IRAN'S ATTEMPTS TO EXPAND BANKING RELATIONSHIPS

UNCLAS SECTION 01 OF 02 STATE 132635

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: KNNP MNUC IR GM
SUBJECT: IRAN'S ATTEMPTS TO EXPAND BANKING RELATIONSHIPS
IN GHANA

REF: A) STATE/TREASURY/EMBASSY ACCRA EMAILS- 12/02/08


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

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SUMMARY
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2. (SBU) Representatives in the Iranian government have met
with counterparts in the Ghanaian government to discuss the
opening of an Iranian bank in Ghana. Given Iran's attempts
to evade UNSC sanctions, the establishment of an Iranian bank
in Ghana could potentially threaten the integrity of the
Ghanaian banking system and provide Iran a new conduit to
circumvent UN Security Council sanctions. The U.S. urges
Ghana to deny Iran's requests to open a bank in Ghana and to
subject Iranian activities to increased scrutiny, as called
for by the international community.

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BACKGROUND
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3. (SBU) Press reports throughout 2008 have noted that Iran
is actively working to expand its banking relationships with
Ghana. The bank will be a joint venture between the Iranian
Chamber of Commerce and the Ghana Chamber of Commerce, as
part of a larger effort by the Iranian government to expand
its ties and influence in Africa. Governments should
exercise increased vigilance regarding financial and
commercial relationships with Iranian entities that may be
associated with Iran's proliferation sensitive nuclear
activities, in particular to ensure full compliance with
UNSCRs 1737, 1747 and 1803.


4. (SBU) UN Security Council resolutions 1737, 1747, and
1803, adopted under Chapter VII of the UN Charter, contain
several finance-related provisions. Resolution 1737 requires
UN Member States to prevent the provision to Iran of
financial services related to the transfer, manufacture or
use of the prohibited items described in that resolution.
All three resolutions also require UN Member States to apply
targeted sanctions to entities and individuals designated in
the resolutions for their involvement with Iran's
proliferation-sensitive nuclear activities or ballistic
missile program. Member States are required to prevent the
provision of financial assets or economic resources to or for
the benefit of designated individuals/entities, and to freeze
their assets as well as those of entities "owned or
controlled" by them or persons/entities acting on their
behalf (operative paragraph 12 of UNSCR 1737). In addition,
UNSCR 1803 calls on all member states to exercise vigilance
over the activities of financial
institutions in their territories with banks domiciled in
Iran, in particular Bank Melli and Bank Saderat, and their
branches and subsidiaries abroad.


5. (SBU) On October 16, 2008, the Financial Action Task
Force (FATF) issued its fourth warning on the serious threat
posed by Iran's lack of a sufficient anti-money laundering
and counterterrorist financing regime. The statement noted
particular concern by Iran's lack of effort to address the
terrorist financing risk and reinforced the call for
jurisdictions to implement preventative measures to protect
their financial sectors from this risk.


6. (SBU) In addition, FATF has issued guidance on
implementation of UNSCRs, most recently on UNSCR 1803's call
for enhanced vigilance regarding Iranian banks, including
their branches and subsidiaries abroad, to protect against
the proliferation finance risk posed by Iran. The FATF
guidance, among other things, encourages jurisdictions to
implement risk mitigation practices with transactions,
accounts and relationships with Iranian banks. The U.S. has
urged jurisdictions to implement the FATF guidance on 1803
and take preventative measure that include denying any
requests by Iranian financial institutions to enter into
joint ventures or to establish a subsidiary, branch or
representative office in their jurisdiction. As other
countries take additional action to protect their financial

STATE 00132635 002 OF 002


systems from Iranian abuse, Iran is seeking new jurisdictions
in which to operate. Allowing this Iranian activity in Ghana
would introduce increased risks for the Ghanaian banking
system. It would also significantly increa
se the burden on Ghana's implementation of UNSCRs and FATF
standards.


7. (SBU) The European Union adopted laws in November that
apply Community-wide measures related to the implementation
of UNSCR 1803. This regulation calls for continued vigilance
over account activity relating to money laundering and
financing of terrorism and requires Bank Saderat to notify
each Member State's financial authority of all transfers of
funds carried out or received by them within their
jurisdiction within five working days of the transaction.


8. (SBU) As part of the FATF recommendations, countries
need to have measures in place to protect themselves from
jurisdictions of concern. Ghana's ability to protect its
financial system from jurisdictions of concern, such as Iran,
will be evaluated during its upcoming mutual evaluation
assessment scheduled for April 2009.


9. (SBU) Executive Order 13382 allows for the designation of
firms or individuals which are found to be working for or on
behalf of entities already designated. This E.O. provides
the authority for the assets of any person in violation of
the E.O. to be blocked and prevents the transfer, export,
withdrawal of these assets. If any Ghanaian firms or
individuals are found to be working for or on behalf of
entities designated under U.S. Executive Order 13382, they
may be designated themselves.

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OBJECTIVES/ACTION REQUEST
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10. (SBU) Washington requests Post draw from the summary and
background in paragraphs 2-8 to address these concerns with
appropriate host government officials in the foreign affairs
and finance ministries. Post should pursue the following
objectives:

-- Seek clarification and more details on press reports that
Iran and Ghana are seeking to establish a joint venture bank
in Ghana.

-- Inform the GOG that the establishment of an Iranian bank
could threaten the integrity of the Ghanaian financial system
and increase the burden on Ghana to implement international
standards and protect its financial system from jurisdictions
of concern such as Iran.

-- Inform the GOG that the European Union has recently
implemented regulations calling for enhanced vigilance over
Iranian account activity relating to money laundering and
financing of terrorism and requires Bank Saderat to notify
each Member State's financial authority of all transfers of
funds carried out or received by them within their
jurisdiction within five working days of the transaction.

-- Urge Ghana to refuse Iran's request to open a bank in
Ghana and to subject Iranian financial activities to
increased scrutiny, as called for by the international
community.

-- Encourage the GOG to warn Ghanaian financial institutions
about the risks of doing business with Iran.

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REPORTING DEADLINE
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11. (U) Post should report results as soon as possible.
Please slug replies for ISN, T, TREASURY, AF and NEA. Please
include SIPDIS in all replies.

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POINT OF CONTACT
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12. (U) Washington point of contact for follow-up
information is Kevin McGeehan, ISN/CPI, (202) 647-5408,
McGeehanKJ@state.sgov.gov.


13. (U) Department thanks Post for its assistance.
RICE