OMAN MOVING TOWARD FIU IMPLEMENTATION

C O N F I D E N T I A L MUSCAT 000267 SIPDIS SIPDIS STATE FOR NEA/ARP, EEB/TFS TREASURY FOR FINCEN AELBASHARI E.O. 12958: DECL: 04/07/2018 TAGS: EFIN ECON PREL PTER MU SUBJECT: OMAN MOVING TOWARD FIU IMPLEMENTATION REF: 07 MUSCAT 1092 Classified By: Ambassador Gary A. Grappo for Reasons 1.4 (b, d) ¶1. (SBU) On April 5, FINCEN Middle East Director Ahmed el-Bashari and Econoff met with Lt. Colonel Mohsin Awad al-Muqaddam, Director of the Financial Crimes Department, Royal Oman Police (ROP),to review Oman's progress in formally establishing a financial intelligence unit (FIU). Muqaddam noted that the government had just issued a decree creating an independent FIU, to be administratively attached to the ROP with a direct reporting line to its Inspector General of Operations. The FIU's budget, however, would be set directly by the Ministry of National Economy. Muqaddam envisioned that his unit would grow from 13 to 34 officers, and that its primary functions would be to analyze and investigate suspicious transaction reports from the financial community. He added that the officers would also have the authority to arrest individuals suspected of money laundering. ¶2. (C) Bashari remarked that the formal creation of a FIU was a positive step toward gaining Egmont Group membership. Bashari cautioned, however, that the Sultanate would need to expressly criminalize all acts of money laundering and terrorist financing before it could qualify for membership. He outlined additional steps that the FIU would need to take and offered to co-sponsor, along with Qatar, Oman's candidacy. Muqaddam replied that his government would welcome the U.S. and Qatar's support, and that it would implement its "Law to Combat Terrorist Financing," along with the law's executive regulations, "very soon." Muqaddam also pledged to review Egmont requirements with the ROP's Inspector General to ensure the highest level of support for admission. ¶3. (SBU) Bashari and Econoff also discussed Egmont Group membership, along with broader anti-money laundering monitoring initiatives, with Central Bank of Oman officials Malik al-Mahruqi, Banking Development Manager, and Mahran al-Barwani, Director of the Anti-Money Laundering Department. Mahruqi prefaced the conversation by affirming the Central Bank's full support for Egmont Group membership. He continued that the formal mechanism to create a FIU was embedded in Oman's proposed terrorism financing law, which he expected to be promulgated "by the end of the year." In voicing his support for the FIU, Mahruqi raised the importance of the organization being appropriately staffed to carry out its functions. ¶4. (C) Comment: The government appears to be closer to qualifying for Egmont Group membership, but the key element missing is implementation of a terrorism financing law. Given the speed at which the government promulgates legislation, however, it may take more time than envisioned by the ROP before Oman is eligible for Egmont status. End Comment. GRAPPO