INSIDE THE KUWAIT CENTRAL BANK'S AML/TF OFFICE

C O N F I D E N T I A L SECTION 01 OF 02 KUWAIT 003607

SIPDIS

STATE FOR EB/ESC/TFS IKRUM, S/CT TKUSHNER, NEA/ARPI
TWILLIAMS, NEA/ELA SSONTY, NEA/IPA GLOGERFO, EUR/PGI
LREASOR, IO/PSC BFITZGERALD
NSC FOR JZARATE
TREASURY FOR DGLASER, OFAC DIRECTOR RWERNER

E.O. 12958: DECL: 08/10/2010
TAGS: EFIN ETTC KTFN PTER PINR KVPR KU
SUBJECT: INSIDE THE KUWAIT CENTRAL BANK'S AML/TF OFFICE


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


1. (C) Summary: Talal Alsayegh, head of the Anti-Money
Laundering Section of the Central Bank of Kuwait (CBK),
confirmed that the CBK notifies Kuwaiti financial
institutions of new terrorist finance designations and seeks
to ensure compliance through periodic assessments. Alsayegh
affirmed that the National Committee for Combating Money
Laundering and Terrorist Financing recognizes the importance
of criminalizing terrorist finance. He could not confirm a
completion date for the long-awaited amendment to Kuwait's
anti-money laundering (AML) legislation, currently being
drafted by the Kuwaiti Public Prosecutor's office, but noted
that a key provision would authorize the Kuwait FIU to share
its findings with non-Kuwaiti entities. Alsayegh welcomed
USG training opportunities, and urged that they be offered
formally through the Foreign Ministry, but remained
non-committal on technical training assistance offered by the
DOJ, and others, including the IMF and MENA/FATF, until after
a final draft of the AML legislation is completed. End
Summary


2. (C) On August 10, new Embassy Econ officers met with Mr.
Talal A. Alsayegh, head of the Kuwaiti Central Bank's
Anti-Money Laundering Section's On-Site Supervision
Department to discuss three main issues: (1) how USG
terrorist finance designation notifications are processed by
the Kuwaiti Central Bank (CBK); (2) the status of the pending
Anti-Money Laundering (AML) draft legislation; (3) and the
GOK's response to the pending DOJ offer to provide technical
assistance in drafting the revised AML legislation.


New Designations Forwarded To Kuwaiti Financial Sector
-------------- --------------


3. (C) Econoffs sought confirmation that new designations
were received and acted upon by the Kuwait Central Bank (CBK)
in a timely manner. Alsayegh explained that all Embassy
notifications on new designations are received by the Kuwait
Central Bank within a week after designations are sent by
Diplomatic Note to the Ministry of Foreign Affairs (MFA).
Upon receipt of the designation notice, the CBK drafts memos
from the Central Bank Governor (CBG) or his deputy to all
local financial institution heads notifying them of the
designations and requiring compliance and necessary action in
accordance with international treaties and regulations. The
CBK also forwards to financial institutions any relevant
background material provided by the USG on new designees.
According to Alsayegh, the USG
is not identified as the source of any background
information. Alsayegh noted that while the CBK was empowered
with ensuring compliance, it did not have the power to freeze
assets without a court ruling from the Public Prosecutor. He
added that the CBK conducts periodic assessments of financial
institutions to ensure compliance with domestic and
international regulations.


Anti-Money Laundering Amendment Still Being Drafted
-------------- --------------


4. (C) Econoffs inquired about the status of the pending
anti-money laundering legislation. Alsayegh explained that
the National Committee for Combating Money Laundering and
Financing Terrorism (NC),chaired by the Central Bank
Governor and comprised of 9 government entities (CBK,
Ministry of Interior, MFA, Ministry of Interior, Public
Prosecutor, Social Affairs, Customs, Ministry of Commerce,
and Banking Union) serves as the strategic body on AML/TF
issues. Just this past week, the NC submitted a progress
report (not available for public dissemination) to the
Council of Ministers (Cabinet). The NC, in-turn, established
a working group, headed by the Public Prosecutor's office, to
draft the AML legislation for Cabinet, and subsequently,
National Assembly approval. Alsayegh pointed out that the
smaller working group, comprised of the Public Prosecutor's
office (lead drafter),working in consultation with the CBK,
Finance and Commerce Ministries, would allow for a more
streamlined drafting process.


5. (C) Alsayegh said that the NC recognizes the importance
of criminalizing terrorist financing. He underscored the
NC's commitment to drafting a comprehensive bill that would,
as a key feature, allow the Kuwait FIU to share its
information with non-Kuwaiti entities, a practice prohibited
under current legislation. Alsayegh hinted that without a
specific drafting deadline, the completion date for the final
draft remained uncertain. He added that the August summer
holiday season has further delayed what is likely to be a
drawn-out National Assembly approval process (Comment: the
National Assembly will be back in session in October).
However, he was confident that the global rise in terrorist
attacks and the January 2005 shoot-outs in Kuwait will help
spur parliamentary action on the legislation. (Embassy will
seek opportunities to press for action.)


USG Technical Assistance Welcome But Timing Not Right
-------------- --------------


6. (C) Alsayegh expressed enthusiasm about continued USG
training opportunities, but remained non-committal about the
DOJ offer and said that any specific assistance would have to
come through formal MFA channels and would be considered only
after the Public Prosecutor's office had completed a first
draft of the AML legislation. Alsayegh noted that the IMF
and MENA/FATF had offered similar technical assistance.


Bio Note
--------------


7. (C) Alsayegh remains a valuable and well-informed contact
on AML and other terrorist finance related matters. He is a
professional technocrat and appears highly motivated,
probably in his late 30s/early 40s. He speaks excellent
English, is very familiar and comfortable with life in
America (enjoys country music and travels frequently with his
wife to Costa Mesa, CA). He apparently has a number of
private and commercial investments in the US, and is in the
process of buying a ranch in Irvine, CA. He has received
training in the US and has participated in the State
Department's International Visitor's program.
LEBARON