ALGERIAN EFFORTS AGAINST MONEY LAUNDERING

C O N F I D E N T I A L SECTION 01 OF 03 ALGIERS 001952

SIPDIS

STATE FOR S/CT AND NEA/MAG
DEPARTMENT OF JUSTICE FOR MS. SUZANNE HAYDEN

E.O. 12958: DECL: 09/18/2015
TAGS: EFIN KCRM PREL PTER AG
SUBJECT: ALGERIAN EFFORTS AGAINST MONEY LAUNDERING

Classified By: Ambassador Richard W. Erdman,
for reasons 1.4 (b) and (d)

SUMMARY AND ACTION RECOMMENDATION
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1. (C) In a September 14 meeting with Department of Justice
money laundering expert Suzanne Hayden, the head of Algeria's
inter-ministerial financial action task force, Mohamed
Benamar Aid, briefed on the group's activities since the
adoption of new national money-laundering legislation in
February 2005. Expressing great appreciation for Ms.
Hayden's visit, Ait said the group had been actively
consulting with MENAFATF counterparts in the region; was
anxious to increase its international money-laundering
cooperation by joining the Egmont Group as soon as feasible;
and, despite being in operation less than a year, had already
begun two money-laundering prosecutions under the new
legislation.


2. (C) According to Aid, Algeria's primary challenges with
respect to money laundering included: the lack of a modern
banking system; the cash nature of the Algerian economy; a
lack of trained analysts with the necessary financial and
legal expertise; and the unfamiliarity of many banks with
their new legal obligation to report suspicious transactions.
Aid said the group planned to launch an awareness campaign
to sensitize banks concerning suspicious transaction
responsibilities, strongly urged Ms. Hayden to return again
for more in-depth discussion, and made a strong pitch,
reinforced at a follow-on dinner hosted by Ambassador, for
U.S. help in training Algerian officials tasked with
implementing Algeria's new money-laundering legislation.
Embassy strongly recommends we offer USG anti-money
laundering training for selected GOA personnel, either in
Algiers or at the ILEA training center in Budapest. End
Summary and Comment)


3. (SBU) Justice Department money laundering expert Suzanne
Hayden, accompanied by Ambassador and Pol/Econ chief, called
on Mohamed Benamar Aid and the other member of Algeria's
inter-ministerial Working Group on Money Laundering (WGML) on
September 14. Aid reviewed the history of Algerian money
laundering legislation, noting that the law under which the
WGML was established was adopted in February 2005. The WGML
was intentionally structured to be independent of the
Ministry of Finance and thus retained its autonomy, even
though there were established links between the Finance
Ministry and the WGML. The WGML was created after the
adoption of various UN conventions, especially those related
to UNSCR 1373. Algeria had adopted all the UN conventions
related to money laundering and terrorism financing. The
fight against terrorism and money laundering was linked,
emphasized Aid.

MISSION OF WGML
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4. (SBU) AID explained that the WGML had three main
missions. First, it was to establish an apparatus to fight
money laundering in Algeria. Second, it advised the GOA on
actions to fight money laundering. Third, it forged and
maintained international ties, which were essential to the
fight against money laundering. The WGML consisted of six
members: two magistrates, a senior Interior Ministry
official; a senior Central Bank official; one member
appointed by the Ministry of Finance; a member drawn from
Customs; and other analysts still to be hired, who will
assist in the functioning of the WGML. These members were
named this past March. The Justice, Interior, and Finance
Ministries were the main partners in anti-money laundering
efforts, as was Customs.


5. (SBU) Aid said that in order to learn how best to manage
the WGML operations, members visited their counterparts in
other countries. The first discussions took place with
France, followed by Lebanon, Bahrain, Luxembourg, Switzerland
and others. Meetings were sometimes bilateral, sometimes on
the margins on international forums. The WGML was focused on
establishing ties with the main money laundering centers in
Asia and the Middle East. Members of the group hoped to
visit North America and China soon.

INTERNATIONAL CONTACTS DESIRED
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6. (SBU) Aid explained that Algeria belonged to and was a
founding member of the Middle East/North Africa Financial
Action Task Force on Money Laundering (MENA FATF). Algeria's
candidacy for membership in Egmont was being sponsored by
Egypt and France. He expressed appreciation for U.S. support
of their membership as well. The WGML did not believe
Algeria was ready for membership just yet in Egmont. As a
result, Algeria has asked its sponsors for a delay. In any
event, Algeria learned much from attending international
fora.

TWO PROSECUTIONS ALREADY UNDER WAY
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7. (SBU) In 1995, said Aid, the GOA made money laundering a
crime, and the Penal Code was updated accordingly. Terrorism
financing was also a crime. The law dealt with establishing
financial mechanisms to fight money laundering, encouraging
international cooperation against it and penalties for
breaking the law. Algeria closely cooperated with French and
World Bank experts, as well as experts from the French bank
Credit Agricole. Aid said the World Bank had told the WGML
it was doing a good job with little funding over a short
period of time. For example, there were two prosecutions
already underway under Algeria's new money-laundering
legislation.

NEED HELP FROM OUR FRIENDS
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8. (SBU) Asked about bank's track record in reporting
"suspicious transactions," Aid said that the larger banks
were doing this, especially in the northern urban areas. In
smaller towns and, especially in the south, the record was
less good because these smaller operations were not aware of
their new legal obligations to report suspicious
transactions. Another problem was that employees in the
banking sector were not yet trained to look for or recognize
suspicious activities. Algeria thus sought short-term
training programs from its overseas friends to build
awareness. The WGML would like to pursue U.S. opportunities
for training that would complement efforts underway with the
Belgians and French. Since the WGML had been in existence
only a year, Algeria still had a lot of work ahead of it in
this area, Aid commented.

U.S. HAPPY TO SHARE LESSONS IT HAS LEARNED
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9. (SBU) Hayden welcomed Aid's presentation, noting it was
important to share experiences internationally. The U.S. law
on money laundering dated to 1986. The U.S. had made many
mistakes -- and learned from them. The Algerians could learn
from the U.S., just as we had also learned from our
counterparts in other countries. Money laundering laws, she
continued, were among the most complex in existence because
of the combination of financial and legal expertise necessary
for prosecutors, courts, attorneys, and others to be
effective in enforcing money-laundering legislation. Banks
had to be vigilant and furnish the necessary information. As
in a symphony orchestra, everyone had a role to play.

VULNERABILITIES FOR ALGERIA
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10. (C) Asked about Algeria's vulnerable points, WGML
members said Algeria had no banking system. Algeria's
economy worked on an informal, cash basis. There were no
checks or credit cards, making it difficult to track funds.
People normally carried money in large amounts. A new
payment system was expected in January 2006, and a draft law
was under consideration to set the limit on cash transactions
at about $500. The WGML thought this figure was too low and
would prefer a higher amount, probably $5,000. The GOA also
was fighting the problems of the informal market by
instituting a new ID card system with a unique number for
everyone. Documentation fraud, according to the WGML, was a
big problem in Algeria. The problem would only grow as trade
flows increased. New technologies combined with an opening
up of Algerian markets had put Algeria in a difficult
situation. The work of the WGML, Aid commented, was not
easy. The WGML was not always protected or helped. Much
work remained to be done in breaking taboos and convincing
banks of the need to do their part. The law required banks
to report to report suspicious transactions, but banks were
not complying with the law.

PLEA FOR HELP, ESPECIALLY IN INFORMATION TECHNOLOGY
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11. (SBU) Noting that the U.S. had about 20 years of
experience with money laundering legislation, Aid hoped the
U.S. could augment the experience and expertise of WGML
staff. Adding that the U.S. was very computerized, he also
hoped the U.S. could play a role in helping Algeria in the
area of information technology.

ACTION / RECOMMENDATION
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12. (SBU) Embassy understands S/CT may have funding for
anti-money-laundering training programs. Given Algeria's
direct experience with terrorism heavily funded from abroad,
its strong commitment to counter-terrorism cooperation, and
its strong desire to have effective money-laundering
mechanisms and personnel in place before the economy takes
off (in the next 2-3 years),Embassy strongly recommends we
provide anti-money-laundering training for Algerian
personnel. Such a training program could be undertaken
either at the ILEA center in Budapest or here in Algiers.

ERDMAN