PREVENTING ESTABLISHMENT OF IRANIAN JOINT BANK IN

S E C R E T STATE 093583 SIPDIS E.O. 12958: DECL: 09/02/2033 TAGS: ECON EFIN IR KNNP PARM PTER PINR ID SUBJECT: PREVENTING ESTABLISHMENT OF IRANIAN JOINT BANK IN INDONESIA Classified By: Classified by: ISN C.S. Eliot Kang, Acting, and EAP DAS Scot Marciel for reasons 1.4 (b) and (d). ¶1. (U) This is an action request. Please see paragraph 3. -------------- SUMMARY/BACKGROUND -------------- ¶2. (S) The United States has information that Iran is engaged in efforts to establish a joint bank in Indonesia between Iran's Bank Melli and an Indonesian bank. We believe one of the Indonesian banks that Iran may have approached is Indonesia's Penin Bank. We are concerned that a joint bank involving Iran's Bank Melli, or any other Iranian bank, could be used by the government of Iran to facilitate proliferation-related payments in circumvention of UNSCRs 1737, 1747 and 1803. We want to alert Indonesia to these activities and urge the GOI to investigate and prevent the establishment of this joint bank. -------------- OBJECTIVE/ACTION REQUEST -------------- ¶3. (S//REL INDONESIA) Washington requests Post deliver the non-paper in paragraph 4 to appropriate host government officials in the ministries of foreign affairs and finance and the central bank. Post should pursue the following objectives: -- Inform Indonesia that the United States believes Iran is attempting to establish a joint bank in Indonesia between Iran's Bank Melli and an Indonesian bank, possibly Penin Bank. -- Warn Indonesia that a joint bank involving Iran's Bank Melli, or any other Iranian bank, could be used by the government of Iran to facilitate proliferation-related payments in circumvention of UNSCRs 1737, 1747 and 1803. -- Urge Indonesia to investigate and prevent the establishment of this joint bank. -------------- NONPAPER FOR INDONESIA -------------- ¶4. (SECRET//REL INDONESIA) -- We would like to raise serious concerns regarding Iranian financial activities in your jurisdiction. -- The United States believes Iran is engaged in efforts to establish a joint bank in Indonesia between Iran's Bank Melli and an Indonesian bank. We believe one of the Indonesian banks that Iran may have approached is Indonesia's Penin Bank. -- We are concerned that a joint bank involving Iran's Bank Melli, or any other Iranian bank, could be used by the government of Iran to facilitate proliferation-related payments in circumvention of UNSCRs 1737, 1747 and 1803. We urge you to investigate these activities and prevent the establishment of this joint bank. -- As you know, UNSCR 1803 was adopted on March 4, 2008, and calls on all member states to exercise vigilance over the financial activities of banks in their territories with all banks domiciled in Iran and their branches and subsidiaries abroad, particularly Bank Melli and Bank Saderat. -- Bank Melli was also designated for financial asset freeze by the United States under Executive Order 13382 for its provision of banking services in support of U.S.- and UN-designated entities, including Bank Sepah, which is also designated under E.O. 13382 and UNSCR 1747. Bank Melli was also designated by the European Union for financial asset freeze on June 23, 2008. -- In addition, the Financial Action Task Force (FATF) has issued three statements of concern over the past year regarding the risks to the international financial system posed by Iran's lack of anti-money laundering and combating terrorist financing (AML/CFT) controls. -- We look forward to working with you on this and other related security and counterproliferation matters. -------------- REPORTING DEADLINE -------------- ¶5. (U) Post should report results by close of business within seven days of receipt of cable. Please slug replies for ISN, T, Treasury, NEA/IR, and EAP. Please include SIPDIS in all replies. -------------- POINT OF CONTACT -------------- ¶6. (U) Washington points of contact for follow-up information are Michelle New, ISN/CPI, (202) 647-0186, newml@state.sgov.gov and Joy Yamamoto, EAP/MTS, (202) 647-2543, yamamotojo@state.gov. ¶7. (U) Department thanks Post for its assistance. RICE