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04AMMAN8401 2004-10-07 13:59:00 CONFIDENTIAL Embassy Amman
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					  C O N F I D E N T I A L SECTION 01 OF 02 AMMAN 008401 


E.O. 12958: DECL: 10/06/2019



1. (C) SUMMARY: The Jordanian Central Bank and several
Jordanian and foreign banks here have reported over recent
weeks attempted cash deposits of large dollar amounts by
individuals who claim to be operating on behalf of Iraqi
government entities or contractors operating in Iraq. The
CBJ Deputy Governor asked Embassy Amman to investigate
whether there was official sanction in Baghdad for such flows
of funds. He was concerned about the potential for illegal
activity. He and several bankers reported that no such
deposits had been allowed. We have encouraged Jordanian
officials to be in direct contact with Iraqi authorities,
while keeping us informed on these potential fraud/money
laundering cases. END SUMMARY.

2. (C) During the visit of a Treasury delegation in
mid-September, officials from the Jordanian branch of the
Lebanese Bank Audi requested a meeting with the delegation.
The bank's manager said the bank had seen a
number of individuals attempting to deposit large sums of
cash in the bank, mainly dollars in large denominations.
Some of the individuals claimed they are dealing with the USG
in Iraq. Both the magnitude and frequency of the attempted
deposits varied. The manager said the bank refused to accept
the deposits, in accordance with the Central Bank of Jordan's
Know-Your-Client (KYC) guidelines.

3. (C) The manager added that he had received a request to
consider a Letter of Credit for $60 million to pay for
imports of lentils and milk to Iraq. He was confident about
this proposal because it included documentation
issued by the Iraqi Ministry of Trade and that the Central
Bank of Iraq had agreed to the proposal. As confirmed by ref
e-mail, a proposal was being considered by the CBI and the
Iraqi Ministry of Trade involving $60 million
for urgently needed foodstuffs. Although a shipment of cash
was considered as one of the possible payment options, the
transaction never occurred. On September 29, the CBI
confirmed to Embassy Baghdad that cash shipments are not
currently planned (ref). On October 6 in Amman, visiting
Iraqi Deputy Minister of Trade Dr. Rashan Fakhri told
Ambassador Robin Raphel (visiting from NEA/IR) and emboff
that his ministry had authorized no cash transfers since
April of this year.

4. (C) In late September, Deputy CBJ Governor Mohammad
Shahin called ECOUNS to ask for guidance in these cases. He
said he was regularly receiving inquiries from banks asking
how to handle these attempted cash deposits. He
said those attempting the deposits were Iraqis who claimed to
be involved with contracts with either the CPA (sic) or the
Iraqi government. He, too, was very suspicious of the
activity and had been telling the banks to continue to apply
KYC provisions and to accept no cash in large sums without
clear documentation.

5. (C) In one case, Embassy discovered that the CEO of
Jordan National Bank (JNB) reported that his bank was
approached within the past ten days by a representative of an
Iraqi trading company (the Al-Sayeb Company) based in
Baghdad. The would-be depositor submitted two six-month old
letters (shown to emboffs by the banker) on what purported to
be official U.S. Army stationary, vouching for the company
and stating that it specialized in constructions, water
treatment, food products, and serves as an agent for several
consumer electronic companies. The letter's masthead read
"Alpha Company, Second Battalion, 32nd Armored Battalion."

6. (C) The would-be depositor asked to set up an account
with $3 million in cash and provided a September 2004
letter to the Deputy Director of the CBI signed by the Deputy
Minister of Defense Brusha Shways, stating that his company
does business with the IIG, and is authorized to take large
sums of cash out of the country and deposit it overseas.
JNB's CEO said that he refused to accept the deposit because
it did not meet the bank's KYC
requirements. The CEO was evasive on whether he would have
accepted the deposit had he known the depositor.

7. (C) In a subsequent meeting, the Executive Manager of
Jordan's Housing Bank related a similar story: at the
beginning of September, a Housing Bank branch manager was
approached by an individual claiming to be a contractor to
the Iraqi Ministry of Defense. The individual wished to open
an account at the branch, deposit $3.5 million in cash in the
account and remit the money out of that account to a bank in
Eastern Europe. The branch manager called the Housing Bank
front office for advice and was told not to open the account.

8. (C) ECOUNS subsequently contacted CBJ Deputy Governor
Shahin to pass him the information provided by Embassy
Baghdad on the proposed, but not executed, foodstuffs
arrangement. ECOUNS told Shahin that the CBI had confirmed
that no cash shipments were planned at this point and that
the CBJ would receive official notification should such an
arrangement ever become necessary. He urged Shahin to
coordinate closely with the CBI on these cases, and to pass
to the Embassy any future cases as well. Shahin agreed that
he would instruct Jordanian banks that when they receive a
potential client wishing to deposit large funds related to
Iraq that they must first present detailed information,
including a signed contract specifying the means of payment
and coordinate with the CBJ before taking action.

9. (C) COMMENT: The CBJ and Jordanian banking officials
seem to be taking all the right steps with respect to the
attempted cash deposits we have heard about. As far as we
are aware, Jordanian banks are applying the CBJ's
Know-Your-Client guidelines, with the strong support of the
CBJ itself. CBJ Deputy Governor Shahin is clearly concerned
about these cases and would prefer that any fund transfers
from Iraq sanctioned by the Iraqi government take place
through normal wire transfers, if at all possible. Although
the CBJ would be willing to consider a cash transfer on an
emergency, one-off basis, it would require clear sanction and
documentation from the IIG to fit in the CBJ's comfort zone.
Since we have been pressing Jordan hard on bank secrecy and
information-sharing on combating terrorist financing, it
would be best to keep such cases to a minimum.

10. (C) COMMENT (cont.): In addition, the CBJ Deputy
Governor's request to the Embassy illustrates that
communication between the CBJ and the CBI needs to be
improved. We will continue to urge the CBJ to enhance its
direct links with the CBI, while continuing to keep the USG
briefed. There may be merit in developing programs organized
by the Treasury Department or the Federal Reserve Bank to
promote greater communication and cooperation between Iraqi
financial authorities and those of Jordan and of other
neighboring countries.

11. (U) Baghdad minimize considered.