

Currently released so far... 12404 / 251,287
Browse latest releases
2010/12/01
2010/12/02
2010/12/03
2010/12/04
2010/12/05
2010/12/06
2010/12/07
2010/12/08
2010/12/09
2010/12/10
2010/12/11
2010/12/12
2010/12/13
2010/12/14
2010/12/15
2010/12/16
2010/12/17
2010/12/18
2010/12/19
2010/12/20
2010/12/21
2010/12/22
2010/12/23
2010/12/24
2010/12/25
2010/12/26
2010/12/27
2010/12/28
2010/12/29
2010/12/30
2011/01/01
2011/01/02
2011/01/04
2011/01/05
2011/01/07
2011/01/09
2011/01/10
2011/01/11
2011/01/12
2011/01/13
2011/01/14
2011/01/15
2011/01/16
2011/01/17
2011/01/18
2011/01/19
2011/01/20
2011/01/21
2011/01/22
2011/01/23
2011/01/24
2011/01/25
2011/01/26
2011/01/27
2011/01/28
2011/01/29
2011/01/30
2011/01/31
2011/02/01
2011/02/02
2011/02/03
2011/02/04
2011/02/05
2011/02/06
2011/02/07
2011/02/08
2011/02/09
2011/02/10
2011/02/11
2011/02/12
2011/02/13
2011/02/14
2011/02/15
2011/02/16
2011/02/17
2011/02/18
2011/02/19
2011/02/20
2011/02/21
2011/02/22
2011/02/23
2011/02/24
2011/02/25
2011/02/26
2011/02/27
2011/02/28
2011/03/01
2011/03/02
2011/03/03
2011/03/04
2011/03/05
2011/03/06
2011/03/07
2011/03/08
2011/03/09
2011/03/10
2011/03/11
2011/03/13
2011/03/14
2011/03/15
2011/03/16
2011/03/17
2011/03/18
2011/03/19
2011/03/20
2011/03/21
2011/03/22
2011/03/23
2011/03/24
2011/03/25
2011/03/26
2011/03/27
2011/03/28
2011/03/29
2011/03/30
2011/03/31
2011/04/01
2011/04/02
2011/04/03
2011/04/04
2011/04/05
2011/04/06
2011/04/07
2011/04/08
2011/04/09
2011/04/10
2011/04/11
2011/04/12
2011/04/13
2011/04/14
2011/04/15
2011/04/16
2011/04/17
2011/04/18
2011/04/19
2011/04/20
2011/04/21
2011/04/22
2011/04/23
2011/04/24
2011/04/25
2011/04/26
2011/04/27
2011/04/28
2011/04/29
2011/04/30
Browse by creation date
Browse by origin
Embassy Athens
Embassy Asuncion
Embassy Astana
Embassy Asmara
Embassy Ashgabat
Embassy Apia
Embassy Ankara
Embassy Amman
Embassy Algiers
Embassy Addis Ababa
Embassy Accra
Embassy Abuja
Embassy Abu Dhabi
Embassy Abidjan
Consulate Auckland
Consulate Amsterdam
Consulate Adana
American Institute Taiwan, Taipei
Embassy Bujumbura
Embassy Buenos Aires
Embassy Budapest
Embassy Bucharest
Embassy Brussels
Embassy Bridgetown
Embassy Bratislava
Embassy Brasilia
Embassy Bogota
Embassy Bishkek
Embassy Bern
Embassy Berlin
Embassy Belmopan
Embassy Belgrade
Embassy Beirut
Embassy Beijing
Embassy Banjul
Embassy Bangkok
Embassy Bandar Seri Begawan
Embassy Bamako
Embassy Baku
Embassy Baghdad
Consulate Barcelona
Embassy Copenhagen
Embassy Conakry
Embassy Colombo
Embassy Chisinau
Embassy Caracas
Embassy Canberra
Embassy Cairo
Consulate Curacao
Consulate Ciudad Juarez
Consulate Chennai
Consulate Casablanca
Consulate Cape Town
Consulate Calgary
Embassy Dushanbe
Embassy Dublin
Embassy Doha
Embassy Djibouti
Embassy Dili
Embassy Dhaka
Embassy Dar Es Salaam
Embassy Damascus
Embassy Dakar
Consulate Dubai
Embassy Helsinki
Embassy Harare
Embassy Hanoi
Consulate Ho Chi Minh City
Consulate Hermosillo
Consulate Hamilton
Consulate Hamburg
Consulate Halifax
Embassy Kyiv
Embassy Kuwait
Embassy Kuala Lumpur
Embassy Kinshasa
Embassy Kingston
Embassy Kigali
Embassy Khartoum
Embassy Kathmandu
Embassy Kampala
Embassy Kabul
Consulate Kolkata
Embassy Luxembourg
Embassy Luanda
Embassy London
Embassy Ljubljana
Embassy Lisbon
Embassy Lima
Embassy Lilongwe
Embassy La Paz
Consulate Lahore
Consulate Lagos
Mission USOSCE
Mission USNATO
Mission UNESCO
Embassy Muscat
Embassy Moscow
Embassy Montevideo
Embassy Monrovia
Embassy Minsk
Embassy Mexico
Embassy Mbabane
Embassy Maputo
Embassy Manila
Embassy Manama
Embassy Managua
Embassy Malabo
Embassy Madrid
Consulate Munich
Consulate Mumbai
Consulate Montreal
Consulate Monterrey
Consulate Milan
Consulate Melbourne
Embassy Nicosia
Embassy New Delhi
Embassy Ndjamena
Embassy Nassau
Embassy Nairobi
Consulate Naples
Consulate Naha
Embassy Pristina
Embassy Pretoria
Embassy Prague
Embassy Port Of Spain
Embassy Port Louis
Embassy Port Au Prince
Embassy Phnom Penh
Embassy Paris
Embassy Paramaribo
Embassy Panama
Consulate Peshawar
REO Basrah
Embassy Rome
Embassy Riyadh
Embassy Riga
Embassy Reykjavik
Embassy Rangoon
Embassy Rabat
Consulate Rio De Janeiro
Consulate Recife
Secretary of State
Embassy Suva
Embassy Stockholm
Embassy Sofia
Embassy Skopje
Embassy Singapore
Embassy Seoul
Embassy Sarajevo
Embassy Santo Domingo
Embassy Santiago
Embassy Sanaa
Embassy San Salvador
Embassy San Jose
Consulate Strasbourg
Consulate St Petersburg
Consulate Shenyang
Consulate Shanghai
Consulate Sao Paulo
Embassy Tunis
Embassy Tripoli
Embassy Tokyo
Embassy The Hague
Embassy Tel Aviv
Embassy Tehran
Embassy Tegucigalpa
Embassy Tbilisi
Embassy Tashkent
Embassy Tallinn
Consulate Toronto
Consulate Tijuana
USUN New York
USEU Brussels
US Office Almaty
US Mission Geneva
US Interests Section Havana
US Delegation, Secretary
UNVIE
Embassy Ulaanbaatar
Embassy Vilnius
Embassy Vienna
Embassy Vatican
Embassy Valletta
Consulate Vladivostok
Consulate Vancouver
Browse by tag
ASEC
AE
AF
AM
AR
AJ
AU
AORC
AG
AEMR
AMGT
APER
AGMT
AL
AFIN
AO
AMED
ADCO
AS
ABUD
ABLD
ASUP
ASECKFRDCVISKIRFPHUMSMIGEG
APECO
AID
AND
AMBASSADOR
AN
ARM
AY
AODE
AMG
ASCH
AMCHAMS
ARF
APCS
APEC
ASEAN
AGAO
ANET
ADPM
ACOA
ACABQ
AORL
AFFAIRS
ATRN
ACS
AFSI
AFSN
ADANA
ASIG
AA
AX
AUC
AC
AECL
AADP
AGRICULTURE
AMEX
ACAO
ACBAQ
AQ
AORG
ADM
AINF
AIT
ASEX
AGR
AROC
ATFN
AFGHANISTAN
AFU
AER
ALOW
AZ
AVERY
BA
BY
BU
BR
BE
BL
BO
BK
BM
BILAT
BH
BEXP
BF
BTIO
BC
BBSR
BMGT
BTIU
BG
BWC
BB
BD
BX
BP
BRUSSELS
BN
BIDEN
BT
CW
CH
CF
CD
CV
CVIS
CM
CE
CA
CJAN
CLINTON
CIA
CU
CASC
CI
CO
CACM
CDB
CN
CMGT
CS
CG
CBW
CIS
CR
CONDOLEEZZA
CPAS
CAN
CWC
CY
COUNTER
CDG
CL
CT
CIC
CIDA
CSW
CHR
CB
CODEL
COUNTERTERRORISM
CTR
COM
CICTE
CFED
CJUS
CKGR
CBSA
CEUDA
CARSON
CONS
CITEL
CLMT
CROS
CITT
CAC
CVR
CDC
CAPC
COPUOS
CBC
CBE
CARICOM
COE
COUNTRY
CLEARANCE
CACS
CTM
CNARC
ECON
EFIN
ETRD
EUN
EFIS
EG
ETTC
EZ
EPET
EAID
EAGR
ENRG
ECUN
EU
ELAB
ECPS
EAIR
EINV
ELTN
EWWT
EIND
EMIN
EI
ECIN
ENVR
ELECTIONS
EINVEFIN
EN
ES
ER
EC
EUC
EINT
EINVETC
ENGR
ET
EK
ENIV
ETRDEINVECINPGOVCS
ECONOMY
EAP
EFTA
EUR
EUMEM
EXIM
ERD
ENERG
EUREM
ESA
ERNG
EXTERNAL
EPA
EINVECONSENVCSJA
ECONOMICS
ELN
EINN
EFINECONCS
ENNP
EEPET
ETRDEINVTINTCS
ENVI
ETRO
ESENV
ECINECONCS
ECONOMIC
EAIDS
EDU
ETRA
ETRN
EFIM
EIAR
ETRC
EAIG
EXBS
EURN
ECIP
EREL
ECA
ENGY
ECONCS
ECONEFIN
ETC
ETRDECONWTOCS
EUNCH
EINDETRD
IR
IZ
IS
IAEA
INRB
IRAJ
IQ
IN
IT
IMO
INTERPOL
ICAO
IO
IC
ITALY
ITALIAN
IRAQI
ICTY
ID
IPR
IWC
ILC
INTELSAT
IL
IBRD
IMF
IA
IRC
ICRC
ILO
ITU
ITRA
IV
IDA
IAHRC
ICJ
ISRAELI
IRS
INMARSAT
ISRAEL
ISLAMISTS
INDO
IZPREL
ITPHUM
ITPGOV
ITF
IBET
IEFIN
INR
IACI
INTERNAL
IDP
IGAD
IEA
ICTR
IIP
INRA
INRO
IF
KJUS
KSCA
KNNP
KU
KCOR
KCRM
KDEM
KTFN
KHLS
KPAL
KWBG
KACT
KGHG
KPAO
KTIA
KIRF
KWMN
KS
KG
KZ
KN
KMDR
KISL
KSPR
KHIV
KPRP
KAWK
KR
KUNR
KDRG
KCIP
KGCC
KTIP
KSUM
KPKO
KVIR
KAWC
KPIN
KGIC
KRAD
KIPR
KOLY
KCFE
KMCA
KE
KV
KICC
KNPP
KBCT
KSEP
KFRD
KFLU
KVPR
KOCI
KBIO
KSTH
KMPI
KCRS
KOMC
KTBT
KPLS
KIRC
KREL
KFRDKIRFCVISCMGTKOCIASECPHUMSMIGEG
KFLO
KBTS
KSTC
KTDB
KFSC
KX
KFTFN
KNEI
KIDE
KREC
KMRS
KICA
KPAONZ
KCGC
KSAF
KRGY
KCMR
KRVC
KVRP
KSEO
KCOM
KAID
KTEX
KNUC
KNAR
KNUP
KNNPMNUC
KLIG
KFRDCVISCMGTCASCKOCIASECPHUMSMIGEG
KCRCM
KHDP
KGIT
KNSD
KOMS
KWMM
KPAI
KHSA
KTLA
KO
KMFO
KRCM
KCSY
KSAC
KTRD
KPWR
KID
KWNM
KRIM
KPOA
KCHG
KOM
KSCI
KFIN
KMOC
KESS
KWAC
KMIG
KSEC
KIFR
KDEMAF
KPRV
KBTR
KERG
KTER
KDDG
KPAK
KRFD
KHUM
KDEV
KCFC
KWWMN
KWMNCS
KJUST
MARR
MOPS
MU
MTCRE
MNUC
MY
MASS
MCAP
MOPPS
MAR
MPOS
MO
ML
MR
MASC
MX
MD
MP
MA
MTRE
MIL
MCC
MZ
MK
MDC
MRCRE
MAPS
MV
MI
MEPN
MAPP
MEETINGS
MAS
MTS
MLS
MILI
MTCR
MG
MC
MARAD
MIK
MILITARY
MEDIA
MEPI
MUCN
MEPP
MT
MERCOSUR
MW
MASSMNUC
MQADHAFI
NZ
NATO
NG
NI
NO
NATIONAL
NU
NPT
NIPP
NL
NPG
NS
NA
NGO
NP
NSG
NDP
NAFTA
NR
NC
NH
NE
NSF
NPA
NK
NSSP
NRR
NATOPREL
NSC
NT
NW
NORAD
NEW
NV
NSFO
NAR
NASA
NZUS
OTRA
OVIP
OPRC
OPDC
OSCE
OAS
ODIP
OIIP
OFDP
OVP
OREP
OFFICIALS
OSAC
OEXC
OPCW
OIE
OIC
OFDA
OSCI
OPIC
OBSP
OECD
ON
OCII
OHUM
OES
OCS
OMIG
OPAD
OTR
PGOV
PREL
PHUM
PINR
PTER
PSOE
PINS
PARM
PK
PBTS
PEPR
PM
POLITICAL
PARTIES
PREF
PBIO
PROP
PA
PSI
PINT
PO
PKFK
PL
PAK
PE
POLITICS
PINL
POL
PHSA
PU
PF
POV
PFOR
PHALANAGE
PARTY
PARMS
PRGOV
PNAT
POLINT
PRAM
PMAR
PG
PAO
PROG
PRELP
PPA
PCUL
PSEPC
PSA
PREO
PAHO
PGIV
PREFA
PALESTINIAN
PAIGH
POSTS
PTBS
PGOVLO
PORG
PGOVE
PLN
PINF
PAS
PUNE
POLICY
PDEM
PDOV
PCI
PGOVSMIGKCRMKWMNPHUMCVISKFRDCA
PBT
PHUMPGOV
PMIL
PNG
PP
PS
PHUH
PECON
POGOV
PY
PHUMPREL
PHUS
PRL
PGOC
PNR
PGGV
PROV
PTERE
PGOF
PHUMBA
PEL
RS
RU
RW
REGION
RP
RICE
ROBERT
RSP
RUPREL
RM
RO
RCMP
RSO
RELATIONS
REACTION
REPORT
RIGHTS
ROOD
RF
RFE
RIGHTSPOLMIL
SP
SA
SY
SF
SYR
SENV
SCUL
SOCI
SNAR
SO
SU
SG
STEINBERG
SHUM
SW
SMIG
SR
SZ
SIPRS
SI
SAARC
SPCE
SARS
SN
SYRIA
SANC
SL
SCRS
SC
SENVKGHG
SAN
SNARCS
SHI
SWE
SNARIZ
SIPDIS
SEN
SNARN
SPCVIS
SEVN
SSA
SH
SOFA
SK
ST
TPHY
TU
TRGY
TI
TX
TS
TW
TC
TFIN
TD
TSPA
TH
TT
TIP
TBIO
TSPL
TZ
TERRORISM
TRSY
TN
THPY
TINT
TF
TL
TV
TK
TO
TP
TURKEY
TNGD
TBID
TAGS
TR
UP
US
UNSC
UK
UZ
UE
UNESCO
UV
UNGA
UN
UNMIK
UNO
UY
UAE
UNEP
UG
UNHCR
UNHRC
USUN
UNAUS
USTR
USNC
USOAS
UNCHR
UNCSD
UNDP
USEU
USPS
UNDC
UNDESCO
UNCHC
UNFICYP
UNC
UNODC
UNPUOS
UNCND
UNICEF
UNCHS
UNVIE
USAID
UNIDROIT
Browse by classification
Community resources
courage is contagious
Viewing cable 08LONDON1352, IRANIAN BANKING IN LONDON: UK PLANS AND CONCERNS
If you are new to these pages, please read an introduction on the structure of a cable as well as how to discuss them with others. See also the FAQs
Understanding cables
Every cable message consists of three parts:
- The top box shows each cables unique reference number, when and by whom it originally was sent, and what its initial classification was.
- The middle box contains the header information that is associated with the cable. It includes information about the receiver(s) as well as a general subject.
- The bottom box presents the body of the cable. The opening can contain a more specific subject, references to other cables (browse by origin to find them) or additional comment. This is followed by the main contents of the cable: a summary, a collection of specific topics and a comment section.
Discussing cables
If you find meaningful or important information in a cable, please link directly to its unique reference number. Linking to a specific paragraph in the body of a cable is also possible by copying the appropriate link (to be found at theparagraph symbol). Please mark messages for social networking services like Twitter with the hash tags #cablegate and a hash containing the reference ID e.g. #08LONDON1352.
Reference ID | Created | Released | Classification | Origin |
---|---|---|---|---|
08LONDON1352 | 2008-05-14 15:03 | 2011-02-02 21:09 | SECRET//NOFORN | Embassy London |
VZCZCXRO4304
OO RUEHBC RUEHBW RUEHDE RUEHDIR RUEHFL RUEHKUK RUEHKW RUEHLA RUEHROV
DE RUEHLO #1352/01 1351516
ZNY SSSSS ZZH
O 141516Z MAY 08
FM AMEMBASSY LONDON
TO RUEHC/SECSTATE WASHDC IMMEDIATE 8602
RUEATRS/DEPT OF TREASURY WASHDC IMMEDIATE
RHEHNSC/NSC WASHDC IMMEDIATE
RUEAIIA/CIA WASHINGTON DC IMMEDIATE
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE IMMEDIATE
RUCNIRA/IRAN COLLECTIVE IMMEDIATE
RUCNDT/USMISSION USUN NEW YORK IMMEDIATE 1180
S E C R E T SECTION 01 OF 04 LONDON 001352
NOFORN SIPDIS
STATE FOR NEA/IR, EEB, ISN/RA, EUR/WE TREASURY FOR COLLEEN EDDY, MOLLY MILLERWISE, DEANNA FERNANDEZ, MICHELLE ZAGER
E.O. 12958: DECL: 05/13/2018
TAGS: EFIN KTFN MNUC IR UK
SUBJECT: IRANIAN BANKING IN LONDON: UK PLANS AND CONCERNS
Classified By: DCM RICHARD LEBARON FOR REASONS 1.4 B & D
1.(C/NF) SUMMARY. The British government is reviewing its options in going after Iranian banks following USG pressure to deny UK licensing requests to the UN regarding Bank Sepah. HMG believes the bank regulator has exhausted its options on the domestic branches, and HM Treasury is considering how far it can go in severing links to the parents in Tehran. HMG will begin explaining to Persian Gulf and East Asian governments its actions against London based Iranian banks, but must be careful not to give the Iranians ammunition for any court action. There is a pronounced split in HMG thinking, with the Prime Minister and Foreign Office backing a strong stance against Iran, while HM Treasury is protecting London's financial position and legal framework. Coordinated USG pressure has worked recently, and if continued, could help move HMG closer to our position. Suggested next steps are provided in paragraph
ΒΆ10. END SUMMARY UNSCR 1803 IMPLEMENTATION -------------------------
2.(C/NF) We met with Pete Maydon, HM Treasury's (HMT) Deputy Head of Financial Sanctions Unit on May 9 to discuss HMT's next steps after its about-face on the Bank Sepah licensing requests. Maydon said the UK shares U.S. objectives in stopping Iran's nuclear proliferation program. The UK is pressing its EU partners to go further than UN Security Council Resolution (UNSCR) 1803, Maydon told us, hoping for action - including against Bank Melli - by May 19th. HMT is also studying how aggressive it can be in following our position on continued vigilance, although Maydon claims they can not be as aggressive as the U.S. For instance, the British government will not agree to a complete ban on international transactions in and out of Iran, but is working with UK banking regulators to take a more forward-leaning stance.
REGULATORY ACTION -----------------
3.(C/NF) According to Maydon, in a heated meeting late last week, HMT pressed the Financial Services Authority (FSA) to sharpen the rest of the tools in its kit in going after Iranian banks. The FSA pushed back claiming they have already fully investigated local branches, and that they needed to show consistency in their approach to all regulated banks and a "proportionate" approach (i.e., the punishment should fit the crime.) HMT and FSA have told us on numerous occasions that the bank regulator was very aggressive in looking for irregularities in the London-based Iranian banks, and that they thought they had cleverly disguised the investigations as part of their normal "fit and proper" investigations. But now the FSA is sensitive to complaints that they have politicized their investigations, and point to the Iranian Foreign Ministry's summoning of the UK Ambassador to lecture about the "political abuse" of the FSA against Iranian banks, Maydon said. The British government is also concerned that if it goes too far under UK law it will run the risk of losing and having to pay compensation to the Iranian banks, which Maydon said would set back efforts on many fronts.
IRAN'S LONDON BRANCHES NOT YET FALLING DOWN -------------------------------------------
4.(C/NF) HMT views the likelihood of the sanctioning of Bank Melli, together with what they call the "state of suspended animation" of Bank Sepah, as positive movement, according to Maydon. When we forcefully pushed back that both banks were still open for business, and that Sepah was still operating at half-capacity, with approximately half of its staff, Maydon argued that it had been effectively cut off from its parent in Tehran. Patrick Guthrie, Head of Financial Sanctions Unit, previously told us that Sepah London was down to about BPS 1 million (approx. 2 million USD) and was not taking on new business; rather it was only doing what was permitted under UNSCR, and reserves are keeping the office going.
5.(S/NF) HMT and FSA have recently looked into shutting down Sepah completely by revoking their license, but can not find LONDON 00001352 002 OF 004 any violations of UK regulatory law which would allow them to do so, said Guthrie. In fact, the Iranian banks operating in London are very clean, probably because they realize they are under the microscope, Guthrie said. HMT originally looked at revoking Sepah's license on policy grounds at the time of the UNSCR, but could not use any UK legal or regulatory lever, and HMG lawyers believed the mere existence of the resolution was not sufficient legal justification. The Chairman of Sepah was, however, removed by FSA because he was designated by the resolution. The British Security Services have investigated Bank Melli for signs of the local branch's participation in proliferation, and have found none. However, they are sufficiently concerned about Melli's parent that they are pushing for EU action and are confident it will happen soon, according to Guthrie.
6.(S/NF) The British government is currently looking into Bank Saderat again to see if they can take any domestic action, Guthrie said, as high levels of government believe Saderat is quite guilty, but have not been able to prove it under UK law. On the other hand, the British government conducted massive investigation to get information on Persia International Plc, another Iranian bank operating in London, only to come up with nothing, Maydon told us.
CUTTING THE UMBILICAL CORD TO THE PARENT BANKS --------------------------------------------- -
7.(C/NF) We pressed further to inquire whether a fit and proper investigation had been done on all the parent banks in Tehran, and did not get a clear answer. According to the FSA, they can withdraw or deny a license to a bank if the parent is unfit to hold a license. It is harder to revoke a license once it is given, than to deny it up front, Sue Fisher, of the FSA's Policy and Intelligence Department told us. Maydon said the FSA was looking into whether they could revoke Sepah's license based on the links to the already UNSC-sanctioned Tehran parent, but has found too much autonomy for the London branch - which could cause the UK legal problems down the road if challenged by the local branches. Guthrie referred to the FSA's concerns about the use of classified evidence in what would likely become part of the public record when challenged in a UK court. (Embassy note: the current draft counter terrorism bill would permit the use of clandestine information in asset-freezing determinations, but would not be used by FSA in regulatory determinations, nor would it directly pertain to WMD proliferation cases.) Guthrie also stressed HMT and FSA were worried that closing a subsidiary of a Tehran bank would neither hurt the parent sufficiently, nor be a "proportional" response to the wrong-doing of the parent (i.e., the sins of the father argument.) Under British law, however, the UK could replace suspect directors with UK persons, if they had sufficient evidence of wrongdoing.
UK TO REACH OUT TO GULF AND FAR EAST ------------------------------------
8.(C/NF) The UK has until now focused on the legality of the measures it could take against the banks, the proportionality of any sanctions, and the ultimate effectiveness in harming the wrong-doing parent banks, Maydon explained. The UK has not sufficiently considered the symbolism of its efforts (or lack thereof), he said. Maydon questioned whether the U.S. was more interested in the symbolism rather than in actually hurting the Tehran parent banks of the proliferators, pointing to what he referred to as "conflicting signals from Washington" as to what the goal is. In taking on board our argument that the UK is setting a poor example for Persian Gulf and East Asian governments who point to the existence of several Iranian banks in London, Maydon described UK plans to approach those governments quietly and tell them that the UK is "cracking down" on Iranian banks in London. He said the UK needs to be careful, however, in describing both the extent of FSA probing (which he claimed "borders on bending the law") and the results of their investigations that show most of the banks are autonomous. HMT is also concerned that these targeted sanctions are growing in scope to a broad-scale full sanctioning of Iran through the back door, Maydon said.
PM AND FOREIGN OFFICE BULLISH ON IRAN; HMT CAUTIOUS LONDON 00001352 003 OF 004 --------------------------------------------- ------
9.(C/NF) Policy differences within the government split Prime Minister Brown and the Foreign Office, who are strong supporters of robust action against Iran, from the more cautious HM Treasury. HMT's concerns are with protecting London's position as a major banking center in the world, and maintaining international finance as a major contributor to the UK GDP. In doing so, HMT is very sensitive to protecting the legal and regulatory framework that holds up the entire financial sector, and not just looking out for specific business interests (i.e., Middle Eastern business.) Maydon told us that Chancellor Darling is concerned that any actions might end up harming the UK and UK banks more than they actually harm Iran. HMT is looking at other measures than to try to completely severe ties to the parent in Iran, but Maydon acknowledged that it may end up coming down to that. HMT is also concerned that if they shut down Iranian banks now, the Foreign Office and PM will start using this tool against other lesser threats.
NEXT STEPS ----------
10.(C/NF) COMMENT: In addition to presenting the UK with information on proliferation financing at the upcoming U.S.-UK Proliferation Finance meetings on May 16, we suggest the following: -Lay out what is at stake (it is particularly important for HMT attendees to hear this); briefly describe Iran's nuclear proliferation and terrorist support, including against U.S. and UK troops in Iraq and Afghanistan. Emphasize that the threat is against us all and we need to make common cause; -Explain how the fact that any money that goes to the regime - directly or through tax revenues or export credits, etc. - allows Iran to continue its dangerous actions; -Make clear that despite the risk that any funds flowing to Iran could help the regime, the USG is NOT/NOT trying to shut down all banks and companies or cripple the Iranian economy. Rather we are targeting the specific bad actors and parties who actively, knowingly or reasonably should know they are supporting proliferation and/or terrorism; -With this in mind, the U.S. and UK need to stick together to show moral leadership and make sacrifices to send a message not just to Iran, but to the next rogue nation that tries to develop nuclear weapons. UK leadership in UN, EU and FATF is superb, but we need the British government to go the extra mile. Specific requests for the British government:
-We should press for more strenuous "fit and proper" reviews of the parents; urge UK to either shut down completely or at a minimum cut all links between suspect Tehran banks and London (i.e., change names, directors, senior managers, in addition to stopping the flow of funds to Iran);
-Revisit the possibility of domestically designating Bank Saderat (UK is considering doing this, but could use more information on Saderat's activities);
-Submitting to Parliament legislation allowing: asset-freezing of WMD and nuclear proliferators; the use of classified information in regulatory and asset-freezing determinations; and solidifying the current asset-freezing regime (not legally linked but very similar in theory and many aspects to sanctioning Iranian banks. The UK is actively working on this latter legislation.)
11.(C/NF) COMMENT CONTINUED: HMT until recently has been concerned about the legality of actions against the London branches, the proportionality of punishment against the subsidiaries for the sins of the parents, and whether domestic action could actually accomplish our goals. They are just now warming to the idea that the symbolism of shutting banks or severing domestic branches' ties to Tehran could have a powerful effect. High-level phone calls from several USG agencies and meetings combined with ground-level efforts made the difference in turning HMT's position on Bank Sepah a few weeks ago. We seem to have their attention now. A similar coordinated campaign could work now as the UK prepares a new approach. An appeal to British pride of principled, global leadership, as well as a further explanation of the risks of inaction, could work. LONDON 00001352 004 OF 004 Visit London's Classified Website XXXXXXXXXXXX
TUTTLE