DEPUTY GOVERNOR OF CENTRAL BANK ON BANK SADERAT

S E C R E T SECTION 01 OF 02 ATHENS 000819 SIPDIS TREASURY/FINCEN FOR ADAM THURSTON & DAVID TEITELBAUM DEPARTMENT OF JUSTICE FOR ROBERT STAPLETON E.O. 12958: DECL: 06/10/2018 TAGS: ECON EFIN ELAB KNNP MNUC PGOV GR SUBJECT: DEPUTY GOVERNOR OF CENTRAL BANK ON BANK SADERAT AND THE GREEK FIU REF: A. SECSTATE 43492 ¶B. ATHENS 623 ¶C. ATHENS 394 Classified By: Economic Counselor Clark Price for Reasons 1.4(b) and (d ) -------------- Summary -------------- ¶1. (SE) In a meeting on June 9, Deputy Governor of the Bank of Greece (BG) Panayotis-Aristidis Thomopoulos told the Acting Deputy Economic Counselor that the Bank of Greece had just conducted a detailed control operation against Bank Saderat,s Athens branch as a follow-up to reftels A and B. Thomopoulos indicated that they found nothing out of the ordinary in Bank Saderat,s transactions, but said that the Bank of Greece would continue to conduct periodic controls against the bank. Thomopoulos also candidly expressed his frustration with the Ministry of Finance,s draft money-laundering/terrorist finance law to be submitted to Parliament sometime this month, stating that the law should have been sent to Parliament in May in order to be passed prior to the upcoming June FATF meeting. In his opinion, the law is technically adequate, but it does nothing to reform the Greek FIU,s leadership structure and organization and therefore leaves its problems in place. End Summary. -------------- Bank of Greece Control Against Bank Saderat -------------- ¶2. (SE) Thomopoulos walked the Acting Deputy through the BG,s recent control operation against Bank Saderat,s Athens branch in response to reftels A and B. Under its role as bank supervisor, BG recently executed a control in which it reviewed approximately 900 separate Bank Saderat transactions from the first 5 months of 2008 worth a total of 33 million euros. As part of the operation, Bank Saderat needed to provide complete financial records for each transaction over 50,000 euros. According to Thomopoulos, Bank Saderat,s records were complete, and BG found no discrepancies in the transactions. Bank Saderat acted as a trade finance bank in most of the transactions, facilitating payments through letters of credit (LOCs) between Iranian entities purchasing goods/services and foreign entities selling goods/service. Thomopoulos gave examples of some of the transactions, indicating there were several large transactions (between 250,000 euros and 1.5 million euros) logged from banks and other entities in UAE, Dubai, Turkey, and China for goods such as chemicals, electronics, fertilizers, high resolution cameras, incubators, and plastics. ¶3. (SE) Thomopoulos indicated that the BG will from now on conduct periodic controls of Bank Saderat transactions, and will continue to update and work with the USG to address our concerns. Finally, Thomopoulos said that he and some of BG,s bank examiners will travel to London to meet with UK central bank examiners who are conducting similar control operations against Bank Saderat,s London branch. He hopes that the meeting might prove useful to exploiting some of the UK,s specific expertise in these matters for the benefit of Greek bank examiners. -------------- The Greek FIU: Zorbas May Be On The Way Out, But It,s STILL broken! -------------- ¶4. (SE) Thomopoulos next turned to the issue of the draft money laundering/terrorist finance law the Ministry of Finance is sending to Parliament, reportedly in mid-June. Thomopoulos believes the law is technically sound, but he is very frustrated that the Ministry did not submit it to Parliament in May, as the Ministry had first indicated. Thomopoulos believes that at this point, it is much too late to have any impact on the end-June Financial Action Task Force (FATF) meeting. ¶5. (SE) Thomopoulos was also critical of the fact that, while the draft law reportedly will limit the term of the head of the Greek Financial Intelligence Unit (FIU) to three years, it does not change the provision that mandates the head be a prosecutor or judge. Thus, while Georgios Zorbas, the current head of the FIU, could see his term end as soon as the draft becomes law, Thomopoulos believes that the new ATHENS 00000819 002 OF 002 head, whomever that might be, will still have the same deficiencies as Zorbas. First, the new head likely will not have the financial expertise the FIU so badly needs. Secod, as a prosecutor or judge, the new head likely will not have sufficient experience managing a staff and organization like the FIU. ¶6. (SE) Thomopoulos admitted that one benefit of new FIU leadership might be that the Ministry of Finance finally may provide to the FIU the support and resources it has held back under the leadership of Zorbas. Thomopoulos admits that the lack of resources is one reason the FIU is not as effective and active as it should be in launching financial investigations. Thomopoulos, however, firmly believes the leadership issue is more important. He ended by saying that until a person with financial expert and experience in managing an organization is put in charge of the FIU, it will remain a troubled and ineffective entity unable to fulfill its important role in the Greek anti-money laundering/terrorist finance apparatus. SPECKHARD