UNSCR 1803: SRI LANKA REVIEWING "LINE BY LINE"

C O N F I D E N T I A L COLOMBO 000313

SIPDIS


SIPDIS

STATE FOR SCA/INS, EEB/ESC/TFS, ISN/CPI, AND NEA/IR
TREASURY FOR LESLIE HULL

E.O. 12958: DECL: 03/27/2013
TAGS: EFIN KNNP UNSC IAEA IR CE
SUBJECT: UNSCR 1803: SRI LANKA REVIEWING "LINE BY LINE"
PRIOR TO AHMADINEJAD VISIT IN APRIL

REF: A. SECSTATE 21770

B. COLOMBO 1307 AND PREVIOUS

C. COLOMBO 281

D. COLOMBO 1506

E. COLOMBO 1639


Classified By: Ambassador Robert O. Blake, Jr., reasons 1.4 (b,d)


1. (C) Summary: Sri Lanka's Ministry of Foreign Affairs and
Central Bank both responded to post's demarches on UN
Security Council Resolution 1803 with assurances that Sri
Lanka would meet its international obligations with respect
to sanctions against Iran. The MFA acting Director General
for UN and Multilateral Affairs said that Sri Lanka would
study the terms of UNSCR 1803 "line by line" prior to planned
late April visit of Iranian President Ahmadinejad. He asked
for further guidance, if possible, about how Sri Lanka should
exercise "vigilance" toward the Iranian banks identified in
the resolution and said Sri Lanka would welcome training in
how to guard against transactions that might facilitate
Iranian banks' evasion of sanctions. Please see action
request in para 6. End summary.


2. (C) On March 4, post conveyed ref A demarche to Sri
Lanka's Ministry of Foreign Affairs. The same day,
Ambassador and Econoff delivered the demarche to Central Bank
Governor Cabraal and Deputy Governor Jayamaha. Cabraal and
Jayamaha assured the Ambassador that Sri Lanka would comply
with te obligations created by the new Security Council
resolution against Iran. Jayamaha reaffirmed tha the
Central Bank had instructed other Sri Lankanbanks not to
conduct transactions with Bank Sepa, in accordance with
UNSCR 1747 (ref B).


3. () On March 25, Econoff followed up the UNSCR 1803
demarche with the MFA acting Director General forUN and
Multilateral Affairs Vijaya Padukkage. Ecnoff, noting Sri
Lanka's recent aid and trade dels with Iran, urged Sri Lanka
to pay particular ttention to the resolution's call for
states to xercise vigilance with respect to public support
for trade with Iran and with regard to transactionsinvolving
Banks Melli and Saderat. (Note: Econof did not mention to
Padukkage the recent case of Citibank's Sri Lanka branch
blocking a payment to Bank Melli, because the matter has not
yet become public (ref C).)


4. (C) Padukkage was familiar with UNSCR 1803 and responded
that Sri Lanka would be "extra careful" in complying with it.
He said his ministry was going through the resolution "line
by line" prior to the planned late April visit of Iranian
President Ahmadinejad to Sri Lanka. He had in fact noted the
resolution's call for "vigilance" and asked how to interpret
the term. Econoff replied that the Financial Action Task
Force (FATF) had issued guidance to its members on this
issue, and that Sri Lanka's Central Bank was aware of the
FATF guidance (ref D). Padukkage asked if the United States
was satisfied that Sri Lanka was fully complying with the
UNSCR 1747 prohibition against transactions with Bank Sepah.
Econoff replied that we had taken the Central Bank at its
word that it had instructed local banks in how to comply.


5. (C) Returning to the question of exercising vigilance on
transactions with Iran, Padukkage said Sri Lanka would
welcome any training the United States could provide on what
kind of transaction to watch out for and what kind of
evasions the Iranian banks were practicing. Padukkage also
asked whether anything in the UN sanctions limited the
issuance of "import permits" for products from Iran. Econoff
reminded him that UNSCR 1747 prohibited Iran's export of all
arms and related materiel, but that he was not aware of any
reference to import permits in the various UN sanctions.


6. (C) Comment and action request: Sri Lanka is increasing
its aid, trade and investment ties with Iran (ref E),but
appears to be serious at the same time about following the
terms of UN resolutions against Iran. Post would welcome any
additional guidance or training from the Department on how a
country should exercise vigilance with respect to
transactions involving Iran. Padukkage did not elaborate on
the types of products that might be the subject of his query
regarding import permits. Sri Lanka requires import permits


for certain goods that have security implications, such as
global positioning systems, night vision devices, etc. and
also for various other categories, such as
telecommunications, agricultural, health products. We would
also welcome guidance, if any, on the question of whether UN
Iran sanctions in any way touch on the issue of import
permits.
BLAKE