S E C R E T STATE 043492

SIPDIS

SIPDIS

E.O. 12958: DECL: 04/15/2018
TAGS: KNNP MNUC IR GM ECON XG XT ZL ZS GR
SUBJECT: REQUEST FOR VIGILANCE REGARDING BANK SADERAT,S
BRANCH IN ATHENS

Classified By: EUR/PRA Office Director Anita Friedt for
reasons 1.4 (b) and (d).


1. (U) This is an action request. Please see paragraph 3.

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SUMMARY
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2. (S) The United States has concerns about Bank Saderat's
growing presence in Greece, both in size and profit margin.
The U.S. designated Bank Saderat, pursuant to Executive Order
13224, for providing support to terrorist organizations. The
bank has been used by the Iranian government to channel funds
to terrorist organizations, including Hizballah, Hamas, the
Popular Front for the Liberation of Palestine- General
Command (PFLP-GC) and Palestinian Islamic Jihad. Senior bank
officials are claiming that Bank Saderat's growth is a result
of Greece's lax enforcement of banking laws and a perception
by some in the banking community that transactions in Greece
will not receive the same scrutiny that those in other
European locales. Washington requests that Post inform the
Greek government about this information, urge enhanced
vigilance from the Government of Greece regarding Bank
Saderat, and request that the governments of Germany, France
and the United Kingdom ensure that their domestic banks are
not using the Athens branch of Bank Saderat to facilitate
terrorism or proliferation.

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OBJECTIVES/ACTION REQUEST
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3. (S) Washington requests Posts deliver the non-paper in
paragraph 4 to appropriate host government officials in the
foreign affairs and finance ministries. Post should pursue
the following objectives:

-- Inform Greece, Germany, France, and the United Kingdom of
Bank Saderat's growing presence in Greece.

-- Urge Greece to investigate Bank Saderat's activities to
ensure that it is neither facilitating terrorism nor
facilitating proliferation-related activities in

circumvention of UNSCRs 1737, 1747, and 1803.

-- Urge Greece to enact and implement an anti-money
laundering/combating terrorist financing (AML/CFT) regime
consistent with international standards to reduce the chance
of proliferation-sensitive, or otherwise illicit,
transactions.

-- Urge Germany, France, and the United Kingdom to ensure
that their domestic banks and Iranian banks located in their
countries are not using the Athens branch of Bank Saderat to
facilitate terrorism or proliferation in circumvention of
UNSCRs 1737, 1747, and 1803.

-- Underscore the calls for increased vigilance with respect
to Iranian financial institutions in UNSCR 1803 and to
deficiencies in Iran's AML/CFT regime in FATF statements.
Emphasize the growing international consensus on the risks of
engaging in Iran-related financial transactions.

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BACKGROUND AND NONPAPER
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4. BEGIN NON-PAPER S/REL GREECE, UK, FRANCE, GERMANY:

-- We would like to raise concerns about Iranian financial
activities in your region.

-- As of early February 2008, the Athens branch of Iranian
Bank Saderat had seen its profits double to over 3 million
Euros in 2007, compared with profits of approximately 1.5
million Euros in the 2004 to 2005 timeframe. Comments by a
senior Bank Saderat official indicate that the Athens branch
had profited as a result of what he described as Greece's lax
enforcement of banking regulations.

-- Some customers from other parts of Europe and other
areas, such as Dubai, UAE, were working with the Athens
branch, despite the existence of other Bank Saderat offices
in their respective countries, because they probably believe
that the transactions would receive less scrutiny from Greek
government officials than from officials in their home
countries.

-- We have information that Iran has decided to increase the
staff at the Athens branch of Bank Saderat. This may
indicate that Iran plans to continue using this branch to
exploit Greece's financial system including in an attempt to
circumvent UNSC sanctions.

-- As you know, UNSCR 1803 was passed on March 4, 2008 and
calls on all member states to exercise vigilance over the
activities of financial institutions in their territories
with all banks domiciled in Iran, and their branches and
subsidiaries abroad, in order to avoid activities
contributing to proliferation-sensitive nuclear activities or
to the development of nuclear weapon delivery systems.

-- UNSCR 1803 specifically identified Bank Saderat as a bank
of particular concern, by naming it in the resolution.

-- You may also know that the U.S. designated Bank Saderat
pursuant to Executive Order 13224 for providing support to
terrorist organizations. The bank has been used by the
Iranian government to channel funds to terrorist
organizations, including Hizballah, Hamas, the Popular Front
for the Liberation of Palestine- General Command (PFLP-GC)
and Palestinian Islamic Jihad.

FOR GREECE:

-- We urge you to investigate Bank Saderat's activities to
ensure that it is neither facilitating terrorism nor
facilitating proliferation-related activities in
circumvention of UNSCRs 1737, 1747, and 1803.

FOR THE UK, FRANCE AND GERMANY:

-- We urge you to ensure that your domestic banks and
Iranian banks domiciled in your country are neither using the
Athens branch of Bank Saderat to facilitate terrorism nor to
facilitate proliferation activities in circumvention of
UNSCRs 1737, 1747, and 1803.

-- UNSCR 1803 called for "vigilance" concerning the
activities of Banks Saderat and Melli. Given the apparent
activities of the Greek branches of Bank Saderat, we hope
that your country will, at a minimum, also increase your
vigilance of local Bank Saderat branches and correspondent
relationships in accordance with UNSCR 1803.

-- Concrete action in the banking sector is a high priority
for the United States, and if major western financial powers
do not take action to freeze accounts and ultimately close
branches, we will not succeed in convincing more skeptical
countries to do so. The European Union and its member states
should take strong action against Banks Sepah, Melli,
Saderat, and other Iranian banks following on UNSCRs 1747 and

1803.

FOR ALL RECIPIENTS:

-- We look forward to working with you on this and other
related security, counterterrorism or counterproliferation
matters, and are prepared to provide additional assistance as
appropriate.

END NON-PAPER S/REL GREECE, UK, FRANCE, GERMANY

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REPORTING DEADLINE
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5. (U) Post should report results within seven (7) business
days of receipt of this cable. Please slug replies for ISN,
T, TREASURY, EUR, IO, 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 Kevin McGeehan, ISN/CPI, (202) 647-5408,
McGeehanKJ@state.sgov.gov.


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