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 .