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Cablegate: Treasury U/S Levey Calls Dutch Officials'

VZCZCXRO8422
RR RUEHAG RUEHROV
DE RUEHTC #0782/01 2661504
ZNY SSSSS ZZH
R 221504Z SEP 08
FM AMEMBASSY THE HAGUE
TO RUEHC/SECSTATE WASHDC 1985
INFO RUCNMEM/EU MEMBER STATES COLLECTIVE
RUEHTC/AMCONSUL AMSTERDAM 4018
RUEATRS/DEPT OF TREASURY WASH DC

S E C R E T SECTION 01 OF 02 THE HAGUE 000782

NOFORN
SIPDIS

TREASURY FOR MMILLERWISE, JBURKE, DFERNANDEZ

E.O. 12958: DECL: 09/22/2018
TAGS: EFIN PREL KNNP KTFN IR NL
SUBJECT: TREASURY U/S LEVEY CALLS DUTCH OFFICIALS'
ATTENTION TO IRAN'S DECEPTIVE PRACTICES

Classified By: Pol-Econ Counselor Andrew Mann, reasons 1.4 (b),(d)

1. (S/NF) SUMMARY: In a productive meeting with the Dutch
Finance Ministry (MoF) and Foreign Ministry (MFA), Treasury
U/S Levey discussed Iran's efforts to circumvent
international financial sanctions. The MoF's number three
official, Ronald Gerritse, engaged as U/S Levey spoke about
Credit Europe (a bank operating in the Netherlands that is
facilitating transactions for Iranian banks) and the need to
target parts of the insurance sector vulnerable to Iranian
deception. Gerritse told U/S Levey that MoF would follow up
vigorously with relevant Dutch financial regulators on all
issues raised. END SUMMARY.

2. (S/NF) Treasury Under Secretary for Terrorism and
Financial Intelligence Stuart Levey and Treasury officials
Molly Millerwise and Jonathan Burke met with Dutch government
officials September 12 to discuss efforts to prevent Iran
from evading financial sanctions. Ronald Gerritse, MoF
Secretary General and Treasurer, led the Dutch side. Andre
van Wiggen, MFA Deputy Director of the Terrorism and New
Threats Unit, and sanctions experts from MoF and MFA joined
Gerritse.

--------------------------------------------- --------
Warning on Banks that Facilitate Iranian Transactions
--------------------------------------------- --------

3. (S/NF) U/S Levey described his visit to the Netherlands as
part of a series of conversations with governments and
financial institutions regarding the few European banks that
still provide payment services to Iranian entities. He
praised the multilateral coalition that has worked in recent
years to enforce international sanctions on Iran. However,
he said, Iran continues to evade the sanctions, victimizing
financial institutions that have borne the brunt of this
illicit conduct (a reference to ABN Amro, a Dutch bank). U/S
Levey said most European banks have decided to forego
Iran-related business because it is too risky, but one of the
few exceptions is Credit Europe (a Turkish-owned bank
operating under a Dutch license). He shared information with
Gerritse suggesting Credit Europe has played a role in
providing significant volume of payment services to Iran and
had been involved in some illicit transactions with Iran.
Gerritse was disconcerted by this information and asked
whether U/S Levey thought Credit Europe had played this role
willingly. U/S Levey said no, he assumed that Credit Europe
was not conspiring with Iran, but that the payment services
business exposed the bank to serious risk. Gerritse
indicated he thought the banking supervisors at the Dutch
Central Bank (DNB) were already scrutinizing Credit Europe
and he would ensure they followed up on the matter diligently.

4. (S/NF) U/S Levey stressed the need for European banks to
exercise great vigilance in dealing with any Iranian bank,
including the Central Bank of Iran, as they could unwittingly
involve themselves in efforts to circumvent sanctions. He
described a scheme Bank Sepah employed to disguise payments
as innocuous transactions. He said financial institutions
acting as high-volume correspondent banks (rather than
handling only their own customers' transactions) would
inevitably handle transactions that violate the law. U/S
Levey agreed that performing detailed due diligence on each
transaction of this type might not be efficient but, as the
burden of proof has shifted, correspondent banks could no
longer take for granted what transactions purported to be.
Gerritse assured U/S Levey that the MoF would take up this
point with DNB.

--------------------------------------
New Focus on Insurance Industry's Role
--------------------------------------

5. (S/NF) U/S Levey also raised the issue of the insurance
industry's vulnerability to deceptive Iranian practices. He
noted that the international community had not scrutinized
the insurance industry as it did the banking sector in
implementing UN Security Council resolutions prohibiting the
provision of financial services to Iran. Specifically, he
described how insurance supported Islamic Republic of Iran
Shipping Lines (IRISL), which Treasury had designated
September 10 for its illicit proliferation activity.
Gerritse asked whether targeting IRISL's insurance providers
would have a knock-on effect in the oil market. U/S Levey
responded that a separate Iranian shipping company handled
all of Iran's oil, so focusing on IRISL's bad conduct should
not affect the oil market.
THE HAGUE 00000782 002 OF 002

--------------------------------------------- ---------
Firm Dutch Commitment to Enforcing Financial Sanctions
--------------------------------------------- ---------

6. (S/NF) Gerritse assured Levey that the Netherlands was
very much in line with the United States on the issues of
terrorism finance and Iran. He committed to have Finance
Minister Wouter Bos take up the Credit Europe and insurance
issues with the head of DNB. U/S Levey expressed his
interest in discussing the Credit Europe case in greater
detail in the future.

7. (U) U/S Levey has cleared this cable.
Culbertson

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