VZCZCXRO9019
OO RUEHAG RUEHAO RUEHAP RUEHAT RUEHBC RUEHBI RUEHBL RUEHBZ RUEHCD
RUEHCHI RUEHCI RUEHCN RUEHDA RUEHDBU RUEHDE RUEHDF RUEHDT RUEHDU
RUEHED RUEHEL RUEHFK RUEHFL RUEHGA RUEHGD RUEHGH RUEHGI RUEHGR RUEHHA
RUEHHM RUEHHO RUEHHT RUEHIHL RUEHIK RUEHJO RUEHJS RUEHKN RUEHKR
RUEHKSO RUEHKUK RUEHKW RUEHLA RUEHLH RUEHLN RUEHLZ RUEHMA RUEHMC
RUEHMJ RUEHMR RUEHMRE RUEHNAG RUEHNG RUEHNH RUEHNL RUEHNP RUEHNZ
RUEHPA RUEHPB RUEHPD RUEHPOD RUEHPT RUEHPW RUEHQU RUEHRD RUEHRG RUEHRN
RUEHROV RUEHRS RUEHTM RUEHTRO RUEHVC RUEHVK RUEHYG
DE RUEHC #8605/01 2981136
ZNR UUUUU ZZH
O 251117Z OCT 07
FM SECSTATE WASHDC
TO RUEHAR/AMEMBASSY ACCRA IMMEDIATE 0259
RUEHBJ/AMEMBASSY BEIJING IMMEDIATE 5746
RUEHSL/AMEMBASSY BRATISLAVA IMMEDIATE 6479
RUEHBZ/AMEMBASSY BRAZZAVILLE IMMEDIATE 0598
RUEHBS/AMEMBASSY BRUSSELS IMMEDIATE 8037
RUEHJA/AMEMBASSY JAKARTA IMMEDIATE 7779
RUEHPE/AMEMBASSY LIMA IMMEDIATE 9819
RUEHMO/AMEMBASSY MOSCOW IMMEDIATE 5367
RUEHOT/AMEMBASSY OTTAWA IMMEDIATE 8276
RUEHZP/AMEMBASSY PANAMA IMMEDIATE 1020
RUEHSA/AMEMBASSY PRETORIA IMMEDIATE 5449
RUEHKO/AMEMBASSY TOKYO IMMEDIATE 1207
RUEHWL/AMEMBASSY WELLINGTON IMMEDIATE 4472
RUEHHK/AMCONSUL HONG KONG IMMEDIATE 3971
RUEHBS/USEU BRUSSELS IMMEDIATE
ALL NEAR EAST COLLECTIVE IMMEDIATE
EU MEMBER STATES COLLECTIVE IMMEDIATE
RUEHTV/AMEMBASSY TEL AVIV IMMEDIATE 1737
RUEHUL/AMEMBASSY SEOUL IMMEDIATE 5184
RUEHAH/AMEMBASSY ASHGABAT IMMEDIATE 8665
INFO RUCNDT/USMISSION USUN NEW YORK IMMEDIATE 9275
ALL DIPLOMATIC AND CONSULAR POSTS COLLECTIVE IMMEDIATE
RUEHTRO/AMEMBASSY TRIPOLI IMMEDIATE 6474

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