AUSTRALIA'S IMPLEMENTATION OF FINANCIAL PROVISIONS

C O N F I D E N T I A L CANBERRA 000301 SIPDIS SIPDIS STATE FOR ISN/CPI (M.NEW AND J.CHALMERS),NEA, EAP AND T E.O. 12958: DECL: 03/27/2018 TAGS: ETRD EFIN ETTC PARM KNNP MNUC AS SUBJECT: AUSTRALIA'S IMPLEMENTATION OF FINANCIAL PROVISIONS OF UNSCR 1803 REF: A. STATE 29096 ¶B. STATE 29464 Classified By: Political Counselor James F. Cole for reasons 1.4 (b) an d (d). SUMMARY -------------- ¶1. (C) Australia recently completed updating laws and regulations designed to facilitate its implementation of financial and other provisions of Iran-related Security Council resolutions, including UNSCR 1803. Australian banks are fully compliant with the measures, which entered into force on March 24, according to the Department of Foreign Affairs and Trade's (DFAT) Legal Branch. Because Australian banks can be penalized for transactions involving not only designated Iranian individuals and entities, but also other entities owned, controlled or directed by such designees, DFAT would welcome U.S. assistance in identifying such second tier or subsidiary entities. (Please see action request at para 5 below.) Australia's implementation of dual use items provisions of UNSCR 1803 (Ref B) is reported septel. End summary. ¶2. (C) Poloff presented Ref A points and non-papers to Peter Scott, Director for Sanctions and Transnational Crime, International Legal Branch, and to Valerie Grey, Director for Arms Control, DFAT, on March 25. On March 27, Scott briefed us on updates to Australian legal instruments and regulations that came into effect on March 24 intended to strengthen and facilitate implementation of UNSC resolution sanctions, including UNSCR 1803, relating to Iran. ¶3. (SBU) Noting the changes were mostly procedural rather than substantive, Scott traced changes to Australian laws, including the International Trade Integrity Act 2007, that amended Australia's Charter of the United Nations Act 1945 by more clearly defining terms and powers of the Minister to designate Commonwealth (of Australia) entities and specify provisions of Commonwealth laws as UN sanction enforcement law. These were given further definition and force by Foreign Minister Smith's March 19 Charter of the United Nations (UN Sanction Enforcement Law) Declaration 2008, and Governor-General Jeffery's March 20 issuance of the Charter of the United Nations (Sanctions - Iran) Regulations 2008, which updated and replaced the previous year's Iran sanctions regulations. (Full text of the latter declarations are available on the Federal Register of Legislative Instruments at www.frli.gov.au.) ¶4. (C) Scott said Australian banks and other financial institutions were in full compliance with the measures. Some banks had raised concerns about their liability under the revised laws and regulations that prohibit dealings not only with designated individuals and entities, but also with "any person acting on behalf of or at the direction of" a designated person or entity, or "an entity owned or controlled by" a designated person or entity. Unless the Australian bank could successfully demonstrate it had exercised due diligence to prevent dealings with prohibited subsidary financial institutions, it could be subject to substantial financial penalties. Scott asked if there was any help we could provide to assist the banks in identifying such subsidiary entities. ¶5. (C) ACTION REQUESTED: Embassy would appreciate whatever assistance the State and Treasury can provide in indentifying persons or entities controlled or acting on behalf of designated Iranian banks and financial institutions. Qdesignated Iranian banks and financial institutions. CLUNE