WORLD BANK ON HAITI'S EFFORTS TO COMBAT MONEY

UNCLAS PORT AU PRINCE 001742

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SENSITIVE
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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

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- 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