WORLD BANK ON HAITI'S EFFORTS TO COMBAT MONEY

UNCLAS PORT AU PRINCE 001742 SIPDIS SENSITIVE SIPDIS STATE FOR WHA/CAR AND INL, STATE PASS TREASURY FOR FINCIN E.O. 12958: N/A TAGS: ECON PREL PGOV KCOR HA SUBJECT: WORLD BANK ON HAITI'S EFFORTS TO COMBAT MONEY LAUNDERING AND FINANCIAL CRIMES ¶1. (U) A World Bank assessment team out-briefed PolCouns and Poloff October 5 on Haiti's efforts to combat money laundering and financial crimes subsequent to a two-week in-country evaluation. World Bank assessment team leader Jean Pesme highlighted several factors that contribute to money laundering and financial crime in Haiti, namely: - Weak or non-existent institutional oversight of financial transactions; - Insufficient monitoring of real estate transactions-)a likely source of money laundering; - Significant number of informal commercial cash transactions conducted in U.S. dollars, in which it is difficult to distinguish criminal from legal activities; - The reluctance of commercial banks to file ''suspicious activity reports'' when they encounter suspicious transactions; - Concern by commercial banks that financial information shared with investigatory bodies will neither be handled confidentially nor result in prosecution; and SIPDIS - Few cases (less than 20 currently) sent to prosecutors for action. ¶2. (U) Pesme said that Haitian laws governing money laundering and financial crimes, including operation of a financial intelligence unit, are generally adequate. Enforcement, however, is sorely lacking. Pesme said it is imperative that the government begin to mount a few carefully prepared prosecutions of financial crimes resulting in convictions. This will both get the message out that wrongdoers will face justice and be critical to increasing confidence in the banking and commercial sectors. ¶3. (U) The World Bank money laundering/financial crimes report on Haiti will be released spring 2008. Pesme said it would outline several recommendations for implementation over an 18- to 24-month period, including increased banking sector supervision; additional training of financial, judicial and law enforcement officials; and better management of money laundering and financial crimes cases from investigation to prosecution. Pesme noted that there is no great threat of terrorist financing in Haiti. ¶4. (U) International Monetary Fund (IMF) Resident Representative Ugo Fasano told Poloff October 19 that the World Bank is preparing an aide memoir and will present preliminary findings of its assessment to representatives of the Ministry of Economics and Finance, the Bank of the Republic of Haiti (Central Bank) and World Bank and IMF in-country representatives in early November. SANDERSON