ETHIOPIA: COMBATING COUNTERFEITING AND MONEY

S E C R E T SECTION 01 OF 02 ADDIS ABABA 001221

SIPDIS

SIPDIS

STATE FOR AF AND AF/E
LONDON, PARIS, ROME FOR AFRICA WATCHER
PRETORIA FOR LEGATT AND SECRET SERVICE
CJTF-HOA FOR POLAD

E.O. 12958: DECL: 04/19/2032
TAGS: EFIN KCRM SNAR KN ET GM
SUBJECT: ETHIOPIA: COMBATING COUNTERFEITING AND MONEY
LAUNDERING


Classified By: AMBASSSADOR DONALD YAMAMOTO. REASON: 1.4 (B) AND (D).


1. (S/NF) SUMMARY: In response to the discovery in Germany of
counterfeit U.S. currency ("supernotes") from Ethiopia over
two years ago, the Treasury Department in coordination with
the Secret Service and the State Department began working
with Ethiopia's central bank. In the near future, Treasury
plans to sign an agreement with the Ethiopian central bank
governor on a workplan to help upgrade skills and knowledge
of Ethiopian banking staff on money laundering and
counterfeiting issues. The Secret Service plans to conduct a
training program in June to support these efforts. The
Ambassador and Embassy staff raised the importance of
combating counterfeiting and money laundering with the
central bank governor. While Ethiopia is not the largest
counterfeiting operation in Africa, it is the location with
the highest incident rate of supernote passage in Africa.
The 2004 Ethiopian police investigation implicated the North
Korean Embassy, at which point the police turned the matter
over to the Ministry of Foreign Affairs. END SUMMARY.

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BACKGROUND/EMBASSY STEPS BEING TAKEN
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2. (S/NF) In August 2004, Commerzbank AG, Germany's
second-largest bank, received 5,036 pieces of counterfeit
U.S. Federal Reserve notes in deposits from Ethiopia's
central bank, the National Bank of Ethiopia (NBE). In
December 2004, the Ethiopian Government requested Embassy
assistance to investigate the counterfeiting. The U.S.
Secret Service subsequently met in February 2005 with

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Ethiopian Federal Police officials to investigate the
counterfeit notes. The Ethiopian police provided information
on suspects, including a Kenyan national, who may have passed
the counterfeit money. By December 2005, the Secret Service
had taken custody of USD 406,600 in suspected counterfeit
notes. In September 2006, another 170 bills suspected of
being counterfeit were deposited into the Commerzbank in
Frankfurt, Germany, by the NBE. While investigations
continued, the Ethiopian banking officials requested training
to identify counterfeit currency. A training program was
provided in November 2006. Another training program will be
provided by the Secret Service in June 2007 to Ethiopian
banking officials.


3. (S/NF) The Ambassador, while serving as DAS in the Africa
Bureau, raised the counterfeit issue with senior Ethiopian
officials during trips to Addis Ababa in 2005 and 2006.
Since arriving in Ethiopia, the Ambassador raised with the
Foreign Minister (as recently as last week) the
counterfeiting question as a priority for the U.S. Mission.
To date, no suspects have been arrested. Embassy staff
continue to support Secret Service cooperation with Ethiopian
officials. According to Secret Service officers from
Pretoria, the counterfeit money from Ethiopia, while not the
highest volume uncovered in Africa, did have a significant
amount of supernotes (the officer said Ethiopia is the
location with the highest incident of supernotes in Africa.).
USSS said, however, that the supernote problem has
significantly declined since August 2004. In 2006, within a
USD 90 million deposit, USD 17,000 from the supernote family
(C-21555) was detected by the German Federal Bank. The
German BundesKriminal Amt (BKA) interviewed Ethiopian
officials who claimed the money came from deposits from ten
banks located within Ethiopia. The reason for the sharp
decline in supernotes from USD 715,000 in 2004 to USD 17,000
in 2006 from Ethiopia is unknown. The police suspect that
this is cyclical (passage of bills, investigation, interview
of suspects and then tapers off) and will return again. The
police nor the banks lack sophisticated technology to detect
supernotes. It is believed that devices to detect supernotes
cost an estimated USD 60,000 each.


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4. (S/NF) Parallel to the Secret Service efforts, the
Treasury Department dispatched one person to work in the NBE
to develop a workplan and training program for central bank
employees. The Treasury Department hopes to sign a workplan
agreement within the next month to help NBE employees
identify and stop money laundering as well as counterfeit
currency.

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FUTURE PLANS
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5. (S/NF) The Ambassador and Embassy plan to continue
raising this issue with Ethiopia,s senior leadership,
especially information-sharing on counterfeit currency and
money laundering, and to push for prosecution of those
involved.
YAMAMOTO