UK-BASED IRANIAN BANKS ATTEMPTING TO ACCESS

S E C R E T SECTION 01 OF 02 STATE 029855

SIPDIS

SIPDIS

E.O. 12958: DECL: 03/21/2018
TAGS: KNNP IR EFIN PARM PGOV ETRD UK MT
SUBJECT: UK-BASED IRANIAN BANKS ATTEMPTING TO ACCESS
MALTA,S EURO PAYMENT SYSTEM

REF: A. REF A: VALLETTA 000089

B. REF B: STATE 29096

Classified By: EUR/PRA Office Dir A Friedt for reasons 1.4 (b) & (d)


1. (U) This is an action request. Please see paragraph 4.

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SUMMARY
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2. (S) Malta's Ministry of Finance conveyed its concerns
regarding attempts by two banks located in the United
Kingdom, Melli Bank PLC, a wholly-owned subsidiary of Bank
Melli Tehran, and Persia International Bank PLC, a subsidiary
of Bank Mellat Tehran, to access Malta's Central Bank Euro
payment system (ref A). As major European banks have moved
to cut off or limit their ties with Iran, Iranian banks are
likely to look to smaller but well-connected jurisdictions
like Malta to meet their financial services needs.


3. (U) Bank Melli was singled out in UNSCR 1803, which calls
for vigilance against all Iranian banks, as an entity of
particular concern due to its involvement in transactions
supporting proliferation-sensitive activities. Melli Bank
PLC and Persia International Bank PLC were designated by the
U.S. under E.O. 13382 ("Blocking the Property of Weapons of
Mass Destruction Proliferators and their Supporters") on 25
October 2007 for being owned or controlled by Bank Melli and
Bank Mellat, respectively. Bank Melli was designated for
providing banking services to entities involved in Iran's
nuclear and ballistic missile programs, including entities
sanctioned by the U.N. for their involvement in those
programs. Bank Mellat was designated for providing banking
services in support of Iran's nuclear entities, including the
Atomic Energy Organization of Iran (AEOI) (AEOI is sanctioned
by the UN, under UNSCR 1737, 23 December 2006). Further,
Bank Mellat services and maintains accounts to Novin Energy
Company, which
has moved millions on behalf of AEOI and is sanctioned under
UNSCR 1747, 24 March 2007. Bank Mellat has facilitated the
movement of millions of dollars for Iran's nuclear program
since at least 2003. (A Fact Sheet on the designations of
Bank Melli and Bank Mellat can be found at
http://www.treasury.gov/offices/enforcement/o fac/.)

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OBJECTIVES/ACTION REQUEST
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4. (S) Washington requests Post meet with appropriate host
government officials in the foreign affairs and finance
ministries to pursue the following objectives. Post may draw
from points included in STATE 29096 (ref B).

-- Welcome Malta's request for U.S. support in addressing
Maltese concerns regarding Iranian efforts to evade sanctions
imposed on its financial sector.

-- Encourage Malta to take all available precautions to
protect Malta's financial sector from Iranian deceptive
practices, to include denying access to the Iranian banks
seeking to use Malta's Euro payment system, consistent with
UN and FATF actions.

-- Recommend that Malta issue a warning to its financial
institutions to remain vigilant not only to activities of
Iran's state-owned commercial banks, but to all Iranian
financial institutions, including the Central Bank of Iran,
and advising them of the risks of doing business with Iran.
The U.S. Treasury Department's advisory can serve as an
example (found at:
www.fincen.gov/guidance fi increasing mlt iranian.html).

-- Encourage Malta to engage the United Kingdom on these
transactions and Maltese concerns.

-- Request Malta's permission for the U.S. to engage the UK
on these activities, in support of Malta's effort to avoid
becoming a haven for illicit Iranian financial activities.

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REPORTING DEADLINE
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5. (U) Post should report results within one week of receipt

STATE 00029855 002 OF 002


of this cable. Please slug replies for ISN, T, TREASURY, EUR
and NEA. Please include SIPDIS in all replies.

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POINT OF CONTACT
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6. (U) Washington point of contact for follow-up information
is Michelle New, ISN/CPI, (202) 647-0186,
newml@state.sgov.gov.


7. (U) Department thanks Posts for their assistance.
RICE