ROMANIA: DEMARCHE ON FATF STATEMENTS AND IRAN

C O N F I D E N T I A L BUCHAREST 000867

SIPDIS

STATE FOR ISN, T, NEA, INR, EEB, S/CT, INL, EUR/CE

E.O. 12958: DECL: 11/10/2018
TAGS: PARM PREL EFIN KNNP RO
SUBJECT: ROMANIA: DEMARCHE ON FATF STATEMENTS AND IRAN

REF: STATE 115523

Classified By: Charge d'Affaires Jennifer Bonner for 1.4 (B) and (D).


1. (SBU) EconCouns delivered reftel demarche on Financial
Action Task Force (FATF) statements on Iran to Cristina
Mezdrea and Laura Gradinaru of the Office for Implementation
of International Sanctions at the Ministry of Foreign Affairs
(MFA) on November 3, and subsequently to Adrian Cosmescu,
Deputy Director of the Bank Supervision Department of the
National Bank of Romania (BNR) on November 6.


2. (C) The MFA officials said they would disseminate the
FATF statements and guidance on UNSCR 1803 implementation to
other relevant ministries within the Government of Romania
(GOR). Mezdrea said that Romania fully supports restrictions
on business with Iranian banking and financial institutions
and that the GOR would adopt "strict implementation" of 1803
and of whatever additional sanctions on Iran, including
financial, which result from the on-going sanctions review at
the European Union level. Mezdrea explained that the GOR is
not well-organized internally for coordinating and
implementing sanctions policy and that MFA is attempting to
play a more active coordinating role vis-a-vis other
institutions, like the Ministry of Economy and Finance (MEF),
which have actual implementation responsibilities. In this
regard, an internal experts' group has been meeting to
discuss revisions to the legal code needed to enable GOR
authorities to apply sanctions more effectively, and MFA is
hopeful these changes will be issued as an Emergency
Ordinance by the Prime Minister's Cabinet prior to national
parliamentary elections scheduled for November 30. Mezdrea
cited a recent case in which banking authorities were able to
freeze assets in a private bank account under existing
sanctions law, but then could not agree internally on whether
MEF or BNR had legal authority over disposition of the
assets. The new emergency legislation is intended to clarify
these kinds of discrepancies, she said.


3. (C) BNR Deputy Director Cosmescu said BNR would study
carefully the suggested list in reftel of preventive measures
to address financial sector risks connected with Iran.
Cosmescu said that BNR exercises very strict oversight of
banking sector transactions with Iran, but noted that no
Iranian banks have a business presence in Romania and the
level of transactions is extremely low. Cosmescu also
observed that, to an extent, Romania has to rely on the
vigilance of banking authorities in other EU countries since
nearly 90 percent of Romania's banking sector is controlled
by large European banks. Still, in light of the FATF
statements and UNSCR 1803, Cosmescu agreed that added
vigilance is required and said BNR would police this issue
"very carefully."
BONNER