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Branch is 'unofficial consulate'

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A portrait of the leader of Iran's Islamic revolution, the late Ayatollah Ruhollah Khomeiny, hanging in the lobby of the Hong Kong branch of Bank Melli makes clear it is no ordinary financial institution.

No counters or ATMs can be seen behind the locked glass doors on the seventh floor of Wheelock House in Pedder Street, Central.

Even though it is subject to United States sanctions and was the subject of a Hong Kong government review just before the British withdrew in 1997, business has continued at the Bank Melli branch - business that includes more than matters of finance and trade, according to diplomats.

They say it also acts as an unofficial consulate. The Iranian consulate was closed in 1989 when Britain broke off ties with Teheran after Ayatollah Khomeiny issued a fatwa calling for the death of author Salman Rushdie over his novel, The Satanic Verses.

China granted permission to Iran to open a Hong Kong consulate in 1999 but there are no signs that a mission will be established, according to diplomatic sources.

Beijing's decision aroused concern among British and US diplomats. Washington has accused China of supplying Iran with missile technology and chemical weapons.

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