TERRORIST FINANCING: INDIA'S CABINET OKAYS

UNCLAS NEW DELHI 007291

SIPDIS

SENSITIVE

STATE FOR SA/INS, EB/TPP, AND INL/AAE
TREASURY FOR MIDDLE EAST AND SOUTH ASIA
STATE PASS TO FINCEN FOR MARYJO MELANCON

E.O. 12958: N/A
TAGS: ETTC EFIN PTER KSEP KTFN SNAR PREL IN KWPR GOI
SUBJECT: TERRORIST FINANCING: INDIA'S CABINET OKAYS
FINANCIAL INTELLIGENCE UNIT

REF: STATE 241413


1. (U) India's Cabinet on November 11 gave its approval to
establish a Financial Intelligence Unit (FIU),the last
formal hurdle for setting up this long-delayed office.
Several years have elapsed as the GOI sorted out the
intramural wrangling over the unit's composition and
responsibilities. Last May's national election, which
brought the Congress Party into power, was the most recent
delay as the new Cabinet has spent its first six months in
office contending with a host of pressing issues.


2. (U) The FIU will be organized as an independent body
within the Finance Ministry's Central Economic Intelligence
Bureau (CEIB),located in New Delhi. The press reports that
the FIU will have an intelligence and an investigative wing.


3. (SBU) Sharmila Chavaly, our Finance Ministry contact for
anti-terrorist financing, told us today that the next step
"is to identify the people," who will serve in the FIU, and
hoped that the new director would be named "in the next week
or so." Chavaly looked forward to pinning down a convenient
date for a visit to New Delhi by representatives of the
Treasury Department's Financial Crimes Enforcement Network
(FinCEN).

Comment
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4. (SBU) India has long signaled its desire to boost
bilateral cooperation with the US on anti-terrorist
financing as well as in multi-lateral forums. However, its
membership in the Paris-based Financial Action Task Force
has been pending, with the lack of an FIU as one of several
hurdles that need to cleared (reftel). Even though the FIU
is not yet up and running, the Embassy will move forward
with plans for an exchange visit with FinCEN. Blake