US embassy cable - 05MANAMA684

UNCLAS SECTION 01 OF 03 MANAMA 000684 
 
SIPDIS 
 
SENSITIVE 
 
STATE FOR S/CT, EB/ESC/TFS, INL/C/CP, H, NEA/ARPI 
TREASURY FOR ZARATE, GLASER, AND MURDEN 
NSC FOR PHEFFERNAN 
 
E.O. 12958: N/A 
TAGS: PTER, KTFN, EFIN, ETTC, BA 
SUBJECT: MENA FATF PLENARY - OFF TO A GOOD START 
 
Sensitive but unclassified; please protect accordingly. 
 
1.  (U) Summary. The first plenary meeting of the newly 
created Middle East and North African Financial Action Task 
Force (MENA FATF) was held in Manama, Bahrain April 11-14. 
The United States is an observer country to the MENA FATF and 
Treasury DAS Glaser attended as the USG representative. 
Representatives from the 14 member countries of the MENA FATF 
held a productive meeting led by President Mohammed Baasiri 
with informal leadership from the representatives of Kuwait 
and the UAE.  The MENA FATF created permanent working groups 
on Mutual Evaluation and Typologies, and three ad hoc 
committees on hawala, cash couriers, and charities.  They 
also approved the budget and agreed to appoint accounting 
firm BDO Jawad Habib as its external auditor.  The group also 
discussed the status of a comparative study of anti-money 
laundering and combating the financing of terrorism (AML/CFT) 
regimes and adding new members, including Iraq.  The second 
plenary will be held in Beirut September 2005.  End summary. 
 
2.  (U) On April 11-14, 2005 the first plenary of the MENA 
FATF was held in Manama, Bahrain.  The MENA FATF is a FATF 
styled regional body (FSRB) that promotes international 
AML/CFT standards.  Delegates from finance ministries, 
central banks, and law enforcement agencies represented the 
14 member countries: Morocco, Algeria, Tunisia, Egypt, Yemen, 
Saudi Arabia, Jordan, Lebanon, Syria, Bahrain, the UAE, 
Qatar, Kuwait, and Oman.  Member countries sent delegates at 
the undersecretary, assistant secretary, and director levels, 
which appropriately allowed for a more detailed working-level 
environment.  The United States and the UK attended as 
observer countries. Deputy Assistant Secretary for Terrorist 
Financing and Financial Crimes, Daniel L. Glaser, led the 
U.S. delegation.  Mr. Glaser was also accompanied at the 
plenary meeting by a US delegation, which included Gary 
Peters, State INL, Jason Herring, FBI, Ahmed Elbashari, 
FinCEN, and Rachel Lebenson, Treasury.  (Note. France is also 
a MENA FATF observer country but did not send any 
representatives to the plenary. Endnote).  The World Bank, 
the International Monetary Fund (IMF), the GCC, FATF, the 
United Nations Office on Drugs and Crime (UNODC), and the 
Egmont Group also attended as official observers to MENA FATF. 
 
Official and Unofficial Leadership at the Plenary 
 
3.  (SBU) The plenary was chaired by Mohammed Baasiri of 
Lebanon, President of the MENA FATF, Vice President Mahmoud 
Abdel Latif from Egypt and Executive Secretary Adel Hamad Al 
Qulish from Saudi Arabia.  Baasiri led the plenary adeptly, 
contributing instructive comments based on his role in 
constructing Lebanon,s AML/CFT regime.  Representatives from 
Kuwait and the UAE played leading roles throughout the 
plenary, which was characterized by general enthusiasm and 
engagement among the participants.  Yaqoub Al-Ebrahim, 
Manager of Supervision at the Central Bank of Kuwait, 
delivered a presentation outlining Kuwait,s administrative 
and legal procedures for overseeing charities.  He also 
supported the role of international observers in the MENA 
FATF working groups given their expertise and experience, 
despite the concerns of several participants (notably Saudi 
Arabia and Syria) who challenged the intrusiveness and value 
of international observers.  Kuwait volunteered to chair the 
Mutual Evaluations Working group and is participating in two 
of the three ad hoc committees. 
4.  (SBU) The UAE representatives similarly took on a 
leadership role.  Led by Abdulrahim Mohamed al Awadi, 
Assistant Executive Director of AML at the Central Bank of 
the UAE, the UAE delegation asserted that the MENA FATF 
should aggressively tackle issues such as encouraging its 
members to ratify and implement the UN conventions on 
terrorism and terrorist financing, and drafting AML/CFT laws 
among the member states.  The UAE has also volunteered to 
chair the Typologies Working Group and is participating in 
all three of the ad hoc committees.  On several occasions, 
the UAE offered to provide training and technical assistance 
to other MENA FATF members, or to serve as a host for 
regional training. 
 
Working Groups and Other Business 
 
5.  (U) By the second day, two working groups and three ad 
hoc groups were formed to handle more specific work of the 
MENA FATF.  The Mutual Evaluation Working Group, chaired by 
Kuwait, includes Tunisia, Algeria, Saudi Arabia, Syria, and 
Egypt.  The Training and Typology Working Group, chaired by 
the UAE, includes Bahrain, Lebanon, Morocco and Yemen. 
Additionally, three ad hoc groups were formed to address the 
issues of cash couriers (UAE, Qatar, Kuwait), charities (UAE, 
Saudi Arabia, Kuwait, Egypt), and hawalas (Jordan, UAE, 
Algeria, Egypt).  Observers from the IMF, World Bank, and 
FATF will participate in the working groups. 
 
6.  (SBU) After some debate the Plenary also chose an 
external auditor and approved the budget.  During a 
discussion on choosing an outside auditor, Kuwait encouraged 
using an auditor of global renown.  However, the plenary 
ultimately decided to appoint the Bahrain based accounting 
firm BDO Jawad Habib. The plenary also approved the budget 
(which is funded up to $500,000 each year for the first five 
years by Bahrain) and agreed to provide recommendations to 
the Secretariat for additional funding by the members. 
 
7.  (SBU)  The membership also discussed the distribution of 
a comparative survey of AML/CFT regimes in the region. There 
was some disagreement about the nature of such a resource and 
whether or not it would be used as a benchmark for 
evaluation.  MENA FATF members were concerned that they would 
have no input on this study or that this was a final report. 
Baasiri noted that this was simply a baseline document to see 
where the member states currently stand.  He urged the 
members to provide corrections to allow the Secretariat to 
translate the document before the end of April 2005. 
 
Possible New Members 
 
8.  (U) Baasiri noted that he had had inquiries from Iraq, 
Libya, Sudan, Mauritania, and Djibouti to become new members 
of the MENA FATF.  The plenary decided that the Secretariat 
could send these countries letters advising them of the 
conditions for requesting membership including the MENA FATF 
MOU.  However, the letter must be clear that it is not an 
"invitation" to join MENA FATF.  (Note. According to the MOU 
a country must request in writing to become a member and the 
membership must be approved unanimously by the MENA FATF 
membership. Endnote).  Japan and Spain have also requested to 
be included as observer countries. 
The Politics of Language and Identity 
 
9.  (SBU) The plenary, at times, provided a forum for 
national and regional politics.  Egypt and Saudi Arabia 
implored all members to speak Arabic as an indication of the 
plenary,s Arabic identity.  However, the UAE and Bahrain 
spoke almost exclusively in English, while the North African 
countries spoke in French.  Saudi Arabia was adamant about 
the minimal role of observers.  The Saudi delegate reiterated 
several times the "independent character" of the MENA FATF, 
which should be respected by minimizing the role of outside 
observers.  The President, Baasiri, and the representatives 
from Bahrain, Kuwait, and the UAE as well as the observers 
countries and institutions all stressed the importance of 
working with the observers who bring the expertise and 
knowledge of what an FSRB needs to do. 
 
A successful first Plenary 
 
10.  (SBU)  Baasiri concluded the plenary by urging member 
countries to exercise political will.  He stated that 
developing institutions alone would not suffice in creating 
tenable AML/CFT regimes but that strong commitments from each 
country,s senior leadership is also necessary.  Glaser noted 
that, the MENA FATF, though still in its infancy was already 
ahead of other FSRBs given the level of engagement displayed 
at the first plenary session.   Glaser advised that the 
plenary should consider acting as a body to develop strategy 
and oversight without micromanaging everything that the 
Secretariat does.  Both Glaser and the representative from 
 
SIPDIS 
FATF conveyed that the purpose of the MENA FATF was to adopt 
regional solutions to these issues based on the accepted 
international standards, as set forth by global FATF. 
 
World Bank and IMF Seminars on AML/CFT 
 
11.  (U)  Following two days of plenary sessions, the World 
Bank and IMF held two days of seminars addressing key AML/CFT 
topics.  Kuwait and Saudi Arabia made valuable presentations 
on the structure of their respective charitable oversight 
mechanisms.  Lebanon presented the foundation of its 
successful AML/CFT regime, and the UAE gave a presentation on 
the scope of its AML/CFT regime. 
 
The Second Plenary 
 
12.  (U) The second MENA FATF Plenary is scheduled for 
September 2005 in Beirut, Lebanon.  As part of that plenary, 
observer institutions will train MENA FATF members on doing 
AML/CFT mutual evaluations. 
MONROE