ITALY/IRAN: INTESA SAO PAOLO INVESTIGATION INTO

S E C R E T ROME 000449 SIPDIS NOFORN SIPDIS E.O. 12958: DECL: 04/09/2018 TAGS: EFIN PTER ECON IT IR SUBJECT: ITALY/IRAN: INTESA SAO PAOLO INVESTIGATION INTO SUSPICIOUS ACTIVITIES INVOLVING MELLI Classified By: Econ Minister Counselor Thomas Delare for reasons 1.4 b and d. ¶1. (S/NF) Post has learned that the U.S. Department of Justice has passed to Italian authorities a request under our Mutual Legal Assistance Treaty (MLAT) for information regarding possible violations of U.S. and New York criminal law. Banca Intesa San Paolo (Italy's largest bank) is suspected of conspiring with Iranian banks in a scheme that would have allowed an Iranian Bank to circumvent U.S. sanctions that prevent it from transferring funds into the United States. In particluar, Intesa San Paolo is suspected of having deliberately disguised the origins of money transfers to the United States from the Iranian banks in order to prevent these transfers from tripping automatic filters in the U.S. banking system that are designed to prevent sanctioned entities from sending funds into the U.S. According to Italian media reports, Italian police officials have visited banks that are listed in the request and have gathered at least some of the requested files. In particluar Italian newspaper Sole 24 ore reported on the case in its April 3 edition. ¶2. (S/NF) One of the sanctioned Iranian banks involved in the suspected conspiracy is Bank Melli. The Italian government has since February 12 been blocking EU efforts to impose EU SANCTIONS on Bank Melli and other entities. We do not know if this sanctions-blocking measure by the GOI is in any way related to the U.S. investigation. ¶3. (S/NF) The U.S. Justice Department Attache in Rome has told us that the MLAT request comes as part of a confidential criminal investigation in the United States. SIPDIS He is now contacting U.S. prosecutors to determine what if anything Post and other USG agencies may say about this case. He stresses that all involved must respect the Confidential nature of the investigation, and avoid any SIPDIS actions or statements that might harm the efforts of U.S. prosecutors. According to our Justice Attache, there is no reason to believe that the Italian Justice Ministry informed the Italian Ministry of Foreign Affairs in this matter. ¶4. (S/NF) The Justice Attache agrees however that Post could, at this point, use press reports on the matter in an immediate effort to put additional pressure on the Italian government to lift its hold on EU SANCTIONS against Bank Melli. ¶5. (S/NF) Late on April 9, Economic Minister Counselor Delare was contacted by, Gianluca Alberini, an aide to Italian MFA Political Director Terzi working the SANCTIONS account. Alberini said that the call came at the direct instruction of PolDir Terzi, who wanted us to be informed that Italy had decided to act proactively and freeze assets of individuals listed under UNSC 1803, "even before the EU regulation was adopted." Pointedly, he noted that the new action, which implements Decree 109 of June 2007, will not apply to banks. ¶6. (S/NF) Quickly switching gears, Alberini then mentioned that the MFA had also become aware of a press report carried in "Il Sole" (see above) that detailed a search of the offices of Banca Intesa in response to an "international" request for assistance. He then regretted that the need for secrecy on the part of judicial authorities would make it difficult to obtain more information in the matter. EcMin thanked Alberini for the action to act on at least a portion of 1803 immediately, but added that we were consulting with our own judicial authorities about the matter in "Il Sole" and would be seeking an appointment with PolDir Terzi on April 10 to further discuss the issue. BORG