NICARAGUA: FACING CHALLENGES IN ADDRESSING CASH

UNCLAS MANAGUA 001431

SIPDIS

SENSITIVE
SIPDIS

STATE FOR WHA/CEN, WHA/EPSC, EB/ESC/TFS - LEAHY AND CANNON,
S/CT HILL AND GALER

E.O. 12958: N/A
TAGS: PTER EFIN ETTC KTFN PREL NU
SUBJECT: NICARAGUA: FACING CHALLENGES IN ADDRESSING CASH
COURIERS

REF: STATE 16120


1. (SBU) Summary: On May 24, Econoff delivered reftel
demarche on illicit cash couriers to representatives of the
Nicaraguan inter-agency Anti-Terrorism Working Group
(ATWG). ATWG representatives responded that cash couriers
are an issue of growing concern in Nicaragua, but current
laws and the lack of a Financial Intelligence Unit make it
difficult to prosecute this and other financial crimes
effectively. The ATWG believes, however, that several
bills nearing approval by the National Assembly, including
a new Penal Code, will address these limitations. The ATWG
is exploring funding sources for integrated training on
financial crimes to take place in Nicaragua. Nicaragua's
highly politicized and corrupt judicial system will make
enforcement of any new laws difficult, as politics
determines judicial decisions. Extensive training of
investigators and judges will be essential. End Summary.


2. (SBU) On May 24, Econoff delivered reftel demarche on
illicit cash couriers to representatives of the Nicaraguan
ATWG. Econoff left as an aide-memoire the non-paper, the
text of the UN International Convention for the Suppression
of the Financing of Terrorism, the nine Special
Recommendations of the FATF-GAFI, and relevant talking
points. Full list of representatives at the meeting are in
Paragraph 9.

Cash Couriers are a problem not well addressed
-------------- -

3. (SBU) In response to the demarche, ATWG representatives
stated that cash couriers have become a growing concern in
Nicaragua. The Prosecutor General's office reported four
large (over USD 1 million) seizures since October 2006.
Because the cash seizures did not happen as part of drug
seizures (although they were probably connected) the
Attorney General's office can only prosecute under Law 42,
which addresses customs contraband. The short sentences
proscribed for these crimes are ineffective for addressing
this growing problem.


4. (SBU) According to post's Regional Legal Advisor, the
Prosecutor General's office unwillingness to consider money
laundering charges in any case not tied directly to
narcotics trafficking also hampers the police and Attorney
General's efforts. Nicaragua also lacks a Financial
Intelligence Unit (the only country in the Americas without
one),and regulations on how to transparently seize and
process the assets of convicted criminals, including cash
and bank accounts.

The National Assembly Holds Potential Solutions
-------------- --

5. (SBU) The ATWG believes several bills nearing approval
by the National Assembly will address current limitations
for prosecuting financial crimes. The new Penal Code,
expected to be approved and implemented in August, now
lists money laundering (to include cash smuggling) as a
crime independent of narcotics trafficking, with sentences
starting at five years. With UN funding, the ATWG is
supporting an anti-terrorism bill, expected to reach the
full Assembly for consideration in June. The ATWG is also
pressuring the National Assembly to pass a long-stalled
bill creating an independent and fully-funded Financial
Analysis Unit (a FATF requirement by January 2008.) The
Chief of Police and Superintendent of Banks will lead this
lobbying effort.

Other Efforts and Needs
--------------

6. (SBU) The GON is preparing people to address financial
crimes. The National Police has a permanent training
program for officers working on the borders and is actively
sharing intelligence with other agencies. The Prosecutor
General's office is creating a special economic crimes unit
to work in coordination with the National Police's Economic
Crimes Office. They are also drafting a bill to create a
unit specialized in handling seized assets. All of the
agencies in the ATWG are hampered by a lack of money to
attend training opportunities in the region. This limits
the number of people trained and the access to new
information on changing crime patterns and investigation
techniques.


7. (SBU) The ATWG and its member agencies are interested in
hosting training opportunities on the various aspects of
financing terrorism and organized crime including
investigation and prosecution techniques. In September,
the U.S. IRS will hold an introductory course on
investigating and prosecuting money laundering, the first
in a series of training modules already carried out in
Panama.

Comment
--------------

8. (SBU) Nicaragua's highly politicized and corrupt
judicial system makes enforcement of any laws in Nicaragua
difficult. Most of the members of the ATWG are serious
about improving Nicaragua's ability to fight organized
crime and terrorism. At the moment, however, politics
takes precedence over judicial decisions. Extensive
training for investigators and judges would help Nicaragua
become an effective player in the world-wide efforts to
stop terrorism and organized crime financing. End comment.

ATWG Representatives at the meeting
--------------

9. (U) - Ministry of Foreign Affairs (MFA) Director of
Democratic Security Carlos Bana

- MFA Deputy Director of Democratic Security Marazeli
Rodriguez

- MFA Deputy Director of the Americas Rene Morales

- MFA U.S. Desk Officer Gregorio Torres

- Executive Secretary of the Prosecutor General's Office
Delia Rosales

- Assistant Attorney General for Criminal Maters Amy Garcia
Curtis

- Superintendence of Banks Anti-money Laundering
Coordinator Heynar Francisco Martinez

- National Police Director of Economic Investigations
Javier Obando Galeano

- National Police Director of Customs Fidel Dominguez
Alvarez
TRIVELLI