SARG TRUMPETS COSMETIC STEPS TO CRAFT AML/CFT

C O N F I D E N T I A L DAMASCUS 006571

SIPDIS

SIPDIS

NEA/ELA
NSC FOR ABRAMS/DORAN/SINGH
TREASURY FOR GLASER/LEBENSON
EB/ESC/TFS FOR SALOOM

E.O. 12958: DECL: 12/19/2015
TAGS: ECON EFIN PTER SY
SUBJECT: SARG TRUMPETS COSMETIC STEPS TO CRAFT AML/CFT
REGIME DURING TWO-DAY REGIONAL CONFERENCE

REF: A. DMS6439

B. DMS6524

Classified By: Charge d'Affaires Kathy Johnson-Casares, reasons 1.4 b/d


1. (SBU) In a further attempt to reach out to the
international community and promote the Asad regime as
reform-minded (ref A),SARG officials used a two-day regional
conference last week on strategies to combat money laundering
and the financing of terror (AML/CFT) to assert that the SARG
already has established an effective AML/CFT regime that
meets international standards. The Central Bank of Syria
hosted the conference in Damascus in collaboration with the
Middle East and North Africa branch of the Financial Action
Task Force (MENA/FATF),the World Bank and the IMF. The
conference followed a closed, two-day meeting, which local
press billed as a national strategy session on AML/CFT, for
Syrian officials from the Central Bank, Ministry of Finance,
and the Combating Money Laundering and Terrorism Financing
Commission, which acts as Syria's Financial Intelligence Unit
(FIU).


2. (SBU) Over the course of the conference, SARG officials
emphasized the government's legislative achievements in 2005
and outlined its plans to develop a unified national approach
to AML/CFT. Imad Mawed, Secretary of the Central Bank and
working-level member of the FIU, stated that the FIU is fully
operational and has broad legislative authority under Decree
33, Syria's AML/CFT legislation that President Asad signed in
May 2005, to investigate and prosecute financial crime, as
well as share information with the judiciary and security
services. Dr. Melhem Dibo, Chairman of the Real Estate
Bank, one of four specialized public banks, announced that
the bank recently amended its structure to create a new
department in charge of AML, and that the bank is working
with the FIU to identify and report suspicious activities.
Dr. Bassel Sanoufa, General Director of the Syrian General
Customs Directorate, summarized his department's future plan
to link customs posts with a unified database, monitor border
crossings with cameras, and work with the Ministry of Finance
to track and halt the cross-border movement of money.
However, none of the speakers provided an example in which
the government has used its new legislative authority to
interdict financial crime.


3. (C) Comment: Overall, the conference seemed designed to
demonstrate that the SARG is avoiding international
isolation, which the presence of the World Bank and the IMF
appeared to support, while whitewashing major deficiencies in
the SARG's ability or willingness to combat money laundering
and terrorist finance (ref B). However, a representative of
the IMF, who presented a lecture on the criminalization of
money laundering and terrorist financing and who reviewed a
draft copy of Decree 33, privately stated that the AML/CFT
regime does not adequately address terrorist financing, which
she contends is not criminalized under existing legislation
despite SARG statements to the contrary. Conspicuous in his
absence- and perhaps indicative of the SARG,s overall
position on AML/CFT- was Mr. Ahmed Diab, Vice President of
the Commercial Bank of Syria, who was scheduled to speak on
his bank's AML/CFT operations.
JOHNSON-CASARES