Identifier
Created
Classification
Origin
07ISLAMABAD2950
2007-07-06 08:54:00
CONFIDENTIAL
Embassy Islamabad
Cable title:  

HIGH-LEVEL APG DELEGATION EXPRESSES CONCERN TO GOP

Tags:  KTFN EFIN PTER ECON PREL PK 
pdf how-to read a cable
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RR RUEHDBU RUEHLH RUEHPW
DE RUEHIL #2950/01 1870854
ZNY CCCCC ZZH
R 060854Z JUL 07
FM AMEMBASSY ISLAMABAD
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RUEHAH/AMEMBASSY ASHGABAT 2695
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RUEHLH/AMCONSUL LAHORE 2785
RUEHPW/AMCONSUL PESHAWAR 1208
C O N F I D E N T I A L SECTION 01 OF 02 ISLAMABAD 002950 

SIPDIS

SIPDIS

STATE FOR SCA/PB, EB/OMA DHAVILAND AND EB/ESC LLAMBERT
USAID FOR ANE MWARD
TREASURY FOR SSEGAL, PDERGARABEDIAN AND ASHARMA
COMMERCE FOR ANESA/OSA
JUSTICE FOR LSAMUEL
MANILA PASS USED AT ADB
WARSAW FOR RSEAMAN
ABU DHABI FOR BMULLINAX

E.O. 12958: DECL: 07/06/2017
TAGS: KTFN EFIN PTER ECON PREL PK
SUBJECT: HIGH-LEVEL APG DELEGATION EXPRESSES CONCERN TO GOP
OVER LACK OF PROGRESS ON AML LEGISLATION

REF: ISLAMABAD 2866

Classified By: Ambassador Anne Patterson for Reasons 1.4(b) and (d)

C O N F I D E N T I A L SECTION 01 OF 02 ISLAMABAD 002950

SIPDIS

SIPDIS

STATE FOR SCA/PB, EB/OMA DHAVILAND AND EB/ESC LLAMBERT
USAID FOR ANE MWARD
TREASURY FOR SSEGAL, PDERGARABEDIAN AND ASHARMA
COMMERCE FOR ANESA/OSA
JUSTICE FOR LSAMUEL
MANILA PASS USED AT ADB
WARSAW FOR RSEAMAN
ABU DHABI FOR BMULLINAX

E.O. 12958: DECL: 07/06/2017
TAGS: KTFN EFIN PTER ECON PREL PK
SUBJECT: HIGH-LEVEL APG DELEGATION EXPRESSES CONCERN TO GOP
OVER LACK OF PROGRESS ON AML LEGISLATION

REF: ISLAMABAD 2866

Classified By: Ambassador Anne Patterson for Reasons 1.4(b) and (d)


1. (C) Summary: A high-level delegation of the Asia-Pacific
Group on Money Laundering (APG),a regional subsidiary of
FATF, traveled to Pakistan on July 2-3 to gage the country's
progress on passing Anti-Money Laundering (AML) legislation,
and to send a message that quick movement was necessary in
order to prevent Pakistan from being subject to eventual
disciplinary action. While the delegation met with a range
of GOP officials, they were not met at a particularly high
level, and they were unable to meet with the Prime Minister
or Financial Advisor Salman Shah. Their agenda was changed
at the last minute to remove meetings with any member of the
Standing Committee on Finance, which has been considering the
AML bill for the past two years. Meetings with the
Commissioner of the Pakistan Securities and Exchange
Commission and Foreign Ministry were particularly tense, as
neither saw any urgency to passing the legislation. It is
likely, as an initial step, that, at the next meeting of the
APG in Perth on July 23, Pakistan will not be allowed to
assume a seat on the Group's steering committee, which it is
scheduled to do based on an alphabetic rotation. While it is
unlikely that Pakistan will be barred from the group at this
point, it will face more intense scrutiny, perhaps monthly
evaluations. End Summary.


2. (C) In two days of meetings, the APG high level
delegation -- consisting of Dr. Yunus Husein, APG Co-Chair;
Djoko Kurnijanto, Indonesian Financial Transaction Reports
and Analysis Centre; Gordon Hook, Executive Secretary, APG
Secretariat; Stuart Hughes, Canadian High Commission;


SIPDIS
Vincente Aquino, Executive Director, Anti-Money Laundering
Council; and Ian Knight, Deputy Secretary, APG Secretariat --
met with Major General (R) Mohammed Siddique, Acting Chairman
of the National Accountability Board; Dr. Shamshad Akhtar,
Governor of the State Bank of Pakistan (via video-link from
Karachi); Commissioner Razi-ur-Rahman of the Pakistan
Securities and Exchange Commission; Additional Secretary
Haider at the MFA; Secretary Mansoor Ahmed of the Law
Ministry; and Nawid Ahson, Secretary General, Ministry of
Finance. The team was originally scheduled to meet with
members of the National Assembly's Standing Committee on
Finance, but this appointment was canceled with no
explanation. (Note: as Committee member Piracha (reftel) was
unaware of the possible sanctions the APG could impose, such
a meeting with the lawmakers might have proven useful. End
Note) They had requested to meet with Finance Advisor to the
Prime Minister Salman Shah and the Prime Minister, but were
unable to do so.


3. (C) The delegation concluded that the State Bank's Dr.
Akhtar and Chairman Aziz of the NAB were the only two of
their interlocutors who were committed to the swift passage
of the AML legislation. They met particular resistance from
the PSEC Commissioner Rehman, who did not see why he should
be involved at all, even though he regulates all non-bank
financial institutions, and from MFA Additional Secretary
Haider, who said that if Pakistan were removed from the APG,
they could expect much less cooperation in the future on
fighting the war on terror. He claimed that the West has not
lived up to its end of the bargain in terms of providing

ISLAMABAD 00002950 002 OF 002


technical cooperation in the broader GWOT.


4. (C) The were told by the Ministry of Finance that the
Standing Committee had finished reviewing the draft
legislation in May, but had requested a smaller sub-committee
be formed to ensure that all the comments were reflected in
appropriate legally correct language. The sub-committee had
yet to meet, however, and the MOF predicted that they would
need at least one month to finalize the legislation. No
timetable for presentation to the full National Assembly was
given. Hook asked for a copy of the terms of reference for
the sub-committee, but was not given any indication that they
existed.


5. (C) The delegation said it had sent an "uncompromising
message", but in the spirit of friendly cooperation. It is
clear that they are losing patience with Pakistan, which has
been a member of the APG since 2000. It finished a draft
bill in 2002, but there has been no concrete progress since
then, as the bill has languished with the Standing Committee
of the National Assembly for almost two years. The team was
not particularly concerned with the wording of the draft
bill, as their feeling was that the legislation could be
amended in the future if necessary. Hook did note that,
under the draft legislation, the military (which owns one of
the largest banks in Pakistan) is entirely exempt from
inclusion in the AML legislation. He did express concern
that the NAB's corruption function would remain unchanged,
and, as the NAB was created by a Presidential ordinance and
reports directly to the President, the President could
theoretically dissolve it if its findings were not to his
liking. Hook also compared Pakistan unfavorably with India,
which had made great strides in its legislation and
enforcement. Aquino of the Philippines recounted the
comprehensive steps his country had taken to become compliant
after being notified that it was on the list of
non-cooperative countries.


6. (C) The APG will next meet in Perth the week of July 23.
While no formal sanctions will be taken against Pakistan at
that time, according to Hook, it is likely that Pakistan will
be dis-invited to be a member of the steering committee, on
which it is scheduled to sit based on alphabetic rotation.
GOP officials indicated to the delegation that they would be
sending many more than their usual number of delegates to
Perth, but did not directly acknowledge that this was in
response to concerns about the stagnant AML legislation.
According to Hook, initially it is probable that Pakistan
will be put under a schedule of stricter monitoring, perhaps
monthly.


7. (C) Comment: If it was Pakistan's intent to reassure the
APG that it was taking its membership commitments seriously,
it obviously failed in that effort. There appears to be no
high-level commitment or coordinated strategy in place to
pass the legislation, a critical element for progress here.
It was unfortunate that the delegation was unable to meet
with the Prime Minister, but understandable given the
breaking events at the Red Mosque at the time of their
appointment request. The Ambassador plans to raise the lack
of progress on the AML bill with the Prime Minister during
her introductory courtesy call. End Comment.
PATTERSON