MALDIVES: FIU WANTS AND NEEDS USG ASSISTANCE IN

C O N F I D E N T I A L COLOMBO 000572

TREASURY FOR DAS MCDONALD AND DAS GLAZER
STATE FOR SCA/INS, SCA/RA, EEB/TFS AND INL
NEW DELHI FOR LEGATT STEARMAN AND S/CT COORD MCCLELLAN

E.O. 12958: DECL: 06/06/2018
TAGS: EFIN PTER ETTC PREL MV
SUBJECT: MALDIVES: FIU WANTS AND NEEDS USG ASSISTANCE IN
COUNTERING TERRORIST FINANCING

REF: COLOMBO 54

Classified By: CDA James Moore, Reasons 1.4 (b)(d)


1. (SBU) Summary: Despite the lack of a developed Financial
Intelligence Unit (FIU),Maldives -- a moderate, pro-U.S.
Islamic state -- is taking steps to combat financial crimes
and enact legislation that will make it more difficult for
money launderers or terrorist financing networks to abuse
Maldives' financial system. Maldives desires, and would
benefit from, future U.S. engagement and training on
countering money-laundering and terrorism financing.
Maldives is not currently a major money laundering or
terrorism finance location, but it is vulnerable to
exploitation. A small dollar amount of technical assistance
will help ensure the country can protect itself from
financial crimes. End summary.

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Small But Competent Quasi-FIU Doing Well...
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2. (C) In 2005, the Maldives Monetary Authority (MMA),which
oversees the country's financial institutions, adopted
FATF-style regulatory provisions for banks' reporting of
large cash transactions and suspicious transactions by banks
under a general "Safety and Soundness" provision within its
Banking Law. A two-person financial intelligence "unit"
within the MMA administers the regulations. In the absence
of a developed FIU, this unit manages many of the same
responsibilities as a traditional FIU and has demonstrated
progress in identifying and combating financial crimes. It
also readily shares information concerning suspicious
transactions, despite the lack of a formal bilateral MLAT
with the United States or membership in the Egmont Group.


4. (U) An AML/CFT (Anti-Money Laundering/Countering
Financing of Terrorism) bill remains pending within the
Maldivian Majlis (parliament); however, it is expected to
pass before the end of 2008.

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...with USG Assistance, But Wants and Needs More
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5. (C) Between 2006 and spring 2008, Treasury's Office of
Technical Assistance (OTA) Resident Advisor in Colombo worked
closely with the MMA and other Maldives' agencies --
including the Attorney General's office, the Ministry of
Finance, and the Police -- to provide advice and training on
detecting and countering financial crimes. While these
meetings and ad-hoc training were fruitful, following a
change in the MMA Board of Director's in August 2007,
Maldives requested additional training and assistance from
OTA to help with the establishment of a formal FIU.
Unfortunately, Treasury had reprogrammed funding to other
projects. In early 2008, Treasury turned down several
requests for CFT (combating the financing of terrorism)
training from MMA and the Police due to a lack of funding.


6. (SBU) With the departure of post's OTA resident advisor
in early June 2008, Maldives will likely seek, and will
definitely need, greater assistance in CFT. Specifically,
needs include CFT analysis and investigative skills training.
Following passage of AMF/CFT legislation, Maldives will also
benefit from assistance to ensure rapid implementation of the
legislation by the MMA. Post recommends that, as funding
allows, Treasury and/or State provide robust assistance to
Maldives to enhance its domestic ability to combat money
laundering and combat terrorist financing.

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Assistance Now May Keep Terrorist Financing Out
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7. (C) COMMENT: While it appears that money launderers and
terrorist financiers have not yet tried to exploit Maldives'
immature financial system on a large scale, it is likely only
a matter of time before they do. A small dollar amount of
technical assistance, delivered one-on-one and through
regional training, has the strong prospect of making Maldives
financial authorities more capable of preventing such
exploitation. Post notes that Maldives has an excellent
track record of quickly and effectively applying the lessons
learned from USG technical assistance; Maldives officials are
exceptional, especially in this region, for their readiness
to implement the measures we recommend. For these reasons,
we urge Washington agencies to regards this message not
simply as a routine post request for more training, but as an
opportunity to have a formative impact on the AML/CFT
capabilities of a moderate Muslim country that has friendly
relations with the United States.

MOORE