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Viewing cable 09STATE108151, UK DECISION TO BAN THE PROVISION OF INSURANCE TO
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Reference ID | Created | Released | Classification | Origin |
---|---|---|---|---|
09STATE108151 | 2009-10-19 19:49 | 2011-08-24 01:00 | UNCLASSIFIED//FOR OFFICIAL USE ONLY | Secretary of State |
VZCZCXRO4164
OO RUEHBC RUEHDE RUEHDIR RUEHHT RUEHKUK RUEHTRO
DE RUEHC #8151/01 2930538
ZNR UUUUU ZZH
O 191949Z OCT 09
FM SECSTATE WASHDC
TO IRAN COLLECTIVE IMMEDIATE
RUEHCP/AMEMBASSY COPENHAGEN IMMEDIATE 1112-1114
RUEHLE/AMEMBASSY LUXEMBOURG IMMEDIATE 6107-6109
RUEHNY/AMEMBASSY OSLO IMMEDIATE 8900-8902
RUEHSM/AMEMBASSY STOCKHOLM IMMEDIATE 8288-8290
RUEHTC/AMEMBASSY THE HAGUE IMMEDIATE 6678-6680
RUEHKO/AMEMBASSY TOKYO IMMEDIATE 0920-0922
RUEHHT/AMCONSUL HAMILTON IMMEDIATE 4593-4595
INFO RUEHRL/AMEMBASSY BERLIN IMMEDIATE 4039-4041
RUEHVT/AMEMBASSY VALLETTA IMMEDIATE 7546-7548
UNCLAS SECTION 01 OF 03 STATE 108151
SENSITIVE
C O R R E C T E D C O P Y (SENSITIVE CAPTION ADDED)
SIPDIS
E.O. 12958: N/A
TAGS: EFIN ETTC KNNP XF ZP ZR IR UK XG XT
SUBJECT: UK DECISION TO BAN THE PROVISION OF INSURANCE TO
IRISL
REF: A. A) LONDON 002351
¶B. B) STATE 104496
¶C. C) STATE 069339
STATE 00108151 001.2 OF 003
¶1. (U) This is an action request. Please see paragraph 3.
------------------
SUMMARY/BACKGROUND
------------------
¶2. (SBU) On October 12, the United Kingdom banned British
companies from trading with the Islamic Republic of Iran
Shipping Lines (IRISL) and Iranian Bank Mellat. This ban was
implemented under HM Treasury's authority under the Counter
Terrorism Act (CTA), which entered into force on November 26,
¶2008. The ban against IRISL was implemented due to the
services that the shipping line provides to Iran's Ministry
of Defense and Armed Forces Logistics (MODAFL), which
facilitates the transport of cargo for Iran's nuclear and
ballistic missile programs. Due to this ban, it is now
illegal for British Protection and Indemnity (P&I) clubs to
offer services, including insurance coverage, to IRISL
vessels. We understand that other members of the
International Group of P&I clubs operate in your jurisdiction
and may be approached by Iran to obtain services lost from
the UK market. In order to send a strong message to Iran
regarding its defiance of its international responsibilities
and to protect against the risk of
P&I clubs in your jurisdictions from facilitating
proliferation-related shipments, Washington requests that
posts approach host governments and request that they urge
P&I Clubs in their jurisdictions to refrain from providing
P&I Club services to IRISL. P&I Clubs should also recommend
that their members exercise caution when asked to charter
their vessels on behalf of IRISL, due to the risk that these
vessels could be used to support IRISL's illicit activity.
--------------
ACTION REQUEST
---------------
¶3. (SBU) Washington requests Posts to pursue the following
objectives with appropriate host government officials at the
Office Director-level or higher in each host country's
Ministry of Foreign Affairs and Ministry of Finance. Posts
should also work with representatives from the UK Embassy to
deliver this demarche in tandem. HM Government has
instructed its missions to reach out to U.S. embassies to
coordinate timing details for this demarche. The points in
this demarche have been coordinated with representatives from
HM Government.
Documents relating to the ban can be found on HM Treasury's
website at
http://www.hm-treasury.gov.uk/fin crime policy.htm. Please
refer to reftel for more detail about the background of this
decision by HM Treasury and our demarches related to IRISL.
Host governments and their respective P&I clubs may ask for
additional information on IRISL's deceptive practices. Posts
should draw from the press release issued by the State
Department on September 10, 2008 regarding IRISL's
designation under E.O. 13382, which can be found at
www.state.gov/r/pa/prs/ps/2008/sept/109485.ht m; and the press
release issued by the Treasury Department on September 10,
2008, which can be found at
WWW.TREASURY.GOV/PRESS/RELEASES/HP1130.HTM. Posts are
requested to pursue the following objectives:
-- Reinforce the importance of the UK's ban against IRISL and
Bank Mellat.
-- Provide more information about the implementation of the
ban in conjunction with HM Government.
STATE 00108151 002.2 OF 003
-- Urge host governments to ensure that P&I clubs in their
jurisdictions refuse any requests to provide P&I Club
services to IRISL.
-----------------------
BACKGROUND AND NONPAPER
-----------------------
¶4. (SBU) On October 12, 2009, the United Kingdom banned
British companies from trading with the Islamic Republic of
Iran Shipping Lines (IRISL) and Iranian Bank Mellat. This
ban was implemented under HM Treasury's authority under the
Counter Terrorism Act (CTA), which entered into force on
November 26, 2008. The act prohibits the UK financial sector
from engaging in business with the two Iranian entities and
restricts the ability of financial and credit institutions
(including Protection and Indemnity (P&I) Clubs which provide
an array of services, namely insurance) from entering into
new transactions or business relationships, or from
continuing existing relationships.
IRISL AND ITS DECEPTIVE PRACTICES
-- IRISL is Iran's national, maritime carrier; it is a global
operator with a worldwide network of subsidiaries, branch
offices and agent relationships. It provides a variety of
maritime transport services including bulk, break-bulk,
cargo, and containerized shipping. These services connect
Iranian exporters and importers with South America, Europe,
the Middle East, Asia and Africa.
-- According to information available to the U.S. government,
IRISL also facilitates shipments of military-related cargo
destined for MODAFL and its subordinate entities, including
organizations that have been designated by the United States
under Executive Order (E.O.) 13382 and designated under UN
Security Council Resolutions 1737 and 1747.
-- For example, IRISL in 2007 transported a shipment of a
precursor chemical destined for use in Iran's missile
program. The end user of the chemical was Parchin Chemical
Industries, an entity designated under E.O. 13382 and listed
in UNSCR 1747 as a subordinate of Iran's Defense Industries
Organization. DIO was listed in UNSCR 1737 as an
overarching, MODAFL-controlled entity that is involved in the
nuclear program.
-- In order to ensure the successful delivery of
military-related goods, IRISL has deliberately misled
maritime authorities through deceptive techniques. These
techniques were adopted to conceal the true nature of
shipments ultimately destined for MODAFL.
-- As international attention over Iran's WMD programs has
increased, IRISL has pursued new strategies to maintain
commerce which also afford it the potential to evade future
detection of military shipments, including: falsifying
shipping documents in order to hide the true end users of
shipments; employing the use of generic terms to describe
shipments so as not to attract the attention of shipping
authorities; and creating and making use of cover entities to
conduct official IRISL business.
-- These tactics are exemplified by the case of the M/V
MONCHEGORSK. On January 19, 2009, the USS SAN ANTONIO
conducted a compliant boarding of the M/V MONCHEGORSK in the
Red Sea. Owned by a Russian company and registered in
Cyprus, the MONCHEGORSK bore no overt legal connections to
Iran. However, upon examination of the ship's documents, the
paperwork revealed that it was under charter to IRISL and
carrying component materials for high-explosive ammunition
from the Iranian Defense Industries Organization to Syria's
Industrial Establishment of Defense. The ship was requested
by the flag state to divert to Cyprus, where the cargo was
detained. The cargo was determined to be in violation of
UNSCR 1747, which restricts Iran from the "supply, (sale) or
transfer ( (of) arms or related material." While this cargo
was not associated with Iran's or Syria's ballistic missile
programs, the methodology used indicates a willingness by
Iran and IRISL to employ evasive measures beyond renaming and
reflagging in orde
r to move goods in violation of international sanctions.
STATE 00108151 003.2 OF 003
HM TREASURY'S BAN AND ITS EFFECT
-- HM Treasury's ban requires the immediate cancellation of
P&I insurance contracts with IRISL, but allows a license for
seven days to permit continued third party coverage for ships
at sea. In general, licenses will only be granted to help
close down existing business - not to continue a business
arrangement. Two British clubs provide P&I services for
IRISL: North of England and Steamship Mutual. For all
practical purposes, these clubs will no longer provide P&I
Club services to IRISL.
-- As more and more reputable businesses decide to curtail or
end business relationships with Iran, Iranian entities have
sought new outlets to access international financial
services. In the wake of this decision by the UK, we expect
IRISL to continue this pattern and seek insurance coverage
from other P&I Clubs.
-- We understand that other members of the International
Group of P&I clubs operate in your jurisdiction. In order to
send a strong message to Iran regarding its defiance of its
international responsibilities, and to protect against the
risk of P&I Clubs in your jurisdiction from facilitating
proliferation-related shipments, we request that you approach
P&I clubs in your jurisdiction and urge them to refrain from
providing any P&I services to IRISL and its vessels. P&I
Clubs should also recommend that their members exercise
caution when asked to charter their vessels on behalf of
IRISL, due to the risks that these vessels could be used to
support IRISL's illicit activity.
-- 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.
------------------
REPORTING DEADLINE
------------------
¶5. (U) Post should report results within seven business days
of receipt of this cable. Please slug replies for ISN, T,
TREASURY, INR, EUR, and NEA. Please use the caption SIPDIS
in all replies.
----------------
POINT OF CONTACT
----------------
¶6. (U) Washington point of contact for follow-up information
is Kevin McGeehan, ISN/CPI, (202) 647-5408.
¶7. (U) Department thanks Post for its assistance.
CLINTON