COLOMBIAN FIU (MONEY LAUNDERING PREVENTION UNIT):

C O N F I D E N T I A L BOGOTA 001584

SIPDIS

SIPDIS

E.O. 12958: DECL: 02/14/2016
TAGS: ECON EFIN CO
SUBJECT: COLOMBIAN FIU (MONEY LAUNDERING PREVENTION UNIT):
COOPERATION STRONG, MODEL FOR OTHERS


Classified By: CDA: MKDRUCKER

(SUMMARY) 1. (U) Colombia's financial intelligence unit,
UIAF, is an important ally in the effort to combat
money-laundering activities and narco-terrorist groups. In
2006 UIAF's budget was doubled, allowing for the creation of
new outreach and public awareness programs as well as a
restructuring of data collection teams to match partner
organizations. UIAF's is a model of cooperation with the U.S.
and next steps include the passage of pending legislation to
criminalize terrorist financing in Colombia. UIAF hopes that
new legislation, which will clarify banking secrecy laws and
bring Colombia's regime more in line with international
levels, will quickly win approval and increase already strong
bilateral cooperation. (END SUMMARY)

UIAF
--------------

2.(U) UIAF, Unidad Administrativa Especial de Informacion y
Analysis Financiero, was one of the first in the region and
was modeled on FINCEN. UIAF receives and analyzes reports of
suspicious transactions from banking institutions to identify
potential money-laundering cases. The unit does not have any
criminal investigative authority, but does provide
information to investigative agencies such as the national
police, the fiscalia (equivalent of the district attorney's
office),and other criminal investigators. UIAF is a member
of the Egmont group and does not have a special bilateral
agreement with the U.S. Despite the absence of a special
MOU, UIAF works with the U.S. Department of Treasury's
financial crimes enforcement network office (FINCEN) under
the precepts of the Egmont agreement. Employees of the UIAF
are subject to a rigorous agency-imposed vetting process,
which includes a background investigation and a polygraph
test.


3. (SBU) UIAF provides financial information to the
Department of Treasury's Office of Foreign Asset Control
(OFAC),Department of Homeland Security, and the Department
of Justice's Drug Enforcement Agency. The GOC nearly doubled
UIAF's 2006 budget, increasing full-time staff to 40
employees. UIAF is almost completely automated allowing for
the expeditious relay of suspicious transactions from the
banks directly to the analyst units. UIAF regularly provides
U.S. and Colombian investigative authorities with
information. Recently UIAF provided support and information
on two recent high profile cases; the Grupo Grajales (North
Valle Cartel) and the Rodriguez Orejuela brother's Drogas La
Rebaja (Cali Cartel) case. In one instance, UIAF information
led to the identification and seizure of an important North
Valle Cartel account in the U.S.

CURRENT PROJECTS
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4.(C) Department of Homeland Security Officials are
currently working with Colombia's customs and tax authorities
(DIAN) to implement an import/export
verification program to be called "Trade Transparency". The
program compares the DIAN's import-export tax receipts
against tax returns filed by businesses. The Dian reports
those companies that demonstrate large discrepancies in their
trade activities compared to their tax filings to UIAF. UIAF
then analyzes and evaluates transactions related to those
suspect companies. Suspicious activity is submitted to the
Department of Homeland Securities' vetted unit within the
National Police for investigation and prosecution both in
Colombia and the U.S.

5.(C) UIAF is preparing a campaign in conjunction with the
local telephone companies and other partners to educate
vulnerable segments of the population against abetting
money-laundering. The campaign includes the distribution of
flyers in the major cities advertising free money and easy
money obtained through the lending of one's identity,
checking or savings accounts. The phone number listed on the
flyers dials a call center donated by local telecom
companies. The caller is informed of the dangers in
answering these types of ads. Lastly, television
advertisements further reinforce the concept that lending
one's name or other sensitive information is not only
detrimental to the individual, but is also a crime punishable

with fines and imprisonment.


6. UIAF reorganized project teams to better exploit
relationships with law enforcement agencies. The unit's
employees are grouped along the same lines as their
investigative counterparts and each team focuses on cases
that will appeal to their counterpart's mandate. In 2005,
UIAF requested an inspection by the Treasury's office of
technical assistance, and the results were used by UIAF to
improve operations.

NEXT STEPS
--------------


3. UIAF is seeking to bring Colombia closer to compliance
with international standards on combating terrorist
financing. UIAF presented a proposal to Congress in December
of 2005 that modifies the laws regulQng the banking
sector's reporting requirements, allows UIAF to receive
reports from the financial sector about possible terrorist
financing, includes terrorist finance activities in the
criminal code, and adds terrorist financing to related crimes
such as extortion and narcotics trafficking. UIAF director
Alberto Lozano has requested assistance from poQto help
design a strategy to move the new law through Congress. The
new legislation would also criminalize terrorist financing
and expand UIAF's mandate to include reporting on
terrorist-related financial transactions. Lozano pointed out
that while the working relationship with post is very strong,
USG assistance was needed to obtain Congressional approval of
this new legislation.

COMMENT
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7.(U) UIAF does exactly what its mandate outlines, and areas
for improvement lie more in the uses and application of UIAF
prepared reports. Colombian investigative units are only
beginning to use the information UIAF can provide and this
limits the overall effectiveness of Colombian law
enforcement. Additionally, current Colombian secrecy laws
prevent investigative authorities from using UIAF reports
outright, increasing the cost of investigations. The new
money-laundering legislation seeks to address these issues.
Post will work with UIAF and the Congress to insure that the
new law does not lower UIAF's efficacy and does not harm the
excellent working relationship we currently enjoy.
DRUCKER