COMOROS SHELL BANKS ILLEGAL AND UNAUTHORIZED

UNCLAS ANTANANARIVO 001202

SIPDIS

SENSITIVE
SIPDIS

DEPT FOR AF/E AND AF/FO
DEPT PASS TO USTR FOR FLISER

E.O. 12958: N/A
TAGS: EFIN ECON PREL CN
SUBJECT: COMOROS SHELL BANKS ILLEGAL AND UNAUTHORIZED


1. (SBU) SUMMARY. "Just as the United States is not responsible
for the criminals who manufacture counterfeit dollars, so the
Comoros should not be blamed for criminals who market banking
licenses when they lack the legal authority to issue them." With
this argument, Vice Governor of the Central Bank of the Union of the
Comoros, Abdou Mohamed Chanfou, reiterated his request for any
possible assistance to shut down these illicit entities wherever
they may exist. He pointed out the difficulty they face given that
these banks are all "virtual" with neither the operators nor the
internet servers resident on Comoran soil. END SUMMARY.


2. (U) In a meeting with Poloff November 21, Central Bank Vice
Governor Chanfou and Director of the Union Ministry of Finance,
Soilih Mohamed Soilih, went over Union Government policies and
efforts with regard to shell banking. Both officials, with several
staff from both institutions in attendance, emphasized the shell
banking issue was a criminal, not a national, problem. The Vice
Governor reported on his efforts to communicate to the public on
illicit banking taking place outside the Comoros in the name of
"Anjouan," noting shell banking entities have no legal standing in
the Comoros.


3. (SBU) In January 2008, Chanfou will launch another public
relations campaign, again issuing circulars indicating the small
number of commercial banks with approved licenses to operate in the
Comoros, and the long list of illicit entities, with licenses issued
by criminal individuals in Anjouan (and Moheli). Individuals who
sold licensing authority, use such ill-gotten authority, or profit
from shell banks are in violation of Comoran law.


4. (SBU) Cabinet Director Soilih, with a polite tone of
frustration, stated the Union Government does not condone or
facilitate license issuance or operation of shell banking entities.
He added his concern that Union statements and actions were so far
insufficient to address Western government condemnation of the
Comoros. Soilih repeated his government's request for technical
assistance and international cooperation to resolve the shell bank
issue.


5. (SBU) Vice Governor Chanfou likened his country's punishment for
shell banks to the global problem of counterfeit U.S. dollars. Like
criminals who produce fraudulent U.S. currency, the individuals who
sold "Anjouan licensing rights" acted privately for private gain
without any legal authority. The sole governing authorities for
finance in the Union of the Comoros are the Union Central Bank and
Union Minister of Finance. These legitimate Union institutions have
long sought to educate the banking public, discredit the likes of
"anjouan.net," and dissuade international financial institutions
from doing business with these entities. In addition to public
awareness via official circulars on sanctioned and non-sanctioned
banks, the Union Government has filed legal proceedings against
individuals in France for illegally operating shell banks in the
name of Comoros or Anjouan.


6. (SBU) To further make his point about the unfair nature of
punishing the Comoros, Vice Governor Chanfou reiterated his
government's request for international assistance to shut down shell
bank internet sites. Neither servers nor individuals are reported
to operate within Comoran jurisdiction. The Union Government lacks
the resources or technical expertise to tackle this international
financial crime alone. Chanfou candidly asked what percentage of
global money laundering is facilitated by Comoran criminals, what
steps were taken in other countries where shell banking existed, and
why did it seem the Comoros had been singled out as a pariah?

SIBLEY