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Cablegate: Bermuda Directs Bermuda Firms to Cease Doing Business With

VZCZCXRO2151
RR RUEHHT
DE RUEHHT #0014 0191919
ZNR UUUUU ZZH
R 191919Z JAN 10
FM AMCONSUL HAMILTON
TO RUEHC/SECSTATE WASHDC 3978
INFO RHMFIUU/DEPT OF JUSTICE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUEHLO/AMEMBASSY LONDON 0932
RUEHHT/AMCONSUL HAMILTON 2156

UNCLAS HAMILTON 000014

SIPDIS

SENSITIVE

INL; SCT; EEB
JUSTICE FOR AFMLS,CIA,OPDAT
TREASURY FOR FINCEN (BEZEK AND MICHAEL);
EUR/WE (MARBURG AND ABBASZEDEH);
EUR/PPD (MCMANIS AND PIPKIN);
LONDON (HUBER AND M. JOHNSON);

E.O. 12958: N/A
TAGS: EFIN KTFN KCRM PGOV PREL BD
SUBJECT: BERMUDA DIRECTS BERMUDA FIRMS TO CEASE DOING BUSINESS WITH
THE ISLAMIC REPUBLIC OF IRAN SHIPPING LINES

Summary

1. (U) The Government of Bermuda (GOB) has taken
expeditious and concrete steps to comply with international
sanctions against Iran with the passage of new legislation and
directives that strengthen Bermuda's Anti-Money
Laundering/Anti-Terrorist Financing (AML/ATF) regime. On
January 15, 2010, the Minister of Justice issued an Order
specifically prohibiting Bermuda financial firms from doing
business with the Bank Mellat and the Islamic Republic of Iran
Shipping Lines (IRISL). The Minister stressed that Bermuda is
committed to complying with international AML/ATF standards.
End summary.

2. (SBU) In December the U.S. Treasury Department contacted
the Consul General seeking action from Bermuda with respect to
business transactions involving the Islamic Republic of Iran
Shipping Lines (IRISL). IRISL had obtained insurance through a
company legally domiciled in Bermuda - the South of England
Protection and Indemnity Association (SEPIA). The Consul
General immediately contacted the Bermuda Monetary Authority
(BMA) and the National Anti-Money Laundering Committee (NAMLC),
who indicated that the GOB was fast-tracking passage of the
Anti-Terrorism (Financial and Other Measures) Amendment Act 2009
(Amendment Act), and that implementation was a priority.
Minister of Justice Kim Wilson noted that the GOB had been
working with the U.K.'s HM Treasury on the legislation.

3. (SBU) The GOB passed the Amendment Act on December 19,
with effect from January 13, 2010. The Act authorizes the
Minister of Justice to restrict financial firms in Bermuda from
doing business with entities connected with jurisdictions of
concern regarding money laundering, terrorist financing or the
proliferation of chemical, biological, radiological and nuclear
(CBRN) weapons. On January 15, 2010, in conjunction with that
act, which parallels Schedule 7 of the UK Counter Terrorism Act
2009, and at the request of the U.S. Treasury Department, the
Minister of Justice issued the "Anti-Terrorism (Financial
Restrictions Iran) Order 2010" (Order). Effective immediately,
the Order prohibits all AML/ATF-regulated financial institutions
or insurers from entering into, or continuing to participate in,
any transaction or business relationship with "designated
persons," specifically the Bank Mellat, the IRISL, or any branch
thereof. Wilson explained to the Consul General that Bank
Mellat was not conducting business in Bermuda, but indicated
Bermuda would follow the U.K.'s lead and include it in the
Order. The Order provides seven days for businesses to wind up
existing contracts.

4. (U) Minister of Justice and Attorney General Wilson
publicly stated on January 15 , "In the past, financial
institutions have been prohibited from doing business with
certain persons and entities as a result of international
sanctions, but this is the first time that we have been able to
take this type of action to protect the national interests of
Bermuda. Further, this legislation allows us for the first time
to specifically take action to address matters relating to the
financing of the development of nuclear and other such weaponry
for destructive purposes." Speaking on behalf of the BMA,
William Kattan remarked, "The action taken by the Attorney
General's office to restrict Bermuda based companies from
conducting business with Iranian Bank Mellat and the IRISL is a
clear demonstration of Bermuda's commitment to follow through on
its new anti-money laundering, anti-terrorism financing
framework.

SHELTON

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