ANTI-TERRORISM LEGISLATION FACES HURDLES,

C O N F I D E N T I A L SECTION 01 OF 02 DHAKA 001910 SIPDIS SIPDIS DEPT FOR SCA/PB, S/CT, EEB/ESC/TFS DOJ OPDAT FOR LEHMANN E.O. 12958: DECL: 12/09/2015 TAGS: EFIN PTER PREL PGOV KCRM KTFN SNAR BG SUBJECT: ANTI-TERRORISM LEGISLATION FACES HURDLES, THREATENING DELAY IN BANGLADESH'S EGMONT ADMISSION Classified By: CDA a.i.Geeta Pasi, Reasons 1.4(b) and (d) ¶1. (C) Summary: Prepared with USG assistance, a series of amendments that would strengthen Bangladesh,s Anti-Money Laundering (AML) Act and a draft Anti-Terrorism Act (ATA) are being held up in the Law Ministry, in contravention of instructions from the Chief Adviser that they be enacted by the end of December. Passage of the AML amendments and a resolution of problems with the ATA are needed by December in order for Bangladesh to cross the initial hurdle of admission into Egmont, the international body of Financial Intelligence Units (FIU). Failure to pass the legislation would temporarily derail Bangladesh's efforts to join the prestigious organization. Over the longer term, failure to pass the laws could also cause a problem when the G-8's Financial Action Task Force (FATF) assesses the country's progress on building an anti-money laundering and terrorist financing regime in November 2008. Law Adviser Mainul Hosein is opposed to the creation of a terrorism-specific law. As an alternative, policymakers are debating incorporating measures of the ATA into existing legislation. Despite the bureaucratic wrangling, senior officials assure us that the legislation will pass. End Summary. ¶2. (C) Bangladesh passed an Anti-Money Laundering Act in 2002, but it failed to provide comprehensive definitions, adequate numbers of predicate crimes and mechanisms for asset recovery. New draft amendments remedying these and other deficiencies, prepared with assistance from the U.S. Department of Justice (under a State Department-funded Resident Legal Advisor program),has been presented to the Council of Advisers and is under review by the Law Ministry. Contacts at Bangladesh Bank, the country,s central bank, have reported that these amendments are ready to be enacted by the Council of Advisers. ¶3. (C) Bangladesh has no law criminalizing terrorism or terrorist financing. In 2006, an Anti-Terrorism Act (ATA) was drafted, but was shelved by the BNP government. The 2006 draft was adequate to meet basic international standards, but key provisions were missing regarding information sharing that is required under international conventions. One of the reasons the act was shelved in 2006 is that the GOB was reluctant to undertake any obligation that might require intelligence sharing with India. ¶4. (C) The Chief Adviser assured the CDA a.i. on November 15 that the caretaker government will pass an Anti-Terrorism Act and amendments to strengthen Anti-Money Laundering Act by December. This is a message that he has conveyed to other COMs as well, although the Law Secretary has since told the Embassy that the legislation will not pass until January because Cyclone Sidr upended government timetables. Embassy contacts in the Law Ministry, which is responsible for the legislation, reported that the Chief Adviser personally has requested status reports on where the legislation stands. ¶5. (C) Despite high level assurances, Law Adviser Mainul Hosein has stated several times over the last few months ) most recently on November 12 ) that he does not see the necessity for an anti-terrorism law. (Comment: Hosein is often out of step with his fellow Advisers, and comes in for frequent criticism by observers inside and out of the government). In Hosein,s opinion, terrorism cases should be handled under the existing criminal code. He has said that anti-terrorism legislation would be bad for the country's image and make it appear that it was battling a terrorism problem. He also stated that such legislation also had anti-Islamic undertones, which would not sit well with the public. ¶6. (C) Passage of this legislation is required for Bangladesh to meet the initial threshold for admission into Egmont, the organization of 108-member countries' Financial Intelligence Units (FIU) that share financial data with one another to track illegal assets or terrorist financing. Quick action is important because the lengthy and demanding Egmont process takes about six months; the Egmont committee is scheduled to make its annual decision on membership in June 2008. While there are other requirements that Bangladesh must meet to become an Egmont member, passage of DHAKA 00001910 002 OF 002 these two laws is the first step in the process. If these two laws are not passed and ready for Egmont review, Bangladesh will have to wait at least another year for admission. ¶7. (C) Part of the caretaker government,s interest in Egmont membership likely is due to the access it would have to secure databases of financial information from the 108 Egmont countries, which are bound to help each other in tracking suspicious transactions or known illegal proceeds through their respective financial systems. With its anti-corruption drive in full swing, the GOB is having difficulty in tracking overseas assets to prosecute corrupt suspects. The media report that the government has its eye on tens of millions of dollars that government investigators say corrupt officials and businessmen salted away in overseas bank accounts and property, including in the United States. ¶8. (C) Egmont membership aside, Bangladesh, as a signatory to UN conventions on terrorism and as a member of the Asia Pacific Group, the regional FATF organization, is obligated to pass laws criminalizing terrorism and terrorist financing. A review of Bangladesh,s implementation of its FATF commitments is scheduled for late 2008. If the review finds that Bangladesh is not adequately meeting FATF provisions, FATF could decide to impose sanctions. Among these sanctions is the ability to place a country on a watch list, which requires other nations to examine in a more detailed fashion all/all financial transactions going into or out of the listed country. This measure has serious ramifications for a listed country,s economy. Comment ¶9. (C) The delay in passage of this legislation is symptomatic of the caretaker government,s dysfunctional decision making process. Despite agreement from the Chief Adviser, the Army Chief, and other senior officials, a small group of naysayers have been able to stall passage of the legislation. We hear that the Law Ministry is looking for other laws in which to place provisions of the draft 2006 Anti-Terrorism Act (ATA) that would define and criminalize terrorism and terrorist financing. Under the current caretaker government, the council of advisers can pass legislation as ordinances, which would need parliamentary confirmation once an elected government and Parliament is in place. The thinking in this case is that if the anti-terrorism provisions and anti-money laundering amendments can be passed as ordinances, paving the way for Egmont membership, then the government that succeeds the caretaker government would have an additional incentive to commit to these important pieces of legislation. ¶10. (C) If Bangladesh fails to pass the laws or fails to continue to beef up its anti-money laundering/terrorist regime, there could be trouble when FATF comes to do its assessment in November 2008. Failure to resolve these issues in the next month would be a setback in Bangladesh's efforts to track and seize assets and sit at the Egmont table, and send a signal to the international financial community its commitment to fighting terrorist financing and money laundering. We will continue to press on this issue. Pasi