TERROR FINANCE: GOK PROGRESS IN CHARITY OVERSIGHT

C O N F I D E N T I A L SECTION 01 OF 02 KUWAIT 000434 SIPDIS STATE FOR NEA/ARP, EB/ESC/TFS; TREASURY FOR KRISTEN HECHT, DANNY HARRIS E.O. 12958: DECL: 04/14/2020 TAGS: ECON KU PGOV PREL PTER KTFN SUBJECT: TERROR FINANCE: GOK PROGRESS IN CHARITY OVERSIGHT Classified By: DCM Alan Misenheimer for reasons 1.4 (b) and (d) ¶1. (C) SUMMARY: Members of Kuwait's charity oversight committee from the Ministries of Awqaf, Foreign Affairs and Social Affairs met with Econcouns and Econoff to discuss GOK efforts to strengthen oversight of Kuwaiti charity organizations over the last four years. These included ending direct cash donations, increased monitoring and supervision of mosques and charitable organizations by a follow-up team during Ramadan, and enforcement of regulations implemented by the joint MOSAL-Charities committee. Econcouns underscored the GOK's responsibility to not only monitor its charities domestically, but their overseas branches as well. Ambassador Maqamis asserted that all Kuwaiti branches are regulated by MOSAL and if the host government identifies a problem with an overseas branch, that government has the responsibility to notify the GoK. He added that the GoK can and will shut down branches or limit the work they can do if they are found to be involved in any illegal activities or supporting terrorist activities. End Summary. Monitoring and Tracking Donations -------------- ¶2. (C) In a combined meeting between Ambassador Khalid Al-Maqamis, Head of Follow-up and Coordination Department, Ministry of Foreign Affairs, Nasser Al-Ammar, Director of the Charities and Philanthropic Department, Ministry of Social Affairs and Labor, and Kredi Al-Dousari, Representative for the Ministry of Awqaf and Islamic Affairs, Ammar explained the process by which the GoK monitors and tracks the in-flow of donations collected by GoK approved charitable organizations. (Note: In 2005, MOSAL initiated a project prohibiting the collection of cash donations, as part of the GoK's efforts to improve its monitoring of the flow of donations collected by GoK approved charitable organizations. End note.) ¶3. (C) In order to better control the fund-raising, all donations must be made at GOK-approved charitable organization headquarters in accordance with the following guidelines 1) cash donations are authorized only during the month of Ramadan in exchange for documented stamped vouchers provided to GOK-approved charitable organizations; 2) at all other times, donations can only be made through electronic bank transfer; 3) charities that want to collect cash donations during Ramadan must submit an official request through MOSAL before the start of Ramadan; 4) MOSAL inspects charities' financial records at the end of the fiscal year; 5) a follow-up team from MOSAL monitors and supervises the activities of the authorized charitable organizations to ensure that the regulations and instructions are adhered to; 6) a joint committee for charitable works, comprised of officials from the Ministries of Commerce and Industry, Interior, Information and the Kuwait Municipality monitors and regulates charity work in Kuwait and reports any violations to MOSAL. Al-Ammar stressed that MOSAL and MOI work closely together throughout the year to find and report any illegal collection of funds and noted that this year no violations had been observed and only a few minor violations reported in 2007. He insisted that MOSAL, MOI and MFA take fundraising violations seriously and investigate appropriately. ¶4. (C) Al-Ammar explained how MOSAL and MFA track the transfer of money to beneficiaries. He said that all charities are required to provide MOSAL a report of donations collected 30 days after designated collection dates and to provide a statement of beneficiaries after funds are disbursed. All money must be transferred through authorized banks approved by the Central Bank of Kuwait (CBK). CBK is responsible for tracking all funds transferred by the charitable organization and MOSAL is responsible for informing the legal department of the Ministry of Foreign Affairs when funds are transferred overseas. In turn MFA follows up on the flow of money out of the country. Ambassador Al-Maqamis added that the MFA acts as the link between the local charities and the foreign governments by monitoring the distribution of donations abroad through its embassies and consulates and takes into consideration any recommendations from its embassies abroad. ¶5. (C) Econcouns said it was clear the government monitored its charities domestically, but underscored the GOK's responsibility to also monitor its overseas branches in order to prevent divisions and protect Kuwait's reputation and the reputation of its charities. He asked Al-Maqamis if he was KUWAIT 00000434 002 OF 002 aware of the GoB's recent decision to deport a Sudanese who was said to be the former head of the Bangladeshi Branch of the Kuwait-based Revival of Islamic Heritage Society (RIHS). Al-Maqamis heatedly said that the GoB had not talked to the GoK about this issue. He argued that if the host government does identify a problem it bears the responsibility to coordinate with the GoK. He added that the GoK can and will shut down branches or limit the work they can do if they are found to be involved in illegal activities. He rhetorically asked whether the USG had any evidence of wrongdoing or was just working from newspaper reports. Controlling Mosque Donations -------------- ¶6. (C) Kreedi Al-Dousari, Representative of the Ministry of Awqaf and Islamic Affairs explained how the GoK monitors mosques. He said that cash collection boxes have been prohibited since 2005 and fund raising is prohibited in mosques. All mosques are monitored by the local Imam clergy and regulated through MOSAL. There are 1200 Imams employed by the GoK and during Ramadan an inspection team is assigned by MOSAL to observe the mosques' operations. According to Dousari, the mosques do not take cash contributions even to subsidize the daily Ramadan fast breaking. Contributors either provide food directly or coordinate with the mosque, charitable societies, or local restaurants to make the food available to the mosques. Localizing Charitable Donations -------------- ¶7. (U) Al-Ammar told Econcouns that there are 10 charities authorized by the GoK. He stated that the bulk of the funds collected are disbursed within Kuwait, although he was unable to provide statistics at the meeting. He also noted that most of the charities focused their efforts inside Kuwait, highlighting two that were totally domestically focused. ¶8. (U) The Al-Takaful Society for Solidarity of Prisoners provides funds to support the families of prisoners and the Bahaier Al-Khair Society focuses on rehabilitation of former drug users. In response to Econcoun's question about the apparent proliferation of charities in Kuwait, far beyond the ten official charities, Ammar explained that branch offices had previously not been clearly identified as part of the parent charity. In addition, he explained that there were 65 "Mabara," which were family run charitable trusts (i.e., modern versions of "Waqf" or charitable endowments) Ammar stated that the Mabara were also regulated by MOSAL. (Note: According to subsequent press reports, MOSAL is planning to suspend licenses for 13 of the Mabara for unidentified rules violations. End note.) ¶9. (C) Comment: While the GoK has clearly shown progress in its efforts to strengthen oversight of charities both domestically and abroad, post believes that there remain areas in which the GoK can further improve. It would appear that there might be an opportunity for a sharing of "best practices" between the GoK and other charities' regulators, whether in the U.S. or elsewhere. Given the ongoing disagreements over the U.S. domestically designated RIHS, it might be more effective if another country takes the lead in this discussion. In addition, if the USG has specific and credible information we can provide regarding misuse of Kuwaiti charities, our chances of successfully engaging the GoK to address the issue will be enhanced commensurately. End Comment. ********************************************* ********* For more reporting from Embassy Kuwait, visit: visit Kuwait's Classified Website at: http://www.intelink.sgov.gov/wiki/Portal:Kuwa it ********************************************* ********* JONES