FOURTH SESSION OF THE ANTICORRUPTION WORKING GROUP

C O N F I D E N T I A L SECTION 01 OF 03 BEIJING 003742 SIPDIS DEPT FOR EAP/CM BANDREWS; INL/AAE ABUHLER, DMELLEBY, INL/C DLUNA DOJ FOR CRIMINAL DIVISION JRUSCH OGE FOR JLEY E.O. 12958: DECL: 09/26/2018 TAGS: PGOV PREL KCOR KCRM KFRD KJUS CH XB SUBJECT: FOURTH SESSION OF THE ANTICORRUPTION WORKING GROUP (ACWG) OF THE U.S.-CHINA JOINT LIAISON GROUP (JLG) FOR LAW ENFORCEMENT COOPERATION Classified By: Political Minister Counselor Aubrey Carlson for reasons 1.4 (B/D). Summary -------------- ¶1. (C) The Anticorruption Working Group (ACWG) of the U.S.-China Joint Liaison Group (JLG) for Law Enforcement Cooperation held its fourth session in Beijing and Nanjing September 16-18. Interagency participants from the United States and China discussed the Mutual Legal Assistance Agreement (MLAA) cooperation, implementation of the UN Convention against Corruption (UNCAC),and combating fraud in disaster zones such as New Orleans after Hurricane Katrina and Sichuan Province after the Wenchuan earthquake. The high-level participation from multiple sectors on the Chinese side reflects significant Chinese support for the ACWG, as well as for the JLG as a whole. End Summary. A "solid foundation" -------------- ¶2. (SBU) The respective delegations were led by David Luna, State Department Bureau of International Narcotics and Law Enforcement Affairs (INL) Anti-Crime Programs Division Director, and Wang Yongjun, Ministry of Supervision (MOS) Foreign Affairs Department Director General, while the sessions were attended by members of the U.S. Department of Justice, the U.S. Office of Government Ethics, the Department of Homeland Security and Embassy Beijing, and on the Chinese side by the Supreme People's Procuratorate, the Ministry of Foreign Affairs, the Ministry of Public Security and the Ministry of Justice. ¶3. (SBU) During the opening session, both Director Luna and DG Wang praised the work of the ACWG to date, expressed satisfaction at the "solid foundation" created over the past three years of cooperation and noted that the ACWG operated under principles of "mutual trust and respect." Both sides promised to continue their work and to uphold and advance the political commitment expressed by both President Bush and President Hu Jintao to combat corruption through increased U.S.-China law enforcement cooperation, formal exchanges and joint hosting of regional events. A "model" for cooperation -------------- ¶4. (SBU) Participants noted that the most successful example of cooperation was the recently concluded "Kaiping case" in which the defendants, former Bank of China's Kaiping branch managers and their wives, were convicted August 29 by a U.S. federal jury in Las Vegas on charges of racketeering, money laundering, international transportation of stolen property as well as passport and visa fraud. The convictions were due in large part to evidence provided by the PRC. The case required experts from four legal systems (those of China, the United Sates, Hong Kong Special Administrative Region (SAR) and Canada) to cooperate on evidence collection, and to establish pilot court proceedings involving video depositions. Thanks to this unprecedented cooperation, the case, which involved an elaborate scheme to defraud the Bank of China of at least $485 million, was handled swiftly and effectively. Many firsts -------------- ¶5. (SBU) Wang noted that the Kaiping case represented the first time China has pursued a case by implementing the U.S.-China Mutual Legal Assistance Agreement (MLAA). He added that China was especially pleased with the result because the case marked the first time stolen assets were returned to China. Embassy Beijing LegAtt pointed out that it was also the first time Chinese witnesses were sent to the United States in order to appear in a U.S. court, something U.S. officials deemed especially beneficial for the U.S. judicial proceedings. All agreed that this case was indeed a "model" for future cooperation. A priority for China -------------- ¶6. (SBU) Ministry of Supervision Vice Minister Yao Zengke, in his first-ever address to an American delegation, said that BEIJING 00003742 002 OF 003 the JLG is a "sparkling jewel" of Sino-U.S. legal cooperation, of which the ACWG is an integral part. He pointed out that despite differences in culture and tradition, the United States and China are able to cooperate effectively on law enforcement issues, and that this is the only way to combat corruption. In an aside with Luna during a dinner reception hosted by the Chinese delegation, Vice Minister Yao added that anticorruption is a core area of cooperation in the overall bilateral strategic dialogue. Sharing lessons on combating disaster-zone fraud -------------- --- ¶7. (SBU) The ACWG held a substantive discussion on fighting fraud in disaster zones. After presentations by Chinese officials from the Ministry of Supervision, the Ministry of Civil Affairs, and the National Audit Office on measures to combat fraud in the wake of the May 12 Wenchuan earthquake, DOJ Criminal Division Fraud Section Deputy Chief for Strategy and Policy Jonathan Rusch shared lessons learned and best practices from the Hurricane Katrina Fraud Task Force's efforts to reduce fraud in what has amounted to the largest domestic financial disbursement after a natural disaster in U.S. history. (NOTE: The Hurricane Katrina Fraud Task Force, established by former Attorney General Alberto Gonzales in September 2005, is an inter-agency body chaired by DOJ designed to deter, investigate and prosecute disaster-related federal crimes such as charity fraud and insurance fraud.) Both sides agreed to continue to share information on this issue and agreed that this was an important contribution to the legacy of the ACWG. UN Convention on Corruption -------------- ¶8. (SBU) In an update on China's efforts to implement the UN Convention against Corruption (UNCAC),MOS Department of Treaty and Law Deputy Director General Chen Yujiang said that China established the National Bureau for Corruption Prevention (NBCP) in May 2007 in order to meet its obligations under Article 6 of UNCAC. Reporting directly to the State Council, the NBCP is responsible for anticorruption program and policy formulation, preventive anticorruption measures and international cooperation. Chen added that China has created an inter-departmental coordinating agency involving 24 departments to research and analyze the gap between China's anticorruption laws and measures mandated by UNCAC. ¶9. (SBU) In response, Luna said that the United States welcomed China's input on the UNCAC Dozen proposal to implement a review mechanism for UNCAC, and that his colleagues are looking forward to working with China on this proposal at the Working Group meeting September 22-24 in Vienna. APEC Anticorruption Initiative -------------- ¶10. (SBU) In Nanjing, Luna and U.S. Office of Government Ethics Deputy Director Jane Ley met with Jiangsu Province Executive Vice Governor Zhao Kezhi, Communist Party of China (CPC) Municipal Deputy Secretary Chen Xiaoze, Director General of Jiangsu Province Supervision Department Xie Xiulan and Nanjing Municipal leaders to discuss the spring 2009 U.S.-China Asia Pacific Economic Cooperation (APEC) Symposium on the APEC Leaders' Anticorruption Initiative and the APEC Principles of Conduct for Public Officials, which APEC leaders adopted in Sydney in September 2007. The spring 2009 conference, to be held in Nanjing, will focus on issues related to conflict of interests, financial disclosures, codes of conduct, ethics education, and enforcement. ¶11. (SBU) The U.S. delegation was briefed on Jiangsu Province's efforts to combat corruption and promote transparency standards, including efforts on administrative reform and various innovative e-governance initiatives with the Construction Board Commission and latest technologies on surveillance systems for detecting fraud by Jiangsu Province Supervision Department. The United States and China agreed to showcase these innovative technologies by Jiangsu Province during the APEC Nanjing conference. The Nanjing commitment is a follow-up to the joint U.S.-China APEC Shanghai workshop in 2006 on prosecuting kleptocrats, denying safe haven, and recovering assets. BEIJING 00003742 003 OF 003 Comment -------------- ¶12. (C) The high-level participation from multiple sectors on the Chinese side, as well as the effective law enforcement cooperation on the Kaiping case, reflects significant Chinese support for the ACWG. Moreover, as the Chinese delegation reiterated several times that they "recognize the importance" of working on cases that are especially sensitive to the United States and of "achieving beneficial results," there also seems to be a willingness to continue this cooperation in the future. As such, it is clear that China is pleased with the ACWG's progress over the past three years, considers it a priority area for engagement and continues to attach importance to the JLG. ¶13. (U) Participants: UNITED STATES David Luna, Director, Department of State Bureau for International Narcotics and Law Enforcement Affairs Anticrime Program Division Jonathan Rusch, Deputy Chief for Strategy and Policy, U.S. Department of Justice Criminal Division Fraud Section Jane Ley, Deputy Director, U.S. Office of Government Ethics Amy Chang Lee, Resident Legal Advisor, U.S. Embassy Steve Hendershot, Legal Attache, U.S. Embassy James "Steve" Thomas, Attache, Department of Homeland Security, U.S. Embassy Brooke Spelman, Political Officer, U.S. Embassy Chen Jia, Legal Specialist, U.S. Embassy Vicky Segal, Interpreter CHINA Yao Zengke, Vice Minister, Ministry of Supervision Wang Tie, Director General, General Office, Ministry of Supervision; Deputy Director, Leading Group on Relief Supervision Wang Yongjun, Director General, Foreign Affairs Office, Ministry of Supervision Kong Xiangren, Deputy Director General, Foreign Affairs Office, Ministry of Supervision Cai Wei, Division Director, International Cooperation Division, Foreign Affairs Office, Ministry of Supervision Chen Yujiang, Deputy Director General, Department of Treaty and Law, Ministry of Supervision Ma Jianjun, Deputy Director General, Second Supervision Division, Ministry of Supervision Cui Yang, Central Administration on Commercial Bribery Li Aimin, Division Director, Anticorruption Bureau, Supreme People's Procuratorate Gao Shan, Deputy Director, National Corruption Prevention Bureau Chen Dong, Anticorruption and Bribery Bureau, Supreme People's Procuratorate Zhu Yong, Second Secretary, Treaty and Law Department, Ministry of Foreign Affairs Guo Ping, Deputy Division Director, Economic Criminal Investigation Bureau, Ministry of Public Security Zhang Xiaoming, Division Director, Judicial Assistance and Foreign Affairs Department, Ministry of Justice Wang Zhongxin, Director General, Department of Social Security, National Audit Office Li Baojun, Division Director, Department of Disaster Relief, Ministry of Civil Affairs Zhao Kezhi, Executive Vice Governor, Jiangsu Province Chen Xiaoze, Deputy Secretary, Communist Party of China (CPC) Nanjing Municipal Committee Xie Xiulan, Director General, Jiangsu Province Supervision Department ¶14. (U) INL Anticrime Programs Division Director David Luna cleared this message. RANDT