Written Testimony of Under Secretary for Terrorism and Financial Intelligence David Cohen before the House Committee on Foreign Affairs

October 14, 2011

U.S. Department of the Treasury on October 14, 2011 released the following:

“Chairman Ros-Lehtinen, Ranking Member Berman, and distinguished members of the Committee: Thank you for the opportunity to appear before you today to discuss the Treasury Department’s efforts to implement and enforce Iran and Syria sanctions.

The focus of my testimony today will be the progress we are making in our financial strategies to increase pressure on the Iranian and the Syrian regimes. But first, I would like to say a few words about this week’s revelation that we disrupted an Iran Qods Force plot to assassinate the Saudi Ambassador here in Washington.

This is a dramatic reminder that the urgent and serious threat we face from Iran is not limited to Iran’s nuclear ambitions. We have been working for several years to address the full spectrum of Iranian illicit conduct, including nuclear and missile proliferation, human rights abuses, misuse of the international financial system and support for terrorist groups worldwide.

This week is no different. On Tuesday, Treasury imposed financial sanctions against five individuals, including the Commander of the Qods Force and three other senior Qods Force officers connected to the assassination plot. In taking this action, Treasury exposed the Iranian government’s involvement in the plot through the Qods Force, Iran’s primary arm for exporting terror.

And Wednesday, we took another action targeting Qods Force involvement in terrorist activities, this time by imposing sanctions on Mahan Air – Iran’s second largest airline – which was secretly ferrying operatives, weapons and funds on its flights for the Qods Force.

Actions like these, along with a raft of additional sanctions we have imposed on Iran over the past several months and years, have put increasing financial pressure on Iran in recent years.

CISADA has markedly amplified this effect. As we have explained to banks and governments in nearly 50 countries around the world, CISADA offers a clear choice: a foreign bank can have access to the largest and most important financial sector in the world – the United States – or it can do business with sanctioned Iranian banks, but it cannot do both. For the overwhelming majority of foreign banks, the choice has been a simple one. Those with potentially sanctionable relationships quickly elected to stop that business. And where we learn of potentially sanctionable activity under CISADA, we have actively investigated it.

Our efforts are paying off. Iran is now facing unprecedented levels of financial and commercial isolation. The number and quality of foreign banks willing to transact with designated Iranian financial institutions has dropped precipitously over the last year. Iran’s shrinking access to financial services and trade finance has made it extremely difficult for Iran to pay for imports and receive payment for exports. Iran’s Central Bank has been unable to halt the steady erosion in the value of its currency. And Iran has been increasingly unable to attract foreign investment, especially in its oil fields, leading to a projected loss of $14 billion a year in oil revenues through 2016.

Our efforts in Syria are also yielding results. Since the uprising in Syria began in March, President Obama has issued three new Executive Orders to establish sanction programs that have systematically escalated the financial pressure on the Asad regime. These U.S. sanctions – which target human rights abusers, block the assets of the Government of Syria, impose a import ban on Syrian petroleum products, and prohibit new investment in Syria – are intended to pressure Asad to relinquish power. Our efforts have been echoed by our European partners, who have established an embargo on Syrian oil and imposed financial sanctions targeting officials responsible for Syrian repression.

Echoing action that we have taken, just this morning the EU announced sanctions on the Commercial Bank of Syria, by far the largest bank in Syria, and its key link to the international financial system.

As a result of these sanctions, the Asad regime is struggling to find buyers for its oil, to access foreign currency, and to maintain economic stability. The IMF has revised its projections for the Syrian economy this year — from three percent growth to a two percent contraction – and predicts increasing pressure on Syria’s foreign currency reserves and ability to finance imports.

We are making progress, but there is still much to be done to prevent Iran and Syria from evading sanctions already in place and to take new steps to increase the pressure on these regimes. In the case of Iran, we continue to focus on the Central Bank of Iran (“the CBI”). Although U.S. financial institutions are already generally prohibited from doing business with any bank in Iran – including the CBI – further U.S. action against the CBI, if it attained multilateral support, could further isolate the CBI, with a potentially powerful impact on Iran. I can assure the Committee, as Secretary Geithner said in his letter of August 29, “All options to increase the financial pressure on Iran are on the table, including the possibility of imposing additional sanctions against the CBI.” We will also continue to work with governments in Europe, the Gulf, and elsewhere to impose financial measures that will ratchet up the pressure on Asad to step down.

If the Iranian and Syrian regimes continue to choose the path of defiance, we will continue to develop new and innovative ways to impose additional costs on them. I look forward to continuing our work with Congress to advance our national interests.”

To find additional global criminal news, please read The Global Criminal Defense Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition and OFAC SDN Sanctions Removal.

The author of this blog is Douglas McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.


Weapons of Mass Destruction Proliferators [NPWMD] Entries Added on OFAC’s SDN List on August 10, 2011

August 10, 2011

As of today, OFAC has added Weapons of Mass Destruction Proliferators [NPWMD] Entries to the Specially Designated Nationals List (SDN List):

The following [NPWMD] entries have been added to OFAC’s SDN list:

COMMERCIAL BANK OF SYRIA, Damascus Branch, P.O. Box 2231, Moawiya St., Damascus, Syria; P.O. Box 933, Yousef Azmeh Square Damascus, Syria; Aleppo Branch, P.O. Box 2, Kastel Hajjarin St., Aleppo, Syria; SWIFT/BIC CMSY SY DA; all offices worldwide [NPWMD]

SYRIAN LEBANESE COMMERCIAL BANK, Hamra, Makdessi Street, SLCB Building, P.O. Box 113-5127/11-8701, Beirut, Lebanon; Hamra Branch, Hamra St., Darwish and Fakhro Building, P.O. Box 113-5127/11-8701, Beirut, Lebanon; Mar Elias Branch, Mar Elias Street, Fakhani Building, P.O. Box 145 796, Beirut, Lebanon; SWIFT/BIC SYLC LB BE [NPWMD]

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Treasury Sanctions State-Owned Syrian Financial Institutions and Syria’s Largest Mobile Phone Operator

8/10/2011
WASHINGTON – The U.S. Department of the Treasury today announced the designation of the Commercial Bank of Syria, a Syrian state-owned financial institution, and its Lebanon-based subsidiary, Syrian Lebanese Commercial Bank, pursuant to Executive Order (E.O.) 13382, and Syriatel, the largest mobile phone operator in Syria, pursuant to E.O. 13572.

“By exposing Syria’s largest commercial bank as an agent for designated Syrian and North Korean proliferators, and by targeting Syria’s largest mobile phone operator for being controlled by one of the regime’s most corrupt insiders, we are taking aim at the financial infrastructure that is helping provide support to Asad and his regime’s illicit activities,” said Under Secretary for Terrorism and Financial Intelligence David S. Cohen.

E.O. 13382 is an authority that targets proliferators of weapons of mass destruction (WMD) and their supporters, and E.O. 13572 targets Syrian officials and others responsible for human rights abuses in Syria. As a result of today’s actions, U.S. persons are generally prohibited from engaging in commercial or financial transactions with the Commercial Bank of Syria, Syrian Lebanese Commercial Bank and Syriatel, and any assets of these entities under U.S. jurisdiction are frozen.

Commercial Bank of Syria and Syrian Lebanese Commercial Bank
The Commercial Bank of Syria, a Syrian state-owned financial institution based in Damascus with approximately 50 branches, was designated today for providing financial services to Syria’s Scientific Studies and Research Center (SSRC) and North Korea’s Tanchon Commercial Bank (Tanchon). SSRC and Tanchon were listed in the Annex to E.O. 13382 in June 2005 for their support for WMD proliferation by Syria and North Korea, respectively. The Syrian Lebanese Commercial Bank was designated today for being owned or controlled by the Commercial Bank of Syria.

SSRC controls Syria’s missile production facilities and oversees Syria’s facilities to develop unconventional weapons and their delivery systems. The Commercial Bank of Syria has continued to provide financial services to the SSRC and associated companies following the SSRC’s designation, including the maintenance of bank accounts and financing for purchases that permit the SSRC and associated companies to advance Syria’s WMD programs. For example, in 2010, SSRC arranged financing through the Commercial Bank of Syria for missile-related purchases.

The Commercial Bank of Syria also holds an account for Tanchon, the primary financial agent for the Korea Mining Development Corporation (KOMID), North Korea’s premier arms dealer and main exporter of goods and equipment related to ballistic missiles and conventional weapons. KOMID was also listed in the Annex to E.O. 13382.

The Commercial Bank of Syria has also engaged in dealings with several Iranian banks designated by Treasury under E.O. 13382, including the Export Development Bank of Iran, Bank Saderat and Bank Melli.

The Commercial Bank of Syria was identified by Treasury as a financial institution of primary money laundering concern under Section 311 of the USA PATRIOT ACT in May 2004, and issued its Final Rule in March 2006. The Commercial Bank of Syria remains in control of much of the Syrian banking market and controls most public sector contracts. In light of today’s designation, Treasury’s Financial Crimes Enforcement Network (FinCEN) has issued an advisory to alert U.S. financial institutions of the Commercial Bank of Syria’s continued involvement in illicit financial activities.

Syriatel
Syriatel, the largest mobile phone operator in Syria, was designated today for being owned or controlled by Rami Makhluf, a powerful Syrian businessman and regime insider designated under E.O. 13460 in February 2008 for improperly benefitting from and aiding the public corruption of Syrian regime officials.

Treasury identified Syriatel as property blocked pursuant to E.O. 13460 in July 2008 because of Makhluf’s majority ownership interest in the company. Despite attempts to obscure his controlling interest in Syriatel, Makhluf has continued to own and run the telecommunications company.

Syriatel was also designated today for being owned and controlled by Al Mashreq Investment Fund – a firm designated by Treasury pursuant to E.O. 13572 in May 2011 for being owned and controlled by Makhluf. Al Mashreq Investment Fund is Syriatel’s largest shareholder.

Identifying Information:

Entity: Commercial Bank of Syria (and all offices worldwide)
Location: P.O. Box 933, Yousef Azmeh Square, Damascus, Syria
Alt. Location: Aleppo Branch, P.O. Box 2, Kastel Hajjarin St., Aleppo, Syria
Alt Location: Damascus Branch, P.O. Box 2231, Moawiya St., Damascus, Syria
SWIFT/BIC: CMSY SY DA

Entity: Syrian Lebanese Commercial Bank
Location: Hamra, Makdessi Street, SLCB Building, P.O. Box 113-5127/11-8701, Beirut, Lebanon
Alt. Location: Hamra Branch, Hamra Street, Darwish and Fakhro Building, P.O. Box 113-5127/11-8701, Beirut, Lebanon
Alt. Location: Mar Elias Branch, Mar Elias Street, Fakhani Building, P.O. Box 145 796, Beirut, Lebanon
SWIFT/BIC: SYLC LB BE

Entity: Syriatel
AKA: Syriatel Mobile Telecom
Address: Doctors Syndicate Building, Al Jalaa Street, Abu Roumaneh Area, P.O. Box 2900, Damascus, Syria​”

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To find additional global criminal news, please read The Global Criminal Defense Daily.

Douglas McNabb and other members of the firm practice and write extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition and OFAC SDN List Removal.

The author of this blog is Douglas McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.

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