SAUDI RESPONSE TO FATF STATEMENT ON IRAN DEMARCHE

C O N F I D E N T I A L RIYADH 001849 SENSITIVE SIPDIS DEPT FOR ISN, T, INR, EEB, S/CT, INL, AND NEA/ARP E.O. 12958: DECL: 12/23/2018 TAGS: PARM PREL EFIN ETTC KNNP SA IR SUBJECT: SAUDI RESPONSE TO FATF STATEMENT ON IRAN DEMARCHE REF: SECSTATE 115523 Classified By: Acting Deputy Chief of Mission Sandra Muench for reasons 1.4 (b) and (d) ¶1. (SBU) Econ Counselor delivered the points contained in reftel on leveraging the FATF statement on Iran to Dr. Abdulrahman Al-Hamidy, Deputy Governor of the Saudi Arabian Monetary Authority (SAMA),on December 23. Dr. Hamidy responded by highlighting Saudi Arabia's active participation in FATF and emphasized that Saudi banks are "fully aware" of FATF's actions, including the recent statement on Iran and the guidance related to UNSCR 1803. He said the Kingdom was alert to the potential risk posed by correspondent bank relationships. He described Iran's commercial relationship with Saudi Arabia as extremely limited and mostly related to the Hajj. Also, he outlined the strict procedures used to ensure that Hajj-related transactions involving Iran are not allowed to be used for other purposes. ¶2. (C) Dr. Hamidy interjected a personal comment into the discussion, saying it was unlikely Saudi businesses would enter into significant commercial relationships with Iranian entities as the "political relationship" was not conducive to this. He said that to prevent the use of front companies for illicit purposes, the Saudi government tracked corporate ownership to four degrees. ¶3. (U) Note: Saudi Arabia does not allowed branches of foreign banks in its territory. There are a number of commercial banks that are partially owned by foreign banks, including Citibank, HSBC, and Deutsche Bank, but none by an Iranian bank. RUNDELL