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Viewing cable 08STATE14230, DUBAI CITES FATF IRAN STATEMENT IN WARNING TO

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Reference ID Created Released Classification Origin
08STATE14230 2008-02-11 21:31 2011-08-24 01:00 UNCLASSIFIED//FOR OFFICIAL USE ONLY Secretary of State
VZCZCXRO5245
OO RUEHBC RUEHDE RUEHDIR RUEHKUK
DE RUEHC #4230/01 0422133
ZNR UUUUU ZZH
O 112131Z FEB 08
FM SECSTATE WASHDC
TO RUEHDO/AMEMBASSY DOHA IMMEDIATE 8914
RUEHKU/AMEMBASSY KUWAIT IMMEDIATE 2900
RUEHMK/AMEMBASSY MANAMA IMMEDIATE 4017
RUEHMS/AMEMBASSY MUSCAT IMMEDIATE 0246
RUEHRH/AMEMBASSY RIYADH IMMEDIATE 6057
INFO IRAN COLLECTIVE IMMEDIATE
RUEHAD/AMEMBASSY ABU DHABI IMMEDIATE 0034
RUEHRL/AMEMBASSY BERLIN IMMEDIATE 2061
RUEHLO/AMEMBASSY LONDON IMMEDIATE 4915
RUEHFR/AMEMBASSY PARIS IMMEDIATE 7024
UNCLAS SECTION 01 OF 02 STATE 014230 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: KNNP MNUC IR GM UK FR XF ZP AE
SUBJECT: DUBAI CITES FATF IRAN STATEMENT IN WARNING TO 
BANKING SECTOR 
 
REF: A. A) ABU DHABI 000028 
     B. B) ABU DHABI 002026 
     C. C) STATE 149648 
 
1.  (U)  This is an action request.  Please see paragraph six. 
 
------------------ 
SUMMARY/BACKGROUND 
------------------ 
 
2.  (U)  On January 7, 2008, the Dubai Financial Services 
Authority (DFSA) issued an advisory to all Senior Executive 
Officers of DFSA-regulated firms regarding dealings with 
Iran.  The U.S. would like to notify the GCC of Dubai's 
actions, as well as those by numerous other countries, and 
urges other GCC members to issue similar advisories to their 
financial institutions. 
 
3. (U) The DFSA advisory was based on the October 11, 2007 
Financial Action Task Force (FATF) statement warning of the 
risk of doing business with Iranian banks.  The FATF 
statement cautioned that Iran's lack of comprehensive 
anti-money laundering / combating the financing of terrorism 
(AML/AFT) regime represents a significant vulnerability 
within the international financial system.  The FATF advised 
that financial institutions should take the risk arising from 
the deficiencies in Iran's AML/CFT regime into account for 
enhanced due diligence. 
 
4. (U) The DFSA's advisory recommended that firms may need to 
review and enhance their existing policies, procedures, 
systems, and controls to guard against threats of illicit 
activity related to money laundering, terrorist financing and 
WMD proliferation financing. The statement specifically 
emphasized the need for regulated firms to apply a risk-based 
approach to identify high-risk customers, transactions, and 
correspondent banking relationships. 
 
5. (SBU) The supervision of the UAE banking and financial 
sector falls under the authority of the Central Bank.  It 
issues licenses to financial institutions and can impose 
administrative sanctions for compliance violations.  The 
Dubai Financial Services Authority (DFSA) on the other hand 
has supervisory authority only for financial institutions 
operating in the Dubai International Financial Center (DIFC) 
a financial free zone exempt from UAE civil, but not criminal 
laws.  Please note that neither the UAE Central Bank, nor any 
other regional central bank, have issued similar statement to 
avoid angering Iran or any domestic constituents. 
 
------------------------- 
OBJECTIVES/ACTION REQUEST 
------------------------- 
 
6.  (U)  Washington requests Posts approach appropriate host 
government officials in the foreign affairs and financial 
ministries and pursue the following objectives: 
 
For Embassies Riyadh, Manama, Kuwait City, Muscat, Doha: 
 
--  Notify the members of the GCC that the Dubai Financial 
Services Authority is the most recent financial entity to 
issue a statement regarding the deficiencies in Iran's 
AML/CFT regime, FATF guidance on the implementation of UNSCR 
1737, and FATF guidance on the implementation of financial 
provisions of UNSCRs on weapons of mass destruction.  The 
DFSA joins a host of other regulators that have issued 
statements in support of the FATF's warning, including those 
from Canada, Germany, Japan, and the United Kingdom. 
 
--  Urge other GCC regulators to follow the DFSA's lead and 
issue similar warnings to their financial institutions.  In 
light of the October 2007 FATF statement, states should 
exercise due diligence in ensuring that their financial 
institutions guard against threats of Iranian illicit 
activity related to money laundering, terrorist financing, 
and WMD proliferation financing. 
 
 
STATE 00014230  002 OF 002 
 
 
FOR EMBASSIES BERLIN, PARIS, LONDON: 
 
--  Provide additional information to the EU3 on the actions 
of Dubai in relation to the threat posed by transactions with 
Iranian banks. 
 
FOR EMBASSIES PARIS, LONDON 
 
--  Urge the appropriate authorities to issue similar 
statements to their banks and financial entities. 
 
------------------ 
REPORTING DEADLINE 
------------------ 
 
7.  (U)  Post should respond within seven business days of 
receipt of cable.  Please slug replies for ISN, T, TREASURY, 
EUR, and NEA.  Please include SIPDIS in all replies. 
 
---------------- 
POINT OF CONTACT 
---------------- 
 
8.  (U)  Washington point of contact for follow-up 
information is Kevin McGeehan, ISN/CPI, (202) 647-5408, 
mcgeehankj@state.sgov.gov. 
RICE