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Cablegate: Designation of Additional Iranian Entities Under

VZCZCXRO1376
OO RUEHAG RUEHAO RUEHAP RUEHAT RUEHBC RUEHBI RUEHBL RUEHBZ RUEHCD
RUEHCHI RUEHCI RUEHCN RUEHDA RUEHDE RUEHDF RUEHDT RUEHDU RUEHED RUEHEL
RUEHFK RUEHFL RUEHGA RUEHGD RUEHGH RUEHGI RUEHGR RUEHHA RUEHHM RUEHHO
RUEHHT RUEHIHL RUEHIK RUEHJO RUEHJS RUEHKN RUEHKR RUEHKSO RUEHKUK
RUEHKW RUEHLA RUEHLH RUEHLN RUEHLZ RUEHMA RUEHMC RUEHMJ RUEHMR RUEHMRE
RUEHMT RUEHNAG RUEHNEH RUEHNG RUEHNH RUEHNL RUEHNP RUEHNZ RUEHPA
RUEHPB RUEHPD RUEHPOD RUEHPT RUEHPW RUEHQU RUEHRD RUEHRG RUEHRN
RUEHROV RUEHRS RUEHSK RUEHTM RUEHVC RUEHVK RUEHYG
DE RUEHC #3198/01 3550113
ZNR UUUUU ZZH
O 200105Z DEC 08
FM SECSTATE WASHDC
TO ALL DIPLOMATIC AND CONSULAR POSTS COLLECTIVE IMMEDIATE

UNCLAS SECTION 01 OF 02 STATE 133198

SENSITIVE

SIPDIS

E.O. 12958: N/A
TAGS: KNNP EFIN PARM IR
SUBJECT: DESIGNATION OF ADDITIONAL IRANIAN ENTITIES UNDER
E.O. 13382

1. (U) THIS IS AN ACTION REQUEST PLEASE SEE PARAGRAPH 9.

-------
SUMMARY
-------

2. (SBU) THE UNITED STATES ON DECEMBER 17, 2008, DESIGNATED
TWO IRANIAN ENTITIES OF PROLIFERATION CONCERN UNDER U.S.
EXECUTIVE ORDER (E.O.) 13382 (BLOCKING PROPERTY OF WEAPONS
OF MASS DESTRUCTION PROLIFERATORS AND THEIR SUPPORTERS):
ASSA CORP., A FRONT COMPANY CREATED AND CONTROLLED BY
IRAN'S BANK MELLI AND DOMICILED IN NEW YORK, AND ITS PARENT
COMPANY ASSA CO. LTD, LOCATED IN THE CHANNEL ISLANDS. BOTH
ENTITIES WERE DESIGNATED FOR BEING CONTROLLED BY AND/OR
ACTING ON BEHALF OF, BANK MELLI. BANK MELLI, IRAN'S
LARGEST BANK, WAS IDENTIFIED IN UN SECURITY COUNCIL
RESOLUTION 1803 AS A BANK OF PROLIFERATION CONCERN
WARRANTING GREATER SCRUTINY, WAS DESIGNATED UNDER E.O.
13382 IN OCTOBER 2007, AND WAS DESIGNATED BY THE EUROPEAN
UNION IN AUGUST 2008 FOR ITS SUPPORT FOR PROLIFERATION. IN


A RELATED ACTION, THE DEPARTMENT OF JUSTICE FILED A CIVIL
FORFEITURE ACTION SEEKING TO FORFEIT ALL RIGHT, TITLE AND
INTEREST OF ASSA CORP., ASSA CO. LTD, AND BANK MELLI IN A
MANHATTAN OFFICE TOWER ON FIFTH AVENUE. WE WOULD LIKE TO
NOTIFY HOST GOVERNMENTS OF THE DESIGNATIONS.

-------------------------
ACTION REQUEST/OBJECTIVES
-------------------------

3. (SBU) POSTS ARE REQUESTED TO PURSUE THE FOLLOWING
OBJECTIVES. IN DOING SO, POSTS MAY DRAW FROM THE PRESS
STATEMENT RELEASED BY THE STATE DEPARTMENT ON DECEMBER 17,
2008, WHICH CAN BE FOUND AT
WWW.STATE.GOV/R/PA/PRS/PS/2008/DEC/113288.HTM ; THE PRESS
STATEMENT RELEASED BY THE TREASURY DEPARTMENT, WHICH CAN BE
FOUND AT WWW.TREASURY.GOV/PRESS/RELEASES/HP1330.HTM; THE
PRESS STATEMENT RELEASED BY THE FEDERAL BUREAU OF
INVESTIGATION, WHICH CAN BE FOUND AT
WWW.NEWYORK.FBI.GOV/DOJPRESSREL/PRESSREL08/NY FO121708/HTM;
AND PARAGRAPHS 4-11 BELOW. PRESS STATEMENTS MAY BE PASSED
TO HOST GOVERNMENT OFFICIALS.

-- INFORM HOST GOVERNMENT OFFICIALS OF THE U.S.
DESIGNATIONS UNDER E.O. 13382 OF ASSA CORP AND THE ASSA CO
LTD.

-- REMIND HOST GOVERNMENT OFFICIALS THAT PARAGRAPH 10 OF
UNSCR 1803 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 PROLIFERATION SENSITIVE NUCLEAR
ACTIVITIES, OR TO THE DEVELOPMENT OF NUCLEAR WEAPON
DELIVERY SYSTEMS, AS REFERRED TO IN RESOLUTION 1737 (2006)

-- URGE HOST GOVERNMENTS, CONSISTENT WITH NATIONAL LAWS AND
REGULATIONS, TO FREEZE THE ASSETS OF THESE ENTITIES IF THEY
HAVE NOT ALREADY DONE SO, 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, ASSA CORP
AND ASSA CO LTD, 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 OCTOBER 17, 2008, THE
FINANCIAL ACTION TASK FORCE ISSUED GUIDANCE ON 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. THE LINK TO
THE GUIDANCE CAN BE FOUND AT WWW.FATF-
GAFI.ORG/DATAOECD/47/41/41529339.PDF.

----------
BACKGROUND
----------

4. (SBU) ASSA CORP. IS A FRONT COMPANY CREATED AND

STATE 00133198 002 OF 002


CONTROLLED BY IRAN'S BANK MELLI AND DOMICILED IN NEW YORK,
AND ITS PARENT ORGANIZATION, ASSA CO. LTD, IS LOCATED IN
THE CHANNEL ISLANDS. THESE ENTITIES WERE DESIGNATED UNDER
EXECUTIVE ORDER 13382 FOR BEING CONTROLLED BY AND FOR
ACTING FOR OR ON BEHALF OF, IRAN'S BANK MELLI, AND FOR
HAVING PROVIDED FINANCIAL SUPPORT FOR, OR SERVICES IN
SUPPORT OF, BANK MELLI. E.O. 13382 IS AN AUTHORITY AIMED
AT FREEZING THE ASSETS OF PROLIFERATORS OF WEAPONS OF MASS
DESTRUCTION (WMD) AND THEIR SUPPORTERS.

5. (SBU) BANK MELLI PROVIDES FINANCIAL SERVICES, INCLUDING
OPENING LETTERS OF CREDIT AND MAINTAINING ACCOUNTS, FOR
IRANIAN FRONT COMPANIES AND ENTITIES ENGAGED IN
PROLIFERATION ACTIVITIES. FURTHER, BANK MELLI HAS
FACILITATED THE PURCHASE OF SENSITIVE MATERIALS UTILIZED BY
IRAN'S NUCLEAR AND MISSILE INDUSTRIES, AND HAS HANDLED
TRANSACTIONS FOR OTHER DESIGNATED IRANIAN ENTITIES,
INCLUDING BANK SEPAH, DEFENSE INDUSTRIES ORGANIZATION
(DIO), AND THE SHAHID HAMMAT INDUSTRIAL GROUP (SHIG).

6. (SBU) BANK MELLI HAS BEEN DESIGNATED AS A PROLIFERATOR
BY THE UNITED STATES AND THE EUROPEAN UNION FOR ITS ROLE IN
IRAN'S NUCLEAR AND BALLISTIC MISSILE PROGRAM. PARAGRAPH 10
OF UNSCR 1803 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 PROLIFERATION SENSITIVE NUCLEAR
ACTIVITIES, OR TO THE DEVELOPMENT OF NUCLEAR WEAPON
DELIVERY SYSTEMS, AS REFERRED TO IN RESOLUTION 1737 (2006).

7. (SBU) BANK MELLI, THROUGH ASSA CORP., HAS AN INTEREST IN
A PROPERTY LOCATED AT 650 FIFTH AVENUE, NEW YORK, NEW YORK.
BANK MELLI CREATED ASSA CORP AS A VEHICLE TO HOLD BANK
MELLI'S INTEREST IN THE 650 FIFTH AVENUE BUILDING. THE
CONSTRUCTION OF THE BUILDING WAS FINANCED, IN PART, BY A
BANK MELLI LOAN. ASSA CORP CO-OWNS THE BUILDING THROUGH A
PARTNERSHIP FORMED WITH THE ALAVI FOUNDATION OF NEW YORK,
CALLED 650 FIFTH AVENUE COMPANY.

8. (SBU) ASSA HAS REPEATEDLY TRANSFERRED RENTAL INCOME
GENERATED FROM THE 650 FIFTH AVENUE PARTNERSHIP BACK TO
BANK MELLI THROUGH ASSA CO LTD. ASSA ALSO HAS REGULARLY
FOLLOWED BANK MELLI'S INSTRUCTIONS WITH REGARD TO ASSA'S
AFFAIRS AND ITS MANAGEMENT OF THE INVESTMENT, AND HAS
REGULARLY REPORTED BACK TO BANK MELLI ON ITS FINANCIAL
SITUATION, INCLUDING FREQUENTLY RESPONDING TO BANK MELLI
REQUESTS FOR AUDITS AND INFORMATION REGARDING COMPANY
EXPENSES.

9. (SBU) IN A RELATED ACTION, THE DEPARTMENT OF JUSTICE
FILED A CIVIL FORFEITURE ACTION SEEKING TO FORFEIT ALL
RIGHT, TITLE AND INTEREST OF ASSA CORP., ASSA CO. LTD, AND
BANK MELLI IN A MANHATTAN OFFICE TOWER ON FIFTH AVENUE.
THE COMPLAINT ALLEGES THAT THE FUNDS IN THE BANK ACCOUNTS
ARE FOREITABLE AS PROCEEDS OF VIOLATIONS OF THE
INTERNATIONAL EMERGENCY ECONOMIC POWERS ACT (IEEPA), AND
THAT ASSA CORPORATION'S INTEREST IN 650 FIFTH AVENUE
COMPANY IS FORFEITABLE AS PROPERTY INVOLVED IN MONEY
LAUNDERING AND A CONSPIRACY TO COMMIT MONEY LAUNDERING.

10. (SBU) THESE DESIGNATIONS HIGHLIGHT THE RISKS OF DOING
BUSINESS WITH IRANIAN FINANCIAL INSTITUTIONS, AND PROVIDE
ADDITIONAL INFORMATION THAT WILL HELP FINANCIAL
INSTITUTIONS IN THE U.S. AND WORLDWIDE PROTECT THEMSELVES
FROM DECEPTIVE FINANCIAL PRACTICES EMPLOYED BY IRANIAN
ENTITIES LIKE ASSA CORP AND ASSA CO LTD.

11. (SBU) WE WANT TO CONVEY TO HOST GOVERNMENTS THAT ANY
ENTITY IN THEIR JURISDICTION FOUND TO BE CONDUCTING
BUSINESS WITH ASSA CORP OR ASSA CO LTD AND ITS AFFILIATES
AND ANY OTHER DESIGNATED ENTITIES, OR ANY ENTITY THAT IS
OWNED OR CONTROLLED BY, OR ACTING FOR OR ON BEHALF OF ASSA
CORP AND ITS AFFILIATES, MAY BE SUBJECT TO DESIGNATION
UNDER E.O. 13382.

------------------
REPORTING DEADLINE
------------------

12. (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, AND NEA/IR.
PLEASE USE SIPDIS CAPTION ON ALL RESPONSES.

----------------
POINT OF CONTACT
----------------

13. (U) QUESTIONS MAY BE DIRECTED TO ISN/CPI JENNIFER
CHALMERS, 202-647-9715.

14. (U) DEPARTMENT THANKS POSTS FOR THEIR ASSISTANCE.
RICE

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