VZCZCXRO1376
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DE RUEHC #3198/01 3550113
ZNR UUUUU ZZH
O 200105Z DEC 08
FM SECSTATE WASHDC
TO ALL DIPLOMATIC AND CONSULAR POSTS COLLECTIVE IMMEDIATE

UNCLAS SECTION 01 OF 02 STATE 133198 
 
SENSITIVE 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: KNNP EFIN PARM IR
SUBJECT: DESIGNATION OF ADDITIONAL IRANIAN ENTITIES UNDER 
E.O. 13382 
 
¶1. (U) THIS IS AN ACTION REQUEST PLEASE SEE PARAGRAPH 9. 
 
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SUMMARY 
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¶2. (SBU) THE UNITED STATES ON DECEMBER 17, 2008, DESIGNATED 
TWO IRANIAN ENTITIES OF PROLIFERATION CONCERN UNDER U.S. 
EXECUTIVE ORDER (E.O.) 13382 (BLOCKING PROPERTY OF WEAPONS 
OF MASS DESTRUCTION PROLIFERATORS AND THEIR SUPPORTERS): 
ASSA CORP., A FRONT COMPANY CREATED AND CONTROLLED BY 
IRAN'S BANK MELLI AND DOMICILED IN NEW YORK, AND ITS PARENT 
COMPANY ASSA CO. LTD, LOCATED IN THE CHANNEL ISLANDS.  BOTH 
ENTITIES WERE DESIGNATED FOR BEING CONTROLLED BY AND/OR 
ACTING ON BEHALF OF, BANK MELLI.  BANK MELLI, IRAN'S 
LARGEST BANK, WAS IDENTIFIED IN UN SECURITY COUNCIL 
RESOLUTION 1803 AS A BANK OF PROLIFERATION CONCERN 
WARRANTING GREATER SCRUTINY, WAS DESIGNATED UNDER E.O. 
13382 IN OCTOBER 2007, AND WAS DESIGNATED BY THE EUROPEAN 
UNION IN AUGUST 2008 FOR ITS SUPPORT FOR PROLIFERATION. IN 
 
 
A RELATED ACTION, THE DEPARTMENT OF JUSTICE FILED A CIVIL 
FORFEITURE ACTION SEEKING TO FORFEIT ALL RIGHT, TITLE AND 
INTEREST OF ASSA CORP., ASSA CO. LTD, AND BANK MELLI IN A 
MANHATTAN OFFICE TOWER ON FIFTH AVENUE.  WE WOULD LIKE TO 
NOTIFY HOST GOVERNMENTS OF THE DESIGNATIONS. 
 
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ACTION REQUEST/OBJECTIVES 
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¶3. (SBU) POSTS ARE REQUESTED TO PURSUE THE FOLLOWING 
OBJECTIVES.  IN DOING SO, POSTS MAY DRAW FROM THE PRESS 
STATEMENT RELEASED BY THE STATE DEPARTMENT ON DECEMBER 17, 
2008, WHICH CAN BE FOUND AT 
WWW.STATE.GOV/R/PA/PRS/PS/2008/DEC/113288.HTM ; THE PRESS 
STATEMENT RELEASED BY THE TREASURY DEPARTMENT, WHICH CAN BE 
FOUND AT WWW.TREASURY.GOV/PRESS/RELEASES/HP1330.HTM; THE 
PRESS STATEMENT RELEASED BY THE FEDERAL BUREAU OF 
INVESTIGATION, WHICH CAN BE FOUND AT 
WWW.NEWYORK.FBI.GOV/DOJPRESSREL/PRESSREL08/NY FO121708/HTM; 
AND PARAGRAPHS 4-11 BELOW.  PRESS STATEMENTS MAY BE PASSED 
TO HOST GOVERNMENT OFFICIALS. 
 
-- INFORM HOST GOVERNMENT OFFICIALS OF THE U.S. 
DESIGNATIONS UNDER E.O. 13382 OF ASSA CORP AND THE ASSA CO 
LTD. 
 
-- REMIND HOST GOVERNMENT OFFICIALS THAT PARAGRAPH 10 OF 
UNSCR 1803 CALLS UPON ALL MEMBER STATES TO EXERCISE 
VIGILANCE OVER THE ACTIVITIES OF FINANCIAL INSTITUTIONS IN 
THEIR TERRITORIES WITH ALL BANKS DOMICILED IN IRAN, IN 
PARTICULAR WITH BANK MELLI AND BANK SADERAT, AND THEIR 
BRANCHES AND SUBSIDIARIES ABROAD, IN ORDER TO AVOID SUCH 
ACTIVITIES CONTRIBUTING TO PROLIFERATION SENSITIVE NUCLEAR 
ACTIVITIES, OR TO THE DEVELOPMENT OF NUCLEAR WEAPON 
DELIVERY SYSTEMS, AS REFERRED TO IN RESOLUTION 1737 (2006) 
 
-- URGE HOST GOVERNMENTS, CONSISTENT WITH NATIONAL LAWS AND 
REGULATIONS, TO FREEZE THE ASSETS OF THESE ENTITIES IF THEY 
HAVE NOT ALREADY DONE SO, AS WELL AS THE ASSETS OF PERSONS 
OR ENTITIES ACTING ON THEIR BEHALF OR AT THEIR DIRECTION, 
OR BY ENTITIES OWNED OR CONTROLLED BY THEM. 
 
-- NOTE THAT FIRMS IN THE JURISDICTION OF HOST GOVERNMENTS 
RISK DESIGNATION UNDER E.O. 13382 IF THEY ACT OR PURPORT TO 
ACT FOR OR ON BEHALF OF, DIRECTLY OR INDIRECTLY, ASSA CORP 
AND ASSA CO LTD, OR ANY OTHER E.O. 13382 DESIGNATED ENTITY, 
AND/OR IF THEY PROVIDE, OR ATTEMPT TO PROVIDE, FINANCIAL, 
MATERIAL, TECHNOLOGICAL, OR OTHER SUPPORT FOR, OR GOODS OR 
SERVICES IN SUPPORT OF ANY DESIGNATED ENTITY. 
 
-- REMIND HOST GOVERNMENTS THAT ON OCTOBER 17, 2008, THE 
FINANCIAL ACTION TASK FORCE ISSUED GUIDANCE ON PARAGRAPH 10 
OF UNSCR 1803, WHICH CALLS UPON ALL MEMBER STATES TO 
EXERCISE VIGILANCE OVER THE ACTIVITIES OF FINANCIAL 
INSTITUTIONS IN THEIR TERRITORIES WITH ALL BANKS DOMICILED 
IN IRAN, IN PARTICULAR WITH BANK MELLI AND BANK SADERAT, 
AND THEIR BRANCHES AND SUBSIDIARIES ABROAD.  THE LINK TO 
THE GUIDANCE CAN BE FOUND AT WWW.FATF- 
GAFI.ORG/DATAOECD/47/41/41529339.PDF. 
 
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BACKGROUND 
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¶4. (SBU) ASSA CORP. IS A FRONT COMPANY CREATED AND 
 
STATE 00133198  002 OF 002 
 
 
CONTROLLED BY IRAN'S BANK MELLI AND DOMICILED IN NEW YORK, 
AND ITS PARENT ORGANIZATION, ASSA CO. LTD, IS LOCATED IN 
THE CHANNEL ISLANDS.  THESE ENTITIES WERE DESIGNATED UNDER 
EXECUTIVE ORDER 13382 FOR BEING CONTROLLED BY AND FOR 
ACTING FOR OR ON BEHALF OF, IRAN'S BANK MELLI, AND FOR 
HAVING PROVIDED FINANCIAL SUPPORT FOR, OR SERVICES IN 
SUPPORT OF, BANK MELLI.  E.O. 13382 IS AN AUTHORITY AIMED 
AT FREEZING THE ASSETS OF PROLIFERATORS OF WEAPONS OF MASS 
DESTRUCTION (WMD) AND THEIR SUPPORTERS. 
 
¶5. (SBU) BANK MELLI PROVIDES FINANCIAL SERVICES, INCLUDING 
OPENING LETTERS OF CREDIT AND MAINTAINING ACCOUNTS, FOR 
IRANIAN FRONT COMPANIES AND ENTITIES ENGAGED IN 
PROLIFERATION ACTIVITIES.  FURTHER, BANK MELLI HAS 
FACILITATED THE PURCHASE OF SENSITIVE MATERIALS UTILIZED BY 
IRAN'S NUCLEAR AND MISSILE INDUSTRIES, AND HAS HANDLED 
TRANSACTIONS FOR OTHER DESIGNATED IRANIAN ENTITIES, 
INCLUDING BANK SEPAH, DEFENSE INDUSTRIES ORGANIZATION 
(DIO), AND THE SHAHID HAMMAT INDUSTRIAL GROUP (SHIG). 
 
¶6. (SBU) BANK MELLI HAS BEEN DESIGNATED AS A PROLIFERATOR 
BY THE UNITED STATES AND THE EUROPEAN UNION FOR ITS ROLE IN 
IRAN'S NUCLEAR AND BALLISTIC MISSILE PROGRAM.  PARAGRAPH 10 
OF UNSCR 1803 CALLS UPON ALL MEMBER STATES TO EXERCISE 
VIGILANCE OVER THE ACTIVITIES OF FINANCIAL INSTITUTIONS IN 
THEIR TERRITORIES WITH ALL BANKS DOMICILED IN IRAN, IN 
PARTICULAR WITH BANK MELLI AND BANK SADERAT, AND THEIR 
BRANCHES AND SUBSIDIARIES ABROAD, IN ORDER TO AVOID SUCH 
ACTIVITIES CONTRIBUTING TO PROLIFERATION SENSITIVE NUCLEAR 
ACTIVITIES, OR TO THE DEVELOPMENT OF NUCLEAR WEAPON 
DELIVERY SYSTEMS, AS REFERRED TO IN RESOLUTION 1737 (2006). 
 
¶7. (SBU) BANK MELLI, THROUGH ASSA CORP., HAS AN INTEREST IN 
A PROPERTY LOCATED AT 650 FIFTH AVENUE, NEW YORK, NEW YORK. 
BANK MELLI CREATED ASSA CORP AS A VEHICLE TO HOLD BANK 
MELLI'S INTEREST IN THE 650 FIFTH AVENUE BUILDING.  THE 
CONSTRUCTION OF THE BUILDING WAS FINANCED, IN PART, BY A 
BANK MELLI LOAN.  ASSA CORP CO-OWNS THE BUILDING THROUGH A 
PARTNERSHIP FORMED WITH THE ALAVI FOUNDATION OF NEW YORK, 
CALLED 650 FIFTH AVENUE COMPANY. 
 
¶8. (SBU) ASSA HAS REPEATEDLY TRANSFERRED RENTAL INCOME 
GENERATED FROM THE 650 FIFTH AVENUE PARTNERSHIP BACK TO 
BANK MELLI THROUGH ASSA CO LTD.  ASSA ALSO HAS REGULARLY 
FOLLOWED BANK MELLI'S INSTRUCTIONS WITH REGARD TO ASSA'S 
AFFAIRS AND ITS MANAGEMENT OF THE INVESTMENT, AND HAS 
REGULARLY REPORTED BACK TO BANK MELLI ON ITS FINANCIAL 
SITUATION, INCLUDING FREQUENTLY RESPONDING TO BANK MELLI 
REQUESTS FOR AUDITS AND INFORMATION REGARDING COMPANY 
EXPENSES. 
 
¶9. (SBU) IN A RELATED ACTION, THE DEPARTMENT OF JUSTICE 
FILED A CIVIL FORFEITURE ACTION SEEKING TO FORFEIT ALL 
RIGHT, TITLE AND INTEREST OF ASSA CORP., ASSA CO. LTD, AND 
BANK MELLI IN A MANHATTAN OFFICE TOWER ON FIFTH AVENUE. 
THE COMPLAINT ALLEGES THAT THE FUNDS IN THE BANK ACCOUNTS 
ARE FOREITABLE AS PROCEEDS OF VIOLATIONS OF THE 
INTERNATIONAL EMERGENCY ECONOMIC POWERS ACT (IEEPA), AND 
THAT ASSA CORPORATION'S INTEREST IN 650 FIFTH AVENUE 
COMPANY IS FORFEITABLE AS PROPERTY INVOLVED IN MONEY 
LAUNDERING AND A CONSPIRACY TO COMMIT MONEY LAUNDERING. 
 
¶10. (SBU) THESE DESIGNATIONS HIGHLIGHT THE RISKS OF DOING 
BUSINESS WITH IRANIAN FINANCIAL INSTITUTIONS, AND PROVIDE 
ADDITIONAL INFORMATION THAT WILL HELP FINANCIAL 
INSTITUTIONS IN THE U.S. AND WORLDWIDE PROTECT THEMSELVES 
FROM DECEPTIVE FINANCIAL PRACTICES EMPLOYED BY IRANIAN 
ENTITIES LIKE ASSA CORP AND ASSA CO LTD. 
 
¶11. (SBU) WE WANT TO CONVEY TO HOST GOVERNMENTS THAT ANY 
ENTITY IN THEIR JURISDICTION FOUND TO BE CONDUCTING 
BUSINESS WITH ASSA CORP OR ASSA CO LTD AND ITS AFFILIATES 
AND ANY OTHER DESIGNATED ENTITIES, OR ANY ENTITY THAT IS 
OWNED OR CONTROLLED BY, OR ACTING FOR OR ON BEHALF OF ASSA 
CORP AND ITS AFFILIATES, MAY BE SUBJECT TO DESIGNATION 
UNDER E.O. 13382. 
 
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REPORTING DEADLINE 
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¶12. (U) PLEASE REPORT DELIVERY OF THE DEMARCHE AND 
ANY RESPONSE WITHIN SEVEN DAYS OF RECEIPT OF THIS CABLE. 
PLEASE SLUG REPLIES FOR ISN, T, TREASURY, AND NEA/IR. 
PLEASE USE SIPDIS CAPTION ON ALL RESPONSES. 
 
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POINT OF CONTACT 
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¶13. (U) QUESTIONS MAY BE DIRECTED TO ISN/CPI JENNIFER 
CHALMERS, 202-647-9715. 
 
¶14. (U) DEPARTMENT THANKS POSTS FOR THEIR ASSISTANCE. 
RICE