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PP RUEHBC RUEHDE RUEHDIR RUEHKUK
DE RUEHDO #0505/01 1970640
ZNY CCCCC ZZH
P 150640Z JUL 08 ZDK
FM AMEMBASSY DOHA
TO RUEHC/SECSTATE WASHDC PRIORITY 8051
INFO RUEATRS/DEPT OF TREASURY WASHINGTON DC PRIORITY
RUCNIRA/IRAN COLLECTIVE
RUEHRL/AMEMBASSY BERLIN 0085
RUEHLO/AMEMBASSY LONDON 1099
RUEHFR/AMEMBASSY PARIS 0155

C O N F I D E N T I A L SECTION 01 OF 04 DOHA 000505 
 
SIPDIS 
 
DEPARTMENT FOR ISN, T, AND NEA 
 
E.O. 12958: DECL: 07/13/2018 
TAGS: PREL KTFN KNNP INRB PARM MNUC ECON EFIN IR QA
SUBJECT: QATAR CONTINUES BALANCING ACT WITH IRAN'S BANK 
SADERAT 
 
REF: SECSTATE 67950 
 
DOHA 00000505  001.3 OF 004 
 
 
Classified By: CDA Michael A. Ratney, reasons 1.4 (b) and (d). 
 
¶1. (C) SUMMARY:  Qatar's Deputy Central Bank Governor Sheikh 
Fahad Bin Faisal Al Thani told Charge the early June opening 
of a second Bank Saderat branch in Doha was the result of 
last-minute Iranian action on an old license.  He asserted 
that the Central Bank is watching Iranian activity closely 
but expressed concern over the possibility of masked accounts 
and investment activities.  Sheikh Fahad provided a copy of a 
confidential Central Bank circular ordering local banks to 
check their records for entities sanctioned under UNSCR 1803. 
 Separately, Post obtained a recent letter from the Qatar 
Financial Center to its registered firms warning about Iran's 
lack of comprehensive anti-money laundering/combating the 
financing of terrorism (AML/CFT) controls.  Post believes the 
GOQ sees a limited Iranian banking presence as placating its 
larger neighbor's aggressive push for expanded economic ties 
without undermining tougher sanctions by the United States 
and international community.  END SUMMARY. 
 
-------------------------------------- 
Demarche on Second Bank Saderat Branch 
-------------------------------------- 
 
¶2. (C) Deputy Central Bank Governor and Chair of the National 
Anti-Money Laundering and Terrorism Financing (AML/CFT) 
Committee Sheikh Fahad Bin Faisal Al Thani told Charge and 
Econoff July 13 that Bank Saderat's second branch in Qatar 
opened under an old license the Central Bank had issued "a 
long time ago" on which the Iranians had not acted.  Sheikh 
Fahad explained that the Central Bank had recently informed 
Bank Saderat that the license would be soon be revoked 
because it had been dormant for so long; this was apparently 
the impetus for Saderat's decision to open a second branch. 
 
¶3. (C) In delivering reftel demarche, Charge emphasized to 
the Deputy Governor that Bank Saderat is an entity of concern 
due to its involvement in the financing of terrorist groups 
and Iran's nuclear proliferation activities.  He stressed 
that the bank's continued presence would harm Qatar's 
financial reputation in the eyes of United States and the 
international community. 
 
¶4. (C) Sheikh Fahad did not respond directly to these 
concerns but noted that Bank Saderat's activities in Qatar 
remain small and that Qatar's Financial Information Unit 
(FIU) gives priority to scrutiny of the bank's transactions. 
To illustrate his point, he showed Charge copies of internal 
Central Bank spreadsheets documenting Bank Saderat's 
transactions and accounts.  Sheikh Fahad noted that Qatar has 
not/not seen suspicious Iranian diplomatic activity as has 
occurred in other countries, but he worried Iran may be 
depositing state funds into individuals' personal accounts. 
According to the spreadsheets Sheikh Fahad displayed, Bank 
Saderat in Qatar maintains small accounts with Doha Bank, 
Future Bank, and Qatar National Bank (QNB).  For example, the 
QNB account holds 114,000 Qatari Riyals (about USD 31,318). 
Sheikh Fahad said he did not know the purpose of these 
accounts but opined that they could be for facilitating trade 
or investment activity.  Separately, he suspects some Qataris 
may be working with Iranians to conceal the true extent of 
investment activity, especially in the real estate sector, 
where he suspects that Shi'a families in Qatar may receive 
commissions in exchange for helping Iranians invest in 
building projects. 
 
----------------------------- 
Central Bank Circular on Iran 
----------------------------- 
 
¶5. (C) Sheikh Fahad provided a copy of a confidential Central 
Bank circular from April, directing all banks in Qatar to 
check their records for transactions involving the entities 
named in UNSCR 1803 as subject to a travel ban and asset 
freeze.  (Note: As Sheikh Fahad provided this in confidence, 
addresses should regard it as classified.)  An unofficial 
embassy translation of the circular and summary of the 
attachments follows: 
 
Date: April 10, 2008 
 
Circular Number 54/2008 
 
To all banks operating in Qatar 
 
DOHA 00000505  002 OF 004 
 
 
 
Subject: Financial Transactions, Accounts, and Private 
Companies' and Individuals' Deposits, as attached 
 
Under Article 79 of the decreed law number 33/2006, the Qatar 
Central Bank must be urgently informed of any bank, 
financial, account, or deposit transactions involving any of 
the companies or individuals listed in the relevant 
attachments.  Because of the high importance of this issue, 
you are requested to respond immediately and keep the 
necessary confidentiality. 
 
(Signed) Fahad Bin Faisal Al Thani, Deputy Governor 
 
Attached: List of individuals and companies 
 
Attachment 1:  List of companies and agencies of Iranian 
nationality (Note: Listed are the 12 names from UNSCR 1803, 
Annex 3). 
 
Attachment 2:  Personal Names of Iranian Nationality (Note: 
Listed are the 18 names from UNSCR 1803, Annex 1). 
 
Attachment 3:  FINCEN Advisory from March 20, 2008 - 
"Guidance to Financial Institutions on the Continuing Money 
Laundering Threat Involving Illicit Iranian Activity." 
 
Attachment 4:  FATF Statement from February 28, 2008 which 
includes warning on Iran's lack of comprehensive AML/CFT 
controls. 
 
¶6. (C) Sheikh Fahad also provided a reply letter from Bank 
Saderat to the Central Bank which said that the bank did 
not/not find any accounts connected to the identifying 
information listed in the circular.  An unofficial embassy 
translation of the letter follows: 
 
April 13, 2008 
 
Serial Number: 203/2623/41 
 
Sheikh Fahad Bin Faisal Al Thani 
Deputy Governor 
Doha, Qatar 
 
(Standard Greeting), 
 
In reference to your circular number 54/2008 dated 4/10/2008, 
please be informed that the individuals, agencies, and 
organizations mentioned by name in the lists attached to the 
mentioned circular do not have any accounts or bank or 
financial transactions with the Bank Saderat branch in Doha. 
 
(Standard Closing), 
 
Bank Saderat Iran 
 
------------------------------------------ 
FIU Chief on Iran, Qatar's FATF Evaluation 
------------------------------------------ 
 
¶7. (C) In a separate meeting on July 13, Qatar's FIU Chief 
Sheikh Ahmed Bin Eid Al Thani told Econoff that Bank Saderat 
had invited him to the opening of the second branch in early 
June, but he declined to attend.  He said the bank took out 
an advertisement in a local paper to announce the opening and 
listed his name and other officials as guests.  He speculated 
that the bank merely published the guest list, not the actual 
list of attendees. 
 
¶8. (C) Sheikh Ahmed said that he had been working non-stop to 
prepare for Qatar's MENA-FATF evaluation report.  He noted 
that the discussion of Qatar stretched to nine hours at the 
April MENA-FATF meeting - "setting a new record" - but he was 
pleased with the scrutiny because it would help Qatar focus 
on the areas for improvement.  The FIU Chief added that many 
of the recommended changes can be accomplished at the 
ministry level (i.e., without a royal decree or change in 
law), and the AML/CFT Committee was working to coordinate 
their implementation.  He professed not to know when Qatar 
would form a single financial regulator but hoped it would be 
soon, as its establishment would streamline the FIU's job. 
He concluded that AML/CFT Committee Chair Sheikh Fahad was 
pressing him to complete a follow-up report for FATF in one 
year, vice the normal two year timeframe typical for such 
reports. 
 
DOHA 00000505  003 OF 004 
 
 
 
-------------------------------------- 
Qatar Financial Center Warning on Iran 
-------------------------------------- 
 
¶9. (C) Separately, an American contact at the Qatar Financial 
Center provided Econoff with a copy of a QFC letter which was 
recently issued to each of the 70 registered firms in the 
Center.  (Note: The QFC is a parallel financial services 
"free zone" with its own, generally more stringent, set of 
regulations distinct from the Central Bank).  The text of the 
letter is as follows: 
 
Dear (Name) 
 
(Firm name and License number) 
 
FATF Statement - Jurisdictions with Deficient AML/CFT Regimes 
 
The National Anti-Money Laundering and Terrorism Financing 
Committee has recommended that the Qatar Financial Centre 
Regulatory Authority ("QFC Regulatory Authority") distribute 
the enclosed Financial Action Task Force Statement (28 
February 2008) to all Relevant Persons.  In the statement 
FATF expressed concern about the lack of comprehensive 
AML/CFT systems in Uzbekistan, Iran, Pakistan, Turkmenistan, 
Sao Tome and Principe and the northern part of Cyprus. 
 
This step reflects the State of Qatar's serious commitment to 
the fight against money laundering and terrorist financing, 
particularly to ensure that financial institutions are aware 
of jurisdictions with AML/CFT deficiencies. 
 
The QFC Regulatory Authority takes this opportunity to remind 
Relevant Persons of their obligation under Article 14 of the 
QFC Anti Money Laundering Regulations to have arrangements in 
place to obtain and ensure proper use is made of government, 
regulatory and international findings, including those issued 
by the Financial Action Task Force. 
 
As you are aware, Relevant Persons must examine and pay 
special attention to any Transactions or business relations 
with Persons (including Beneficial Owners) located in a 
country or jurisdiction identified as deficient, including 
those described in the attached FATF Statement. 
 
Further, any Relevant Person considering Transactions or 
business relationships with Persons located in any 
jurisdiction identified as deficient must be aware of the 
background against which the assessment or specific 
recommendations have been made. 
 
The QFC Regulatory Authority expects that your firm's systems 
and controls have operated in compliance with the AML 
Regulations and that proper use has been made of the FATF 
findings. 
 
Any questions should be directed to your firm's case officer 
in the Supervision Division or to Andrew Sealey in the Legal 
and Regulatory Compliance Division (495-6831). 
 
Yours sincerely, 
 
Phillip Thorpe 
CEO & Chairman 
 
(End text of letter) 
 
------------------------------------ 
Bank Saderat Identifying Information 
------------------------------------ 
 
¶10. (U) The second Bank Saderat branch opened on June 1, 
¶2008.  At least for now, it has the same contact information 
as the first branch: 
 
Bank Saderat 
P.O. Box 2256 
Doha, Qatar 
Tel: 974-443-0346 
Fax: 974-443-0121 
 
The first branch is located on Grand Hamad Street near the 
Gold Souq.  The second branch is located on Salwa Road, near 
Ayn Khalid Roundabout, across from Lord's Furniture. 
 
 
DOHA 00000505  004 OF 004 
 
 
--------------------------------------------- ------------- 
COMMENT:  Saderat Part of a Larger Balancing Act with Iran 
--------------------------------------------- ------------- 
 
¶11. (C) The background information provided by the Deputy 
Central Bank Governor and the FIU Chief suggest that Bank 
Saderat's role in Qatar's financial sector remains small and 
that the Iranian authorities sought the second branch as a 
means to expand channels for financial activity given the 
increasingly restrictive international environment for 
Iranian financial entities. 
 
¶12. (C) While Sheikh Fahad has an important regulatory and 
monitoring role within the GOQ, and he is clearly concerned 
about Iranian and Shi'a banking and investment activity in 
Qatar, it is also clear that he sees the presence of Bank 
Saderat as a political issue above his pay grade.  Press 
reports amplify what we hear privately from various Qatari 
contacts: that Iranian officials are frequently pressing 
their Qatari interlocutors for expanded bilateral economic 
ties.  The GOQ is carrying out a delicate balancing act with 
its larger neighbor (with which it shares trillions of 
dollars of potential natural gas wealth) - permitting 
economic activity, primarily payments of remittances to Iran 
which can be openly monitored, while guarding against actions 
by Iranian entities that would jeopardize Qatar's 
international reputation as a developing financial hub.  We 
expect the GOQ to keep a close watch on Bank Saderat's 
activities but not to close any of the bank's Doha branches 
absent a UN Security Council Resolution specifically 
sanctioning the bank.  END COMMENT. 
 
¶13. (C) BIO NOTE:  Sheikh Fahad is an unusually (by Qatari 
standards) open and fluid interlocutor who enjoys 
give-and-take when by himself.  Unfortunately, Emboffs 
usually only see him in conjunction with the Central Bank 
Governor, who is friendly but tends to stick to standard 
talking points.  Sheikh Fahad is in his mid-40s, educated in 
the U.S. (he received a Bachelor's Degree at Portland State) 
and genuinely cares about protecting the financial integrity 
of his country.  He is also more inclined to be helpful when 
separated from his boss; for instance, he provided us with a 
copy of the internal circular on background, even asking us 
to hide it from the secretary who sits outside his office. 
RATNEY