Identifier
Created
Classification
Origin
09PRAIA262
2009-12-07 18:41:00
UNCLASSIFIED
Embassy Praia
Cable title:
CAPE VERDE 2009-2010 INTERNATIONAL NARCOTICS CONTROL
how-toUNCLASSIFIEDÂ Â Â PRAIAÂ Â Â 00000262 VZCZCXRO9724 RR RUEHPA DE RUEHPA #0262/01 3411841 ZNR UUUUU ZZH R 071841Z DEC 09 FM AMEMBASSY PRAIA TO RUEHC/SECSTATE WASHDC 1890 INFO RUEHDK/AMEMBASSY DAKAR 0646 RUEATRS/DEPT OF TREASURY WASHINGTON DC RHMFIUU/DEPT OF JUSTICE WASHINGTON DC RUEHPA/AMEMBASSY PRAIA 2804
UNCLAS SECTION 01 OF 05 PRAIA 000262
SIPDIS
INL,SCT, EEB, JUSTICE FOR AFMLS, OIA, OPDAT, TREASURY FOR FINCEN
E.O. 12958: N/A
TAGS: KCRM EFIN PTER SNAR ECON
SUBJECT: CAPE VERDE 2009-2010 INTERNATIONAL NARCOTICS CONTROL
STRATEGY REPORT (INCSR PART II)
REF: STATE 114960
The following is the draft submission for Cape Verde in the 2009
International Narcotics Control Strategy Report (INCSR PART II).
This message answers questions 18-69 per reftel. Please direct
additional questions to DCM Dana Brown at browndml@state.gov
--------------
GENERAL QUESTIONS
--------------
18. Cape Verde is not considered an important regional financial
center. It is not significant in terms of money laundering.
19. Money laundering in Cape Verde is primarily related to the
proceeds from illegal narcotics trafficking, especially cocaine,
and the narcotraffickers themselves use the laundered money.
Public corruption is very limited and does not contribute to
money laundering/terrorist financing in Cape Verde.
20. There is no significant black market for smuggled goods.
Contraband smuggling is not a significant problem.
21. The formal financial sector may be involved in money
laundering, but there is no evidence that it finances terrorism.
There has been no significant increase in financial crimes in
Cape Verde.
22. To the best of our knowledge, Cape Verde's financial
institutions do not engage in currency transactions involving
international narcotics trafficking proceeds that (1) include
significant amounts of U.S. currency; (2) currency derived from
illegal drug sales in the United States or; (3) otherwise
significantly affect the United States.
23. There is trade-based money laundering activity in Cape Verde
(example: Last seizures in October included a boutique, and
commercial buildings in Praia.)
--------------
OFFSHORE FINANCIAL CENTERS
--------------
24. Cape Verde is not considered an offshore financial center.
25. Offshore banks, international business companies, other
forms of exempt and trusts are permitted. Shell companies are
not permitted.
a. The country licenses offshore banks and businesses and
adequately performs background checks on applicants for banking
and business licenses in its offshore sector. Physical presence
is required.
b. There are ten offshore banks; and two insurance companies
c. Anonymous nominee directors and/or trustees are not allowed.
26. There are no casinos in the country. If a casino wanted to
open, the government would license and regulate the operation.
27. The offshore financial sector is regulated by the onshore
regulator. Regulations governing offshore banks and businesses
do not differ in any key respect from regulations governing
domestic banks and businesses. Both offshore and onshore
financial institutions are required to perform due diligence on
customers and to file suspicious activity reports.
--------------
FREE TRADE ZONES (FTZs)
--------------
28. Currently there are no free trade zones operating in the
jurisdiction.
29. N/A
30. N/A
--------------
LEGAL FOUNDATION OF AML REGIME
--------------
31. Money laundering is a criminal offense in Cape Verde. The
law, enacted in 2002, was amended in April 2009. It
criminalizes (1) converting or transferring proceeds from
criminal activity, with the intent of hiding their illegal
origin or of hindering their confiscation; (2) hiding the
nature, location, or origin of the proceeds of criminal
activity; (3) receiving proceeds of criminal activity. The law
applies with equal force regardless of whether the underlying
criminal activity giving rise to the laundered proceeds was
committed in Cape Verde or abroad. The law punishes the above
acts with 4 to 12 years' imprisonment. Those aiding and
abetting such crimes are subject to the same penalties. The
minimum and maximum sentences are increased by 50%, however, in
cases involving organized crime, narcotrafficking, terrorism,
and/or trafficking in persons, weapons, or explosives.
32. Cape Verde has not enacted secrecy laws that prohibit
disclosure of client and ownership information by domestic and
offshore financial services companies to bank supervisors and
law enforcement authorities.
--------------
FINANCIAL SECTOR
--------------
33. Bearer securities are not permitted for banks and/or for
companies.
34. The Central Bank supervises and examines financial
institutions for compliance with AML/CFT laws and regulations.
The institution regularly trains its staff.
35. Banks and other financial institutions are required to
determine, record, and report the identity of customers engaging
in significant financial transactions, including the recording
of large currency transactions at thresholds appropriate to the
country's economic situation. Passengers entering or exiting
the country may carry up to one million Cape Verde Escudos (CVE)
(approximately equivalent to 13,900 USD) without declaring the
currency to customs.
36. Banks and other financial institutions are required to
maintain records necessary to reconstruct significant
transactions through financial institutions for a five-year
period following the relevant transaction(s).
37. Financial institutions are required to report all suspicious
transactions.
38. The law also extends the safeguards of Cape Verde's witness
protection law to individuals filing reports of suspicious
transactions with respect to their cooperation with law
enforcement entities.
-------------- --------------
INFORMAL FINANCIAL SECTOR AND NONFINANCIAL BUSINESSES AND
PROFESSIONS
-------------- --------------
39. The AML/CFT controls are applied to non-bank financial
institutions (NBFIs) and to 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). All
of the above are required to report suspicious and/or large
financial transactions. Nonetheless, to date only banks and
exchange houses have reported suspicious transactions.
-------------- ---
FINANCIAL INTELLIGENCE UNIT (FIU)/INVESTIGATIONS
-------------- ---
40. Cape Verdean law number 1/08 of January 14, 2008 provides
for the establishment and funding of a financial intelligence
unit (FIU).
41. The country created FIU in January 14, 2008, and it started
to function in February 2009. It is operational, but still not
adequately staffed. Although the law provides for its budgetary
and operational independence, in practice it is dependent from
the Central Bank. It is housed within the Central Bank's
headquarters.
42. FIU was created as an administrative body with the function
of collecting, centralizing, treating and analyzing information
related to money laundering. It is composed of one element from
each of the following entities: the Central Bank (coordinator),
the Ministry of Justice, the Ministry of Internal
Administration, the Attorney General's Office, and the Judiciary
Police. The FIU performs analytical duties, and has no criminal
investigative and/or regulatory responsibilities.
43. The FIU has access to the records or databases of other
government entities and financial institutions. It has formal
mechanisms in place to share information domestically and
internationally.
44. There have been 21 suspicious transaction reports (STRs) as
of December 1, 2009. Only three out of 21 were the subject of
investigation, but all three resulted in referrals to State
Prosecutor for action.
45. The Judiciary Police are responsible for investigating
financial crimes, including money laundering and terrorist
financing. As of December 2009, they are staffing and training
additional personnel.
--------------
ASSET FORFEITURE AND SEIZURE LEGISLATION
--------------
46. In October 2009, five persons were convicted and sentenced
to 23 to 25 years of imprisonment for drug trafficking,
organized crime, and money laundering activities. During the
first semester of 2009, Cape Verdean authorities seized 407.8
million CVE, equivalent to 5.6 million dollars worth of assets
in connection with these convictions. Final statistics for 2009
are not yet available.
47. The money laundering law enacted in 2002, as amended in
2009, establishes systems for the identification, freezing, and
seizure of narcotics-related assets.
48. The problems are related to financial constraint of the
country due to budgetary limitations.
49. The 2002 money laundering legislation, as amended in April
2009, broadens the scope of assets subject to seizure to include
all assets that authorities reasonably believe have derived from
money laundering activities. Authorities may only seize such
assets, however, if they can prove a relationship between the
assets and a specific crime. Legitimate businesses can also be
seized if they are being used to launder drug money, support
terrorist activity, or are otherwise related to criminal
activity.
50. The Judiciary Police and courts are responsible for tracing,
seizing, and freezing assets. Authorities may only freeze
assets for five months, although the Judiciary Police has the
power to confiscate such assets while frozen.. There is no asset
forfeiture fund in Cape Verde. The law designates the Treasury
as the recipient of the proceeds from asset seizures and
forfeitures. The government has the responsibility of managing
the seized assets.
51. The banking community cooperates with law enforcement
efforts to trace funds and to seize/freeze bank accounts.
52. The law allows for civil as well as criminal forfeiture.
53. The government enforces existing asset seizure and
forfeiture laws. The country is in the process of upgrading its
police powers and resources to trace, seize, and freeze assets.
54. The government does not have an independent national system
and mechanism for freezing terrorist assets.
55 During the first semester of 2009, Cape Verdean authorities
seized 407.8 million CVE, equivalent to 5.6 million dollars
worth of assets in connection with these convictions. Last year
total year amount reported was 1.3 million dollars. Final
statistics for 2009 are not yet available.
56. The 2002 money laundering law, as amended, allows the
government to share seized assets with other governments. Cape
Verde is engaged in bilateral and multilateral negotiations with
US, Spain, Portugal, France, the Netherlands, and Brazil-among
others-to enhance asset tracing, freezing, and seizure.
--------------
TERRORIST FINANCING
--------------
57. Cape Verde has 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 thru Law number 39/VII/2009 of April 2009, article 25.
58. Cape Verde has 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. It has also circulated the list of terrorist
organizations/financiers that the USG and the European Union
(EU) have designated under relevant authorities. No
terrorist-financed activities were ever identified in Cape Verde.
59. Cape Verde acknowledges the existence and use of value
transfer systems outside the formal financial system. No actions
have been taken regarding the informal sector.
60. N/A. See answer 58.
-------------- --------------
CROSS-BORDER TRANSPORTATION OF CURRENCY AND NEGOTIABLE
INSTRUMENTS
-------------- --------------
61. There are statutory requirements for limiting or monitoring
the cross-border transportation of currency and monetary
instruments. Under law number 39/VII/2009 of April 2009,
article, cross-border currency reporting requirements for both
inbound and outbound currency are limited to amounts exceeding
one million CVE (approximately equivalent to 13,900 USD). There
are no mandatory declaration forms used at border crossings.
62. Cash declaration or smuggling reports are entered into a
database. Data is shared between Customs and the FIU.
--------------
INTERNATIONAL COOPERATION
--------------
63. Cape Verde has adopted laws or regulations that allow for
the exchange of records with other countries on investigations
and proceedings related to narcotics, all-source money
laundering, terrorism, and terrorist financing. No agreement
exists with the United States authorities on a mechanism for
exchange of records in connection with such investigations and
proceedings. Cape Verde is open to negotiating in good faith
with the United States to establish such an exchange mechanism.
64. The country has entered bilateral judicial agreement to
cover all areas of cooperation in criminal areas with Spain,
Portugal, Senegal, and Guinea Bissau. See also 67.
No specific agreements on money laundering were signed.
65. Cape Verde has always cooperated with requests from
appropriate USG law enforcement agencies and other governments
investigating financial crimes related to narcotics, and other
crimes financial crimes. The Judiciary Police has exchanged
information with the FBI regarding deportees involved in drug
trafficking and money laundering.
66. No instances of refusals to cooperate with foreign
governments have ever occurred.
67. Cape Verde is 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.
68. Cape Verde has adhered to the recommendations of the
Financial Action Task Force (FATF). It is a member of GIABA
(Intergovernmental Anti-Money Laundering Group in Africa).
MYLES
SIPDIS
INL,SCT, EEB, JUSTICE FOR AFMLS, OIA, OPDAT, TREASURY FOR FINCEN
E.O. 12958: N/A
TAGS: KCRM EFIN PTER SNAR ECON
SUBJECT: CAPE VERDE 2009-2010 INTERNATIONAL NARCOTICS CONTROL
STRATEGY REPORT (INCSR PART II)
REF: STATE 114960
The following is the draft submission for Cape Verde in the 2009
International Narcotics Control Strategy Report (INCSR PART II).
This message answers questions 18-69 per reftel. Please direct
additional questions to DCM Dana Brown at browndml@state.gov
--------------
GENERAL QUESTIONS
--------------
18. Cape Verde is not considered an important regional financial
center. It is not significant in terms of money laundering.
19. Money laundering in Cape Verde is primarily related to the
proceeds from illegal narcotics trafficking, especially cocaine,
and the narcotraffickers themselves use the laundered money.
Public corruption is very limited and does not contribute to
money laundering/terrorist financing in Cape Verde.
20. There is no significant black market for smuggled goods.
Contraband smuggling is not a significant problem.
21. The formal financial sector may be involved in money
laundering, but there is no evidence that it finances terrorism.
There has been no significant increase in financial crimes in
Cape Verde.
22. To the best of our knowledge, Cape Verde's financial
institutions do not engage in currency transactions involving
international narcotics trafficking proceeds that (1) include
significant amounts of U.S. currency; (2) currency derived from
illegal drug sales in the United States or; (3) otherwise
significantly affect the United States.
23. There is trade-based money laundering activity in Cape Verde
(example: Last seizures in October included a boutique, and
commercial buildings in Praia.)
--------------
OFFSHORE FINANCIAL CENTERS
--------------
24. Cape Verde is not considered an offshore financial center.
25. Offshore banks, international business companies, other
forms of exempt and trusts are permitted. Shell companies are
not permitted.
a. The country licenses offshore banks and businesses and
adequately performs background checks on applicants for banking
and business licenses in its offshore sector. Physical presence
is required.
b. There are ten offshore banks; and two insurance companies
c. Anonymous nominee directors and/or trustees are not allowed.
26. There are no casinos in the country. If a casino wanted to
open, the government would license and regulate the operation.
27. The offshore financial sector is regulated by the onshore
regulator. Regulations governing offshore banks and businesses
do not differ in any key respect from regulations governing
domestic banks and businesses. Both offshore and onshore
financial institutions are required to perform due diligence on
customers and to file suspicious activity reports.
--------------
FREE TRADE ZONES (FTZs)
--------------
28. Currently there are no free trade zones operating in the
jurisdiction.
29. N/A
30. N/A
--------------
LEGAL FOUNDATION OF AML REGIME
--------------
31. Money laundering is a criminal offense in Cape Verde. The
law, enacted in 2002, was amended in April 2009. It
criminalizes (1) converting or transferring proceeds from
criminal activity, with the intent of hiding their illegal
origin or of hindering their confiscation; (2) hiding the
nature, location, or origin of the proceeds of criminal
activity; (3) receiving proceeds of criminal activity. The law
applies with equal force regardless of whether the underlying
criminal activity giving rise to the laundered proceeds was
committed in Cape Verde or abroad. The law punishes the above
acts with 4 to 12 years' imprisonment. Those aiding and
abetting such crimes are subject to the same penalties. The
minimum and maximum sentences are increased by 50%, however, in
cases involving organized crime, narcotrafficking, terrorism,
and/or trafficking in persons, weapons, or explosives.
32. Cape Verde has not enacted secrecy laws that prohibit
disclosure of client and ownership information by domestic and
offshore financial services companies to bank supervisors and
law enforcement authorities.
--------------
FINANCIAL SECTOR
--------------
33. Bearer securities are not permitted for banks and/or for
companies.
34. The Central Bank supervises and examines financial
institutions for compliance with AML/CFT laws and regulations.
The institution regularly trains its staff.
35. Banks and other financial institutions are required to
determine, record, and report the identity of customers engaging
in significant financial transactions, including the recording
of large currency transactions at thresholds appropriate to the
country's economic situation. Passengers entering or exiting
the country may carry up to one million Cape Verde Escudos (CVE)
(approximately equivalent to 13,900 USD) without declaring the
currency to customs.
36. Banks and other financial institutions are required to
maintain records necessary to reconstruct significant
transactions through financial institutions for a five-year
period following the relevant transaction(s).
37. Financial institutions are required to report all suspicious
transactions.
38. The law also extends the safeguards of Cape Verde's witness
protection law to individuals filing reports of suspicious
transactions with respect to their cooperation with law
enforcement entities.
-------------- --------------
INFORMAL FINANCIAL SECTOR AND NONFINANCIAL BUSINESSES AND
PROFESSIONS
-------------- --------------
39. The AML/CFT controls are applied to non-bank financial
institutions (NBFIs) and to 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). All
of the above are required to report suspicious and/or large
financial transactions. Nonetheless, to date only banks and
exchange houses have reported suspicious transactions.
-------------- ---
FINANCIAL INTELLIGENCE UNIT (FIU)/INVESTIGATIONS
-------------- ---
40. Cape Verdean law number 1/08 of January 14, 2008 provides
for the establishment and funding of a financial intelligence
unit (FIU).
41. The country created FIU in January 14, 2008, and it started
to function in February 2009. It is operational, but still not
adequately staffed. Although the law provides for its budgetary
and operational independence, in practice it is dependent from
the Central Bank. It is housed within the Central Bank's
headquarters.
42. FIU was created as an administrative body with the function
of collecting, centralizing, treating and analyzing information
related to money laundering. It is composed of one element from
each of the following entities: the Central Bank (coordinator),
the Ministry of Justice, the Ministry of Internal
Administration, the Attorney General's Office, and the Judiciary
Police. The FIU performs analytical duties, and has no criminal
investigative and/or regulatory responsibilities.
43. The FIU has access to the records or databases of other
government entities and financial institutions. It has formal
mechanisms in place to share information domestically and
internationally.
44. There have been 21 suspicious transaction reports (STRs) as
of December 1, 2009. Only three out of 21 were the subject of
investigation, but all three resulted in referrals to State
Prosecutor for action.
45. The Judiciary Police are responsible for investigating
financial crimes, including money laundering and terrorist
financing. As of December 2009, they are staffing and training
additional personnel.
--------------
ASSET FORFEITURE AND SEIZURE LEGISLATION
--------------
46. In October 2009, five persons were convicted and sentenced
to 23 to 25 years of imprisonment for drug trafficking,
organized crime, and money laundering activities. During the
first semester of 2009, Cape Verdean authorities seized 407.8
million CVE, equivalent to 5.6 million dollars worth of assets
in connection with these convictions. Final statistics for 2009
are not yet available.
47. The money laundering law enacted in 2002, as amended in
2009, establishes systems for the identification, freezing, and
seizure of narcotics-related assets.
48. The problems are related to financial constraint of the
country due to budgetary limitations.
49. The 2002 money laundering legislation, as amended in April
2009, broadens the scope of assets subject to seizure to include
all assets that authorities reasonably believe have derived from
money laundering activities. Authorities may only seize such
assets, however, if they can prove a relationship between the
assets and a specific crime. Legitimate businesses can also be
seized if they are being used to launder drug money, support
terrorist activity, or are otherwise related to criminal
activity.
50. The Judiciary Police and courts are responsible for tracing,
seizing, and freezing assets. Authorities may only freeze
assets for five months, although the Judiciary Police has the
power to confiscate such assets while frozen.. There is no asset
forfeiture fund in Cape Verde. The law designates the Treasury
as the recipient of the proceeds from asset seizures and
forfeitures. The government has the responsibility of managing
the seized assets.
51. The banking community cooperates with law enforcement
efforts to trace funds and to seize/freeze bank accounts.
52. The law allows for civil as well as criminal forfeiture.
53. The government enforces existing asset seizure and
forfeiture laws. The country is in the process of upgrading its
police powers and resources to trace, seize, and freeze assets.
54. The government does not have an independent national system
and mechanism for freezing terrorist assets.
55 During the first semester of 2009, Cape Verdean authorities
seized 407.8 million CVE, equivalent to 5.6 million dollars
worth of assets in connection with these convictions. Last year
total year amount reported was 1.3 million dollars. Final
statistics for 2009 are not yet available.
56. The 2002 money laundering law, as amended, allows the
government to share seized assets with other governments. Cape
Verde is engaged in bilateral and multilateral negotiations with
US, Spain, Portugal, France, the Netherlands, and Brazil-among
others-to enhance asset tracing, freezing, and seizure.
--------------
TERRORIST FINANCING
--------------
57. Cape Verde has 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 thru Law number 39/VII/2009 of April 2009, article 25.
58. Cape Verde has 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. It has also circulated the list of terrorist
organizations/financiers that the USG and the European Union
(EU) have designated under relevant authorities. No
terrorist-financed activities were ever identified in Cape Verde.
59. Cape Verde acknowledges the existence and use of value
transfer systems outside the formal financial system. No actions
have been taken regarding the informal sector.
60. N/A. See answer 58.
-------------- --------------
CROSS-BORDER TRANSPORTATION OF CURRENCY AND NEGOTIABLE
INSTRUMENTS
-------------- --------------
61. There are statutory requirements for limiting or monitoring
the cross-border transportation of currency and monetary
instruments. Under law number 39/VII/2009 of April 2009,
article, cross-border currency reporting requirements for both
inbound and outbound currency are limited to amounts exceeding
one million CVE (approximately equivalent to 13,900 USD). There
are no mandatory declaration forms used at border crossings.
62. Cash declaration or smuggling reports are entered into a
database. Data is shared between Customs and the FIU.
--------------
INTERNATIONAL COOPERATION
--------------
63. Cape Verde has adopted laws or regulations that allow for
the exchange of records with other countries on investigations
and proceedings related to narcotics, all-source money
laundering, terrorism, and terrorist financing. No agreement
exists with the United States authorities on a mechanism for
exchange of records in connection with such investigations and
proceedings. Cape Verde is open to negotiating in good faith
with the United States to establish such an exchange mechanism.
64. The country has entered bilateral judicial agreement to
cover all areas of cooperation in criminal areas with Spain,
Portugal, Senegal, and Guinea Bissau. See also 67.
No specific agreements on money laundering were signed.
65. Cape Verde has always cooperated with requests from
appropriate USG law enforcement agencies and other governments
investigating financial crimes related to narcotics, and other
crimes financial crimes. The Judiciary Police has exchanged
information with the FBI regarding deportees involved in drug
trafficking and money laundering.
66. No instances of refusals to cooperate with foreign
governments have ever occurred.
67. Cape Verde is 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.
68. Cape Verde has adhered to the recommendations of the
Financial Action Task Force (FATF). It is a member of GIABA
(Intergovernmental Anti-Money Laundering Group in Africa).
MYLES