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O 251117Z OCT 07
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UNCLAS SECTION 01 OF 08 STATE 148605
SIPDIS
SENSITIVE
SIPDIS
E.O. 12958: N/A
TAGS: PREL KNNP IR PARM EFIN
SUBJECT: DESIGNATIONS OF IRANIAN ENTITIES AND INDIVIDUALS
UNDER U.S. EXECUTIVE ORDERS
1. (U) This is an action request please see paragraphs 2-
5. For Moscow, Beijing, G7, and all NEA Posts, Washington
requests delivery of the talking points at the Ministerial
level.
OBJECTIVES
----------
2. (SBU) Secretary Rice and Secretary Paulson will go on
camera at 0900 EST on Thursday, October 25, 2007 to
announce the designation of several Iranian entities,
individuals, and banks for their support to terrorism and
on proliferation grounds.
3. (SBU) Washington requests that Posts embargo this
information until the press conference begins. Ambassador
should notify host government/EU officials (including the
finance and foreign ministries) and provide the non-paper
in paragraph 7 and fact sheet in paragraph 8 not earlier
than 9:00 a.m. EST on Thursday, October 25, 2007.
4. (SBU) Specifically, the United States is designating
Iran's Islamic Revolutionary Guard Corps (IRGC) the
Ministry of Defense and Armed Forces Logistics, Banks
Melli and Mellat, 9 IRGC-affiliated companies, 5 IRGC
general officers, and 3 Aerospace Industry Organization
(AIO) individuals under E.O. 13382 ("Blocking the Property
of Weapons of Mass Destruction Proliferators and their
Supporters") and IRGC-Qods Force and Bank Saderat under
E.O. 13224 ("Blocking Property and Prohibiting
Transactions With Persons Who Commit, Threaten to Commit,
or Support Terrorism").
5. (SBU) These designations are aimed at implementing USG
UNSCR 1737 and 1747 (the two UN Chapter VII resolutions
passed against Iran in the last year) obligations, as well
as protecting the U.S. financial system from financial
activity supporting ongoing Iranian proliferation and
terrorism activities facilitated by Iranian banks. Post
should pursue the following objectives:
-- Inform host government/EU officials of the U.S.
designations under E.O. 13382 and 13224.
-- Notify host government/EU officials these designations
are aimed at implementing USG UNSCR 1737 and 1747
obligations, as well as protecting the U.S. financial
system from financial activity supporting ongoing Iranian
proliferation and terrorism activities facilitated by
Iranian banks.
-- Note that many of the entities/individuals not
specifically named in UNSCR 1737 and 1747 are covered by
the resolution's requirement to freeze the assets of
entities/individuals acting on behalf of or owned or
controlled by designated entities/individuals.
-- Urge host government/EU officials to take parallel
steps to isolate these entities/individuals from the
international financial system to prevent further
facilitation of Iran's proliferation and terrorist
activities.
-- Ask host government officials to designate IRGC,
MODAFL, Banks Melli and Mellat, IRGC-Qods Force, and Bank
STATE 00148605 002 OF 008
Saderat. Ask EU member states and EU officials to put such
designations on the table with other EU autonomous
measures now being considered.
REPORTING DEADLINE
------------------
6. (U) Please report delivery of the U.S. non-paper and
any immediate response by October 25, 2007. Please slug
replies for ISN, T, TREASURY, EUR, EAP and NEA. Please
use SIPDIS caption on all responses.
NONPAPER
--------
7. (U) Begin text of non-paper (embargoed until 0900 EST
on Thursday, October 25, 2007) for all listed Posts:
-- In May 2006, the United States and its P5+1 partners
(Russia, China, UK, France, Germany) offered the Iranian
government an historic opportunity to improve its
relations with the international community and with the
United States. Secretary Rice said at that time that our
nation deeply respects the Iranian people, and that we are
eager to build a better future together. We offered Iran
new incentives to cooperate with the international
community, including the construction of light water
reactors in Iran. But we also said that, if the
government of Iran continued to violate its international
obligations and to confront the international community,
that it would face sanctions in the UN and by individual
countries.
-- The United States remains fully committed to a
diplomatic solution with Iran. Unfortunately, the Iranian
government continues to spurn the P5+1 offer for
cooperation; instead, it remains committed to threatening
peace and stability in the Middle East: by pursuing
nuclear weapons, building dangerous missiles and
proliferating that technology, supporting terrorists and
other violent extremists in Iraq, Afghanistan, Lebanon,
and the Palestinian territories, denying the existence of
our ally, Israel, and threatening to "wipe Israel off the
map."
-- Working with other concerned nations all across the
world, the United States has adopted a comprehensive
policy to counter the threatening behavior of the Iranian
government. We have worked with our fellow members of the
U.N. Security Council to impose two sets of Chapter VII
sanctions on the Iranian government and are now discussing
a third UNSC Chapter VII sanctions resolution.
-- The U.S. will take an important step today in our
continuing efforts to curtail Iran's misuse of the
international financial system as it seeks to procure and
develop WMD capabilities. We will also separately take aim
at disrupting Iran's support for terrorism.
-- We are acting in concert with our obligations under
UNSCRs 1737 and 1747, which require states to freeze the
assets of designated entities and individuals, as well as
entities owned or controlled by, or acting on behalf of
them. Today's actions are also consistent with a warning
recently by the Financial Action Task Force, an
intergovernmental body that issues guidance on combating
money laundering and terrorist financing, which
highlighted the threat posed by Iran to the international
financial system. U.S. actions will assist U.S. financial
institutions in protecting themselves from deceptive
STATE 00148605 003 OF 008
financial practices by Iranian entities and individuals
engaged in or supporting proliferation and terrorism
activities.
-- We see these moves as complementary to possible
parallel moves on other tracks, at the UN, within the EU,
and by individual states that, like the U.S., may deem the
risk to their financial institutions sufficiently grave as
to merit immediate action on a national basis.
-- These steps to designate Iranian state organizations
and individuals involved in proliferation should be seen
in the context of our larger collective effort to put
pressure on Tehran to change course. Calibrating a series
of moves - our own national designations, continuing P5+1
discussions on a third resolution, kicking off discussion
in the EU of autonomous measures - will, we believe,
amplify a sense of international resolve and unity on this
critical issue that Tehran will find increasingly
difficult to ignore or dismiss.
-- We remain committed to the P5+1's dual track approach
of supporting negotiations with Iran while at the same
time being prepared to impose UNSC sanctions on Iran if it
will not comply with its international obligations. To
that end, we reaffirm our support for the P5+1 package of
incentives offered to Iran in June 2006. However, as the
P5+1 has agreed, we are also prepared to adopt additional
Chapter VII sanctions at the UNSC as escalation of the
pressure on Tehran should Iran fail to suspend its
proliferation sensitive nuclear activities and enter into
negotiations on the basis of the P5+1 offer.
-- The designations we will announce today were crafted
with that in mind. We would urge you to begin looking at
efforts similar or comparable to those we announce today
that will both assist in protecting the international
financial system, as well as signal clearly to Tehran that
international commitment and unity remain firm. In short,
we need the international community to make the diplomacy
more effective and credible to raise the cost to Iran of
its current behavior and to convince it to agree to
negotiations.
End non-paper.
8. (U) Begin text of fact sheet (embargoed until 0900 EST
on Thursday, October 25, 2007) for all listed Posts:
Fact Sheet:
Designation of Iranian Entities and Individuals for
Proliferation Activities and Support for Terrorism
--------------
-- The U.S. Government is taking several major actions
today to counter Iran's bid for nuclear capabilities and
support for terrorism by exposing Iranian banks, companies
and individuals that have been involved in these dangerous
activities and by cutting them off from the U.S. financial
system.
-- Today, the Department of State designated under
Executive Order 13382 two key Iranian entities of
proliferation concern: the Islamic Revolutionary Guard
Corps (IRGC) and the Ministry of Defense and Armed Forces
Logistics (MODAFL). Additionally, the Department of the
Treasury designated for proliferation activities under
E.O. 13382 nine IRGC-affiliated entities and five IRGC-
affiliated individuals as derivatives of the IRGC, Iran's
state-owned Banks Melli and Mellat, and three individuals
STATE 00148605 004 OF 008
affiliated with Iran's Aerospace Industries Organization
(AIO).
-- The Treasury Department also designated the IRGC-Qods
Force (IRGC-QF) under E.O. 13224 for providing material
support to the Taliban and other terrorist organizations,
and Iran's state-owned Bank Saderat as a terrorist
financier.
-- Elements of the IRGC and MODAFL were listed in the
Annexes to UN Security Council Resolutions 1737 and 1747.
All UN Member States are required to freeze the assets of
entities and individuals listed in the Annexes of those
resolutions, as well as assets of entities owned or
controlled by them, and to prevent funds or economic
resources from being made available to them.
-- The Financial Action Task Force, the world's premier
standard-setting body for countering terrorist financing
and money laundering, recently highlighted the threat
posed by Iran to the international financial system. FATF
called on its members to advise institutions dealing with
Iran to seriously weigh the risks resulting from Iran's
failure to comply with international standards. Last
week, the Treasury Department issued a warning to U.S.
banks setting forth the risks posed by Iran. (For the
text of the Treasury Department statement see:
http://www.fincen.gov/guidance_fi_increasing_ mlt_iranian.p
df.) Today's actions are consistent with this warning, and
provide additional information to help financial
institutions protect themselves from deceptive financial
practices by Iranian entities and individuals engaged in
or supporting proliferation and terrorism.
Effect of Today's Actions
---------
-- As a result of our actions today, all transactions
involving any of the designees and any U.S. person will be
prohibited and any assets the designees may have under
U.S. jurisdiction will be frozen. Noting the UN Security
Council's grave concern over Iran's nuclear and ballistic
missile program activities, the United States also
encourages all jurisdictions to take similar actions to
ensure full and effective implementation of UN Security
Council Resolutions 1737 and 1747.
-- Today's designations also notify the international
private sector of the dangers of doing business with three
of Iran's largest banks, as well as the many IRGC-
affiliated companies that pervade several basic Iranian
industries.
Proliferation Finance - Executive Order 13382 Designations
-------------
-- E.O. 13382, signed by the President on June 29, 2005,
is an authority aimed at freezing the assets of
proliferators of weapons of mass destruction and their
supporters, and at isolating them from the U.S. financial
and commercial systems. Designations under the Order
prohibit all transactions between the designees and any
U.S. person, and freeze any assets the designees may have
under U.S. jurisdiction.
-- The Islamic Revolutionary Guard Corps (IRGC):
Considered the military vanguard of Iran, the Islamic
Revolutionary Guard Corps (IRGC), is composed of five
branches (Ground Forces, Air Force, Navy, Basij militia,
and Qods Force special operations) in addition to a
STATE 00148605 005 OF 008
counterintelligence directorate and representatives of the
Supreme Leader. It runs prisons, and has numerous
economic interests involving defense production,
construction, and the oil industry. Several of the IRGC's
leaders have been sanctioned under UN Security Council
Resolution 1747.
-- The IRGC has been outspoken about its willingness to
proliferate ballistic missiles capable of carrying WMD.
The IRGC's ballistic missile inventory includes missiles,
which could be modified to deliver WMD. The IRGC is one
of the primary regime organizations tied to developing and
testing the Shahab-3. The IRGC attempted, as recently as
2006, to procure sophisticated and costly equipment that
could be used to support Iran's ballistic missile and
nuclear programs.
-- Ministry of Defense and Armed Forces Logistics
(MODAFL): The Ministry of Defense and Armed Forces
Logistics (MODAFL) controls the Defense Industries
Organization, an Iranian entity identified in the Annex to
UN Security Council Resolution 1737 and designated by the
United States under E.O. 13382 on March 30, 2007. MODAFL
also was sanctioned, pursuant to the Arms Export Control
Act and the Export Administration Act, in November 2000
for its involvement in missile technology proliferation
activities.
-- MODAFL has ultimate authority over Iran's Aerospace
Industries Organization (AIO), which was designated under
E.O. 13382 on June 28, 2005. The AIO is the Iranian
organization responsible for ballistic missile research,
development and production activities and organizations,
including the Shahid Hemmat Industries Group (SHIG) and
the Shahid Bakeri Industries Group (SBIG), which were both
listed under UN Security Council Resolution 1737 and
designated under E.O. 13382. The head of MODAFL has
publicly indicated Iran's willingness to continue to work
on ballistic missiles. Defense Minister Brigadier General
Mostafa Mohammad Najjar said that one of MODAFL's major
projects is the manufacturing of Shahab-3 missiles and
that it will not be halted. MODAFL representatives have
acted as facilitators for Iranian assistance to an E.O.
13382- designated entity and, over the past two years,
have brokered a number of transactions involving materials
and technologies with ballistic missile applications.
-- Bank Melli, its branches, and subsidiaries: Bank Melli
is Iran's largest bank. Bank Melli provides banking
services to entities involved in Iran's nuclear and
ballistic missile programs, including entities listed by
the U.N. for their involvement in those programs. This
includes handling transactions in recent months for Bank
Sepah, Defense Industries Organization, and Shahid Hemmat
Industrial Group. Following the designation of Bank Sepah
under UNSCR 1747, Bank Melli took precautions not to
identify Sepah in transactions. Through its role as a
financial conduit, Bank Melli has facilitated numerous
purchases of sensitive materials for Iran's nuclear and
missile programs. In doing so, Bank Melli has provided a
range of financial services on behalf of Iran's nuclear
and missile industries, including opening letters of
credit and maintaining accounts.
-- Bank Melli also provides banking services to the IRGC
and the Qods Force. Entities owned or controlled by the
IRGC or the Qods Force use Bank Melli for a variety of
financial services. From 2002 to 2006, Bank Melli was
used to send at least $100 million to the Qods Force.
When handling financial transactions on behalf of the
STATE 00148605 006 OF 008
IRGC, Bank Melli has employed deceptive banking practices
to obscure its involvement from the international banking
system. For example, Bank Melli has requested that its
name be removed from financial transactions.
-- Bank Mellat, its branches, and subsidiaries: Bank
Mellat provides banking services in support of Iran's
nuclear entities, namely the Atomic Energy Organization of
Iran (AEOI) and Novin Energy Company. Both AEOI and Novin
Energy have been designated by the United States under
E.O. 13382 and by the UN Security Council under UNSCRs
1737 and 1747. Bank Mellat services and maintains AEOI
accounts, mainly through AEOI's financial conduit, Novin
Energy. Bank Mellat has facilitated the movement of
millions of dollars for Iran's nuclear program since at
least 2003. Transfers from Bank Mellat to Iranian
nuclear-related companies have occurred as recently as
this year.
-- IRGC owned or controlled companies: Treasury is
designating the companies listed below under E.O. 13382 on
the basis of their relationship to the IRGC. These
entities are owned or controlled by the IRGC and its
leaders. The IRGC has significant political and economic
power in Iran, with ties to companies controlling billions
of dollars in business and construction and a growing
presence in Iran's financial and commercial sectors.
Through its companies, the IRGC is involved in a diverse
array of activities, including petroleum production and
major construction projects across the country. In 2006,
Khatam al-Anbiya secured deals worth at least $7 billion
in the oil, gas, and transportation sectors, among others.
-- Khatam al-Anbiya Construction Headquarters
-- Oriental Oil Kish
-- Ghorb Nooh
-- Sahel Consultant Engineering
-- Ghorb-e Karbala
-- Sepasad Engineering Co
-- Omran Sahel
-- Hara Company
-- Gharargahe Sazandegi Ghaem
-- IRGC Individuals: Treasury is designating the
individuals below under E.O 13382 on the basis of their
relationship to the IRGC. One of the five is listed on
the Annex of UNSCR 1737 and the other four are listed on
the Annex of UNSCR 1747 as key IRGC individuals.
-- General Hosein Salimi, Commander of the Air Force, IRGC
-- Brigadier General Morteza Rezaie, Deputy Commander of
the IRGC
-- Vice Admiral Ali Akhbar Ahmadian, Chief of the IRGC
Joint Staff
-- Brigadier Gen. Mohammad Hejazi, Commander of Bassij
resistance force
-- Brigadier General Qasem Soleimani, Commander of the
Qods Force
-- Other Individuals involved in Iran's ballistic missile
programs: E.O. 13382 derivative proliferation designation
by Treasury of each of the individuals listed below for
their relationship to the Aerospace Industries
Organization, an entity previously designated under E.O.
13382. Each individual is listed on the Annex of UNSCR
1737 for being involved in Iran's ballistic missile
program.
-- Ahmad Vahid Dastjerdi, Head of the Aerospace Industry
Organization (AIO)
-- Reza-Gholi Esmaeli, Head of Trade & International
STATE 00148605 007 OF 008
Affairs Dept., AIO
-- Bahmanyar Morteza Bahmanyar, Head of Finance & Budget
Department, AIO
Support for Terrorism -- Executive Order 13224
Designations
-----------
-- E.O. 13224 is an authority aimed at freezing the assets
of terrorists and their supporters, and at isolating them
from the U.S. financial and commercial systems.
Designations under the E.O. prohibit all transactions
between the designees and any U.S. person, and freeze any
assets the designees may have under U.S. jurisdiction.
-- IRGC-Qods Force (IRGC-QF): The Qods Force, a branch of
Iran's Revolutionary Guard Corps (IRGC), provides material
support to the Taliban, Lebanese Hizballah, Hamas,
Palestinian Islamic Jihad, and the Popular Front for the
Liberation of Palestine-General Command (PFLP-GC).
-- The Qods Force is the Iranian regime's primary
instrument for providing lethal support to the Taliban.
The Qods Force provides weapons and financial support to
the Taliban to support anti-U.S. and anti-Coalition
activity in Afghanistan. Since at least 2006, Iran has
arranged frequent shipments of small arms and associated
ammunition, rocket propelled grenades, mortar rounds,
107mm rockets, plastic explosives, and probably man-
portable defense systems to the Taliban. This support
contravenes Chapter VII UN Security Council obligations.
UN Security Council resolution 1267 established sanctions
against the Taliban and UN Security Council resolutions
1333 and 1735 imposed arms embargoes against the Taliban.
Through Qods Force material support to the Taliban, we
believe Iran is seeking to inflict casualties on U.S. and
NATO forces.
-- The Qods Force has had a long history of supporting
Hizballah's military, paramilitary, and terrorist
activities, providing it with guidance, funding, weapons,
intelligence, and logistical support. The Qods Force
operates training camps for Hizballah in Lebanon's Bekaa
Valley and has reportedly trained more than 3,000
Hizballah fighters at IRGC training facilities in Iran.
The Qods Force provides roughly $100 to $200 million in
funding a year to Hizballah and has assisted Hizballah in
rearming in violation of UN Security Council Resolution
1701.
-- In addition, the Qods Force provides lethal support in
the form of weapons, training, funding, and guidance to
select groups of Iraqi Shi'a militants who target and kill
Coalition and Iraqi forces and innocent Iraqi civilians.
-- Bank Saderat, its branches, and subsidiaries: Bank
Saderat, which has approximately 3200 branch offices, has
been used by the Government of Iran to channel funds to
terrorist organizations, including Hizballah and EU-
designated terrorist groups Hamas, PFLP-GC, and
Palestinian Islamic Jihad. For example, from 2001 to
2006, Bank Saderat transferred $50 million from the
Central Bank of Iran through its subsidiary in London to
its branch in Beirut for the benefit of Hizballah fronts
in Lebanon that support acts of violence. Hizballah has
used Bank Saderat to send money to other terrorist
organizations, including millions of dollars on occasion,
to support the activities of Hamas. As of early 2005,
Hamas had substantial assets deposited in Bank Saderat,
and, in the past year, Bank Saderat has transferred
STATE 00148605 008 OF 008
several million dollars to Hamas.
End fact sheet.
POINT OF CONTACT
----------------
9. (U) Questions may be directed to ISN/CPI Anthony
Ruggiero, 202-647-5181.
10. Minimize considered.
RICE