COORDINATED DEMARCHE ON IRAN WITH EUROPEAN

UNCLAS STATE 125658


E.O. 12958: N/A
TAGS: KNNP MNUC PARM IR
SUBJECT: COORDINATED DEMARCHE ON IRAN WITH EUROPEAN
LIKEMINDED

REF: STATE 125441


1. (U) This is an action request. Please see paragraph 5.


2. (SBU) OBJECTIVE: To participate in a joint demarche with
France, Germany, Italy, and the United Kingdom to the
Republic of Korea and Malaysia regarding the implementation
of national sanctions measures on Iran.


3. (SBU) BACKGROUND: Since July 2008, the United States has
been engaged with France, Germany, and the United Kingdom in
an effort to prompt the implementation of the strongest
possible national sanctions measures on Iran in response to
its noncompliance with its international obligations. This
effort was motivated in part by the resistance of Russia and
China to additional UN Security Council sanctions. Our goal
has been two-fold: 1) to assemble a "menu of options" for
national measures that could be pursued by likeminded states;
and, 2) to use these options to prompt other states to take
action against Iran in order to create the greatest possible
pressure on Iran. Italy joined the group in October 2008 and
there are now plans to conduct outreach to Canada, Australia,
Japan, South Korea, the Netherlands, and Denmark starting on
12 December 2008.


4. (SBU) BACKGROUND CONT: In furtherance of our overall
objectives, France, the UK, Italy, and Germany have proposed
a joint demarche on Malaysia and South Korea to convey views
on measures to prevent Iran's access to the international
financial sector and oil/gas business relationships and
relevant technology. These measures and points ) provided
below and in REF A ) have been agreed upon by the likeminded
group, which has indicated interest in doing so between 24
November and 2 December 2008.


5. (SBU) ACTION REQUEST: Using the background in paragraphs
3-4 and points contained in REF A, Posts are requested to
conduct a joint demarche to the Republic of Korea and
Malaysia at the highest appropriate levels. Washington
defers to Posts with respect to the logistics of this
demarche and coordination with French, German, Italian, and
UK Posts in capitals. In conveying this demarche, Posts
should provide copies of the non-paper provided in paragraph

6.


6. (SBU) NON-PAPER ON CONVENTIONAL ENERGY RELATIONSHIPS

-- Major new deals with Iran, especially those involving
investment in Iran's oil and gas sectors, undermine global
efforts to compel Iran's compliance with its international
obligations.

-- Such deals suggest to the Iranian regime that the
international community is willing to take a "business as
usual" approach with respect to its relations with Iran,
despite Iran's continuing pursuit of a nuclear weapons
capability and failure to cooperate fully with the
International Atomic Energy Agency (IAEA).

-- They also undermine the P5 1's June 2008 offer of enhanced
economic and energy engagement as an inducement for Iranian
compliance, impeding efforts to achieve a diplomatic solution
to international concerns.

-- Companies should ask themselves whether they want to do
business with a country already under sanctions from three
UNSC Chapter 7 resolutions, sanctions that were reaffirmed by
the UN Security Council on 27 September 2008 with the
unanimous adoption of UNSCR 1835.

-- The business and reputational risk presented by engaging
in such deals with Iran is significant, as a result of its
defiance of international normative standards of behavior.
Iran's credit risk rating has gone up, and many banks have
stopped issuing letters of credit to companies seeking to do
business with Iran.

-- We encourage your government to discourage domestic firms
from entering into new energy investments with Iran.

END NON-PAPER


7. (SBU) Post is requested to report any substantive
response by 2 December 2008. Richard Nephew (ISN/RA,
202-647-7680, NephewRM@state.sgov.gov) and Sonata Coulter
(EEB/TFS, 202-647-5027, CoulterSN@state.sgov.gov) are the the
Department's POCs for this activity.


RICE