat Bank in Armenia, but said
that the accounts were largely inactive. He said that in
order to provide information about specific transactions
between the two banks, he would need a written request from
FinCen. None of the transactions, however, since the passage
of UNSCR 1747 had exceeded the suspicious transaction
threshold under Armenian law of AMD 20 million (approximately
USD 55,500) and there was no evidence of asset flight.


2. (S) We told Yeritsyan that Armenia is obligated under
UNSCR 1747 to freeze any assets owned or controlled by Bank
Sepah. He responded that under current Armenian legislation,
the FIU can freeze assets of entities identified on the UN
Terrorism Finance Consolidated List, but that Sepah Bank was
not on that list and that UNSCR 1747 was about
nonproliferation not specifically terrorism finance. He
added that the Central Bank had referred the Sepah Bank
situation to the MFA for guidance on how to implement UNSCR
1747 given the limitations in Armenia's domestic legislation.



3. (S) On May 11, Embassy Charge met with Deputy Foreign
Minister Kirakossian and MFA Director of Arms Control and
Security Armen Yedigarian to underscore that UNSCR 1747
obliged Armenia to freeze Bank Sepah's assets and those of
other listed entities. We urged the MFA to immediately
instruct the FIU to freeze Bank Sepah's assets and take all
other necessary steps to fully implement UNSCRs 1747 and

1737. Kirakossian agreed to look into the matter. We will
follow up with the FIU next week and report any new
developments.
GODFREY