US embassy cable - 04YEREVAN790

C O N F I D E N T I A L SECTION 01 OF 02 YEREVAN 000790 
 
SIPDIS 
 
STATE FOR EUR/CACEN, S/CT, INL 
 
E.O. 12958: DECL: 04/01/2014 
TAGS: PTER, ASEC, EFIN, PREL, AM 
SUBJECT: COUNTERTERRORISM ACTION GROUP (CTAG): IN-COUNTRY 
MEETINGS AND TERRORIST FINANCING CONVENTION DEMARCHE 
 
REF: A) SECSTATE 63901 B) SECSTATE 71826 C) YEREVAN 543 
 
Classified By: Charge Vivian Walker for reasons 1.5 (b) and (d). 
 
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SUMMARY 
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1. (SBU) Per Ref A, and in the effort to promote 
counterterrorism cooperation (Ref B), Post hosted a follow-up 
meeting of the in-country Counterterrorism Action Group, 
April 1, 2004, comprising representatives from the French, 
German, Italian, British and Russian Embassies.  Post invited 
Deputy Minister of Finance and Economy David Avetisian to 
speak about Armenia,s recent efforts to implement safeguards 
against terrorist financing.  Avetisian confirmed that 
Armenia has ratified the International Convention on the 
Suppression of Terrorist Financing (as reported previously 
ref B).  He conceded, however, that Armenia is still in the 
process of developing an action plan to implement the legal 
reforms for which the treaty calls.  END SUMMARY. 
 
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LAW ON TERRORIST FINANCE STILL IN DRAFT FORM 
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2. (SBU) Armenia has not yet passed a long-standing draft 
bill On Prevention of Illegally Received Income Legalization 
and Terrorist Financing, which Avetisian considers the first 
step in discharging Armenia,s duties under the Convention. 
Although Armenia has no special article in the Criminal Code 
for the financing of Terrorism, it does have various 
provisions of criminal and civil law that allow it to 
prosecute acts of terrorist financing and freeze accounts of 
suspected terrorist organizations.  Avetisian said that he 
looks forward to the passing of the draft bill as an 
opportunity to consolidate the government,s legal regime 
governing money laundering and terrorist finance and to 
establish a unified system of investigation and oversight of 
financial transactions.  He pointed out that their system is 
still in flux and that foreign technical assistance may be 
justified to help them create an enforcement regime up to 
international standards. 
 
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NOT YET CLEAR WHO'S IN CHARGE 
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3. (SBU) According to Avetisian, it is not yet clear which 
government entity will be responsible for implementing the 
reforms in the Convention.  Avetisian noted that currently 
the lead for meeting Armenia,s obligations under the 
Convention rests with the Ministry of Foreign Affairs, 
although the Ministry of Finance and Economy (MFE) plays an 
active cooperative role.  (Note:  Avetissian insisted that 
the MFE is the "heart and head" of GOAM efforts against 
terrorist financing.  End Note.)  He added that the 
Convention was ratified very quickly but that the government 
has not yet put together an action plan to implement its 
obligations.  The Central Bank and the National Security 
Service share responsibility for implementing Armenia,s 
current efforts to guard against terrorist financing.  The 
Central Bank oversees the reporting and investigation 
obligations of private banks, and circulates lists of names 
of individuals associated with terrorist organizations.  The 
National Security Service tracks any suspected terrorist 
activity in the country.  When asked under which entity a 
Financial Intelligence Unit, to be formed under the new law, 
might be rest in the future, Mr. Avetisian dodged the 
question, adding only that the Ministry of Finance and 
Economy is a policy making body, and noting that the Central 
Bank is not, technically, part of Government.  (Note: 
Avetisian told us on a previous occasion that the Ministry of 
Finance and the Central Bank submitted competing draft laws 
on money laundering, each putting a financial intelligence 
and oversight unit under the supervision of their respective 
entities.  End Note.) 
 
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ARMENIA DOES NOT POSE A BIG THREAT...YET 
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4. (C) Avetisian stated that there have been no prosecutions 
or asset freezes in Armenia related to terrorist financing. 
He pointed out that Armenia is not a major financial center, 
but added that its financial system is maturing and strong 
protections are necessary to prevent Armenia from becoming an 
attractive option for money launderers and terrorist 
financiers.  He noted as an example Armenia,s casinos, which 
are weakly regulated.  (Note:  Avetisian oversees the agency 
charged with regulating gambling.  End Note.)   He claimed 
that casinos posed a small threat as venues for money 
laundering today (because there is no real need to legitimize 
cash in Armenia, a cash economy), but that in the event that 
offshore casinos begin to operate in Armenia, the regulatory 
framework will need to be improved in order to scotch 
opportunities for would-be terrorist financiers and money 
launderers. 
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RUSSIAN POLITICAL COUNSELOR LAUDS COOPERATION 
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5. (C) Russian Political Counselor Oleg Korobkov highlighted 
the close cooperation between Russia and the U.S. on 
counterterrorism matters, and proposed building on what he 
described as the "already fully successful model" for 
cooperating on issues of non-proliferation as the best way to 
structure our joint counterterrorism efforts.  (Note:  It was 
not clear whether he was speaking on instructions; while in 
previous CTAG meetings he has come with written notes from 
which to work, in this case his comments appeared more 
spontaneous.  End Note.)  He stressed that Russia did not see 
Armenia as a particular threat with regards to terrorism, and 
told us of an incident that supposedly took place roughly ten 
years ago, when a group of Chechen activists attempted to use 
Armenia as a staging ground for operations in Chechnya. 
Korobkov noted that the "terrorists were immediately obvious" 
and arrested by Armenian authorities, and turned over to the 
Russian government within a few days.  (Note:  We cannot 
corroborate his comments, but they appear plausible.  End 
Note.)  Russian-Armenian counterterrorism cooperation is 
strong, according to Korobkov. 
 
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CONCLUSION AND COMMENT: ARMENIA KEEN TO COOPERATE 
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6. (SBU) Avetisian was keen to hear support for stronger laws 
against terrorist finance.  He mentioned that the Armenian 
National Security Service would appreciate more information 
on those individuals designated as relating to terrorist 
organizations, and that this information would facilitate 
their investigations.  The French representative, DCM Gilles 
Courregelongue promised that such intelligence cooperation 
was possible and that if the National Security Service made a 
request he would be happy to facilitate cooperation with the 
appropriate body in Paris.  Avetisian concluded by saying 
that he would write a letter to the prime minister about this 
meeting, both expressing the groups interest in Terrorist 
Finance issues and possible areas for cooperation in the 
future. 
WALKER