Identifier
Created
Classification
Origin
07TASHKENT1196
2007-06-25 10:54:00
CONFIDENTIAL
Embassy Tashkent
Cable title:
GOU SUSPENDS PORTIONS OF MONEY
how-toVZCZCXRO4939 RR RUEHDBU DE RUEHNT #1196 1761054 ZNY CCCCC ZZH R 251054Z JUN 07 FM AMEMBASSY TASHKENT TO RUEHC/SECSTATE WASHDC 8056 INFO RUEHAH/AMEMBASSY ASHGABAT 3112 RUEHTA/AMEMBASSY ASTANA 9250 RUEHEK/AMEMBASSY BISHKEK 3724 RUEHDBU/AMEMBASSY DUSHANBE 3588 RUEATRS/DEPT OF TREASURY WASHDC
C O N F I D E N T I A L TASHKENT 001196
SIPDIS
SIPDIS
E.O. 12958: DECL: 06/25/2017
TAGS: PGOV EFIN PTER KTFN UZ
SUBJECT: GOU SUSPENDS PORTIONS OF MONEY
LAUNDERING/TERRORIST FINANCING LEGISLATION
Classified By: CDA Brad Hanson for reasons 1.4 (b) and (d).
C O N F I D E N T I A L TASHKENT 001196
SIPDIS
SIPDIS
E.O. 12958: DECL: 06/25/2017
TAGS: PGOV EFIN PTER KTFN UZ
SUBJECT: GOU SUSPENDS PORTIONS OF MONEY
LAUNDERING/TERRORIST FINANCING LEGISLATION
Classified By: CDA Brad Hanson for reasons 1.4 (b) and (d).
1. (SBU) In late spring, President Karimov signed legislation
suspending aspects of Uzbekistan's 2004 law on preventing
money laundering and terrorist financing until 2013. The new
legislation suspends the authority of the Department on
Combating Tax, Currency Crimes, and Legalization of Criminal
Proceeds ("Special Department") within the General
Prosecutor's Office to order banks and other financial
institutions to stop transactions. It also temporarily ends
a mandatory two-day hold on most financial transactions in
excess of approximately $40,000, as well as requirements that
financial institutions identify and report on transactions
above this amount to the General Prosecutor's Office.
2. (C) Comment: Although passed in 2004, the law on
preventing money laundering and terrorist financing came into
force only in January 2006. The law was adopted with great
fanfare and as recently as November 2006 was touted to Poloff
as bringing Uzbekistan's financial sector into compliance
with international standards against money laundering and
terrorist finance. Post understands from various contacts
that the Special Department will continue to investigate
financial crimes under the overall authority of the General
Prosecutor, and several other laws restricting the flow of
money in and out of Uzbekistan remain in effect.
3. (C) Comment, continued: Officially, the reason for
suspending portions of the 2004 law is that Uzbekistan's
financial system is not sufficiently mature to consistently
carry out its requirements. Legitimate business interests in
Tashkent have welcomed the suspension as the low threshold
amount of $40,000 combined with high import fees created a
situation in which even routine transactions were subject to
mandatory review, leading to increased costs and
frustrations. Various Embassy contacts have said, however,
that, in reality, the law's strict requirements were making
it harder for senior government officials and other members
of the Uzbek elite to do business. Absent pressure from
members of the elite feeling a pinch, the complaints of
Tashkent's legitimate business community likely would have
fallen on deaf ears.
HANSON
SIPDIS
SIPDIS
E.O. 12958: DECL: 06/25/2017
TAGS: PGOV EFIN PTER KTFN UZ
SUBJECT: GOU SUSPENDS PORTIONS OF MONEY
LAUNDERING/TERRORIST FINANCING LEGISLATION
Classified By: CDA Brad Hanson for reasons 1.4 (b) and (d).
1. (SBU) In late spring, President Karimov signed legislation
suspending aspects of Uzbekistan's 2004 law on preventing
money laundering and terrorist financing until 2013. The new
legislation suspends the authority of the Department on
Combating Tax, Currency Crimes, and Legalization of Criminal
Proceeds ("Special Department") within the General
Prosecutor's Office to order banks and other financial
institutions to stop transactions. It also temporarily ends
a mandatory two-day hold on most financial transactions in
excess of approximately $40,000, as well as requirements that
financial institutions identify and report on transactions
above this amount to the General Prosecutor's Office.
2. (C) Comment: Although passed in 2004, the law on
preventing money laundering and terrorist financing came into
force only in January 2006. The law was adopted with great
fanfare and as recently as November 2006 was touted to Poloff
as bringing Uzbekistan's financial sector into compliance
with international standards against money laundering and
terrorist finance. Post understands from various contacts
that the Special Department will continue to investigate
financial crimes under the overall authority of the General
Prosecutor, and several other laws restricting the flow of
money in and out of Uzbekistan remain in effect.
3. (C) Comment, continued: Officially, the reason for
suspending portions of the 2004 law is that Uzbekistan's
financial system is not sufficiently mature to consistently
carry out its requirements. Legitimate business interests in
Tashkent have welcomed the suspension as the low threshold
amount of $40,000 combined with high import fees created a
situation in which even routine transactions were subject to
mandatory review, leading to increased costs and
frustrations. Various Embassy contacts have said, however,
that, in reality, the law's strict requirements were making
it harder for senior government officials and other members
of the Uzbek elite to do business. Absent pressure from
members of the elite feeling a pinch, the complaints of
Tashkent's legitimate business community likely would have
fallen on deaf ears.
HANSON