TERRORISM FINANCE COORDINATION OFFICER

C O N F I D E N T I A L LA PAZ 002995

SIPDIS

SIPDIS

STATE FOR WHA/AND, EB/ESC/TFS, S/CT/PHILL,
INL/C/CP/SPETERSON, AND IO/PSC/JSANDAGE

E.O. 12958: DECL: 11/03/2016
TAGS: EFIN PTER KTFN BL
SUBJECT: TERRORISM FINANCE COORDINATION OFFICER

REF: SECSTATE 181096

Classified By: Ecopol Chief Andrew Erickson for reasons 1.4 (b) and (e)
.


1. (C) U.S. Embassy La Paz has designated Ecopol Chief Andrew
Erickson (591-2-216-8254, EricksonAS@state.gov) as the
Terrorism Finance Coordination Officer and Economic Officer
Dovie Holland (591-2-216-8862, HollandDA2@state.gov) as the
Deputy Terrorism Finance Coordination Officer.


2. (C) Following is the information requested by the chart
referred to in reftel:

- Bolivian authorities do not have the ability to freeze
terrorist funds for more than 48 hours.

- Bolivia has signed the UN Convention on Terrorism Finance.

- Bolivia has failed to implement UNSCRs 1267, 1373, 1390,
and 1455.

- Bolivia has adopted anti-money laundering legislation.
Bolivia's anti-money laundering regime is based on Law 1768
of 1997. That law modifies the Penal Code and criminalizes
money laundering, but only as it relates to narcotics
trafficking, organized criminal activities and public
corruption. The current law does not provide that money
laundering is an autonomous offense. Law 1768 does not cover
terrorist financing or many other criminal activities as
predicate offenses. It fails to allow for the use of special
investigative techniques in pursuing AML or other offenses.
Many non-bank financial institutions (e.g., casinos, exchange
booths) are not obligated to report to the Financial
Intelligence Unit (UIF). Assets that are confiscated under
the AML and drug laws are poorly managed and disposed of by
the Directorate General for Seized Assets, which is a part of
the Ministry of Social Defense (Drug Czar). In practice, the
system has become dysfunctional. To date, there has been
only one conviction under Law 1768. The reporting of
suspicious transactions to the UIF, even by the more
responsible banks, has slowed to a trickle, as have the
reports being forwarded from the UIF to the Public Ministry.
Post is currently working with the GOB to encourage the
passage of a more effective anti-money laundering law,
including terrorism finance provisions, but there is not much
support for comprehensive AML legislation within the
executive branch.

- Bolivia has established a Financial Investigation Unit. Law
1768 of 1997 established Bolivia's Financial Intelligence
Unit (the UIF),within the Office of the Superintendent of
Banks and Financial Institutions. Supreme Decree 24471,
issued July 31, 1997, set forth the powers and duties of the
UIF. However, the UIF did not become operational until 1999.
Under Supreme Decree 24771, obligated reporting entities are
required to report only suspicious transactions to the UIF.
As a matter of practice, most banks also report cash
transactions of $10,000 or more. The UIF is responsible for
analyzing the suspicious transaction reports and transmits
those indicative of criminal activity to the Public Ministry,
which is the office responsible for prosecuting money
laundering offenses. On April 26, 2006, the GOB promulgated
Supreme Decree 28695 (Organizational Structure for the Fight
against Corruption and Illicit Enrichment). Among a number of
other provisions, it referenced (in Article 18) a Financial
and Property Intelligence Unit that does not currently exist
(but is presumed to mean the UIF in some reconstituted form),
while it repealed Supreme Decree 24771 that gives the current
UIF its powers. Realizing that they had effectively put the
UIF out of business until it could assume its new mission of
fighting corruption and illicit enrichment, on May 13, 2006,
the GOB issued Supreme Decree 28713, restoring its functions
and duties for a period of 240 days, but moving the unit from
the Banking Superintendent to the Ministry of Finance. The
extension will expire in December 2006, although the GOB has
pledged to extend it if the UIFP is not legally in place by
that time.

- Bolivia's UIF is a member of Egmont.

- Bolivia is a member of GAFISUD, a FATF-style regional body.

- Bolivia has not issued a freeze order on terrorist-linked
assets.

- Bolivia has rarely conducted thorough searches of financial
institutions for terrorist assets, or shared terrorist
finance information, or reached out to U.S. intelligence and
law enforcement on terrorism-related issues. However, the
UIF, which has been cooperative with post, has checked its
databases for information related to new names added to the
UN 1267 Sanctions Committee list, but has thus far found no
information. The UIF in its current form would not be able
to react strongly if it did find such information.
GOLDBERG