PETALING JAYA: US attempts to shut down an Iranian bank in Malaysia suspected of gun-running were shoved aside, according to Internet whistleblower Wikileaks.
The US government had warned Bank Negara Malaysia that a foreign subsidiary of Bank Mellat known as First East Export Bank (FEEB) was involved in weapons proliferation.
While the secret document did not expressly mention if the bank's activities involved funding for either a chemical or nuclear arsenal, the US was convinced that FEEB's actions were suspect.
“Our information indicates Iran is now using Mellat for the same purpose (proliferation). FEEB could be next, potentially causing significant embarrassment to Malaysia,” US Ambassador James Keith said in a message to the US government.
(Proliferation is commonly referred to both nuclear and chemical weaponry.)
FEEB was established on Dec 18, 2008, and later received an offshore banking licence from the Labuan Offshore Financial Services Authority (LOFSA, now Labuan FSA) on Feb 16, 2009.
(According to its website, LOFSA was set up in 1996 to develop the Federal Territory of Labuan into an international business and financial centre.)
Concerned with Bank Mellat's presence in Malaysia, a meeting was arranged by US diplomats on Sept 10, 2009 with Malaysian representatives from the banking and financial sector.
They included US economic counsellor Matthew J Matthews, Singapore Embassy Treasury Attache Seth Bleiweis, former Bank Negara deputy governor Zamani Abdul Ghani, Bank Negara's legal director Jeremy Lee, LOFSA deputy governor Danial Mah Abdullah and a few others.
An important but unknown individual known as “xxxxxxxxxxxx” was also mentioned in the message.
No strong evidence
During the negotiations, it was revealed that the American representatives attempted to convince the Malaysians into cutting off its links with FEEB.
Bank Negara was warned that if it did not revoke FEEB's licence, the US government would impose sanctions on the latter. Matthews then said that if Malaysia continued to support FEEB, it would seriously affect its reputation.
However, Lee argued that if Bank Negara were to do so, the Malaysian government could face a barrage of lawsuits from FEEB's shareholders.
Lee also said that the US failed to produce any strong evidence that might have convicted FEEB or Bank Mellat in a court of law.
Bank Negara then accused the US government of singling out Malaysia, and pointed out that Bank Mellat branches in other countries such as South Korea, England and Turkey did not suffer Malaysia's fate.
The Malaysian team also defended FEEB's position, and said that it had only performed one oil and gas transaction (amounting to 400,000 euros) in its first six months of operation.
In an attempt to convince the Americans that Bank Mellat was not in the grey, the Danial also revealed that four conditions were laid out for FEEB's operations:
* It was not to do business with any UN-sanctioned entity;
* It had to follow all anti-money laundering and anti-terror financing laws in Malaysia; and
* It had to comply with all of LOFSA's regulations and directives.
Its shareholders were not supposed to be sanctioned by the UN.
According to Abdullah, any breach of these conditions would result in the termination of the bank's licence. He also said that previous Iranian banks, such as Saderat and Melli, were not allowed to do business with LOFSA.
Bank Negara also appeared confident that it was able to to supervise Bank Mellat's actions.
Sanctions against FEEB
However, these points did not allay the fears of the US government, which promptly warned the Malaysian government that it would keep its eye on FEEB, and warn other banks to stay away from it.
“(Matthews) told 'xxxxxxxxxxxx' that the US was offering Bank Negera pre-notification and the release of our intelligence as a good faith gesture,” the US Ambassador said in the cable.
He also said that doing so would help Malaysia in the event of a “proliferation finance incident”. However, these calls were not heeded by Bank Negara and its associates.
Later in November, the US Treasury Department announced sanctions against FEEB, as well as Bank Mellat's chairman Ali Divandari.
These sanctions included freezing the assets of "designated proliferators of weapons of mass destruction (WMD)" and their supporters as well as disallowing US citizens from trading with them.
A look at FEEB's website showed that it had little to no information on both its CEO and its board of directors. There was also little news on the bank's day-to-day operations.
According to the website's sole press release, FEEB accused the US government of seeking political gain over its strained political relationship with Iran.
“The recent allegations made by the US against Bank Mellat has absolutely no justification and legal ground, and is simply based on illegal and baseless accusations,” the release said.
“It is certainly contrary to international law, thus should have no value and effect.”
Reacting to the sanctions, a LOFSA official said that the ban would only affect FEEB's transactions with the US, and not its operations in Labuan.
No comments:
Post a Comment