US embassy cable - 03RANGOON1317

C O N F I D E N T I A L RANGOON 001317 
 
SIPDIS 
 
STATE FOR EAP/BCLTV, EB/ESC 
COMMERCE FOR ITA JEAN KELLY 
TREASURY FOR OASIA JEFF NEIL 
USPACOM FOR FPA 
 
E.O. 12958: DECL: 10/20/2013 
TAGS: EFIN, SNAR, KCRM, PGOV, BM 
SUBJECT: NEW MONEY LAUNDERING SANCTIONS COULD BE USEFUL 
 
REF: A. RANGOON 1313 
     B. RANGOON 1253 
 
Classified By: COM CARMEN MARTINEZ FOR REASONS 1.5 (B,D) 
 
1. (U) This is an action request.  Please see paragraphs 5 
and 6. 
 
2. (C) For reasons laid out in Ref B, we think it unlikely 
that the Burmese government will produce adequate money 
laundering regulations and a draft mutual legal assistance 
law by the November 3 deadline set by the Financial Action 
Task Force (FATF).  According to FATF, if the deadline passes 
without action, the body will recommend that its members 
impose certain "countermeasures" impacting their domestic 
banks' dealings with Burma. 
 
3. (C) Note: On October 16, during a regional drug task force 
meeting in Rangoon (ACCORD) GOB officials reported that a 
mutual legal assistance law had been drafted and was 
undergoing ministerial-level review (see Ref A).  However, 
officials appealed to the UN Office on Drugs and Crime 
(UNODC) for technical assistance in finalizing the process. 
Our observation to the GOB's senior money-laundering expert 
that this appeal appeared to be "too little, too late" was 
met with stony silence.  End note. 
 
4. (C) We understand that the countermeasure options 
available to the United States come under Section 311 of the 
USA PATRIOT Act of 2001.  Most of the alternatives presented 
in this section would only reinforce the recently imposed ban 
on financial transactions between a U.S. person and Burma, 
and the freezing of assets of Burma's state-owned foreign 
trade banks.  However, we think that the Section 311 
sanctions could nonetheless be used to put additional 
pressure on the Burmese economy. 
 
5. (C) Action request 1:  If the Burmese fail to meet FATF 
requirements, we suggest the Department work with the 
Treasury Department to invoke part (b)(2) of Section 311, 
which appears to compel U.S. banks to "obtain and retain 
information concerning the beneficial ownership of any 
account" opened by a Burmese person or his/her agent.  This 
requirement would dovetail with section 4(a) of the 2003 
Burma Freedom and Democracy Act, and might help uncover the 
degree to which SPDC members, government and military 
officials, and others close to the regime, have assets inside 
the United States.  This is particularly the case as we've 
heard that high-ranking Burmese officials keeping their money 
in the United States may be doing so using the name of a 
family member or other agent resident in the United States. 
 
6. (C) Action request 2: We further urge State and Treasury 
to push other FATF members -- particularly members of the 
European Union, Japan, Singapore, and Hong Kong -- to impose 
their own reporting requirements for Burma transactions. 
Burmese business officials complain that many international 
banks are reluctant now to engage in any transaction with a 
Burmese party, even if such a transaction would not fall 
afoul of U.S. law.  However, some banks -- particularly in 
Japan, Hong Kong, and Singapore -- are continuing to legally 
facilitate settlements of international financial 
transactions that include Burma.  New, stricter guidelines 
for transactions with Burma might encourage those banks still 
legally working with Burma to stop.  Likewise, EU 
coordination could be beneficial, as the GOB is encouraging 
businesses to use the euro as a replacement for the U.S. 
dollar. 
Martinez