US embassy cable - 05KUWAIT3607

C O N F I D E N T I A L SECTION 01 OF 02 KUWAIT 003607 
 
SIPDIS 
 
STATE FOR EB/ESC/TFS IKRUM, S/CT TKUSHNER, NEA/ARPI 
TWILLIAMS, NEA/ELA SSONTY, NEA/IPA GLOGERFO, EUR/PGI 
LREASOR, IO/PSC BFITZGERALD 
NSC FOR JZARATE 
TREASURY FOR DGLASER, OFAC DIRECTOR RWERNER 
 
E.O. 12958: DECL: 08/10/2010 
TAGS: EFIN, ETTC, KTFN, PTER, PINR, KVPR, KU 
SUBJECT: INSIDE THE KUWAIT CENTRAL BANK'S AML/TF OFFICE 
 
 
Classified By: Ambassador Richard LeBaron: Reasons 1.4 (b) and (d) 
 
1.  (C) Summary:  Talal Alsayegh, head of the Anti-Money 
Laundering Section of the Central Bank of Kuwait (CBK), 
confirmed that the CBK notifies Kuwaiti financial 
institutions of new terrorist finance designations and seeks 
to ensure compliance through periodic assessments.  Alsayegh 
affirmed that the National Committee for Combating Money 
Laundering and Terrorist Financing recognizes the importance 
of criminalizing terrorist finance.  He could not confirm a 
completion date for the long-awaited amendment to Kuwait's 
anti-money laundering (AML) legislation, currently being 
drafted by the Kuwaiti Public Prosecutor's office, but noted 
that a key provision would authorize the Kuwait FIU to share 
its findings with non-Kuwaiti entities.  Alsayegh welcomed 
USG training opportunities, and urged that they be offered 
formally through the Foreign Ministry, but remained 
non-committal on technical training assistance offered by the 
DOJ, and others, including the IMF and MENA/FATF, until after 
a final draft of the AML legislation is completed.  End 
Summary 
 
 2.  (C) On August 10, new Embassy Econ officers met with Mr. 
Talal A. Alsayegh, head of the Kuwaiti Central Bank's 
Anti-Money Laundering Section's On-Site Supervision 
Department to discuss three main issues: (1) how USG 
terrorist finance designation notifications are processed by 
the Kuwaiti Central Bank (CBK); (2) the status of the pending 
Anti-Money Laundering (AML) draft legislation; (3) and the 
GOK's response to the pending DOJ offer to provide technical 
assistance in drafting the revised AML legislation. 
 
 
New Designations Forwarded To Kuwaiti Financial Sector 
--------------------------------------------- --------- 
 
3.  (C) Econoffs sought confirmation that new designations 
were received and acted upon by the Kuwait Central Bank (CBK) 
in a timely manner.  Alsayegh explained that all Embassy 
notifications on new designations are received by the Kuwait 
Central Bank within a week after designations are sent by 
Diplomatic Note to the Ministry of Foreign Affairs (MFA). 
Upon receipt of the designation notice, the CBK drafts memos 
from the Central Bank Governor (CBG) or his deputy to all 
local financial institution heads notifying them of the 
designations and requiring compliance and necessary action in 
accordance with international treaties and regulations.  The 
CBK also forwards to financial institutions any relevant 
background material provided by the USG on new designees. 
According to Alsayegh, the USG 
is not identified as the source of any background 
information.  Alsayegh noted that while the CBK was empowered 
with ensuring compliance, it did not have the power to freeze 
assets without a court ruling from the Public Prosecutor.  He 
added that the CBK conducts periodic assessments of financial 
institutions to ensure compliance with domestic and 
international regulations. 
 
 
Anti-Money Laundering Amendment Still Being Drafted 
--------------------------------------------- ------ 
 
4.  (C) Econoffs inquired about the status of the pending 
anti-money laundering legislation.  Alsayegh explained that 
the National Committee for Combating Money Laundering and 
Financing Terrorism (NC), chaired by the Central Bank 
Governor and comprised of 9 government entities (CBK, 
Ministry of Interior, MFA, Ministry of Interior, Public 
Prosecutor, Social Affairs, Customs, Ministry of Commerce, 
and Banking Union) serves as the strategic body on AML/TF 
issues.  Just this past week, the NC submitted a progress 
report (not available for public dissemination) to the 
Council of Ministers (Cabinet).  The NC, in-turn, established 
a working group, headed by the Public Prosecutor's office, to 
draft the AML legislation for Cabinet, and subsequently, 
National Assembly approval.  Alsayegh pointed out that the 
smaller working group, comprised of the Public Prosecutor's 
office (lead drafter), working in consultation with the CBK, 
Finance and Commerce Ministries, would allow for a more 
streamlined drafting process. 
 
5.  (C) Alsayegh said that the NC recognizes the importance 
of criminalizing terrorist financing.  He underscored the 
NC's commitment to drafting a comprehensive bill that would, 
as a key feature, allow the Kuwait FIU to share its 
information with non-Kuwaiti entities, a practice prohibited 
under current legislation.  Alsayegh hinted that without a 
specific drafting deadline, the completion date for the final 
draft remained uncertain.  He added that the August summer 
holiday season has further delayed what is likely to be a 
drawn-out National Assembly approval process (Comment: the 
National Assembly will be back in session in October). 
However, he was confident that the global rise in terrorist 
attacks and the January 2005 shoot-outs in Kuwait will help 
spur parliamentary action on the legislation.  (Embassy will 
seek opportunities to press for action.) 
 
 
USG Technical Assistance Welcome But Timing Not Right 
--------------------------------------------- -------- 
 
6.  (C) Alsayegh expressed enthusiasm about continued USG 
training opportunities, but remained non-committal about the 
DOJ offer and said that any specific assistance would have to 
come through formal MFA channels and would be considered only 
after the Public Prosecutor's office had completed a first 
draft of the AML legislation.  Alsayegh noted that the IMF 
and MENA/FATF had offered similar technical assistance. 
 
 
Bio Note 
-------- 
 
7.  (C) Alsayegh remains a valuable and well-informed contact 
on AML and other terrorist finance related matters.  He is a 
professional technocrat and appears highly motivated, 
probably in his late 30s/early 40s.  He speaks excellent 
English, is very familiar and comfortable with life in 
America (enjoys country music and travels frequently with his 
wife to Costa Mesa, CA).  He apparently has a number of 
private and commercial investments in the US, and is in the 
process of buying a ranch in Irvine, CA.  He has received 
training in the US and has participated in the State 
Department's International Visitor's program. 
LEBARON