CHARITIES IN KUWAIT: TREASURY DAS DISCUSSES

C O N F I D E N T I A L SECTION 01 OF 02 KUWAIT 001730

SIPDIS

EB/ESC/TFS MSIDDIQUI, S/CT TKUSHNER, NEA/ELA DBARON
NEA/ARPI TWILLIAMS, NEA/I-ECON K. BRONSON, IO/PSC
JSCHWEITZER
NSC FOR JKEMERSON
TREASURY FOR JZARATE, OFAC RWERNER
MANAMA FOR JBEAL
TREASURY FOR DGLASER, RLEBENSON, MEPSTEIN

E.O. 12958: DECL: 04/20/2015
TAGS: EFIN PTER KTFN KU
SUBJECT: CHARITIES IN KUWAIT: TREASURY DAS DISCUSSES
KUWAIT'S STRONGER ENFORCEMENT OF CHARITABLE CONTRIBUTION
LAWS

Classified By: Ambassador Richard LeBaron for reasons 1.4(b) and (d)


1. (C) SUMMARY: On April 16, 2005, Treasury DAS Glaser met
with a Ministry of Social Affairs and Labor official to
discuss how charitable contributions in Kuwait can be made,
collected and transferred, and the methods the GOK uses to
track and prevent the abuse of charitable contributions for
terrorist financing. In an effort to circumvent the new
restrictions on charities, creative new methods for
collections are being used. The Ministry of Social Affairs
admits that countering these new methods is a challenge
because the GOK has a shortage of experience with prosecuting
money-laundering crimes. END SUMMARY.


2. (C) Visiting Treasury DAS Daniel Glaser, accompanied by
the OFAC regional attach and representatives from the
Treasury Department's Office of Terrorist Finance and
Financial Crimes and the Office of Intelligence and Analysis,
met on April 16 with Mr. Adnan al-Omar, Assistant
Undersecretary of Social Development in the Ministry of
Social Affairs and Labor. Al-Omar is responsible for the
Charities Department within the Ministry.


3. (C) DAS Glaser asked about the GOK's recent decision to
remove unlicensed charitable cash collection kiosks and boxes
throughout Kuwait. Al-Omar explained that a Charitable
Oversight Committee had been formed to address the concerns
that the GOK has with illegal charitable collections. The
Committee is comprised of representatives from the Ministries
of Social Affairs, Interior, Finance, Islamic Affairs and the
Central Bank. With the full support of the Council of
Ministers, the Committee agreed to the forcible removal of
all unregistered charity "cash-boxes" in Kuwait, al-Omar
said. He explained that the unprecedented terrorist attacks
that took place in Kuwait at the beginning of 2005 have
awakened the GOK to the seriousness of the threat that
terrorism poses to the country. The removal of these charity
boxes is a reactive step that the GOK is taking in an effort
to curtail one source of support to the extremists in Kuwait,
al-Omar said.


4. (C) The challenge, al-Omar continued, is that as soon as
one charity cash-box is taken down, more are put up. He also
said that new methods of collections are being used. As
examples, he cited (a) a door-to-door cash-collecting system
using small fast-food type delivery trucks and (b) collecting
clothing for charity, then using the money gained by selling
the clothes to fund illegal activities. The Ministry of the
Interior is currently working with the Charities Department
to identify the owners of the trucks in an effort to trace
the illegal collections, he said. However, no solution has
been identified to stop the clothing collection. He
explained that the goal is to identify the charities
accepting illegal donations and to track them, rather than
"provoke them into going underground," by taking stronger
initial actions against them.


5. (C) Prior to the kiosk-removal crackdown on charities,
al-Omar said, it was easy to follow the known routes for the
disbursements of charitable collections. Now, he said, the
channels have changed in response to the government's actions
and it's "impossible" to track all the new routes. Once the
money leaves Kuwait, he added, there is no easy way to track
where it goes. (Note: During the MENA FATF plenary attended
by DAS Glaser in Bahrain prior to his visit to Kuwait, the
Kuwaiti delegate and Head of Supervision at the Central Bank
of Kuwait mentioned that Kuwait tries to follow the money
through its embassies abroad. End Note). The Charities
Department has little experience in detecting
money-laundering, for example, and al-Omar said that the GOK
could use more support from experienced sources to address
this problem.


6. (C) DAS Glaser also asked about three known charities of
concern to the U.S Treasury Department that are registered in
Kuwait: the Social Reform Society (SRS),the Revival of
Islamic Heritage Society (RIHS),and Al-Najat. (Note:
Al-Najat, or Rescue, is the parent organization of the
Patients Helping Fund and the African Muslim Agency, also
know as Direct Aid Society. End Note). Al-Omar replied that
the Charities Department was also concerned about these
charities and kept a close watch over their transactions.
One of the main concerns about these charities, he added, is
that numerous unlicensed subcommittees are created under the
original licensed charity's name and that these subcommittees
are the source of much of the illegal activities with the
charity. (Note: The U.S. Treasury Department has designated
two such subcommittees for supporting al Qaida - RIHS' Afghan
Support Committee and SRS' Lajnat al Dawa al Islamiya. End
Note). He clarified this by saying that no charities are
allowed to transfer funds outside of Kuwait without the
permission of the Ministry of Social Affairs and that they
have not given these three charities that permission. In a
very candid exchange, al-Omar said that his preference would
be to "dissolve" one of these questionable charities to serve
as an example to all. However, he said, the decision to
dissolve a charity would be a political decision made at the
Ministerial level. Al-Omar was not optimistic that the
Charitable Oversight Committee would allow this to happen due
to political pressures within the GOK.

********************************************
Visit Embassy Kuwait's Classified Website:
http://www.state.sgov.gov/p/nea/kuwait/
********************************************
LEBARON