GERMANY ON IMPLEMENTATION OF THE FINANCIAL

S E C R E T BERLIN 000405

SIPDIS

SIPDIS, ISN, P, T, E, EUR, NEA, EEB

E.O. 12958: DECL: 03/31/2033
TAGS: EFIN ECON ETRD PARM PGOV PREL KNNP IR GM
SUBJECT: GERMANY ON IMPLEMENTATION OF THE FINANCIAL
PROVISIONS OF UNSCR 1803

REF: A. STATE 29096 (UNSCR 1803 IMPLEMENTATION)


B. STATE 29398 (FINCEN ADVISORY)

C. STATE 27642 (U.S. DESIGNATION OF FUTURE BANK)

D. BERLIN 333

E. BERLIN 211

F. DUSSELDORF 003

Classified By: EMIN Robert A. Pollard for reasons 1.4 (b)
and (d).


1. (S) EconOff delivered ref A-C demarches during the week of
March 24 to MFA International Economic Policy Officer Claudia
Schuett, Economics Ministry Foreign Trade Law Division Desk
Officer Ernst Roeder-Messell, and Finance Ministry Terrorism
Finance and Financial Crimes Division Director Michael
Findeisen. Schuett and Roeder-Messell noted that the EU
Commission has already implemented financial measures
targeting individuals and entities listed in UNSCR 1803
Annexes I and III. Responsibility for implementing the
remaining financial provisions of UNSCR 1803 will fall to the
Economics Ministry and the German Bundesbank following
adoption of a corresponding EU Common Position, currently
under discussion in Brussels.


2. (S) Interlocutors from all three ministries noted that the
German Federal Financial Supervisory Authority (BaFin),in
cooperation with the Finance Ministry and the major German
banking associations, circulated specific guidance in early
February informing banks that the October 2007 Financial
Action Task Force (FATF) statement on Iran legally obligates
German banks to undertake additional due diligence on all
Iran-related transactions. BaFin plans to circulate the text
of the March 2008 FATF statement highlighting the need for
rigorous due diligence on all transactions involving the
countries mentioned, even though the text does not include
new Iran-specific guidance. Economics Ministry and MFA
interlocutors also inquired about U.S. progress in
implementing UNSCR 1803.


3. (S) Schuett said some German officials initially expressed
concern that the FinCen advisory included a "German bank,"
the European-Iranian Commercial Bank (Europaeisch-Iranische
Handelsbank AG, or EIHB). EconOff responded that the fact
that EIHB is wholly owned by certain Iranian interests,
including Bank Mellat, is grounds for concern. COMMENT:
According to BaFin officials, EIHB and other Iranian banks
have come under greater scrutiny since the passage of UNSCR

1747. BaFin has imposed additional reporting requirements
and scheduled additional supervisory meetings in order to
ensure that Iranian banks are not interfering with or
circumventing UN and EU sanctions (see also refs D-F). END
COMMENT.
TIMKEN JR