PAKISTAN: RESPONSE TO REQUEST FOR VIGILANCE REGARDING BANK

S E C R E T ISLAMABAD 001932 SIPDIS E.O. 12958: DECL: 05/23/2018 TAGS: ECON EFIN ETTC KNNP MNUC PREL PK SUBJECT: PAKISTAN: RESPONSE TO REQUEST FOR VIGILANCE REGARDING BANK MELLI BRANCH REF: State 51207 Classified by DCM Peter Bodde, reasons 1.4 (b),(c),and (d) ¶1. (S) Economic Counselor and Economic Officer delivered reftel demarche May 22 to senior officials at the Ministries of Finance and Foreign Affairs (MFA). Both Ministry of Foreign Affairs Americas Director General Sohail Mahmood and Ministry of Finance Senior Joint Secretary Iqbal Hussain pledged to share our concerns with relevant Government of Pakistan (GOP) agencies, including the State Bank of Pakistan (SBP). ¶2. (S) EconOff met separately with MFA Director for Disarmament Kamran Akhtar on May 23. Akhtar stated that the GOP was fully compliant with UN Security Council resolutions 1803, 1737 and 1747 and remained vigilant with respect to Iranian financial activities in Pakistan. Aiming to allay USG concerns, he reported that no Pakistani banks have corresponding relationships with Iranian banks. The State Bank of Pakistan has frozen accounts belonging to Bank Sepah, and the GOP has already issued three statutory regulation orders (SRO) urging banking sector caution with respect to financial transactions with Iran. ¶3. (S) Akhtar reported that a final decision has yet to be made on Bank Melli's request to open a branch in Karachi. While Pakistan will follow the Financial Action Task Force (FATF) recommendation of "enhanced vigilance" of Iranian banking activities, the GOP is looking for FATF to further define what actions are required for "enhanced vigilance." PATTERSON