Cablegate: Ecuador Demarche: Growing Ties with the Export

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DE RUEHC #8748 2661559
ZNY SSSSS ZZH
O R 231540Z SEP 09
FM SECSTATE WASHDC
TO RUEHQT/AMEMBASSY QUITO IMMEDIATE 0000
INFO RUEHAC/AMEMBASSY ASUNCION 0000
RUEHBO/AMEMBASSY BOGOTA 0000
RUEHBR/AMEMBASSY BRASILIA 0000
RUEHBU/AMEMBASSY BUENOS AIRES 0000
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RUEHLP/AMEMBASSY LA PAZ SEP LIMA 0000
RUEHMN/AMEMBASSY MONTEVIDEO 0000
RUEHSG/AMEMBASSY SANTIAGO 0000
RUEHGL/AMCONSUL GUAYAQUIL 0000
RUEATRS/TREASURY DEPT WASHINGTON DC 0000
RHEHNSC/WHITE HOUSE NATIONAL SECURITY COUNCIL WASHINGTON DC

S E C R E T STATE 098748

SIPDIS

E.O. 12958: DECL: 09/23/2019
TAGS: PREL EFIN MNUC PARM KNNP IR EC
SUBJECT: ECUADOR DEMARCHE: GROWING TIES WITH THE EXPORT
DEVELOPMENT BANK OF IRAN

REF: A. STATE 105173
B. STATE 114408
C. ...

id: 226556
date: 9/23/2009 15:40
refid: 09STATE98748
origin: Secretary of State
classification: SECRET
destination: 09QUITO1046|09STATE105173|09STATE114408
header:
VZCZCXYZ0014
OO RUEHWEB

DE RUEHC #8748 2661559
ZNY SSSSS ZZH
O R 231540Z SEP 09
FM SECSTATE WASHDC
TO RUEHQT/AMEMBASSY QUITO IMMEDIATE 0000
INFO RUEHAC/AMEMBASSY ASUNCION 0000
RUEHBO/AMEMBASSY BOGOTA 0000
RUEHBR/AMEMBASSY BRASILIA 0000
RUEHBU/AMEMBASSY BUENOS AIRES 0000
RUEHCV/AMEMBASSY CARACAS 0000
RUEHLP/AMEMBASSY LA PAZ SEP LIMA 0000
RUEHMN/AMEMBASSY MONTEVIDEO 0000
RUEHSG/AMEMBASSY SANTIAGO 0000
RUEHGL/AMCONSUL GUAYAQUIL 0000
RUEATRS/TREASURY DEPT WASHINGTON DC 0000
RHEHNSC/WHITE HOUSE NATIONAL SECURITY COUNCIL WASHINGTON DC

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S E C R E T STATE 098748

SIPDIS

E.O. 12958: DECL: 09/23/2019
TAGS: PREL EFIN MNUC PARM KNNP IR EC
SUBJECT: ECUADOR DEMARCHE: GROWING TIES WITH THE EXPORT
DEVELOPMENT BANK OF IRAN

REF: A. STATE 105173
B. STATE 114408
C. QUITO 1046

Classified By: WHA PDAS Craig Kelly, Reasons: 1.4 B, C, and D

1. (U) This is an action request. Please see paragraph 3.

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SUMMARY/BACKGROUND
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2. (S/NF) The United States has information that Ecuador is
coordinating with Iran to open a branch of Iran's Export
Development Bank of Iran (EBDI) in Ecuador, and that Iran is
considering extending a line of credit to Ecuador. The
Treasury Department designated the EDBI, along with three
affiliated entities, on October 22, 2008 (ref B). We are
concerned that Iran may be attempting to conduct transactions
to facilitate proliferation-related payment in circumvention
of UNSCRs 1737, 1747, and 1803.

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OBJECTIVE/ACTION REQUEST
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3. (S/NF) As a follow-up to the meeting between Treasury and
the Embassy of Ecuador in Washington, on May 8, during which
Treasury first expressed U.S. concerns regarding Iran's
efforts to promote and enhance bilateral banking cooperation
with Ecuador, Post is requested to deliver the points in
paragraph 4 to appropriate host government officials in the
Ministries of Foreign Affairs and Finance. (Note: Treasury
and State plan to deliver similar points to representatives
from the Ecuadorian Embassy as well. End Note.) Post should
pursue the following objectives:

-- Highlight the risks involved with doing business with EDBI
and EDBI-affiliated entities.

-- Warn Ecuador of the risks involved in facilitating
financial transactions with Iran.

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POINTS FOR ECUADOR
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4. (S//REL TO EC) We would like to raise serious concerns
regarding planned financial transactions between Iran and
Ecuador.

-- We have information that Iranian officials are seeking to
promote and enhance bilateral banking cooperation with
Ecuador. We understand that Ecuador is coordinating with
Iran to open a branch of Iran's Export Development Bank of
Iran (EBDI) in Ecuador, and that Iran in considering
extending a line of credit to Ecuador.

-- Treasury designated the EDBI and three affiliated entities
on October 22, 2008, because EDBI provides financial services
to multiple subordinate entities of Iran's Ministry of
Defense and Armed Forces Logistics (MODAFL) that permit these
entities to advance Iran's WMD programs. The term
"designate" means to prohibit U.S. persons or entities from
engaging in business with such entities. Treasury also
designated three separate entities which were found to be
owned, or controlled by, or acting or purporting to act for
or on behalf of the EDBI. These entities are: the EDBI Stock
Brokerage Company and the EDBI Exchange Company, both located
in Iran, and Banco Internacional de Desarrollo, CA, a
financial institution located in Venezuela. This action was
taken in accordance with Executive Order 13382 ("Blocking the
Property of Weapons of Mass Destruction Proliferators and
their Supporters").

-- Entities associated with Iran's nuclear and missile
programs utilize an extensive network of front companies to
conceal the true ownership of funds and end-use of commercial
goods. These designations are consistent with obligations in
UN Security Council Resolutions (UNSCRs) 1737, 1747 and 1803,
which require Member States to freeze the assets of entities
and individuals designated by the UN Security Council as
being involved in Iran's nuclear or missile programs, and
freeze the assets of entities acting on their behalf or at
their direction.

-- We want to convey to the Ecuadorian government that any
entity in its jurisdiction found to be conducting business
with EDBI and its affiliates and any other designated
entities, or any entity that is owned or controlled by, or
acting for or on behalf of EDBI and its affiliates, may be
subject to designation under E.O. 13382.

-- We ask that you take any appropriate measures to prevent
Iran from circumventing the applicable UN Security Council
resolutions by accessing your financial system to support its
nuclear and missile program.

-- We look forward to working with you on this and other
related security and counterproliferation matters and are
prepared to provide additional assistance as appropriate.

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REPORTING DEADLINE
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5. (U) Department requests Post report the results of its
demarche within a week of receiving this cable. Please slug
replies for Treasury, WHA, and ISN, and also slug as SIPDIS.

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POINT OF CONTACT
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6. (U) Treasury point of contact is Rachel Fedewa,
TFFC/Treasury, (202) 622-9765, fedewar@tsdn.treasury.sgov.gov.
CLINTON

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