GSE CONFISCATES $20,000 FROM AMCIT

C O N F I D E N T I A L ASMARA 000376 SENSITIVE SIPDIS DEPT FOR AF/E LONDON AND PARIS FOR AFRICA WATCHERS E.O. 12958: DECL: 07/28/2018 TAGS: PGOV EFIN ER SUBJECT: GSE CONFISCATES $20,000 FROM AMCIT Classified By: Ambassador Ronald K. McMullen for reason 1.4(d). ¶1. (C) The Government of the State of Eritrea (GSE) confiscated $21,700 from an Eritrean-American who arrived in Asmara June 22. The AmCit declared $2,000 at the airport and was later pulled into a side room along with other passengers where they were told "now is the time to declare any other money you might have." Upon admitting to having more cash on hand, the authorities immediately seized the funds. On June 27 the AmCit filed an appeal with the Ministry of Finance, attempting to work out a deal where some of his funds would be returned and the GSE would keep the rest. The Ministry of Finance replied that the funds are now the property of the government and that the AmCit would be fined an additional fee for failing to declare the correct amount. ¶2. (C) According to locally employed staff, GSE normal procedure is to fine and imprison individuals who fail to declare USD at the airport, confiscating the undeclared funds in the process. They also speculate that the AmCit intended to trade the USD on the black market for the marked up exchange rate. The official Nakfa-USD exchange rate is 15-1 while the black market is purported to be as high as 25-1. ¶3. (C) COMMENT: As conditions worsen, both Eritreans and the GSE become more desperate for cash. Hard currency flows from the diaspora community are reported to be dwindling and government revenues are not expected to increase until 2010 when the gold mining operations are expected to be up and running. End Comment. MCMULLEN