CHINA'S RESPONSE TO DESIGNATION OF FUTURE BANK,

C O N F I D E N T I A L BEIJING 001253

SIPDIS

SIPDIS

DEPARTMENT FOR EAP/CM, ISN/CPI, T, NEA, EUR

E.O. 12958: DECL: 04/02/2018
TAGS: PGOV PREL ECON EFIN PARM KNNP MNUC CH BA IR
SUBJECT: CHINA'S RESPONSE TO DESIGNATION OF FUTURE BANK,
BAHRAIN UNDER E.O. 13382

REF: STATE 27642

Classified By: Minister Counselor for Financial Affairs, David Loevinge
r for reasons 1.4 (b/d).


1. (C) Minister Counselor for Financial Affairs delivered
points and non-paper in reftel March 27 to Tang Xu, Director
General of the People's Bank of China (PBOC) Anti-Money
Laundering Bureau. Tang responded that over the past two
years, the PBOC has increased its attention to interactions
between Chinese banks and Iran-related entities. He noted
that in October 2007, the PBOC issued an advisory to
financial institutions to exercise special due diligence in
their transactions with Iranian firms and financial
institutions. Tang said the PBOC requires that Chinese
financial institutions undertake careful checks on their
transactions with Iranian entities, but he pointed out that
it is difficult to identify problematic transactions because
the structure of businesses and transactions are complex. He
explained that when the PBOC receives lists of entities
designated by the U.S., it reiterates to Chinese banks the
importance of complying with UN and Financial Action Task
Force (FATF) resolutions. Specific details on how the PBOC
treats entities that are listed by the U.S., but not the UN,
are best discussed between Treasury Secretary Paulson and
PBOC Governor Zhou, he added. Tang noted that the PBOC would
welcome technical assistance from the U.S. to aid PBOC
efforts to identify illegal transactions conducted under the
guise of international trade.
RANDT