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Portugal bank offered to "spy" in Iran for US

Lisbon warns banking officials about risks in doing business in Iran

Political and financial circles in Portugal reacted strongly to revelations that the country's largest private bank, Banco Comercial Portugués (better known as Millennium BCP), attempted to reach a secret deal with the US government that would allow it to conduct business in Iran in exchange for confidential information about financial transactions by account holders there.

The story broke Monday, when EL PAÍS published a classified cable from the US Embassy in Lisbon as part of its coverage of the WikiLeaks disclosure of US State Department communications. It showed that the Portuguese government had been informed of BCP's proposal.

The Portuguese Central Bank on Tuesday confirmed that it was aware that a Millennium BCP delegation traveled to Tehran in April 2009 at the invitation of the Iranian Embassy in Lisbon, but said that it had reminded the private bank of "its legal obligation to inform" Portuguese authorities of any operation that might constitute a money laundering crime or financing of terrorism." The BCP allegedly replied it had taken all necessary steps to ensure it would not violate sanctions, and stated it "would not conduct any business transaction with Iranian banks."

The bank president could have grossly violated confidentiality rules

Millennium BCP officials said in a press release that "the mere idea of sharing information is false and fanciful" and denied that Millennium BCP President Carlos Santos Ferreira offered to inform the US government about Iranian accounts and financial activities in exchange for permission to operate there.

Meanwhile, Prime Minister José Socrates' Cabinet issued a short statement saying that the nation's leader "does not have nor ever had any knowledge of any commercial activity by BCP in Iran." Yet a February 2010 cable from the US Embassy in Lisbon clearly states that "[Millennium BCP President Carlos Santos] Ferreira is willing to establish a relationship with Iran to help the US government track Iranian assets and financial activities. Millennium has consulted with the Bank of Portugal and senior government officials, and would like our views on its proposed relationship with Iran and Washington's interest in tracking Iranian accounts in Portugal."

Parties from the entire political spectrum, from the conservative Social Democrat Party (PSD) to the left-wing Bloco de Esquerda (BE), have demanded explanations from the chief of Millennium BCP. Miguel Macedo, PSD parliamentary spokesman, the main opposition group, described the affair as relevant and of great scope. BE deputy Jorge Costa warned that Santos Ferreira could have grossly violated the banking rule of confidentiality, and requested that the issue be cleared up.

The story began in April 2009, when a Millennium BCP delegation traveled to Tehran at the invitation of the Iranian Embassy in Lisbon to discuss and explore business possibilities between Portugal's first private lender and Iran's banking sector. Ten months later, Santos Ferreira, who had a good relationship with the American Embassy in Lisbon, discussed his idea with its political and economic advisor. At the time, there was no ambassador at the embassy, since Allan J. Katz did not present his credentials to Portuguese President Aníbal Cavaco Silva until April 28 of this year.

The cable notes that while Santos Ferreira did not explicitly say so, the Embassy believes that "the Portuguese Ministry of Foreign Affairs is, at a minimum, aware of his approach to the Embassy."

On their visit to Iran, two BCP executives, board member José João Guilherme and Duarte Pitta Ferraz, director of the international affairs unit, met for five days with banking and diplomatic representatives to discuss the possibility of conducting business without violating EU and United Nations sanctions. A few weeks before this trip, the Portuguese Foreign Ministry's political director, Nuno Brito, had visited Tehran.

According to the US Embassy in Lisbon, Brito said that Portugal had no current plans to pursue economic relationships with Iran although "it is keeping options open for future investments."

* Este artículo apareció en la edición impresa del Miércoles, 15 de diciembre de 2010