HEAD OF CENTRAL BANK'S AML UNIT ON MENA/FATF,

C O N F I D E N T I A L SECTION 01 OF 02 KUWAIT 004741

SIPDIS

SIPDIS

STATE FOR EB/ESC/TFS JCLARK, S/CT TKUSHNER, NEA/ARPI
SWALKER, NEA/RA LLEE, IO/PSC BFITZGERALD, TREASURY FOR TFFC
DGLASER AND OFAC FOR RWERNER, NSC FOR JZARATE, LONDON FOR
LTSOU, MANAMA FOR JBEAL

E.O. 12958: DECL: 11/13/2015
TAGS: EFIN ETTC KTFN PTER CVIS KVPR KU TERROR FINANCE
SUBJECT: HEAD OF CENTRAL BANK'S AML UNIT ON MENA/FATF,
DRAFT TF LAW, AND KUWAIT'S FIU

REF: KUWAIT 3831

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


1. (C) Begin Summary. On November 10, Emboffs met with
Talal Al-Sayegh, head of the Kuwait Central Bank's Anti-Money
Laundering unit, to discuss the latest MENA/FATF
developments, get an update on the new terror finance
legislation, and reaffirm USG technical assistance offers in
support of Kuwait's CTF/AML efforts. Al-Sayegh confirmed
that Kuwait will host a training seminar for MENA/FATF
assessors in December (17-21). He explained that the draft
of the new terror finance law was complete and pending the
approval of the National Committee on Combating Terror
Finance and Money Laundering prior to submission to the
Council of Ministers (cabinet) and National Assembly. He
welcomed USG input on the draft and noted that the timing of
consultations will be determined by the National Committee.
Al-Sayegh explained that the new law would address systemic
shortfalls, including deficiencies in Kuwait's Financial
Intelligence Unit (FIU). He acknowledged and welcomed USG
technical assistance offers without committing to anything
specific at this time. End Summary

Kuwait's Role in MENA/FATF
--------------


1. (C) On November 10, Econoff, accompanied by U.S. Customs
advisor and Poloff, met with Talal Al-Sayegh, head of the
Central Bank of Kuwait's (CBK) Anti-Money Laundering (AML)
unit to discuss Kuwait's participation in the latest Middle
East and North Africa Financial Action Task Force (MENA/FATF)
plenary held in Beirut on September 26-27. Al-Sayegh
informed Emboffs that the plenary was attended by members of
the GOK's interagency National Committee on Combating Terror
Finance and Money Laundering, resulting in Kuwait's active
participation in the development of plenary papers
identifying "best practices" on charities and cash couriers.


2. (C) Al-Sayegh explained that these papers, including a
third on hawalas, were approved by the MENA/FATF member
states and would soon be available on the MENA/FATF website
for public review. He added that two subcommittees, one on
"Training and Assessment" and a second on "Evaluations" were
established with the objective of providing member states
with appropriate technical assistance and guidelines for
conducting self-assessments and mutual evaluations of their
respective CTF/AML regimes.


3. (C) Al-Sayegh noted that Kuwait's well-established
standards of compliance allowed it the opportunity to host a
training workshop for member state assessors, to be conducted
in Kuwait on December 17-21. He explained that the relevant
training material had been provided by the World Bank and IMF
and that each of the member states would nominate a total of
three workshop participants from the financial, legal, and
law enforcement sectors. The training program would provide
for mock assessments in anticipation of the March 2006
FATF-mandated mutual country evaluations.


4. (C) When asked about possible Kuwait membership in the
Paris-based Financial Action Task Force (FATF),Al-Sayegh
explained that FATF was not looking to expand its membership
at this time given budget constraints, but noted that Kuwait
was an indirect member through GCC representation.

New Terror Finance Law
--------------


5. (C) Al-Sayegh said that the draft legislation amending
the country's outdated 2002 money laundering law was complete
and pending final review by the National Committee at its
next meeting (date not confirmed). Emboffs reaffirmed the
USG's interest in reviewing the draft legislation in
anticipation of its submission to the Council of Ministers
and National Assembly for final approval. Al-Sayegh
acknowledged the pending USG offer to review the draft and
explained that such offers by the USG's Department of
Justice, FinCen and others, including the IMF, were welcome
but would have to be agreed upon by the National Committee.
(Note: The Central Bank Governor is the Chairman of the
National Committee and is amenable to "exchanging notes" on
the draft per reftel meeting with Ambassador.)

KUWAIT 00004741 002 OF 002



Strengthening Kuwait's FIU
--------------


6. (C) With regard to the Kuwait Financial Intelligence Unit
(FIU),Al-Sayegh explained that the current FIU is comprised
of seven CBK officials, assigned on a part time basis from
other CBK departments. He acknowledged that the lack of
Egmont Group membership and the FIU's overall structure and
role at present were indicative of "deficiencies in the
system." Without offering specifics, Al-Sayegh noted that
the new draft legislation would rectify the systemic
shortfalls in the FIU, transforming the current operation
into a management entity capable of receiving and sharing
information on a timely and comprehensive basis. He also
noted that Kuwait Customs' request to assign a liaison
officer to the FIU is under consideration. U.S. Customs
advisor stressed the importance of establishing a
coordinating link between the FIU and Kuwait Customs to
ensure timely information exchange. Emboffs informed
Al-Sayegh of USG technical assistance for FIUs and urged
Al-Sayegh to take advantage of those resources. Poloff cited
USG support to Yemen's FIU as a notable example of the broad
resources available from various USG agencies. Al-Sayegh,
although non-committal, was appreciative and promised to take
these and other training offers into consideration.

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