S E C R E T STATE 098748
SIPDIS
E.O. 12958: DECL: 09/23/2019 TAGS: PREL, EFIN, MNUC, PARM, KNNP, IR, EC SUBJECT: ECUADOR DEMARCHE: GROWING TIES WITH THE EXPORT DEVELOPMENT BANK OF IRAN
REF: A. STATE 105173 B. STATE 114408 C. QUITO 1046
Classified By: WHA PDAS Craig Kelly, Reasons: 1.4 B, C, and D
1. (U) This is an action request. Please see paragraph 3.
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2. (S/NF) The United States has information that Ecuador is coordinating with Iran to open a branch of Irans Export Development Bank of Iran (EBDI) in Ecuador, and that Iran is considering extending a line of credit to Ecuador. The Treasury Department designated the EDBI, along with three affiliated entities, on October 22, 2008 (ref B). We are concerned that Iran may be attempting to conduct transactions to facilitate proliferation-related payment in circumvention of UNSCRs 1737, 1747, and 1803.
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3. (S/NF) As a follow-up to the meeting between Treasury and the Embassy of Ecuador in Washington, on May 8, during which Treasury first expressed U.S. concerns regarding Irans efforts to promote and enhance bilateral banking cooperation with Ecuador, Post is requested to deliver the points in paragraph 4 to appropriate host government officials in the Ministries of Foreign Affairs and Finance. (Note: Treasury and State plan to deliver similar points to representatives from the Ecuadorian Embassy as well. End Note.) Post should pursue the following objectives:
-- Highlight the risks involved with doing business with EDBI and EDBI-affiliated entities.
-- Warn Ecuador of the risks involved in facilitating financial transactions with Iran.
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4. (S//REL TO EC) We would like to raise serious concerns regarding planned financial transactions between Iran and Ecuador.
-- We have information that Iranian officials are seeking to promote and enhance bilateral banking cooperation with Ecuador. We understand that Ecuador is coordinating with Iran to open a branch of Irans Export Development Bank of Iran (EBDI) in Ecuador, and that Iran in considering extending a line of credit to Ecuador.
-- Treasury designated the EDBI and three affiliated entities on October 22, 2008, because EDBI provides financial services to multiple subordinate entities of Irans Ministry of Defense and Armed Forces Logistics (MODAFL) that permit these entities to advance Irans WMD programs. The term "designate" means to prohibit U.S. persons or entities from engaging in business with such entities. Treasury also designated three separate entities which were found to be owned, or controlled by, or acting or purporting to act for or on behalf of the EDBI. These entities are: the EDBI Stock Brokerage Company and the EDBI Exchange Company, both located in Iran, and Banco Internacional de Desarrollo, CA, a financial institution located in Venezuela. This action was taken in accordance with Executive Order 13382 ("Blocking the Property of Weapons of Mass Destruction Proliferators and their Supporters").
-- Entities associated with Irans nuclear and missile programs utilize an extensive network of front companies to conceal the true ownership of funds and end-use of commercial goods. These designations are consistent with obligations in UN Security Council Resolutions (UNSCRs) 1737, 1747 and 1803, which require Member States to freeze the assets of entities and individuals designated by the UN Security Council as being involved in Irans nuclear or missile programs, and freeze the assets of entities acting on their behalf or at their direction.
-- We want to convey to the Ecuadorian government that any entity in its jurisdiction found to be conducting business with EDBI and its affiliates and any other designated entities, or any entity that is owned or controlled by, or acting for or on behalf of EDBI and its affiliates, may be subject to designation under E.O. 13382.
-- We ask that you take any appropriate measures to prevent Iran from circumventing the applicable UN Security Council resolutions by accessing your financial system to support its nuclear and missile program.
-- 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.
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5. (U) Department requests Post report the results of its demarche within a week of receiving this cable. Please slug replies for Treasury, WHA, and ISN, and also slug as SIPDIS.
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6. (U) Treasury point of contact is Rachel Fedewa, TFFC/Treasury, (202) 622-9765, .gov. CLINTON
