DESIGNATION OF MALAYSIAN BANK AND BANK MELLAT

UNCLAS STATE 115135 E.O. 12958: N/A TAGS: KNNP EFIN PARM IR SUBJECT: DESIGNATION OF MALAYSIAN BANK AND BANK MELLAT CHAIRMAN UNDER E.O. 13382 ¶1. (U) This is an action request please see paragraph ¶5. -------------- SUMMARY/BACKGROUND -------------- ¶2. (U) The United States on November 5, 2009, designated First East Export Bank (FEEB),a Malaysia-based subsidiary of Iran's state-owned Bank Mellat, and Iranian national and chairman of Bank Mellat, Ali Divandari, under Executive Order (E.O.) 13382 ("Blocking the Property of Weapons of Mass Destruction Proliferators and their Supporters"). FEEB was designated for being owned or controlled by Bank Mellat, and Divandari was designated for acting on behalf of Bank Mellat. Bank Mellat has facilitated the movement of millions of dollars for Iran's nuclear program and was designated under E.O. 13382 on October 25, 2007. E.O. 13382 freezes the assets of designated proliferators of weapons of mass destruction and their supporters and prohibits U.S. persons from engaging in any transactions with them. ¶3. (U) These designations are consistent with obligations in UN Security Council Resolutions (UNSCRs) 1737, 1747 and 1803, which require Member States to freeze the assets of entities and individuals designated by the UN Security Council or the Iran Sanctions Committee as being involved in Iran's nuclear or missile programs, and freeze the assets of entities acting on their behalf or at their direction. These designations are also consistent with obligations in Paragraph 10 of UNSCR 1803, which calls upon all Member States to exercise vigilance over the activities of financial institutions in their territories with all banks domiciled in Iran, in particular with Bank Melli and Bank Saderat, and their branches and subsidiaries abroad, in order to avoid such activities contributing to the proliferation of sensitive nuclear activities, or to the development of nuclear weapon delivery systems, as referred to in resolution 1737 (2006). ¶4. (U) We want to notify host governments of the basis and significance of the designations and convey that any entity in their jurisdiction found to be conducting business with First East Export Bank and its affiliates and any other designated entities, or any entity that is owned or controlled by, or acting for or on behalf of FEEB and its affiliates, may be subject to designation under E.O. 13382. -------------- ACTION REQUEST/OBJECTIVES -------------- ¶5. (SBU) Posts are requested to pursue the following objectives. In doing so, Posts may draw from the press statement released by the Treasury Department, which can be found at www.treasury.gov/press/releases/tg355.htm. The press statement may be passed to host government officials. -- Inform host government officials of the U.S. designations under E.O. 13382 of First East Export Bank (FEEB),and Bank Mellat's chairman, Ali Divandari. -- Notify host government officials that these designations are aimed at implementing USG obligations under UNSCRs 1737, 1747 and 1803 and demonstrate that the United States will continue to implement our existing laws and sanctions against Iranian proliferation as long as Iran continues its illicit activities. -- Note that these designations highlight the dangers of doing business with Iranian financial institutions, and provide information that will help financial institutions in the U.S. and worldwide protect themselves from Iranian entities that abuse the international financial system to support and facilitate proliferation activity. -- Urge host governments to take steps, in accordance with the measures adopted in UNSCRs 1737, 1747 and 1803 and their national authorities, to freeze the assets of this entity and individual, as well as the assets of persons or entities acting on their behalf or at their direction, or by entities owned or controlled by them. -- Note that firms in the jurisdiction of host governments risk designation under E.O. 13382 if they act or purport to act for or on behalf of, directly or indirectly, FEEB, or any other E.O. 13382 designated entity, and/or if they provide, or attempt to provide, financial, material, technological, or other support for, or goods or services in support of any designated entity. -- Remind host governments that on February 25, 2009, the Financial Action Task Force (FATF) issued a statement calling for jurisdictions to impose countermeasures to protect against the risks posed to the international financial system by Iran's AML/CFT deficiencies, and to take these risks into account when considering requests by Iranian financial institutions to open branches and subsidiaries in foreign jurisdictions. The United States urges host government financial regulators to apply extraordinary scrutiny on the operations of FEEB and all Iranian financial institutions, consistent with the UNSCRs on Iran and the FATF's guidance. -------------- REPORTING DEADLINE -------------- ¶6. (U) Please report delivery of the demarche and any response within seven days of receipt of this cable. Please slug replies for ISN, T, TREASURY, EAP and NEA/IR. Please use SIPDIS caption on all responses. -------------- POINT OF CONTACT -------------- ¶7. (U) Questions may be directed to ISN/CPI Jennifer Chalmers, 202-647-9715. chalmersja@state.sgov.gov. ¶8. (U) Department thanks Posts for their assistance. CLINTON NNNN End Cable Text