Identifier
Created
Classification
Origin
06MANAMA1755
2006-10-08 10:08:00
CONFIDENTIAL
Embassy Manama
Cable title:  

TREASURY DELEGATION DISCUSSES NEW MONEY

Tags:  ETTC EFIN PTER BA CTR ECTRD 
pdf how-to read a cable
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TO RUEHC/SECSTATE WASHDC IMMEDIATE 5736
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C O N F I D E N T I A L SECTION 01 OF 02 MANAMA 001755 

SIPDIS

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E.O. 12958: DECL: 10/03/2016
TAGS: ETTC EFIN PTER BA CTR ECTRD
SUBJECT: TREASURY DELEGATION DISCUSSES NEW MONEY
LAUNDERING/TERROR FINANCING LAW

REF: A. MANAMA 1733

B. MANAMA 1550

C. MANAMA 1469

Classified By: Ambassador William T. Monroe for reasons 1.4 (b) and (d)
.

C O N F I D E N T I A L SECTION 01 OF 02 MANAMA 001755

SIPDIS

SIPDIS

E.O. 12958: DECL: 10/03/2016
TAGS: ETTC EFIN PTER BA CTR ECTRD
SUBJECT: TREASURY DELEGATION DISCUSSES NEW MONEY
LAUNDERING/TERROR FINANCING LAW

REF: A. MANAMA 1733

B. MANAMA 1550

C. MANAMA 1469

Classified By: Ambassador William T. Monroe for reasons 1.4 (b) and (d)
.


1. (C) A Department of Treasury delegation led by Assistant
Secretary for Terrorist Financing and Financial Crime Patrick

SIPDIS
O'Brien met with Justice Ministry Under Secretary Shaikh
Khalid bin Ali Al Khalifa to discuss Bahrain's new anti-money
laundering/combating the financing of terror (AML/CFT) law.
Accompanying A/S O'Brien were the Ambassador, Treasury DAS
for Intelligence and Analysis Levitt, Treasury Policy Advisor
Hecht, and Pol/Econ Chief (notetaker).

--------------
New Money Laundering/Terror Finance Law
--------------


2. (C) A/S O'Brien requested to meet with the Ministry of
Justice to discuss the recent adoption of the GOB's new
AML/CFT law and receive clarification regarding the law's
"freedom fighter" carve out. (Note: The Treasury Department
did not have a translation of the new law at the time of the
meeting and thus limited the depth of the discussion.)
Justice Under Secretary Shaikh Khalid told the delegation
that getting the AML/CFT law passed by parliament had been a
difficult task, but now that it was done, "we have gained a
lot by this law" because it allows police and prosecutors to
target money launderers and terrorist financiers (See Refs B
and C). In response to A/S O'Brien's question, Shaikh Khalid
said he was not happy about language that appears to exempt
"freedom fighters" from the provisions of the law. Reading
from the text, Shaikh Khalid said the article states "armed
struggle against foreign occupation and aggression... for
liberation or self-determination according to the principles
of international law shall not be deemed a terrorist crime."
He said that the parliament had inserted this language
against the will of the government, commenting that it should
be considered "political jargon" and not precise legal
drafting.

-------------- --------------
Freedom Fighter Exemption Superseded by Treaty Obligations
-------------- --------------



3. (C) According to Shaikh Khalid, the important phrase is,
"according to the principles of international law."
Additional Protocol No. 1 of the Geneva Convention and the UN
Convention for the Suppression of the Financing of Terrorism,
to which Bahrain is a party and which are considered to be
part of Bahrain's domestic law, make clear that "freedom
fighters" must protect civilian populations. Therefore, the
only "freedom fighters" that would be exempt from the AML/CFT
law are those that safeguard civilian populations. In Shaikh
Khalid's view, there are no terrorist groups that meet this
requirement, thus ensuring that the law applies to all
terrorists. Although the article gives the appearance of
granting a type of exemption, in reality it does not do so
because of the reference to international law.


4. (C) A/S O'Brien noted that the "freedom fighter"
exemption in the new law could be interpreted by the
international community and Bahraini citizens as establishing
a dissonance between what constitutes domestic activities
versus transnational or international activities.
Elaborating further, "We are concerned that this provision
could hinder the GOB from dealing with external versus
domestic terrorist financing," O'Brien said. To avoid
nuanced arguments, a criminal statute requires explicit
clarity for the citizenry to adhere to. Shaikh Khalid agreed
with A/S O'Brien's assertion that the argument is nuanced and
not everyone may agree, but indicated that the article had
been necessary to ensure parliamentary approval. Terrorist
financing is a transnational problem and A/S O'Brien
cautioned that the "freedom fighter" exemption in the AML/CFT
law may cause difficulties when the Financial Action Task
Force (FATF) evaluates Bahrain's compliance with the FATF 40
Recommendations and Nine Special Recommendations on terrorist
financing.


5. (C) With regard to AML legal actions, Shaikh Khalid said
the Ministry of Justice had referred 4-5 cases to the public
prosecutor, but he was unaware of any convictions. He noted
that with Bahrain's increasing reliance upon the financial
sector rather than petroleum for economic growth, it made
sense to create special courts to deal with financial crimes
cases. This was in his long-term plan, but could take up to

MANAMA 00001755 002 OF 002


four years to implement. He said the AML/CFT law
criminalizes non-declaration of cash by couriers, and it was
the responsibility of the Ministry of Finance to set the
limit above which cash must be declared. He said that
non-declaration in and of itself is a crime.


6. (U) A/S O'Brien cleared this cable.


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