VZCZCXRO5922
OO RUEHBC RUEHDE RUEHDIR RUEHKUK
DE RUEHC #5096/01 2202231
ZNR UUUUU ZZH
O 072226Z AUG 08
FM SECSTATE WASHDC
TO RUEHBJ/AMEMBASSY BEIJING IMMEDIATE 2262
RUCNDT/USMISSION USUN NEW YORK IMMEDIATE 2691
INFO IRAN COLLECTIVE IMMEDIATE

UNCLAS SECTION 01 OF 02 STATE 085096 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: KNNP IR PREL PARM
SUBJECT: USG QUESTIONS ON CHINA AUGUST 1 NOTICE ON BANK 
SEPAH 
 
REF: A. A) NOTE VERBALE 
     ¶B. 1 AUGUST 2008 
 
¶1.  (U)  This is an action request.  Please see paragraph 
four. 
 
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SUMMARY 
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¶2.  (U)  On August 1, China notified the UNSCR 1737 Sanctions 
Committee of its intention to authorize-under paragraph 15 of 
UNSCR 1737-payments due under contracts with Bank Sepah 
entered into prior to the listing of Bank Sepah in Annex I of 
UNSCR 1747.  Washington requests that China provide more 
information to the U.S. regarding these payments and the 
underlying contracts in order to confirm that the 
authorization of such payments is fully consistent with the 
terms of paragraph 15 of UNSCR 1737. 
 
¶3.  (U)  In accordance with paragraph 15 of UNSCR 1737 and 
paragraph 4 of 1747 the payments may proceed as early as 
August 14.  We wish to immediately convey our request to 
China, prior to the payment of any funds, and ask China to 
delay authorization or withdraw its notification until more 
information is provided on the type of contract, the parties 
and the description of the goods involved. 
 
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OBJECTIVES 
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¶4.  (U)  Washington requests Mission and Embassy Beijing 
approach appropriate Chinese officials to discuss this issue 
drawing from paragraphs two and three and the objectives 
outlined below.  Please note the time sensitivity of this 
issue and do not delay delivery of the demarche due to the 
Olympics. 
 
--  Inquire about the type of contract or payment involved 
(e.g., letters of credit or other type of contract) and the 
dates of the contracts to ensure that they meet the criteria 
for allowable exemptions. 
 
--  Ask for additional details - prior to the payment of any 
funds - about the nature and a description of the underlying 
goods to ensure that the contracts are not related to any of 
the prohibited items, materials, equipment, goods, 
technologies, or related assistance, as set out in resolution 
¶1737. 
 
--  Obtain information about the parties (including the 
names, locations, and principal owners) involved in these 
transactions to determine whether they have links to any 
UNSC-designated entities or individuals.  Also obtain the 
name of the banks involved for both parties 
 
--  Request that China confirm that the funds to be unfrozen 
and paid to the creditors are currently within China and, if 
not, to indicate the source of the funds. 
 
--  Note that all States should, consistent with UNSCR 
1803's call for States to exercise vigilance over the 
activities of their financial institutions with banks 
domiciled in Iran and their branches and subsidiaries abroad, 
consider establishing reporting, record-keeping or other 
monitoring requirements for their financial institutions' 
activities with these banks. 
 
--  Reiterate that the UNSC 1737 Committee must be notified 
at least ten working days prior to any authorization 
permitting transactions that fall within the scope of 
paragraph 15 with Bank Sepah and/or Bank Sepah International 
Plc. 
 
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REPORTING DEADLINE 
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¶5.  (U)  Posts should report results within seven (7) 
business days of receipt of this cable.  Please slug replies 
for ISN, IO, T, TREASURY, and NEA/IR.  Please include SIPDIS 
in all replies. 
 
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POINT OF CONTACT 
 
STATE 00085096  002 OF 002 
 
 
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¶6.   (U) Washington point of contact for follow-up 
information is Kevin McGeehan, ISN/CPI, (202) 647-5408, 
McGeehanKJ@state.sgov.gov. 
 
¶7. (U) Department thanks Post for its assistance. 
RICE