US embassy cable - 04KUWAIT481

S E C R E T SECTION 01 OF 04 KUWAIT 000481 
 
SIPDIS 
 
STATE FOR EB/ESC/TFS GGLASS AND NROTHSTEIN; S/CT SFOX 
STATE FOR IO/PHO APEREZ 
NSC FOR GPETERS 
TREASURY FOR GEN COUNSEL DAUFHAUSER; OFAC DIRECTOR RNEWCOMB 
TREASURY FOR JZARATE; TASK FORCE ON TERRORIST FINANCING 
PARIS FOR PETER KUJAWINSKI, UZRA ZEYA 
 
E.O. 12958: DECL: 02/09/2014 
TAGS: PTER, ASEC, EFIN, ETTC, PREL, KU 
SUBJECT: (U) KUWAIT COUNTERTERRORISM ACTION GROUP MEETING 
HELD 
 
REF: SECSTATE 14279 
 
Classified By: Charge d'Affaires Frank C. Urbancic, 
Reasons 1.4 (b) and (e) 
 
1.  (SBU) SUMMARY.  Embassy convened the first meeting of 
Kuwait's counterterrorism action group (CTAG) under US 
leadership; the French, Japanese, British, Russian, Italian, 
German, Canadian, Swiss and Spanish embassies participated. 
Only the US and British have specific anti-terrorism programs 
in Kuwait, although all CTAG nations maintain contact with 
the Kuwaitis on counterterrorism issues, and many work 
through the Gulf Cooperation Council (GCC) rather than 
bilaterally.  Several countries have newly established 
counterterrorism funds from which they may draw.  The group 
sees terrorist financing as the primary problem in Kuwait. 
Although most countries agree that there is the will within 
the Government of Kuwait to combat terrorist financing, they 
also concur that it is a very difficult task for the 
Kuwaitis.  The CTAG made two recommendations:  (1) CTAG 
members should launch a fresh push to encourage Kuwait to 
ratify all international anti-terrorism conventions; and (2) 
CTAG should also deal with the GCC as a whole, with CTAG 
states taking advantage of every opportunity for 
institutional dialogue to stress that they are united on 
combating terrorism.  END SUMMARY. 
 
2.  (U) On February 7, Embassy convened a meeting of Kuwait's 
counterterrorism action group (CTAG), the first since the 
United States assumed chairmanship of CTAG; representatives 
from the French, Japanese, British, Russian, Italian, German, 
Canadian, Swiss and Spanish embassies were in attendance. 
The Charge being out of town with OIG inspectors, Acting 
DCM/Pol Chief chaired the meeting.  He began by outlining the 
US counterterrorism program in Kuwait, suggesting that each 
representative do the same for his/her country. 
 
----------------------------- 
(U) Individual Country Strategies 
----------------------------- 
 
3.  (SBU) United States.  A/DCM said that the US's main 
counterterrorism focus in Kuwait is combatting terrorist 
financing, noting that the Office of Foreign Assets Control's 
director had recently made two visits to Kuwait.  The US had 
found the Government of Kuwait (GOK) to be fully cooperative 
in meeting their responsibilities on asset freezes.  The US 
was also engaging representatives of Islamic charities in 
Kuwait.  With regard to training initiatives, a team from the 
US Department of Justice would be conducting a seminar for 
prosecutors on the tracking and prosecution of money 
laundering and terrorist finance cases.  A/DCM outlined two 
other US programs unrelated to anti-terrorist financing.  The 
first focuses on strengthening Kuwait's control of its border 
with Iraq, which has become more vulnerable with the 
increased cross-border flow of goods associated with 
Operation Iraqi Freedom and the rebuilding of Iraq.  Second, 
the US provided an airport security course for 24 Kuwaiti 
officials in FY2004, and hopes to offer training in VIP 
protection and defense against chemical and biological 
weapons in FY2005. 
 
4.  (C) France.  The French Ambassador said that France has 
no specific technical assistance or training program for 
Kuwait, although it does exchange information .  The 
Ambassador commented that the French have noted a lack of 
initiative among the Kuwaiti services. 
 
5.  (SBU) Japan.  The Japanese Ambassador remarked that like 
the French, Japan has no targeted counterterrorism program 
for Kuwait.  Rather, Japan is trying to focus its resources 
on southeast Asian countries, where it has held numerous 
training seminars. 
6.  (SBU) United Kingdom.  The British DCM commented that the 
CTAG meeting was particularly timely:  the Foreign Office 
created a new fund in 2003 for combatting terrorism and each 
British mission has been tasked with determining what their 
colleagues were doing on counterterrorism.  He said that at 
present, the British were focusing on two areas:  terrorist 
financing, and other operational programs (like ordnance 
disposal and handling hostage and hijacking situations). 
With regard to terrorist financing, the British Embassy had 
two specific programs in mind for Kuwait.  First, the UK 
would assist in drafting legislation to ban terrorist 
financing (which would complement existing legislation 
criminalizing money laundering), and second, the UK would 
work toward strengthening the Central Bank of Kuwait's new 
Financial Intelligence Unit (FIU). 
 
7.  (C) Russia.  The Russian DCM said that his government 
maintained contacts with the Kuwaiti side and invited a 
Ministry of the Interior delegation to visit Russia, but had 
received no reply.  The Russian delegate also commented that 
Russia had designated two Kuwaiti charities -- the Social 
Reform Society (SRS) and Lajnat al-Dawa al-Islamiya (LDI) as 
terrorist organizations.  A/DCM expressed condemnation of the 
recent terrorist attack in Moscow, on behalf of the group. 
 
8.  (SBU) Italy.  According to the Italian DCM, Italy also 
has no specific program in Kuwait, although it is interested 
in establishing one.  He pointed out that the Italian 
government, as the then-President of the European Union, 
organized a November 2003 seminar in Brussels that included a 
session particularly for Gulf Cooperation Council (GCC) 
countries.  However, since the seminar occurred during 
Ramadan, the Kuwaitis only sent one individual from the 
Central Bank.  He stressed that every high-level Italian 
visitor reminds the GOK of the importance of combatting 
terrorism, and noted that the Governor of the Central Bank 
has expressed an interest in visiting Italy to learn more 
about anti-money laundering legislation. 
 
9.  (SBU) Germany.  The German DCM also observed that the 
CTAG meeting was particularly timely.  He said that Germany 
did not have a counterterrorism program for Kuwait, although 
like the British, the Germans created a counterterrorism fund 
last year.  He suggested that either Kuwait could be added to 
Germany's list of targeted countries or, preferably, that 
CTAG could focus on the Gulf Cooperation Council (GCC) as a 
whole.  For the latter to occur, he noted, the GCC's profile 
would have to be raised in higher-level CTAG meetings.  He 
said that on a bilateral basis, Germany would be willing to 
support anti-money laundering programs (since Germany is an 
active member in the Financial Action Task Force, or FATF) 
and would also consider monitoring Kuwaiti charitable 
organizations. 
 
10.  (SBU) Canada.  Like most of the other representatives, 
the Canadian political counselor (resident in Abu Dhabi) said 
that her government has no particular counterterrorism 
program in Kuwait, although Canada has identified new funding 
for counterterrorism projects in the region.  She then asked 
for the group's reaction to the creation of an anti-money 
laundering body for the Middle East and North Africa in 
Bahrain; none of the other attendees had any information on 
this development. 
 
11.  (SBU) Switzerland.  The Swiss Ambassador commented that 
his government had not been contacted by Kuwait -- or any 
other government in the region -- for assistance, even though 
the Swiss government signaled that it would collaborate with 
GCC governments as needed.  Generally speaking, he said that 
Switzerland focuses its attention on developing countries, 
especially Latin America and the Caribbean.  The Swiss would 
be prepared, however, to provide similar technical assistance 
to Kuwait if asked to do so. 
 
12.  (SBU) Spain.  Spain's ambassador remarked that terrorism 
is a huge problem for Spain and said that although his 
country has no program in Kuwait, it currently oversees 
several counterterrorism programs in Latin America, focusing 
primarily on judicial reform, legal cooperation, and 
anti-money laundering. 
 
13.  (SBU) To avoid problems of duplication and to facilitate 
exchanges of information on the outcomes of CTAG countries' 
counterterrorism efforts in Kuwait, the participants agreed 
to consult each other informally when pursuing similar 
counterterrorism activities. 
 
--------------------------------- 
(S) CTAG Views on Problems in Kuwait 
--------------------------------- 
 
14.  (S) The bulk of the CTAG's discussion centered on 
combating terrorist financing.  The French ambassador 
reported that a Kuwaiti ambassador to a southeast Asian 
country had told him that one of the diplomats serving under 
him was transferring cash to extremist organizations. 
(Comment.  The country involved was Indonesia, we ascertained 
off-line.  Please protect accordingly.  Embassy has passed 
this information through appropriate channels for separate 
action.  End Comment.)  The Kuwaiti ambassador complained to 
his boss, the Minister of Foreign Affairs, about the 
situation.  The Spanish ambassador, who had also heard the 
same story, said that he called on the Kuwaiti Minister of 
Social Affairs, who responded that there is nothing the GOK 
can do because under Islam, each person has an obligation to 
give charitably.  What the Minister said the GOK could do is 
prevent transfers through banks (although in the Minister's 
view, the reality is that most exchanges go through the 
hawala system or are made through trusted individuals).  The 
Minister emphasized that the GOK was doing all it could to 
control money that moves through regular channels, but said 
that it could not control hawala transfers.  According to the 
Spanish ambassador, the Minister acknowledged that the GOK 
realized it would never be able to do the job it would like 
to do in controlling funds. 
 
15.  (SBU) The German DCM cautioned that the group should not 
forget that there is nothing inherently wrong with the hawala 
system (which he said was invented by Germany and Italy), 
although there was reason to be careful.  He noted that the 
Saudi Minister of Finance pointed out to the German 
ambassador there that not everyone can afford to open bank 
accounts in the Gulf (particularly third country nationals), 
and many are thus forced to use alternative systems.  The 
British DCM agreed, and added that there is a huge hawala 
industry in the UK, mostly involving people from the 
subcontinent.  He said that the UK authorities have not 
devoted many resources to monitoring the hawala system 
because there is evidence that nearly all large amounts of 
cash go through regulated banks. 
 
16.  (SBU) The Swiss ambassador wondered if CTAG countries 
should become more aware of other methods of money 
laundering.  As an example, he noted that goods can be 
exchanged several times, each with a higher stated value as a 
way of laundering funds.  The French ambassador added that 
since hawala exchanges are cash based, they are very hard to 
trace.  The Swiss ambassador suggested that financial 
institutions in the region might be interested in creating 
systems to prevent this sort of activity. 
 
17.  (C) The French ambassador raised the issue of Lajnat 
al-Dawa al-Islamiya (LDI), a Kuwaiti charity that was 
designated by the US and the UN following a French 
recommendation (septel).  He said a Kuwaiti official had told 
him the US was asking LDI to resume activity in Afghanistan. 
A/DCM assured him that the US continued to support LDI's 
designation; at the same time, the US has made it clear to 
the Kuwaitis that it has nothing against Islamic charities 
and encourages those to help the Afghans.  The French 
ambassador also inquired about the receptivity of the 
Kuwaitis to counterterrorism efforts.  Both the US and 
British representatives commented that the Kuwaitis have been 
receptive, without showing much initiative.  According to 
A/DCM, there is political will at the top levels of the GOK 
to fight terrorism because they understand the consequences 
of not doing so.  Absent political will at the top, all 
efforts would fail, but with the will to combat terrorism, 
there is hope. Still, he said, it is very difficult for us, 
let alone the Kuwaitis, to control terrorist financing or 
other forms of money laundering (specifically referring to 
drug money). 
 
--------------------------------------------- --- 
(U) Coordinating Programs in Kuwait and the Gulf 
--------------------------------------------- --- 
 
18.  (SBU) The Kuwait CTAG decided upon two recommendations, 
which we hereby convey on behalf of the group, to the USG as 
chair of the February 20 meeting in Washington. 
 
-- First, launch a fresh push to encourage ratification of 
all international anti-terrorism conventions.   Germany noted 
that to be effective, the CTAG states need to be able to say 
they have ratified all.  Under French leadership last year, 
the CTAG made a joint demarche to the Kuwaitis urging them to 
ratify the protocols.  (Note:  Kuwait is a party to nine of 
the twelve international antiterrorism conventions.  End 
Note.)  The Spanish ambassador stressed that it would be good 
for the group to keep pressure on the Kuwaitis, so that the 
GOK understands that CTAG countries are concerned about 
anti-terrorism.  A/DCM agreed that impressing upon host 
governments that CTAG states are united and see 
counterterrorism as a priority is in itself a powerful 
message. 
 
-- Second, deal with the GCC states as a group and ensure 
that CTAG states take advantage of every opportunity for 
institutional dialogue to stress their unity on combating 
terrorism.  The German DCM noted that using a two-tiered, 
complementary approach on counterterrorism -- at the 
bilateral level and at the CTAG-GCC level -- would allow CTAG 
countries that do not have allocations specifically for 
bilateral counterterrorism programs to contribute to broader 
initiatives.  The Spanish ambassador concurred, and suggested 
that GCC countries might be able to take positions more 
easily under a GCC rubric than individually.  The French 
ambassador said that anti-terrorist cooperation should be 
raised at the EU-GCC Dialogue in Dublin this March.  Since 
the Kuwaitis currently hold the presidency of the GCC, the 
Italian representative pointed out, the timing could be very 
good.  A/DCM noted that GCC heavyweight Saudi Arabia has 
taken a much stronger stand against terrorism since the May 
attack in Riyadh. 
URBANCIC