TERRORIST FINANCE: CASH SMUGGLING IN BELGIUM

UNCLAS BRUSSELS 000450

SIPDIS

SENSITIVE
SIPDIS

DEPT FOR EB/ESC/TFS: KLEAHY AND LCANNON; S/CT: PHILL,
AGALER, AND GNOVIS

E.O. 12958: N/A
TAGS: EFIN ETTC KTFN PTER PGOV BE
SUBJECT: TERRORIST FINANCE: CASH SMUGGLING IN BELGIUM

REF: A. STATE 16120


B. 06 BRUSSELS 3826


1. (U) SUMMARY: Officials in the Belgian Financial
Intelligence Unit (FIU),Belgian customs, and Ministry of
Justice are aware of the problem of cash smuggling and are
taking steps to combat it. As required by law, Belgium is on
track to implement the European Parliament and Council of the
European Union's Regulation (EC) No 1889/2005 by June 15,

2007. This will establish a system of controls of cash
entering or leaving the European Community and also fulfill
Special Recommendation Nine (SR IX) of the Financial Action
Task Force (FATF). In 2001, Belgium became a party to the UN
Convention for the Suppression of the Financing of Terrorism.
Belgium's federal police have a program in place to conduct
random searches, including for bulk cash smuggling, at all of
Belgium's international airports. Belgium is also
proactively regulating its diamond industry with respect to
anti-money laundering and antiterrorist financing laws. END
SUMMARY


2. (SBU) In June 2005 Belgium underwent a mutual evaluation
by the FATF. For SR IX, Belgium was rated as non-compliant
because it had no system of control or reporting requirements
for cross-border currency movements. However, In October
2005, the European Parliament and Council of the European
Union issued Regulation (EC) No 1889/2005 on controls of cash
entering or leaving the Community. According to Belgian
officials, Belgium is ready to implement this regulation by
June 15, 2007 as required. Belgian customs officials and
CTIF-CFI will verify cross-border currency movements and
irregularities may be forwarded to judicial authorities.


3. (U) In 2001, Belgium became a party to the UN Convention
for the Suppression of the Financing of Terrorism.


4. (SBU) In 2004, the federal police created a terrorist
financing unit within its economic crimes department, ECOFIN.
Subsequently the ECOFIN personnel were transferred to the
federal police's counterterrorism department. The federal
police and the specialized services of the Central Office for
the Fight against Organized Economic and Financial Crimes
utilize a number of tactics to uncover money laundering
operations, including investigating significant capital
injections into businesses, examining suspicious real estate
transactions, and conducting random searches at all
international airports. In 2005, Project Cash Watch, carried
out under the auspices of the federal police in Belgium's
international airports and other transit venues, netted
seizures of more than 1.94 million euros (approximately $2.45
million).


5. (SBU) The GOB recognizes the particular importance of the
diamond industry, as well as the potential vulnerabilities it
presents to the financial sector. As such, the GOB has
distributed typologies outlining its experiences in pursuing
money laundering cases involving the diamond trade,
especially those involving the trafficking of African
conflict diamonds. The Belgian financial intelligence unit,
known in French as Cellule de Traitement des Informations
Financires and in Flemish as Cel voor Financile
Informatieverwerking (CTIF-CFI)),is active in this area. It
has initiated several meetings with the Belgian Ministry of
Economic Affairs and the High Council for Diamonds in order
to clarify the obligations of diamond traders with respect to
anti-money laundering and antiterrorist financing laws and
how diamond traders apply this legislation.

IMBRIE
.