TERROR FINANCE: DESPITE GOK CONFIRMATION UN 1267

C O N F I D E N T I A L SECTION 01 OF 02 KUWAIT 000476 SIPDIS SIPDIS STATE FOR NEA/ARP, EEB/ESC/TFS; TREASURY FOR KRISTEN HECHT E.O. 12958: DECL: 04/29/2018 TAGS: EFIN KU KTFN PGOV PREL PTER SUBJECT: TERROR FINANCE: DESPITE GOK CONFIRMATION UN 1267 DESIGNEE ASSETS REMAIN UNFROZEN REF: A. A. 06 KUWAIT 4637 ¶B. B. KUWAIT 79 ¶C. C. KUWAIT 90 ¶D. D. KUWAIT 97 ¶E. E. KUWAIT 98 ¶F. F. STATE 7443 ¶G. G. KUWAIT 0227 ¶H. H. KUWAIT 218 ¶I. I. STATE 192459 Classified By: Classified By: Ambassador Jones for reasons 1.4 (b) and (d) ¶1. (C) Summary and Comment: Despite assurances by MFA officials in March, contacts at the Central Bank of KUWAIT (CBK) and KUWAIT Finance House (KFH) continue to tell us they are unaware of any official instruction to freeze the assets of the three recently designated Kuwaiti terrorist facilitators. A CBK contact added he was unaware of any action being taken by the CBK to freeze the accounts. Moreover, on April 29, a Kuwaiti High Court ordered KFH, a private Islamic bank where all three terrorist facilitators maintain accounts, to reactivate the bank account of one of the facilitators, Mubarak Al-Bathali, and pay KD 500 (USD 1,880) in compensation for the loss of his salary. This ruling may further delay the process by CBK to notify KFH to freeze the accounts of the individuals. We will continue to press the GOK to fully comply with its UNSCR 1267 obligations, including in upcoming calls by the Ambassador with senior GOK and bank officials. End Summary and Comment. ¶2. (C) On April 29 Econoff spoke with MFA Second Secretary for Follow-up and Coordination Abdullah SIPDIS Al-Mailem for an update on the GOK's purported earlier instruction that the Central Bank of KUWAIT freeze the assets of the three terrorist facilitators, Hamed Al-Ali, Jaber Al-Jalahmah and Mubarak Al-Bathali, designated by the UN 1267 Committee in January 2008. Al-Mailem reiterated that the MFA forwarded an official instruction to CBK in early and again in late March requesting that the assets of the three Kuwaitis be frozen pursuant to UNSCR 1267. Al-Mailem suggested that Econoff verify the status of the request with Talal Alsayegh, Deputy Manager of CBK's On-site Supervision Department. ¶3. (C) Econoff contacted Alsayegh on April 30. Alsayegh stated that he had been out of the office for several weeks and had no current information as to whether CBK had received official notification from the MFA. He was unsure if CBK had instructed KFH to freeze the three accounts. Alsayegh promised to look into the matter and report back to Econoff. ¶4. (C) Econoff also spoke with KFH Director of AML/CTF Medhat Al-Kharashi on April 30 (Note: KFH voluntarily froze the accounts of the three individuals following their USG domestic designation in December 2006, but the GOK subsequently ordered KFH to allow the individuals full access to their government salaries deposited with KFH. Pursuant to KFH freezing his account in November 2007, Al-Bathali sued KFH for "unlawfully" freezing his assets. End Note). Al-Kharashi said KFH still had not received any official notification from CBK since the designation of the three Kuwaitis by the UNSCR 1267 Committee on January 16. He stated that KFH has been expecting to receive a Diplomatic Note from the MFA requesting that the accounts of the three individuals be frozen in compliance with UNSCR 1267. He noted that Al-Bathali de-activated (but did not close) his account with KFH in November 2007 to protest KFH's decision to disallow him to conduct bank business. Al-Kharashi also stated that the bank would most likely agree to pay the KD 500 in compensation to Al-Bathali, which would then allow the bank to be free and clear of any dealings with him. ********************************************* * For more reporting from Embassy Kuwait, visit: http://www.state.sgov.gov/p/nea/kuwait/?cable s Visit Kuwait's Classified Website: KUWAIT 00000476 002 OF 002 http://www.state.sgov.gov/p/nea/kuwait/ ********************************************* * ********************************************* * For more reporting from Embassy Kuwait, visit: http://www.state.sgov.gov/p/nea/kuwait/?cable s Visit Kuwait's Classified Website: http://www.state.sgov.gov/p/nea/kuwait/ ********************************************* * Jones