CUSTOMS GIVES MIXED MESSAGE ON ANTI-TERRORIST

C O N F I D E N T I A L SECTION 01 OF 02 KUWAIT 001731 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: 04/24/2015 TAGS: EFIN PTER KTFN ELTN KU SUBJECT: CUSTOMS GIVES MIXED MESSAGE ON ANTI-TERRORIST FINANCING PRIORITIES REF: A. KUWAIT 02347 ¶B. STATE 26825 Classified By: Ambassador Richard LeBaron for reasons 1.4(b) and (d) ¶1. (C) SUMMARY: During an April 17, 2005 meeting with the Kuwait Customs Director General Ibraheem Al-Ghanim, visiting Treasury DAS Daniel Glaser learned of the new steps that Kuwait Customs is taking to combat terrorist financing. Although several new resources are being added to the Customs repertoire to address the problem, some basic money-laundering techniques are being overlooked by Customs or given low priority. END SUMMARY. ¶2. (U) Treasury DAS Glaser met with Kuwait Customs Director General Al-Ghanim on April 17 to learn about current enforcement techniques and new steps Customs is taking to prevent money-laundering and terrorist financing. According to Al-Ghanim, Kuwait Customs currently has Passenger Enforcement Rover Teams (PERT) at the airport and the Free Trade Zone at Shuwaikh Port and plans to expand their presence at all ports of entry, although a specific timeline was not provided. He also explained that Kuwait Customs requires anyone carrying over USD 10,000 (or equivalent) in cash into Kuwait to declare it upon entry. ¶3. (C) When asked about declaration laws for carrying cash out of Kuwait, Al-Ghanim said that this procedure would be the "next step" in Customs enforcement plan, but he was unable to provide any specifics on when or how this change would take place. Given the shared border with Iraq and the involvement of some Kuwaitis in anti-Coalition attacks via Syria (Ref A) DAS Glaser pointed out that not enforcing declarations of cash leaving Kuwait created a vulnerability in anti-terrorist financing efforts in Kuwait. While acknowledging the points raised by DAS Glaser, Al-Ghanim did not seem overly concerned about immediately addressing the cash export declaration issue. Al-Ghanim asserted that a change in legislation was not/not required to start implementing mandatory declarations for outbound cash, but when pressed by DAS Glaser for the reason why Kuwait was not enforcing these declarations, Al-Ghanim was not able to provide a sufficient answer. ¶4. (C) DAS Glaser also asked about any increased use of cash couriers to Iraq to which Al-Ghanim responded that Customs had not seen an increase. However, when specifically asked how Mohsin Al-Fadhli, recently designated by the U.N. under E.O. 13224 (Ref B),was transferring money into Iraq, Al-Ghanim explained that people like Al-Fadhli distribute cash to many people who then smuggle it over into Iraq through the land borders away from the checkpoints. Often, he added, these couriers fly to Syria or Jordan and cross into Iraq overland from there. ¶5. (C) DAS Glaser followed up to inquire about the nature of interagency cooperation in combating terrorist financing and money laundering. Al-Ghanim stated that Customs works closely with the Ministry of Interior (MOI) and Kuwait Security Services (KSS),but gave no specifics on the form of this cooperation. Khalid al-Moosa, Director of Airports for Customs, added that every ministry of the GOK was working together, and that the National Committee on Money Laundering, headed by the Central Bank, was the central authority on the issue. ¶5. (SBU) Turning the focus of the conversation to the new tactics that Customs is implementing to combat terrorist financing, Al-Ghanim was very enthusiastic about the new money-laundering office that is being created in Customs and said that he plans to oversee this new office himself. He also explained that a second US Customs Liaison Officer will soon be joining Kuwait Customs and that this officer's main focus will be countering money-laundering and terrorist financing. ¶6. (SBU) The meeting concluded with Al-Ghanim saying that Kuwait Customs, while pleased with the progress made so far, needs technical assistance in setting up a new Anti-Terrorist Financing Department and training the staff. He also said that they are currently working on a "train the trainer" type program and would appreciate any assistance with it from the USG. DAS Glaser assured Al-Ghanim that Treasury would be willing to work with Customs to assist them in setting up their new department and would work through the Embassy and the US Customs liaison office to provide that help. ¶7. (C) COMMENT: Al-Ghanim's claim that Customs can enforce mandatory declarations for outbound cash without a change in legislation may be inaccurate. Embassy US Customs Liaison Officer (USCLO) believes that Al-Ghanim is referring to Customs' ability to enforce outbound currency declarations through a Ministerial Decree. This would not require a change in actual legislation. However, this decree has not yet been written and Kuwaiti law currently does not/not have provisions giving Kuwait Customs the authority to require outbound cash declarations, according to the USCLO. Further, USCLO said that Kuwait Customs has not truly implemented the inbound cash declaration laws. Indeed, declaration forms are not even available at the airport or other ports of entry and most Customs agents are not familiar enough with the declarations law to properly handle a declarations case if presented with one. Some progress may soon be made with inbound cash declarations, though, since funding to print the declaration forms was approved three months ago. ¶8. (SBU) Embassy will continue to work with the Ministry of Finance and the Central Bank to encourage the establishment of a Ministerial Decree mandating declarations for outbound currency value over USD 10,000 (or equivalent) and will report progress septel. A number of Embassy contacts have noted to us that they are unaware of similar U.S. regulations on outbound cash. END COMMENT. LEBARON