IRAN'S NUCLEAR PROGRAM -- URGING INDONESIA TO RAMP

C O N F I D E N T I A L SECTION 01 OF 02 JAKARTA 002221 SIPDIS DEPT FOR T, EAP, EAP/MTS, EAP/MLS, NEA/IR, IO, IO/UNP, ISN, ISN/CPI (A. RUGGIERO AND K. MCGEEHAN) NSC FOR E.PHU TREASURY FOR T. RAND TREASURY/OFAC FOR L. DEVEREAUX SINGAPORE FOR S. BAKER E.O. 12958: DECL: 12/10/2018 TAGS: PREL PARM KNNP EFIN MNUC ID IR SUBJECT: IRAN'S NUCLEAR PROGRAM -- URGING INDONESIA TO RAMP UP PRESSURE REF: A. STATE 127040 ¶B. JAKARTA 1711 Classified By: Pol/C Joseph L. Novak, reasons 1.4(b+d). ¶1. (C) SUMMARY: Together with European counterparts, Mission delivered reftel message regarding Iran's nuclear program to key Indonesian officials. Emboffs and counterparts underscored the need for increased vigilance in implementing UN Security Council (UNSC) resolutions regarding Iran's nuclear program. Reiterating information provided in September (ref B),Indonesian interlocutors underscored the GOI's commitment to implementing relevant UNSC resolutions. They described what they said were some bureaucratic limitations on the GOI's ability to implement resolutions. END SUMMARY. A JOINT DEMARCHE ¶2. (C) On December 10, Mission economic and political officers joined French, German and UK counterparts in delivering Ref A demarche and associated documents to nonproliferation officials at the Department of Foreign Affairs (DEPLU) and to bank licensing officials at Bank Indonesia (BI),the central bank. Mission will also separately underscore the importance of this issue with GOI financial intelligence and other relevant banking oversight entities. (Note: The Italian Embassy in Indonesia did not/not receive instructions to join the demarche.) KEEPING THE PRESSURE ON IRAN ¶3. (C) Mission and European representatives emphasized the need for the international community to maintain pressure on Iran to end its nuclear program. We noted Iran's history of deception regarding nuclear matters and continued noncooperation with the IAEA. We further noted that Iran continued reprocessing-related activities in defiance of multiple UNSC resolutions and reiterated that the P5 1 offer to engage Iran on a broad range of issues remained on the table if Iran halted reprocessing. ¶4. (C) Iran's continued defiance of its international nonproliferation obligations demonstrated the need for heightened vigilance in implementing the financial elements of relevant UNSC resolutions, USG and European representatives said. Iran had a record of using deceptive practices to finance its proliferation activities. Indonesia should implement the resolutions with the utmost vigor. To assist Indonesia in this, Mission officers provided Indonesian interlocutors with copies of current OFAC guidance documents outlining sanctions on Iran, while European counterparts shared copies of EU regulations implementing the relevant UNSC resolutions. We also provided the most recent Financial Action Task Force (FATF) guidance on implementing these resolutions. INDONESIA TAKING STEPS ¶5. (C) DEPLU's Deputy Director for International Security and Disarmament Affairs Andy Rachmianto reiterated Indonesia's commitment to implementing UNSC resolutions regarding Iran's nuclear program. He acknowledged that the November IAEA report on Iran's nuclear program was "not promising" but also cited a recent Russian assessment that Iran was far from developing a nuclear weapons capability. Rachmianto explained that after the UNSC had adopted Resolution 1803, DEPLU had convened interagency meetings to inform GOI entities of their obligations under this and previous resolutions (see ref B). GOI officials had also informed private Indonesian banks of the need to avoid any financial actions prohibited under relevant UNSC resolutions. JAKARTA 00002221 002 OF 002 ¶6. (C) BI officials echoed this general theme. BI's Director of Bank Licensing and Banking Information Boedi Armanto and the Head of BI's International Study and Relationship Bureau Detty Agustono explained that BI had not received any applications from Iranian banks wishing to establish branches or subsidiaries in Indonesia. Armanto noted, however, that one or two banks had previously made general inquiries. He outlined BI's procedures for reviewing such applications, should they be received, stressing BI's discretion in determining the suitability of applicants. Armanto also provided copies of relevant BI regulations on the requirements and procedures for establishing branches or representative offices. BI officials also asked several questions regarding actions taken by European authorities regarding the operation of previously established Iranian bank branches in Europe. GOI CONCERNS ¶7. (C) The discussions confirmed that, despite the GOI commitment to implementing the relevant resolutions, the GOI feels its ability to act is limited. BI officials said the central bank's review procedures were designed to conform with international banking standards but were not designed specifically to implement the provisions of applicable UNSC resolutions. DEPLU's Rachmianto explained that Indonesia did not yet have any legal mechanism that ensured the harmonization of national laws with UN Security Council resolutions. It was, therefore, up to individual GOI agencies to implement the resolutions through their own regulations and procedures. European counterparts pointed out that the U.S. and EU documents shared with the GOI could help Indonesia to implement the resolutions more vigorously. We urged them do follow our lead in doing this. ¶8. (C) On the overall issue, Rachmianto affirmed Indonesia's support for the dual-track approach to Iran's nuclear program. However, he asserted that the international community had made more progress on the sanctions track than on the engagement track. Indonesia believed that the international community should do more to engage in dialogue with Iran and hoped that the United States would engage in direct talks with Tehran, Rachmianto said. POLOFF responded that the P5 1 offer gave Iran a path toward normalizing its relationship with the international community. Iran, however, had so far refused to take up the offer. HUME