Identifier
Created
Classification
Origin
06TUNIS2742
2006-11-09 16:06:00
UNCLASSIFIED
Embassy Tunis
Cable title:  

TUNISIA - INTERNATIONAL NARCOTICS CONTROL STRATEGY

Tags:  EFIN KCRM KTFN TS 
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VZCZCXRO4893
PP RUEHTRO
DE RUEHTU #2742/01 3131606
ZNR UUUUU ZZH
P 091606Z NOV 06
FM AMEMBASSY TUNIS
TO RUEHC/SECSTATE WASHDC PRIORITY 2191
INFO RUEHAD/AMEMBASSY ABU DHABI PRIORITY 0808
RUEHAS/AMEMBASSY ALGIERS PRIORITY 7332
RUEHLO/AMEMBASSY LONDON PRIORITY 1204
RUEHNK/AMEMBASSY NOUAKCHOTT PRIORITY 0796
RUEHFR/AMEMBASSY PARIS PRIORITY 1657
RUEHRB/AMEMBASSY RABAT PRIORITY 8251
RUEHTRO/AMEMBASSY TRIPOLI PRIORITY 0424
RUEHCL/AMCONSUL CASABLANCA PRIORITY 4010
RUEAWJB/DEPARTMENT OF JUSTICE WASHDC PRIORITY
RUEATRS/DEPT OF TREASURY WASHINGTON DC PRIORITY
UNCLAS SECTION 01 OF 03 TUNIS 002742 

SIPDIS

SIPDIS

STATE FOR NEA/MAG (HARRIS),INL
JUSTICE FOR AFMLS, OIA AND OPDAT
TREASURY FOR FINCEN AND EB/ESC/TFS
LONDON AND PARIS FOR NEA WATCHER

E.O. 12958: N/A
TAGS: EFIN KCRM KTFN TS
SUBJECT: TUNISIA - INTERNATIONAL NARCOTICS CONTROL STRATEGY
REPORT PART II, FINANCIAL CRIMES AND MONEY LAUNDERING

REF: STATE 157136

UNCLAS SECTION 01 OF 03 TUNIS 002742

SIPDIS

SIPDIS

STATE FOR NEA/MAG (HARRIS),INL
JUSTICE FOR AFMLS, OIA AND OPDAT
TREASURY FOR FINCEN AND EB/ESC/TFS
LONDON AND PARIS FOR NEA WATCHER

E.O. 12958: N/A
TAGS: EFIN KCRM KTFN TS
SUBJECT: TUNISIA - INTERNATIONAL NARCOTICS CONTROL STRATEGY
REPORT PART II, FINANCIAL CRIMES AND MONEY LAUNDERING

REF: STATE 157136


1. (U) Tunisia is not considered an important regional
financial center due in large part to the very strict control
exercised by the Central Bank over financial transactions,
particularly those involving foreign currency. There is no
discernible money laundering activity reported to be
occurring in Tunisia. Since 2003, Tunisia has taken
important steps to create a legal framework for the
monitoring, investigation and prosecution of money laundering
and financial crimes. By creating an interagency Financial
Analysis Commission headed by the Central Bank Governor,
Tunisia has also established effective oversight and
coordination capabilities.


2. (U) In December 2003, the Tunisian Parliament passed Law
No. 2003-75, a comprehensive counterterrorism and anti-money
laundering law, to support international counterterrorism
efforts and to establish more severe sentences for
individuals convicted of terrorist acts. This law makes it a
crime to provide financial assistance or any other type of
support to terrorist activities, and provides for the
freezing of assets. Those suspected of violating the law can
be exempted from charges, however, if they report a planned
terrorist action to authorities. Money laundering is
punishable where false information is proffered relating to
the illicit origin of property or income arising directly or
indirectly from an offense. Money laundering is also defined
as investing, depositing, transferring or safekeeping of
property or income resulting from an offense. The law does
not delineate specific crimes; rather it broadly states that
money laundering related to "a crime or infraction" is
illegal. Tunisia's 1992 law (Law No. 1992-52) against
narcotics trafficking also includes provisions that
contribute to combating money laundering. Under Articles 2
and 30 of Law No. 1992-52, anyone aiding in narcotics
operations or the transfer of proceeds in connection with
these operations, including financial institutions, can be
prosecuted.


3. (U) The Tunisian penal code also allows for the
sequestering, confiscating, or seizure of assets and property

in certain situations, including narcotics trafficking and
terrorist activities. The definition of "assets" is broad
and covers any number of financial or physical assets.
Financial assets are traced by the Central Bank and Financial
Analysis Commission, each of which has broad powers for
investigating and seizing financial assets. Following an
initial freeze of assets, authorities have four days to
present additional supporting evidence before the assets must
be released. At any time, the reviewing magistrate can
release frozen assets if he/she determines the evidence does
not support such measures. Tunisia has no legal provisions
for sharing seized criminal assets with other governments.
The Financial Analysis Commission reports that it has never
had to freeze assets in response to money-laundering or
terrorist finance accusations.


4. (U) In 2003, Tunisia created an interagency Financial
Analysis Commission that includes representatives from the
Central Bank, Ministry of Finance, Ministry of Interior,
Customs and the judiciary. The Central Bank Governor acts as
head of the commission, which has both an investigatory and
advisory role in combating money laundering and terrorist
financing. The Financial Analysis Commission has oversight
functions for banks, non-banking financial institutions such
as stock brokerages, insurance companies and casinos,
intermediaries such as lawyers as well as non-governmental
organizations. Under Law 2003-75 all institutions or
intermediaries must report any suspicious, or unusual,
transactions to the Tunisian Financial Analysis Commission
and freeze related accounts. Financial institutions are also
required to report all transactions above 5,000 dinars (3,780
USD). Law 2003-75 also imposes obligations on all financial
institutions to gather full identifying information for
personal and business accounts. Additionally, all
bookkeeping, accounting, and supporting documentation, in

TUNIS 00002742 002 OF 003


both paper and electronic form, must be maintained for 10
years. In April 2006, the Financial Analysis Commission
issued a directive ordering all Tunisian banks to designate a
compliance officer, who will correspond directly with the
Financial Analysis Commission. Banks report regularly
receiving the U.S. Government and United Nations 1267
Sanctions Committee freeze lists from the Central Bank.


5. (U) The Central Bank retains strict control over foreign
currency operations due to the general non-convertability of
the Tunisian dinar. The export of Tunisian dinars, by either
residents or non-residents, is strictly prohibited. Bearer
financial instruments or shares are strictly prohibited (Act
No. 35 of 2000). Only certain categories of individuals and
businesses are allowed to open foreign currency or
convertible dinar accounts and all of these accounts are
monitored by the Central Bank. There are no "secret" or
numbered accounts allowed in Tunisia.


6. (U) Although all fund transfers must go through formal
banking institutions or the National Post Office, these
restrictions and currency exchange controls may encourage
underground methods of moving money or transferring value in
and out of the country. Remittances from abroad are a major
source of hard currency, though there is no evidence of an
organized alternative transfer system such as hawala. A
significant black market in consumer goods does exist in the
country but is not believed to be funded by illicit proceeds.
Residents are generally prohibited from holding or exporting
foreign currency except for certain purposes such as travel
or business and are limited in the value of foreign currency.
Non-residents entering Tunisia with foreign currency or
other instruments are required to declare the total amount if
they wish to re-export a portion (not exceeding 1,000 dinars
or approximately 755 USD) or deposit any of the money in a
Tunisian bank. Non-residents do not need to declare currency
exports under 1,000 dinars. Customs may at any time require
declarations for gold or securities.


7. (U) All offshore financial institutions are held to the
same regulatory standards as onshore financial institutions.
Offshore financial institutions undergo the same due
diligence process as onshore banks and are licensed only
after the Central Bank investigates their references and the
Ministry of Finance approves their application. Anonymous
directors are not allowed. Tunisia currently has eight
offshore banks and a considerable number of offshore
international business companies. Offshore international
business companies are subject to all regulatory
requirements, except for tax requirements and currency
convertability restrictions. There are five casinos in
Tunisia. Although Tunisians are not legally permitted to use
them, in practice Tunisians are able to circumvent this
restriction.


8. (U) Tunisia has two free trade zones, in Bizerte and
Zarzis, with a limited number of companies manufacturing
products for export. There are no offshore financial
institutions located in either free trade zone. There have
been no reports of trade-based money laundering or terrorist
financing activities using either free trade zone.
Government customs officials are present on site at the free
trade zones and at qualifying companies to supervise export
activities. Prior to opening a business in one of the two
free trade zones, the company must conclude a contract with
the free trade zone authority outlining project details, but
are not required to produce a company history.


9. (U) Tunisia is a founding member of the Bahrain-based
Middle East North Africa Financial Action Task Force
(MENAFATF),approved in November 2004. Tunisia is a party to
both the 1988 UN Drug Convention and the 1999 UN
International Convention for the Suppression of Financing of
Terrorism. Tunisia has signed and ratified the UN Convention
against Transnational Organized Crime. Tunisia signed the UN
Convention Against Corruption in 2004, but has not yet
ratified the agreement. Tunisia has bilateral agreements on

TUNIS 00002742 003 OF 003


"criminal matters" with 29 countries and is party to 12
international agreements on counterterrorism.
BALLARD