US embassy cable - 05KUWAIT1731

C O N F I D E N T I A L SECTION 01 OF 02 KUWAIT 001731 
 
SIPDIS 
 
EB/ESC/TFS MSIDDIQUI, S/CT TKUSHNER, NEA/ELA DBARON 
NEA/ARPI TWILLIAMS, NEA/I-ECON K. BRONSON, IO/PSC 
JSCHWEITZER 
NSC FOR JKEMERSON 
TREASURY FOR JZARATE, OFAC RWERNER 
MANAMA FOR JBEAL 
TREASURY FOR DGLASER, RLEBENSON, MEPSTEIN 
 
E.O. 12958: DECL: 04/24/2015 
TAGS: EFIN, PTER, KTFN, ELTN, KU 
SUBJECT: CUSTOMS GIVES MIXED MESSAGE ON ANTI-TERRORIST 
FINANCING PRIORITIES 
 
REF: A. KUWAIT 02347 
 
     B. STATE 26825 
 
Classified By: Ambassador Richard LeBaron for reasons 1.4(b) and (d) 
 
1. (C) SUMMARY: During an April 17, 2005 meeting with the 
Kuwait Customs Director General Ibraheem Al-Ghanim, visiting 
Treasury DAS Daniel Glaser learned of the new steps that 
Kuwait Customs is taking to combat terrorist financing. 
Although several new resources are being added to the Customs 
repertoire to address the problem, some basic 
money-laundering techniques are being overlooked by Customs 
or given low priority.  END SUMMARY. 
 
2. (U) Treasury DAS Glaser met with Kuwait Customs Director 
General Al-Ghanim on April 17 to learn about current 
enforcement techniques and new steps Customs is taking to 
prevent money-laundering and terrorist financing.  According 
to Al-Ghanim, Kuwait Customs currently has Passenger 
Enforcement Rover Teams (PERT) at the airport and the Free 
Trade Zone at Shuwaikh Port and plans to expand their 
presence at all ports of entry, although a specific timeline 
was not provided.  He also explained that Kuwait Customs 
requires anyone carrying over USD 10,000 (or equivalent) in 
cash into Kuwait to declare it upon entry. 
 
3. (C) When asked about declaration laws for carrying cash 
out of Kuwait, Al-Ghanim said that this procedure would be 
the "next step" in Customs enforcement plan, but he was 
unable to provide any specifics on when or how this change 
would take place.  Given the shared border with Iraq and the 
involvement of some Kuwaitis in anti-Coalition attacks via 
Syria (Ref A) DAS Glaser pointed out that not enforcing 
declarations of cash leaving Kuwait created a vulnerability 
in anti-terrorist financing efforts in Kuwait.  While 
acknowledging the points raised by DAS Glaser, Al-Ghanim did 
not seem overly concerned about immediately addressing the 
cash export declaration issue.  Al-Ghanim asserted that a 
change in legislation was not/not required to start 
implementing mandatory declarations for outbound cash, but 
when pressed by DAS Glaser for the reason why Kuwait was not 
enforcing these declarations,  Al-Ghanim was not able to 
provide a sufficient answer. 
 
4. (C) DAS Glaser also asked about any increased use of cash 
couriers to Iraq to which Al-Ghanim responded that Customs 
had not seen an increase.  However, when specifically asked 
how Mohsin Al-Fadhli, recently designated by the U.N. under 
E.O. 13224 (Ref B), was transferring money into Iraq, 
Al-Ghanim explained that people like Al-Fadhli distribute 
cash to many people who then smuggle it over into Iraq 
through the land borders away from the checkpoints.  Often, 
he added, these couriers fly to Syria or Jordan and cross 
into Iraq overland from there. 
 
5. (C) DAS Glaser followed up to inquire about the nature of 
interagency cooperation in combating terrorist financing and 
money laundering.  Al-Ghanim stated that Customs works 
closely with the Ministry of Interior (MOI) and Kuwait 
Security Services (KSS), but gave no specifics on the form of 
this cooperation.  Khalid al-Moosa, Director of Airports for 
Customs, added that every ministry of the GOK was working 
together, and that the National Committee on Money 
Laundering, headed by the Central Bank, was the central 
authority on the issue. 
 
5. (SBU) Turning the focus of the conversation to the new 
tactics that Customs is implementing to combat terrorist 
financing, Al-Ghanim was very enthusiastic about the new 
money-laundering office that is being created in Customs and 
said that he plans to oversee this new office himself.  He 
also explained that a second US Customs Liaison Officer will 
soon be joining Kuwait Customs and that this officer's main 
focus will be countering money-laundering and terrorist 
financing. 
 
6. (SBU) The meeting concluded with Al-Ghanim saying that 
Kuwait Customs, while pleased with the progress made so far, 
needs technical assistance in setting up a new Anti-Terrorist 
Financing Department and training the staff.  He also said 
that they are currently working on a "train the trainer" type 
program and would appreciate any assistance with it from the 
USG.  DAS Glaser assured Al-Ghanim that Treasury would be 
willing to work with Customs to assist them in setting up 
their new department and would work through the Embassy and 
the US Customs liaison office to provide that help. 
 
7. (C) COMMENT: Al-Ghanim's claim that Customs can enforce 
mandatory declarations for outbound cash without a change in 
legislation may be inaccurate.  Embassy US Customs Liaison 
Officer (USCLO) believes that Al-Ghanim is referring to 
Customs' ability to enforce outbound currency declarations 
through a Ministerial Decree.  This would not require a 
change in actual legislation.  However, this decree has not 
yet been written and Kuwaiti law currently does not/not have 
provisions giving Kuwait Customs the authority to require 
outbound cash declarations, according to the USCLO.  Further, 
USCLO said that Kuwait Customs has not truly implemented the 
inbound cash declaration laws.    Indeed, declaration forms 
are not even available at the airport or other ports of entry 
and most Customs agents are not familiar enough with the 
declarations law to properly handle a declarations case if 
presented with one.  Some progress may soon be made with 
inbound cash declarations, though, since funding to print the 
declaration forms was approved three months ago. 
 
8. (SBU) Embassy will continue to work with the Ministry of 
Finance and the Central Bank to encourage the establishment 
of a Ministerial Decree mandating declarations for outbound 
currency value over USD 10,000 (or equivalent) and will 
report progress septel.  A number of Embassy contacts have 
noted to us that they are unaware of similar U.S. regulations 
on outbound cash. END COMMENT. 
LEBARON