US embassy cable - 03KUWAIT4840

S E C R E T SECTION 01 OF 07 KUWAIT 004840 
 
SIPDIS 
 
NOFORN 
 
EB/ESC/TFS FOR GGLASS AND NROTHSTEIN; S/CT FOR SFOX; IO/PHO 
FOR APEREZ; NSC FOR GPETERS; TREASURY GENERAL COUNSEL 
DAUFHAUSER; OFAC DIRECTOR RNEWCOMB; TREASURY JZARATE; 
TREASURY TASK FORCE ON TERRORIST FINANCING; PARIS FOR PETER 
KUJAWINSKI 
 
E.O. 12958: DECL: 10/25/2013 
TAGS: EFIN, ECON, ETTC, PTER, PREL, KU 
SUBJECT: TERRORIST FINANCE: OFAC/STATE TEAM MEETS KUWAITI 
OFFICIALS, CHARITIES 
 
REF: A. KUWAIT 3140 B. KUWAIT 1083 
 
Classified By: AMBASSADOR RICHARD JONES FOR REASONS 1.5(B) and (D) 
 
1. (S/NF) SUMMARY.  Treasury's Office of Foreign Assets 
Control (OFAC) and a State Department representative met with 
Kuwaiti officials 4-5 October to encourage a joint USG-GOK 
investigation of suspicious charities, discuss the status of 
frozen Iraqi assets, and inform the GOK of money transfers 
taken on behalf of Lajnat Al-Dawa Al-Islamiya (LDI) by the 
Social Reform Society (SRS) through the Kuwait Finance House 
(KFH).  Additionally, the team sought an update from the GOK 
on anti-terrorist finance efforts in Kuwait.  This cable, the 
first of two on the visit, reports on terrorist finance 
developments. The issue of frozen Iraqi assets will be 
reported septel.  The delegation (members listed in paragraph 
2 below), accompanied by Ambassador, met with the Ministers 
of Finance, Foreign Affairs, and Social Affairs and Labor; 
the head of the Office of Charitable Oversight and 
Supervision in the Ministry of Social Affairs and Labor; the 
Deputy Governor of the Central Bank; and representatives of 
local charitable organizations (at the charities' request). 
The Deputy Governor of the Central Bank detailed the 
regulatory changes that the GOK has implemented to bring 
Kuwait in compliance with FATF and USG recommendations (ref 
A).  The GOK was unaware of the transactions involving LDI 
but pledged to investigate them, pending receipt of 
additional details from the USG.  Officials were mostly 
receptive to the idea of joint US-GOK investigations of 
charitable organizations.  During the meeting with the 
charities, the groups' representatives appealed to the 
delegation for details on why LDI was designated as a 
terrorist organization.  The groups were given information 
about post-designation LDI transactions, which they could not 
explain. When asked about international branches they denied 
the existence of all but one, but when OFAC presented 
evidence of other branches, the recalled there were more. 
The representatives promised to look into the issues raised 
during the meeting and to report back.  Embassy will continue 
to monitor the issues addressed during the visit.  We look 
forward to receiving additional specific details on the 
various USG concerns for further coordination with our 
Kuwaiti interlocutors.  END SUMMARY 
 
2.  (U) Treasury's Office of Foreign Assets Control (OFAC) 
and a State Department representative traveled to Kuwait 3-5 
October to discuss terrorist finance issues and the status of 
frozen Iraqi assets with Kuwaiti officials.  This cable, the 
first of two on the visit, reports on terrorist finance 
developments; the issue of frozen Iraqi assets will be 
reported septel.  The delegation, led by OFAC Director 
Richard Newcomb, included Mark Roberts, Daniel Yorks, and 
Jason Beal from OFAC; and Nicole Rothstein from EB/ESC/TFS. 
During their stay in Kuwait, the delegation met with the 
Ministers of Finance, Foreign Affairs, and Social Affairs and 
Labor; the head of the Office of Charitable Oversight and 
Supervision in the Ministry of Social Affairs and Labor; the 
Deputy Governor of the Central Bank; and representatives of 
local charitable organizations (at the charities' request). 
Ambassador Richard Jones accompanied the group during all 
government meetings; EconOff attended as notetaker. 
 
3.  (S/NF)  The delegation encouraged a joint USG-GOK 
investigation of suspicious charities (a suggestion first 
raised by Kuwait's Minister of Foreign Affairs during 
Newcomb's May 2002 visit to Kuwait), discussed the status of 
frozen Iraqi assets and informed the GOK of money transfers 
taken on behalf of Lajnat Al-Dawa Al-Islamiya (LDI) by the 
Social Reform Society (SRS) through the Kuwait Finance House 
(KFH).  (NOTE.  LDI was designated under E.O. 13224 on 
January 9, 2003 and by the UN following a request by the 
Government of France.  END NOTE.). 
 
------------ 
(U) CENTRAL BANK 
------------ 
 
4. (C)  On October 5 the delegation met with Deputy Governor 
Dr. Nabeel Ahmed Al-Mannae and his staff at the Central Bank 
of Kuwait (CBK).  The Deputy briefed the delegation on steps 
that the bank has taken to combat money laundering and 
terrorist financing.  Specifically, he outlined efforts made 
to address four key weaknesses that US and Financial Action 
Task Force (FATF) teams had previously identified in the 
Kuwaiti financial system: (1) the absence of an anti-money 
laundering law; (2) the nonexistence of a financial 
intelligence unit (FIU); (3) the lack of supervision of 
Islamic financial institutions (especially the Kuwait Finance 
House, KFH) by a competent state authority; and (4) the 
paucity of training for and awareness among concerned parties 
about money laundering and terrorist financing (see Ref A for 
details). 
 
5.  (C)  Al-Mannae stressed that the modifications that 
Islamic financial institutions have undertaken to bring their 
banks into compliance with Islamic law do not confer upon 
these institutions the right to conduct practices outside the 
scope of regular banking.  He also noted that to date, all 
Islamic financial institutions -- including Kuwait Finance 
House -- have been fully cooperative with CBK freeze orders, 
even absent the legal obligation to do so.  He noted that 
KFH, the key Islamic bank in Kuwait, would be under CBK 
regulatory control as of December 2003. Al-Mannae then 
outlined the steps that CBK has taken to increase awareness 
of money laundering and terrorist financing issues, including 
holding extensive meetings with prosecutors (to establish a 
investigatory mechanism), conducting training sessions for 
financial institutions' staff, and sending speakers to 
participate in financial sector and other ministries' 
conferences.  Al-Mannae said that CBK will sponsor a meeting 
in early 2004 (originally scheduled for this month) that will 
bring together local bank staff, investment companies, 
customs officials, and representatives from other GCC 
countries to discuss money laundering and terrorist finance 
issues.  Finally, CBK has begun briefing the media on new 
developments, as they consider the media a key component in 
the awareness-raising process. 
 
6. (C)  CBK officials also detailed other financial controls 
they have implemented.  When Kuwait receives a notification 
of a new freeze order, the MFA directs the CBK to implement 
the freeze order. That order is passed on to all financial 
institutions, who must search their records and report their 
results within one week.  If assets are found, they are 
frozen within days of receipt of the order.  As an additional 
safeguard, CBK will begin on-site examinations to verify that 
banks are conducting proper investigations.  Al-Mannae said 
that Kuwait now has real-time tracking of all international 
transfers made through banking institutions, regardless of 
amount; these transactions are logged into a computerized 
database.  While exchange house transfers of less than KD 
3000 (about US $10,000) are not currently included, CBK has 
"phase two" plans to require that exchange houses report all 
transfers in the future. 
 
7.  (S/NF)  With regard to charitable organizations, the 
Ministry of Social Affairs and Labor has given CBK a complete 
list of all recognized and licensed charities, along with a 
list of people authorized to make transfers on the groups, 
behalf.  These lists have been forwarded to the banks.  All 
licensed charitable organizations must receive permission 
from the Ministry of Social Affairs and Labor before 
transferring money out of Kuwait.  According to Al-Mannae, 
any charity work undertaken by other groups is a violation of 
regulations.   The Deputy Governor reported that Kuwaiti 
banks have found five possible matches of a designated name; 
they have contacted the MFA for additional information to 
determine if any of the five matches (he says that this is a 
common name).  The Kuwaitis also found one LDI account valued 
at about KD 1 million ($3.3 million) and instructed all banks 
to freeze the assets. (NOTE.  Earlier accounts reported in 
Ref B indicated that the Kuwaitis had frozen KD 1.4 million, 
or approximately $4.6 million.  END NOTE.) 
 
8.  (S/NF) Newcomb said he was very pleased about the steps 
the Kuwaitis had taken on banking laws and asset freezing. 
He then presented the following details of the LDI case, 
which  involves transfers of LDI assets through KFH following 
LDI's designation in the US.  After the UN designated LDI, 
its parent SRS continued to transfer money to the same 
recipients through KFH.  A US bank reported that KFH made 27 
transfers for LDI totaling almost $2 million after LDI was 
designated by the USG on January 9, 2003 (NOTE: The 
Government of France requested that LDI be designated in the 
UN.  The US under E.O. 13224 designated LDI on January 9, 
2003 and the UN designated LDI a month later on February 20, 
2003. END NOTE.).  These transfers include $1.1 million in 
transfers to an LDI account at the Al-Falah Bank in Peshawar, 
Pakistan; five transfers to Mercy International in 
Switzerland and transfers to individuals and organizations in 
Indonesia, Malaysia, Hong Kong and Thailand.  After the 
designation by LDI in the UN on February 20 the Social Reform 
Society (SRS), of which LDI is a subsidiary, made transfers 
of over $1.2 million to the same recipients, again using KFH. 
  The Deputy Governor thanked the delegation for its 
cooperation in providing this information, and pressed for as 
much detail as possible on the transactions.  If the 
transfers occurred after the designation, he vowed, there 
would definitely be a penalty.  Newcomb promised to provide 
the bank with transaction dates and details.  He also 
suggested that the two governments might want to consult 
after CBK,s investigation, and perhaps make a joint 
announcement.   Newcomb informed the officials that the 
delegation had consulted with the Ministries of Foreign 
Affairs, Social Affairs and Labor, and Finance, and agreed to 
a joint investigation of foreign affiliates and subsidiaries 
of the Revival of Islamic Heritage Society (RIHS), LDI, SRS 
and the International Islamic Charity Organization (IICO). 
He also stressed the need for financial and programmatic 
controls, proper audits, and personnel controls within 
charitable institutions, particularly those with overseas 
branches in locations where there is no real ability to carry 
out oversight.  The Deputy Governor agreed that cooperation 
is critical for both sides to investigate properly, and cited 
LDI as a case in point.  He said that the GOK had had no 
previous information that KFH had violated Kuwaiti laws, but 
that the information provided by the delegation would allow 
the Kuwaitis to investigate. 
 
------------------- 
(U) MINISTER OF FINANCE 
------------------- 
 
 
9.  (C) Finance Minister Mahmoud al-Nouri opened by remarking 
positively on his meeting with Treasury Secretary Snow in 
Dubai during the Arab Finance Ministers, meeting, and on a 
separate meeting with Undersecretary for Economic, Business 
and Agricultural Affairs Al Larson regarding the Iraq 
donors, conference in Madrid.  Newcomb congratulated 
al-Nouri on his recent appointment as minister, and noted his 
satisfaction with the progress made by the GOK in regulating 
charities since the September 11, 2001 terrorist attack. 
Newcomb said that he would like to continue coordinated 
efforts between the USG and the GOK, particularly the Office 
of Charitable Oversight and Supervision.  The Minister was 
supportive, adding that most charities in Kuwait have 
publicly announced that they will cooperate with the new GOK 
rules regulating charities (affirmations he believes are 
sincere).  To better regulate charitable donations, Al-Nouri 
said that the GOK is trying to ensure that those individuals 
receiving charitable donations are on a list approved by the 
charity's board of directors, to guard against the misuse of 
funds. 
 
10.  (C) Newcomb then inquired about the efficacy of Law 30, 
which placed Islamic financial institutions under the Central 
Bank's authority and introduced additional regulatory 
safeguards to combat money laundering and terrorist 
financing.  Al-Nouri credited the law with providing 
increased transparency in funds transfers and enhanced 
control and supervision over charitable donations.  He said 
that prior to 2001, many charitable transfers were based on 
emotion, with little attention paid to proper record-keeping 
or oversight; this, he reports, has now changed.  Al-Nouri 
assured the delegation that the GOK would comply with all UN 
resolutions, and would cooperate with the United States. 
 
--------------------------- 
(U) MINISTER OF FOREIGN AFFAIRS 
--------------------------- 
11.  (S/NF) Newcomb opened the meeting by praising Minister 
of Foreign Affairs Shaykh Dr. Muhammad Sabah Al-Salim 
Al-Sabah's suggestion that the two governments work jointly 
in their investigations, a proposal made during Newcomb,s 
May 2002 visit (in the context of a RIHS investigation). 
Newcomb told the Minister he had high hopes that the two 
governments could move forward together.  With that, Newcomb 
raised the Social Reform Society (SRS) and LDI cases, 
outlining the details of the post-designation transactions. 
He also suggested that a joint team look into other 
organizations like IICO.  The Minister replied that GOK's 
primary objective is to ensure that funds from charitable 
organizations are not being misdirected.  He referred the 
team to the Minister of Social Affairs and Labor for more 
details on the laws put into place that require more 
transparency.  The Minister added that if these laws are 
insufficient, the GOK would welcome suggestions as to how to 
improve them, saying that it is in Kuwait's interest to have 
these safeguards in place. 
 
12.  (S/NF) However, he noted, local charities have been 
complaining that countries may allege to the United Nations 
that a particular organization supports terrorism without 
disclosing the evidence.  The charities believe that they are 
being more transparent, and wonder why their accusers are not 
as well.  The Minister said that the GOK does not want 
anti-terrorist financing efforts to turn into a witch hunt; 
rather, the GOK would like to have substantive information 
that can be investigated.  Newcomb advised the Minister that 
he hoped to send a team with additional information after 
Ramadan, to begin an investigation of several charities. 
With regard to LDI, Newcomb said that there is concrete 
information that must be examined.  In his view, this would 
be the sort of task that could be carried out jointly.  He 
also informed the Minister that Treasury would be basing an 
employee at the US Embassy in Bahrain who would have regional 
responsibility, and would make frequent trips to Kuwait. 
 
13. (C) The Minister asked to what extent the USG was 
satisfied with steps the Kuwaitis had taken on banking and 
money laundering issues, noting that they had established a 
specific unit within the Central Bank to combat money 
laundering.  Newcomb called the steps Kuwait had taken to 
regulate funds generated by charity bazaars "incredibly 
important," saying that the regulatory body seems to be doing 
what it was chartered to do. (NOTE.  The government has begun 
cracking down on unauthorized "charity bazaars," where 
donations are gathered illicitly.  To combat this, and in 
anticipation of the month of Ramadan -- traditionally the 
time of heaviest charitable giving -- the Ministry of Social 
Affairs and Labor is creating inspection teams that will 
scrutinize charities throughout the country. END NOTE.) 
Newcomb referred to this as an "impressive step" that is 
"very important (and) very useful."   Shaykh Muhammad sought 
Newcomb,s thoughts on the current status of the banking 
sector in the Gulf generally.  Newcomb said that many 
positive steps have been taken, although work remains, citing 
hawala transfers and charities as examples. 
 
14. (C) The Minister then suggested that the delegation meet 
with some Kuwaiti charities, saying that he had received 
several calls from them that day, and that they were eager to 
meet with the delegation.   Specifically, the charities 
wanted to know the reason why LDI was designated as a 
terrorist organization; the Minister opined that it would 
only be fair to share the USG,s concerns with them directly. 
 
------------------------------------ 
(U) MINISTRY OF SOCIAL AFFAIRS AND LABOR 
------------------------------------ 
 
15.  (S/NF) Following their meeting with the Minister of 
Foreign Affairs, the delegation spoke with Feisal al-Hajji, 
the Minister of Social Affairs and Labor, and Mohammad 
Al-Kandari, head of the new Office of Charitable Oversight 
and Supervision in the Ministry of Social Affairs.  Newcomb 
raised the LDI case, providing details of the transfers.  The 
Minister informed Newcomb that LDI is unlicensed and 
therefore its activities are illegal.  He continued that some 
other committees working under the umbrella of SRS have had 
their international activities stopped.  He stressed that the 
GOK is ready to follow up on any transaction made illegally, 
but that they need more information.  The GOK cannot act by 
guessing, he noted; when they have real information, they can 
act.  Newcomb agreed to provide this information. 
 
16.  (C) Newcomb next turned to the issue of RIHS, saying 
that the USG would like to work with the GOK to investigate 
the activities of several international branches of RIHS, to 
see if they are acting properly and, if not, to designate 
them or take other appropriate steps.  Newcomb suggested a 
follow-up trip after Ramadan, in which a US team would work 
with GOK authorities to jointly investigate RIHS.  Al-Hajji 
agreed with this proposal.  Al-Kandari then provided an 
update on the actions of the Office of Charitable Oversight 
and Supervision, which he said is trying to find out how 
charitable donations are collected and spent.  He noted that 
this will take time, but that the GOK would provide the USG 
with documents on what had been done in the period leading up 
to Ramadan (Al-Kandari provided a spreadsheet in Arabic on 
the spot, specifying the number of unlicensed donations 
kiosks the Ministry found, on what date, and the 
organizations running the kiosks).  He said charities not in 
compliance with the law are given a warning and 15 days to 
rectify the situation.  If they do not comply, the Ministry 
begins court proceedings against the group.  The Ambassador 
inquired about collections in mosques during Ramadan, 
previously an important source of charitable fundraising. 
The Minister answered that this is no longer legal, and that 
his colleagues would be monitoring the mosques. 
 
17. (C) Al-Kandari said that his organization is working with 
the Ministry of Foreign Affairs and with Kuwaiti embassies 
abroad to supervise spending of charitable funds.  Newcomb 
asked who is in charge in countries where Kuwait does not 
have an embassy.  Al-Hajji conceded that it was very 
difficult or impossible to prevent all funds from being 
transferred for illicit purposes, especially if they are 
channeled outside the formal banking system.  However, he 
repeated that the GOK is ready to look for ways to improve 
controls.  He noted that it is hard for embassies to carry 
out this supervisory function, especially in large countries. 
 But he said that with the USG,s help and with the 
assistance of local authorities, any information provided to 
the GOK would be acted upon. 
 
18. (C) Newcomb asked if the GOK would have a problem with 
designating branches of Kuwaiti charities which are operating 
in countries that the GOK cannot easily control; the Minister 
replied with a laugh that that was a tough question.  The 
Ambassador underscored that that was why it is critical for 
the GOK and USG to work with local authorities as well. 
Al-Hajji said that personally, he would be happy to work 
jointly with a US delegation on investigations, but that the 
official GOK position may be different.  Yet he repeated that 
his main objective was to work together to reach the common 
goal.  He ended by asking once more that the USG not hesitate 
to forward to the GOK any information, and promised to act on 
that information. 
 
------------------------------------- 
(U) MEETING WITH CHARITABLE ORGANIZATIONS 
------------------------------------- 
 
19. (C)  At the charities' request and the suggestion of the 
Minister of Foreign Affairs, the delegation met with 
representatives of local charities on October 5.  In 
attendance were Dr. Nasser Al-Sane from the SRS (NOTE. 
Al-Sane is also a member of parliament.  END NOTE.), Ahmad 
Abdulaziz Muhammad al-Falah from LDI, and Waleed Nijm 
Abdullah Mishari Al-Seif from IICO.  Acting as spokesman for 
the group, Dr. Al-Sane detailed their efforts to obtain 
information on the designation of LDI.  They had consulted 
with GOK officials and with the French Director of 
International Organizations in Paris, and asked what they 
needed to do to delist LDI.  According to Al-Sane, the French 
official advised the group to put together information to 
demonstrate that LDI is a legitimate organization, and also 
to talk to the Americans.  Again according to al-Sane, the 
French official said that if LDI could convince the Americans 
that LDI was not a terrorist organization, the French would 
not insist upon the designation. 
 
20. (S/NF) Al-Sane said he took that opportunity to make a 
presentation to the French on LDI,s health and other 
charitable projects, a copy of which he provided to the 
delegation.  He contended that LDI is one of the more 
credible health and humanitarian organizations operating in 
Afghanistan and Pakistan, and that they also organized 
education programs to teach Arabic, drilled wells for water, 
built bakeries, mosques and hospitals, and supervised the 
distribution of meat from religious sacrifice rituals. 
Al-Sane noted that he met with Treasury U/S Taylor in 
November of 2002, who asked if the organization would work in 
Afghanistan to help with the rebuilding process, to which the 
organization agreed.  To that end, Al-Sane said, they signed 
two agreements with the new Afghan government (NOTE.  This 
was before the organization was designated.  END NOTE.). 
 
21.  (S/NF) Al-Sane said that they want to trace alleged 
misused funds.  He expressed frustration that they have not 
been provided with any evidence of their misdeeds.  For 
example, he said that the French informed him that the head 
of the LDI office in Pakistan was affiliated with al-Qaida. 
However, according to Al-Sane, this man had never been in 
charge of the office and had no link with LDI at all. 
Further, he was in Qatar during the period that he was 
alleged to have been running the LDI office in Pakistan. 
Al-Sane said the French alleged that LDI has offices in 
Burkina Faso, Sudan, Saudi Arabia, Bahrain, Qatar and 
Somalia.  Yet he asserted that they only have offices in 
Pakistan and Kuwait. 
 
22. (S/NF) Newcomb asked if there are other groups called 
LDI, which Al-Sane confirmed, saying that it is a widely used 
name.  He stressed although they may have similar names, 
these are not necessarily the same organization.  Newcomb 
then asked if their activities had stopped completely, which 
Al-Sane confirmed.  Newcomb presented them with the evidence 
on LDI's post-designation transfers as well as the 
transactions undertaken by SRS that were sent to previous LDI 
recipients.   Al-Sane agreed that they needed to check them 
out, as this was the first time they had heard of the 
transactions.  The LDI representative said that the transfers 
may have gone to activities that were already underway before 
the designation, so that the projects could be completed. 
 
23.  (S/NF) Newcomb asked directly if LDI had any offices 
other than the ones in Pakistan and Kuwait, specifically in 
Kyrgyzstan, Tajikistan, Russia, Kazakhstan, or Jordan. 
Contradicting Al-Sane's earlier assertion that there were 
only LDI branches in Pakistan and Kuwait, the LDI 
representative said that they do have an office in Russia. 
Newcomb commented that there seemed to be confusion about 
exactly where the offices were, which Al-Sane conceded. 
Al-Sane said that they would provide information on the 
locations of all LDI offices and asked for more information 
on the post-designation transactions, which Newcomb agreed to 
provide.  Newcomb reiterated that he needed a full accounting 
of LDI activities, for the group to put everything on the 
table; Al-Sane said that the group wanted the same thing. 
 
24. (S/NF) Newcomb asked if LDI is a subsidiary of SRS; 
Al-Sane said that yes, LDI is licensed by SRS.  Newcomb noted 
that because of this relationship, SRS is implicated as well 
by LDI,s actions.  Newcomb then asked if there were ties 
between SRS and IICO.  The IICO representative said his 
organization did not have a relationship with SRS; however, 
the two groups have a director in common.  Newcomb stressed 
that it is important to show the nature and breadth of the 
organizations, their methods of oversight, their means of 
hiring personnel, how they are monitored by the GOK and the 
like.  Al-Sane said that the local branches hire their own 
staff and supervise the local projects themselves, and that 
the organization employs Ernst and Young to audit their 
books, which is a guarantor that the funds are going to the 
proper people. (NOTE.  As reported in Ref B, the Foreign 
Minister previously indicated to Ambassador that LDI's US 
auditor was Baker and McKenzie.  END NOTE.)  Newcomb pointed 
out that the auditors can only audit what information they 
have. 
25.  (S/NF) Al-Sane told the delegation that the charities 
have no problem with additional auditing, but that they need 
evidence of what they have done wrong.  Al-Sane said he 
believes that the USG's goal is to combat terrorism, not to 
stop humanitarian efforts.  According to him, if 99% of 
funding is going to humanitarian programs and only 1% to 
improper ends, then the USG should seek to stop the 1% rather 
than the 99%.  Newcomb responded that the USG does not 
differentiate in this manner, and that if even 1% is going to 
fund terrorism, the whole organization is considered a 
supporter of terrorism. Al-Sane closed by sincerely thanking 
the delegation, saying that this was the first information 
they had received on LDI,s transgressions.  He promised to 
provide additional data on the location of LDI branches 
outside Kuwait and on the post-designation transfers. 
 
26. (C)  COMMENT.  As reported by the GOK interlocutors, the 
Kuwaitis have implemented several important regulatory 
changes to combat money laundering and terrorist financing, 
and to bring them in compliance with FATF and US 
recommendations.  The steps that the new charitable oversight 
and supervision body is taking -- particularly in advance of 
Ramadan -- are notable, not only because they improve the 
GOK's control over donations, but because they are so 
politically sensitive.  Cracking down on unauthorized charity 
kiosks and putting an end to charitable collections in the 
mosques carries a certain amount of risk at a time when 
Islamists are increasing their power in Kuwait.  Yet the 
GOK's willingness to incur this risk demonstrates the degree 
to which it takes fighting terrorist financing seriously. 
The meeting with the charities was productive, although their 
inconsistency concerning the locations of LDI offices outside 
Kuwait tends to undermine their credibility.  Their plea for 
more information was consistent with that of GOK officials, 
all of whom stressed the need for concrete details on 
allegations of illegal activities.  Embassy will continue to 
monitor the issues addressed by the delegation.  We look 
forward to receiving additional specific details on the 
various USG concerns for further coordination with our 
Kuwaiti interlocutors.  END COMMENT. 
 
27.  (U)  The delegation cleared this message after their 
departure. 
JONES