BURKINA FASO: 2009-2010 INSCR PART II MONEY LAUNDERING AND

UNCLAS SECTION 01 OF 08 OUAGADOUGOU 001166

SIPDIS

SENSITIVE

DEPT PLEASE PASS TO INL, SCT, EEB, AND AF/W MICHAEL HACKETT
TREASURY FOR FINCEN
JUSTICE FOR AFMLS, OIA, AND OPDAT

E.O. 12958: N/A
TAGS: KCRM EFIN KTFN SNAR UV
SUBJECT: BURKINA FASO: 2009-2010 INSCR PART II MONEY LAUNDERING AND
FINANCIAL CRIMES

REF: STATE 114960


1. (U) Per reftel request, below is Part Two of the International
Narcotics Control Strategy Report concerning Money Laundering and
Financial Crimes.


2. (U) The following are the responses for Burkina Faso to the
2010
INCSR, Part II, Money Laundering and Financial Crimes (paragraph
numbers are keyed to REFTEL):
(Begin text)

GENERAL QUESTIONS
--------------


18. (U) Is the jurisdiction considered an important regional
financial center? What is its significance in terms of money
laundering?

Burkina Faso is not a regional financial center. It is not
perceived as a significant money laundering conduit.


19. (U) To the extent it is known, is money laundering/terrorist
financing primarily related to proceeds from illegal narcotics,
psychotropic substances, and chemical precursors?
(If applicable, specify drug.) If not, what is/are the major
source/s of the proceeds? Also, to the extent known, do the
criminal proceeds laundered in the jurisdiction derive primarily
from domestic or foreign criminal activity? Are the money laundering
proceeds controlled by drug-trafficking organizations, organized
crime, or terrorist groups operating locally? What is the extent
that public corruption contributes to money laundering/terrorist
financing in the host country? If applicable, please provide
examples.

No examples of corruption in the domain of drug trafficking have
been reported by GOBF officials, journalists or by any NGO.


20. (U) Is there a significant black market for smuggled goods in
the country? If so, is there evidence to suggest that it is
significantly funded by narcotic proceeds or other illicit proceeds?
Does contraband smuggling generate funds that are laundered through
the financial system?

Although the smuggling of goods does take place in Burkina Faso,
there is no evidence to suggest that large-scale money laundering is
linked to this activity.


21. (U) Does money laundering/terrorist financing occur in the
formal financial sector, within an offshore financial center or free
trade zone, or in the non-bank financial system (e.g. exchange
houses) or via alternative remittance systems, such as hawala,
hundi, or other systems? Please note if the country is experiencing
an overall increase or decrease in financial crimes.

Burkina Faso's economy is primarily cash-based; and most economic
activity takes place in the informal sector. Only an estimated six
percent of the
population has bank accounts. The country is serviced by a
traditional banking sector composed of 11 commercial banks and three
specialized credit institutions called, "Etablissements Financiers."
Banks include: the Banque Internationale pour le Commerce,
l'Industrie et l'Agriculture du Burkina Faso (BICIA-B),the Banque
Internationale du Burkina (BIB),the Societe Generale de Banques du
Burkina (SGBB),the Banque Commerciale du Burkina
(Arabo-Libyan),(BCB),the Banque Agricole et Commerciale du Burkina
(BACB),
Ecobank, Bank of Africa, and Banque Sahelo-Sahelienne pour
l'Investissement et le Commerce (BSIC),and Coris Banque
International, Banque Atlantique.

(22. (U) To the post's knowledge, do the jurisdiction's financial
institutions engage in currency transactions involving international
narcotics trafficking proceeds that include significant amounts of
U.S. currency or currency derived from illegal drug sales in the
United States or that otherwise significantly affect the United
States?

No.


23. (U) Is there any indication that trade-based money laundering
occurs in the post's jurisdiction?

There have been unsubstantiated reports of some foreign-owned

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businesses engaging in money laundering and narcotics trading.
Others have openly speculated about the source of money for the many
high end homes in the upscale development, Ouaga 2000.

President Blaise Compaore has publicly stated that the illegal
narcotics trade is one of the most serious national security threats
faced by Burkina Faso, although the problem is still small scale by
regional standards.

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OFFSHORE FINANCIAL CENTERS
--------------


24. (U) Is the country considered an offshore financial center?
There are no offshore banking institutions.


25. (U) Are offshore banks, international business companies, or
other forms of exempt or shell companies or trusts permitted?

N/A


26. (U) Please provide the number of offshore casinos or internet
gaming sites.

N/A


27. (U) Is there a separate regulatory agency for the offshore
sector, or is the offshore financial center regulated by the onshore
regulator?

N/A

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FREE TRADE ZONES (FTZs)
--------------


28. (U) Are there free trade zones operating in the jurisdiction?

There are no free trade zones in Burkina Faso.


29. (U) Is there any indication that these FTZs are being used in
trade-based money laundering schemes or by the financiers of
terrorism?

N/A


30. (U) What types of supervisory programs and/or due diligence
procedures are in place to monitor activities in the FTZ zone?

N/A

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LEGAL FOUNDATION OF AML REGIME
--------------


31. (U) What laws and regulations exist in relation to AML/CFT?
Is money laundering a criminal offense in this jurisdiction?
Does the law apply only to drug-related money laundering?
Does the jurisdiction list specific crimes as predicate offences or
take an "all serious crimes" approach? In some jurisdictions,
anti-money laundering laws are applicable to predicate offences
defined as "all serious crimes," crimes that carry a threshold
minimum sentence in the jurisdiction's penal code. If there is a
threshold minimum sentence, what is that threshold? If the country
has a "list" approach, what offenses are covered?

In 2000, the Economic Community of West African States (ECOWAS)
established the Intergovernmental Group for Action against Money
Laundering (GIABA),a Financial Action Task Force (FATF) style
regional body based in Dakar, Senegal. GIABA is charged with
promoting legislation against money laundering and coordinating the
activities of West African Economic and Monetary Union (WAEMU)
member countries.

Burkina Faso outlaws the use, possession, and selling of all forms
of drugs. There are also laws against corruption and money
laundering. Each of these laws is implicated in supporting
counter-drug efforts.
On May 3-5, 2009 the country participated to the 11th meeting of the
Technical Commission of the Intergovernmental Group of Action
against Money Laundry and Terrorism Funding in West Africa in
Bamako, Mali.
March 2003, WAEMU adopted a uniform law to combat money laundering
from a variety of sources and created Cellule Nationale de

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Traitement des
Informations Financieres(CENTIF). The six members of the CENTIF
were put in place October 1, 2009 for a term of three years with the
possibility to serve one additional term.
Regulation 17 article 55 of 2004 allows the government to
investigate any wealth without proof of legitimate origin.


32. (U) Has the country enacted secrecy laws that prevent disclosure
of client and ownership information by domestic and offshore
financial services companies to bank supervisors and law enforcement
authorities?

Burkina Faso has not enacted secrecy laws that prevent the
disclosure of client or ownership information.

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FINANCIAL SECTOR
--------------


33. (U) Are bearer shares permitted for banks and/or for
companies?

Post has not been able to determine whether bearer shares are
permitted or not.


34. (U) Which entities supervise and examine financial institutions
for compliance with AML/CFT laws and regulations? What is their
capacity to conduct compliance investigations (i.e. are they
adequately staffed and trained)?

CENTIF is empowered to investigate, demand documents, propose
reforms as needed to combat money laundering. It produces a report
annually on its activities.


35. (U) Are banks and other financial institutions required to know,
record, and report the identity of customers engaging in significant
transactions, including the recording of large currency transactions
at thresholds appropriate to the country's economic situation? What
is the statutory threshold?

Financial institutions are obligated to confirm the identity and
address of
their clients before they enter into any type of financial
transaction or open an account. Clients must present their original
national identity card and provide a current home and work address.

For those transactions amounting to more than 5,000,000 F CFA, all
parties to the transaction must be disclosed.


36. (U) Are banks and other financial institutions required to
maintain for an adequate time records necessary to reconstruct
significant transactions through financial institutions in order to
be able to respond quickly to information requests from appropriate
government authorities in narcotics-related or other money
laundering or terrorist finance cases? For how long?

Financial organizations must keep records of accounts for ten years.
They must be made available to judicial authorities, state agents
investigating possible wrong doing and the authorities of CENTIF.


37. (U) Do financial institutions report suspicious transactions?
Which ones? Is such reporting mandatory or voluntary? Is reporting
required for all suspicious transactions, or is there a threshold
amount below which suspicious transaction reports are not required?

The Central Bank of West African States (BCEAO),based in Dakar,
Senegal, is the Central Bank for countries in the West African
Economic and Monetary Union (WAEMU): Benin, Burkina Faso,
Guinea-Bissau, Cote d'Ivoire, Mali, Niger, Senegal, and Togo, all of
which use the French-backed CFA franc currency. The BCEAO requires
that all bank deposits over $13,500 in member countries must be
reported.

In March 2003, WAEMU adopted a uniform law to combat money
laundering from a variety of sources. The law imposes due diligence
obligations on financial institutions and directs them to report
suspicious transactions to the Cellule Nationale de Traitement des
Informations Financieres (CENTIF) of each WAEMU member state.


38. (U) Are reporting individuals protected by law with respect to
their cooperation with law enforcement entities?

Yes.


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INFORMAL FINANCIAL SECTOR AND NONFINANCIAL BUSINESSES AND
PROFESSIONS
--------------


39. (U) Are the AML/CFT controls as described in the preceeding 5
paragraphs applied to non-bank financial institutions (NBFIs) and
designated non-financial businesses and professions (DNFBPs),such
as exchange houses, stock brokerages, cash couriers, casinos,
dealers in jewels and precious metals, insurance companies, pawn
shops, realtors, high-worth dealers in art and vehicles, and to
intermediaries, such as lawyers, accountants, notaries, or
broker/dealers? Which are subject to the requirements to report
suspicious transactions and/or large transactions? Which entities
have actually filed such reports?

In late 1998, Burkina Faso adopted rule R #09, governing foreign
financial relations. Under this rule, banks and other financial
institutions are required to report all cash or bond payments of 5
million CFA (USD 10,000) or more and all operations in excess of 10
million CFA (USD 20,000). They must also verify the identity of
both the originator and recipient of these funds as well as details
of the operation involved in the transaction. Institutions must
keep records for 10 years following closure of an account or
finalization of a transaction.


-------------- ---
FINANCIAL INTELLIGENCE UNIT (FIU)/INVESTIGATIONS
-------------- ---

40 - 43, 45. (U)

CENTIF is an autonomous entity under the Ministry of Finance, funded
by the GOBF, UEMOA and various NGOs. It has yet to be voted on by
the National Assembly and the legal framework is not presently in
place although the six members of CENTIF have been identified.

It will have reciprocal agreements with financial institutions for
the exchange of information and must report suspicious transactions
to judicial authorities, the government, and to the BCEAO. CENTIF
draws on the expertise of the Customs Bureau, the Department of the
Treasury, the Ministry of Finance, the Department of Importation,
the Director of Central Administration, magistrates, the police, and
the BCEAO.


44. (SBU) How many suspicious transaction reports (STRs) were
received in 2009? How many were the subject of investigation or
resulted in referrals to law enforcement for investigation?

There are two cases pending judgment. One involves a national of
Niger who entered Burkina Faso with a large, unjustified sum of
money. The second involves a national of Burkina Faso who is not
able to justify the origin of some of his money.

CENTIF will be the organization that will track these types of cases
in the future and will be able to provide more complete reporting.

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ASSET FORFEITURE AND SEIZURE LEGISLATION
--------------


46. (U) Have there been arrests, prosecutions, and convictions for
money laundering or terrorist financing since January 1, 2009? How
many? Please report highlights of any major cases not previously
reported.

No.


47. (U) The seizure and forfeiture of assets (including but not
limited to bank accounts, other financial assets, airplanes, autos,
residences, other
property) derived from international drug trade, money laundering,
terrorist financing or other serious crimes can be important
elements in efforts to control drug trafficking, money laundering,
terrorist financing and organized crime activity. Has the country
enacted laws and established systems for identifying, tracing,
freezing, seizing, and forfeiting narcotics-related assets as well
as assets derived from, or intended for, terrorist financing and
other serious crimes? If so, please describe the authority
(regulatory or judicial). Are new legislation or changes in current
laws, regulations, judicial or administrative authorities being
considered?


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The primary piece of legislation outlawing drugs is law number 017,
voted into existence in 1999 by the National Assembly. According to
this law, all types and quantities of drugs are illegal with the
exception of medical prescriptions. Sentencing of offenders depends
on the type and the quantity of the drug found in possession, on
whether the offender is believed to be dealer, a consumer or a
producer, and on the number of similar charges on the offender's
record.

To combat drug trafficking, the Government of Burkina Faso (GOBF)
has created the Inter-Ministerial National Committee against Drugs
(NCAD),which is directed by the Ministry of Security and includes
representatives from 24 of the 34 ministries. NCAD is a member of
both the United Nations Drug Committee(UNDC)and the African Union
Drug Committee. There are currently plans underway to link this
committee directly to the Prime Ministry, allowing it an even
greater source of financial resources.


48. (U) What are the obstacles or disincentives to enacting such
laws, regulations, other authorities?

Burkina Faso has a very low capacity to conduct investigations due a
significant lack of equipment and training.
- According to Police Commissary Adama Ouedraogo from the NCAD,
Burkina Faso is a transit-country because of:
--the porosity of its borders
--the difficulty and lack resources necessary to police the
borders,
--the very low capabilities of Ouagadougou International Airport to
detect drugs.


49. (U) What are the major provisions in current and/or proposed
legislation? For example, what assets can be seized? Do they
include: instruments of crime such as conveyances used to transport
narcotics, property on which illicit crops are grown or are used to
support terrorist activity, or intangible property such as bank
accounts? Can substitute assets be seized or must a relationship to
the crime be proven? Can legitimate businesses be seized if used to
launder drug money, support terrorist activity, or are otherwise
related to other criminal proceeds?

In late 2006, the GOBF adopted #026-2006/AN, an anti-money
laundering law, which provides an effective mechanism to combat
financial crimes. This Anti-Money Laundering/Counter-Terrorism
Finance (AML/CTF) legislation states that "it is illegal to
transform, conceal, or acquire any goods or funds that result from
participation in a criminal action."

According to #026-2006/AN, AML/CTF controls are applicable to all
individuals and entities involved in the deposit, exchange,
conversion or movement of funds. The law specifically includes the
following entities: the Treasury, BCEAO, all financial
organizations, the national lottery, members of the judicial
profession who counsel clients on the purchase or sale of goods,
commercial enterprises, real estate agents, merchants selling high
value items, fund transporters, casino owners, travel agents and
non-governmental organizations (NGOs). Banks and financial
institutions are also required to implement programs to centralize
client records, train employees on the identification of suspicious
transactions, and establish internal controls to prevent money
laundering.


50. (U) What government entities are responsible for tracing,
seizing assets and freezing assets? Is there a period of time
ascribed to the action of freezing, after which the assets are
released? Are frozen assets confiscated? If yes, by what
government entity? Is there an asset forfeiture fund? What
entity/s receive/s proceeds from asset seizures and forfeitures?
Which agencies manage and have reqponsibility for seized assets?
What is their capacity to manage seized assets?

026-2006/AN also gives the investigating magistrate authority to
order the seizure of assets relating to money laundering and
terrorist financing. Individuals convicted of attempted or actual
money laundering activities face prison sentences of three to seven
years, mandatory confiscation of their merchandise, and fines triple
the amount of the goods or money that was laundered. AML/CTF
legislation calls for the protection of all individuals who
cooperate with law enforcement entities on money laundering or
terrorism issues.


51. (U) Does the banking community cooperate with enforcement
efforts to trace funds and seize/freeze bank accounts?


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WAEMU has a directive on combatting money laundering. According to
this directive, all the banks in Burkina and the other WAEMU member
countries should declare any suspect operation to the CENTIFs which
exist in each country. If a decision of seizing or freezing
accounts is taken, banks should implement it.


52. (U) Does the law allow for civil as well as criminal
forfeiture?

Yes.


53. (U) Does the government enforce existing asset seizure and
forfeiture laws? Does the jurisdiction have adequate police
powers and resources to trace, seize and freeze assets? If
so, can the jurisdiction freeze assets without undue delay?

The police have a special unit dedicated to countering drug
trafficking, although this unit is not well trained or well
equipped. The police, the gendarmerie, and the forest guards,
especially those working at borders, receive training from the NCAD.
Additionally, lawyers working for the NCAD receive training on
Burkina Faso's drug laws.


54. (U) Does the government have an independent national system and
mechanism for freezing terrorist assets?

BCEAO and WAEMU have this authority.


55. (U) What was the dollar amount of narcotics--related,
terrorist-related and other criminal-related assets frozen,
seized, and/or forfeited in the past year? How does this
amount compare to amounts seized/forfeited/frozen in previous
years?

For the first six months of 2009 law enforcement officials seized:

--619,877 Kg of cannabis
--1,235 Kg of cocaine
--0,285 Kg of heroine
--Illegal medical 4,400 tons



56. (U) Has the country enacted laws for the sharing of seized
assets with other governments? Is the government engaged in
bilateral or multilateral negotiations with other governments to
enhance asset tracing, freezing and seizure?

No.

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TERRORIST FINANCING
--------------


57. (U) Has the jurisdiction criminalized the financing of terrorism
as required by the UN International Convention for the Suppression
of the Financing of Terrorism and UN Security Council Resolution
1373? If so, please provide title of act, date of enactment, and
pertinent details. If the jurisdiction has an "all serious crimes"
anti-money laundering law, please indicate if terrorism and
terrorist financing are considered serious crimes. If the country
has listed the predicate offenses for money laundering, please
indicate if terrorism and terrorist financing are on the list.

In January 2006, GIABA's mandate was revised to fully incorporate
the imperative to fight terrorism financing.

In June 2007, the GOBF established the Cellule Nationale de
Traitement des Informations Financihres (CENTIF),which is
responsible for detecting and investigating financial crimes,
including money laundering and terrorist finance. CENTIF is an
autonomous entity under the Ministry of Finance, funded by the GOBF,
UEMOA and various NGOs. It has reciprocal agreements with financial
institutions for the exchange of information and must report
suspicious transactions to judicial authorities, the government, and
to the BCEAO. CENTIF draws on the expertise of the Customs Bureau,
the Department of the Treasury, the Ministry of Finance, the
Department of Importation, the Director of Central Administration,
magistrates, the police, and the BCEAO.


58. (U) Has the jurisdiction circulated to its financial
institutions the list of individuals and entities that have been
included on the UN 1267 sanctions committee's consolidated list as
being linked to Usama bin Ladin, members
of the Al Qa'ida organization or the Taliban? Does the jurisdiction

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circulate the list of terrorist organizations/financiers that the
USG or the European Union (EU) have designated under relevant
authorities? Did the jurisdiction identify, freeze, seize, and/or
forfeit related assets in 2009? If so, please provide dollar
amount.

June 2003, WAEMU issued a directive which provided a legal basis for
governments to implement the asset freeze proisions of UNSCR 1373.
It also directed member govrnments to circulate the names of
suspected terrrists and terrorist organizations on the UNSCR 1267
Sanctions Committee's onsolidated List to all financial
institutions.


59. (U) Does the jurisdiction acknowledge the exstence and use of
value transfer systems outsidethe formal financal system? Describe
the steps he jurisdiction has taken regarding regulating
alernative remittance systems, such as hawala or huni; the
exploitation thereof, including blackmarket exchanges; money
remitters; trade-based money laundering; cross-border cash
smuggling; or the misuse of precious metals and stones.

Because the country's borders tend to be largely unregulated,
illegal narcotics operations and black market currency exchanges
could easily flow in an unregulated manner in and out of the country
and from one country to another within the region.


60. (U) Discuss the efforts the jurisdiction has taken to thwart
the misuse of charitable and or non-profit entities that can
be used as conduits for the financing of terrorism. For
example, is there a government entity that regulates or
supervises the sector? If so, please name the entity. Does it
monitor the sector for potential terrorist financing abuse?
How are overseas financial transactions monitored to prevent
potential terrorist financing?

None at this time.

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CROSS-BORDER TRANSPORTATION OF CURRENCY AND NEGOTIABLE
INSTRUMENTS


61. (U) Are there statutory requirements for limiting or
monitoring the cross-border transportation of currency and
monetary instruments? If so, please describe cross-border
currency reporting requirements for both inbound and outbound
currency, including those that apply to cash couriers,
including the monetary threshold that would require a report
to be filed. Are mandatory declaration forms used at border
crossings?

One should make declaration if the amount exceeds CFAF 5 million.


62. (U) Are cash declaration or smuggling reports entered into a
database? Is such data shared between host government
agencies, in particular with an existing FIU?

No.

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INTERNATIONAL COOPERATION
--------------


63. (U) Has the country adopted laws or regulations that allow
for the exchange of records with the United States on
investigations and proceedings related to narcotics,
all-source money laundering, terrorism and terrorist
financing? Has the jurisdiction reached agreement with the
United States authorities on a mechanism for exchange of
records in connection with such investigations and
proceedings? If not, is the country negotiating in good
faith with the United States to establish such an exchange
mechanism? Does the jurisdiction have similar arrangements
with other jurisdictions?

No.


64. (U) Identify all treaties, agreements, or other mechanisms
for information exchange that the host country has entered
into with the USG or other countries, including agreements
between the FIU and its counterparts, as well as membership
in the Egmont group, and those with home country supervisors
to facilitate the exchange of supervisory information
regarding banks and trust companies operating in the host
country. Describe the status of efforts to update such

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agreements or arrangements.

See references to BCEAO and WAEMU.


65. (U) Has the country cooperated, when requested, with
appropriate USG law enforcement agencies and other
governments investigating financial crimes related to
narcotics, terrorism, terrorist financing and other crimes?
If the country has cooperated on important cases with USG
agencies, please describe.

In August, 2009, the embassy relayed, under cover of diplomatic
note, an official request for assistance related to a Department of
Justice narcotics trafficking investigation. The note requested
that the government of Burkina Faso investigate and verify
information presented in the case, which involved the seizure of
nearly $300,000 from a Burkinabe national for suspected trafficking.
The Ministry of Security completed its investigation and returned
the gathered information, complete and as requested, to the embassy
in November 2009.

66. (U) Please detail any instances of refusals to cooperate with
foreign governments, as well as any actions taken by the USG
and any international organization to address such obstacles,
including the imposition of sanctions or penalties.

None.


67. (U) Is the country a party to the UN International Convention
against Illicit Traffic in Narcotic Drugs and Psychotropic
Substances (Vienna Convention),the UN Convention Against
Transnational Organized Crime (Palermo Convention),the UN
Convention Against Corruption, and the UN International
Convention for the Suppression of the Financing of Terrorism
or other applicable agreements and conventions? If the
country ratified or acceded to these conventions in 2009,
please provide the date of ratification/accession.

Burkina Faso has signed the following multi-lateral agreements: the
United Nations Protocol against the Illicit Manufacturing and
Trafficking in Firearms, Their Parts and Components and Ammunition,
supplementing the United Nations Convention against Transnational
Organized Crime (entered into force March 2005); the United Nations
Convention Against Transnational Organized Crime (entered into
force
September 2003); United Nations Convention against Illicit Traffic
in Narcotic Drugs and Psychotropic Substances (entered into force
November 1990). Burkina Faso is also a party to the UN
International
Convention for the Suppression of the Financing of Terrorism.


68. (U) Does the country adhere to relevant international money
laundering standards, such as the recommendations of the
Financial Action Task Force (FATF)? If so, what steps is it
taking to implement the standards? Is it a member of any
FATF-style regional body? If not, what, if any, steps is the
country taking to become a member of a body or to implement
AML/CFT measures?

Key challenges faced by Burkina Faso in the fight against money
laundering, illegal narcotics and terrorism finance include:
ineffective regional cooperation, ineffective capital controls for
cross border transactions, regional corruption, lack of resources,
and weak and overburdened judicial and law enforcement systems.(End
text)


3. (U) Embassy Ouagadougou's point of contact for inquiries is
Economic Officer Sarah Gourde (gourdesm@state.gov). Backup POC is
Economic Commercial Assistant, Francois Cabore
(caborefh@state.gov).

HANKINS