Identifier
Created
Classification
Origin
06ASTANA689
2006-11-29 09:36:00
UNCLASSIFIED
Embassy Astana
Cable title:  

KAZAKHSTAN: DEFACTO DELAY IN AML LAW?

Tags:  SNAR ASEC KCOR KCRM PREL KZ 
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DE RUEHTA #0689 3330936
ZNR UUUUU ZZH
R 290936Z NOV 06
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC 7804
INFO RUCNCIS/CIS COLLECTIVE
RHMFISS/HQ USEUCOM VAIHINGEN GE//ECJ5//
RUEKDIA/DIA WASHINGTON DC//DHO-2//
RHMFISS/HQ USCENTCOM MACDILL AFB FL//CCJ5//
RUEKJCS/SECDEF WASHINGTON DC//USDP EURASIA//
RUEATRS/DEPT OF TREASURY WASH DC//IET//
UNCLAS ASTANA 000689 

SIPDIS

STATE FOR INL/AAE AND INL/C; SCA/CEN (O'Mara)

SIPDIS

E.O. 12958: N/A
TAGS: SNAR ASEC KCOR KCRM PREL KZ
SUBJECT: KAZAKHSTAN: DEFACTO DELAY IN AML LAW?

Ref: A) 05 Almaty 4353 B) Almaty 1437

UNCLAS ASTANA 000689

SIPDIS

STATE FOR INL/AAE AND INL/C; SCA/CEN (O'Mara)

SIPDIS

E.O. 12958: N/A
TAGS: SNAR ASEC KCOR KCRM PREL KZ
SUBJECT: KAZAKHSTAN: DEFACTO DELAY IN AML LAW?

Ref: A) 05 Almaty 4353 B) Almaty 1437


1. Summary: Enactment of an extension of the Property Legalization
Law until April 1, 2007 is likely to create similar delay in the
enactment of the anti-money laundering (AML) and counter terrorism
financing law currently under consideration in the Kazakhstani
Mazhilis (lower house of parliament). Should this prognosis hold
true, the AML law delay will push off an already twice delayed
strengthening of the AML regime and creation of the Kazakhstani
Financial Intelligence Unit. End summary.


2. On November 17, President Nazarbayev signed into law a three
month extension of the Property Legalization Law originally enacted
on July 5, 2006. Nazarbayev originally called for the extension of
the term of the property legalization law at the opening of the fall
session of the Mazhilis on September 1, claiming the original
measure was passed hastily, contained errors, and provided too
little notification to the public or the terms of compliance. The
Property Legalization law was enacted to legalize a wide range of
property and assets, including real property, capital assets,
movable property, and securities. It will regularize the status
these assets which were obtained since independence and, it is
widely believed, which were acquired illegally during the
privatization period.


3. Observers believe that this extension is likely to cause a delay
in enactment of AML legislation, because once the AML legislation
becomes law, attempts to register previously unrecorded assets would
be considered prima facie evidence that some type of financial
malfeasance took place which could put the owner of those assets at
risk of prosecution.


4. The AML draft legislation was originally introduced to the
Mazhilis in September 2005 but was immediately delayed. It first
ran into resistance from deputies who claimed the structure of the
legislation required further review (Ref A). Subsequently, during a
study tour by members of the Mazhilis AML Working Group to
Copenhagen, post heard concerns about the powerful role in AML and
the FIU accorded to the Procurator General's Office (Ref B).


5. Comment: While it is still unclear whether the AML Working Group
will modify the draft AML law, it appears the implications of the
law were sufficiently understood so that the necessity for the
Property Legalization law became apparent. End comment.

ORDWAY