US embassy cable - 05ALGIERS1952

C O N F I D E N T I A L SECTION 01 OF 03 ALGIERS 001952 
 
SIPDIS 
 
STATE FOR S/CT AND NEA/MAG 
DEPARTMENT OF JUSTICE FOR MS. SUZANNE HAYDEN 
 
E.O. 12958: DECL: 09/18/2015 
TAGS: EFIN, KCRM, PREL, PTER, AG 
SUBJECT: ALGERIAN EFFORTS AGAINST MONEY LAUNDERING 
 
Classified By: Ambassador Richard W. Erdman, 
for reasons 1.4 (b) and (d) 
 
SUMMARY AND ACTION RECOMMENDATION 
--------------------------------- 
 
1. (C) In a September 14 meeting with Department of Justice 
money laundering expert Suzanne Hayden, the head of Algeria's 
inter-ministerial financial action task force, Mohamed 
Benamar Aid, briefed on the group's activities since the 
adoption of new national money-laundering legislation in 
February 2005.  Expressing great appreciation for Ms. 
Hayden's visit, Ait said the group had been actively 
consulting with MENAFATF counterparts in the region; was 
anxious to increase its international money-laundering 
cooperation by joining the Egmont Group as soon as feasible; 
and, despite being in operation less than a year, had already 
begun two money-laundering prosecutions under the new 
legislation. 
 
2. (C) According to Aid, Algeria's primary challenges with 
respect to money laundering included:  the lack of a modern 
banking system; the cash nature of the Algerian economy; a 
lack of trained analysts with the necessary financial and 
legal expertise; and the unfamiliarity of many banks with 
their new legal obligation to report suspicious transactions. 
 Aid said the group planned to launch an awareness campaign 
to sensitize banks concerning suspicious transaction 
responsibilities, strongly urged Ms. Hayden to return again 
for more in-depth discussion, and made a strong pitch, 
reinforced at a follow-on dinner hosted by Ambassador, for 
U.S. help in training Algerian officials tasked with 
implementing Algeria's new money-laundering legislation. 
Embassy strongly recommends we offer USG anti-money 
laundering training for selected GOA personnel, either in 
Algiers or at the ILEA training center in Budapest. End 
Summary and Comment) 
 
3.  (SBU) Justice Department money laundering expert Suzanne 
Hayden, accompanied by Ambassador and Pol/Econ chief, called 
on Mohamed Benamar Aid and the other member of Algeria's 
inter-ministerial Working Group on Money Laundering (WGML) on 
September 14.  Aid reviewed the history of Algerian money 
laundering legislation, noting that the law under which the 
WGML was established was adopted in February 2005.  The WGML 
was intentionally structured to be independent of the 
Ministry of Finance and thus retained its autonomy, even 
though there were established links between the Finance 
Ministry and the WGML.  The WGML was created after the 
adoption of various UN conventions, especially those related 
to UNSCR 1373.  Algeria had adopted all the UN conventions 
related to money laundering and terrorism financing.  The 
fight against terrorism and money laundering was linked, 
emphasized Aid. 
 
MISSION OF WGML 
--------------- 
 
4.  (SBU) AID explained that the WGML had three main 
missions.  First, it was to establish an apparatus to fight 
money laundering in Algeria.  Second, it advised the GOA on 
actions to fight money laundering.  Third, it forged and 
maintained international ties, which were essential to the 
fight against money laundering.  The WGML consisted of six 
members:  two magistrates, a senior Interior Ministry 
official; a senior Central Bank official; one member 
appointed by the Ministry of Finance; a member drawn from 
Customs; and other analysts still  to be hired, who will 
assist in the functioning of the WGML.  These members were 
named this past March.  The Justice, Interior, and Finance 
Ministries were the main partners in anti-money laundering 
efforts, as was Customs. 
 
5.  (SBU) Aid said that in order to learn how best to manage 
the WGML operations, members visited their counterparts in 
other countries.  The first discussions took place with 
France, followed by Lebanon, Bahrain, Luxembourg, Switzerland 
and others.  Meetings were sometimes bilateral, sometimes on 
the margins on international forums.  The WGML was focused on 
establishing ties with the main money laundering centers in 
Asia and the Middle East.  Members of the group hoped to 
visit North America and China soon. 
 
INTERNATIONAL CONTACTS DESIRED 
------------------------------ 
6.  (SBU) Aid explained that Algeria belonged to and was a 
founding member of the Middle East/North Africa Financial 
Action Task Force on Money Laundering (MENA FATF).  Algeria's 
candidacy for membership in Egmont was being sponsored by 
Egypt and France.  He expressed appreciation for U.S. support 
of their membership as well.  The WGML did not believe 
Algeria was ready for membership just yet in Egmont.  As a 
result, Algeria has asked its sponsors for a delay.  In any 
event, Algeria learned much from attending international 
fora. 
 
TWO PROSECUTIONS ALREADY UNDER WAY 
---------------------------------- 
 
7.  (SBU) In 1995, said Aid, the GOA made money laundering a 
crime, and the Penal Code was updated accordingly.  Terrorism 
financing was also a crime.  The law dealt with establishing 
financial mechanisms to fight money laundering, encouraging 
international cooperation against it and penalties for 
breaking the law.  Algeria closely cooperated with French and 
World Bank experts, as well as experts from the French bank 
Credit Agricole.  Aid said the World Bank had told the WGML 
it was doing a good job with little funding over a short 
period of time.  For example, there were two prosecutions 
already underway under Algeria's new money-laundering 
legislation. 
 
NEED HELP FROM OUR FRIENDS 
-------------------------- 
 
8.  (SBU) Asked about bank's track record in reporting 
"suspicious transactions," Aid said that the larger banks 
were doing this, especially in the northern urban areas.  In 
smaller towns and, especially in the south, the record was 
less good because these smaller operations were not aware of 
their new legal obligations to report suspicious 
transactions.  Another problem was that employees in the 
banking sector were not yet trained to look for or recognize 
suspicious activities.  Algeria thus sought short-term 
training programs from its overseas friends to build 
awareness.  The WGML would like to pursue U.S. opportunities 
for training that would complement efforts underway with the 
Belgians and French.  Since the WGML had been in existence 
only a year, Algeria still had a lot of work ahead of it in 
this area, Aid commented. 
 
U.S. HAPPY TO SHARE LESSONS IT HAS LEARNED 
------------------------------------------ 
 
9.  (SBU) Hayden welcomed Aid's presentation, noting it was 
important to share experiences internationally.  The U.S. law 
on money laundering dated to 1986.  The U.S. had made many 
mistakes -- and learned from them.  The Algerians could learn 
from the U.S., just as we had also learned from our 
counterparts in other countries.  Money laundering laws, she 
continued, were among the most complex in existence because 
of the combination of financial and legal expertise necessary 
for prosecutors, courts, attorneys, and others to be 
effective in enforcing money-laundering legislation.  Banks 
had to be vigilant and furnish the necessary information.  As 
in a symphony orchestra, everyone had a role to play. 
 
VULNERABILITIES FOR ALGERIA 
--------------------------- 
 
10.  (C) Asked about Algeria's vulnerable points, WGML 
members said Algeria had no banking system.  Algeria's 
economy worked on an informal, cash basis.  There were no 
checks or credit cards, making it difficult to track funds. 
People normally carried money in large amounts.  A new 
payment system was expected in January 2006, and a draft law 
was under consideration to set the limit on cash transactions 
at about $500.  The WGML thought this figure was too low and 
would prefer a higher amount, probably $5,000.  The GOA also 
was fighting the problems of the informal market by 
instituting a new ID card system with a unique number for 
everyone.  Documentation fraud, according to the WGML, was a 
big problem in Algeria.  The problem would only grow as trade 
flows increased.  New technologies combined with an opening 
up of Algerian markets had put Algeria in a difficult 
situation.  The work of the WGML, Aid commented, was not 
easy.  The WGML was not always protected or helped.  Much 
work remained to be done in breaking taboos and convincing 
banks of the need to do their part.  The law required banks 
to report to report suspicious transactions, but banks were 
not complying with the law. 
 
PLEA FOR HELP, ESPECIALLY IN INFORMATION TECHNOLOGY 
--------------------------------------------- ------ 
 
11.  (SBU) Noting that the U.S. had about 20 years of 
experience with money laundering legislation, Aid hoped the 
U.S. could augment the experience and expertise of WGML 
staff.  Adding that the U.S. was very computerized, he also 
hoped the U.S. could play a role in helping Algeria in the 
area of information technology. 
 
ACTION / RECOMMENDATION 
----------------------- 
12.  (SBU) Embassy understands S/CT may have funding for 
anti-money-laundering training programs.  Given Algeria's 
direct experience with terrorism heavily funded from abroad, 
its strong commitment to counter-terrorism cooperation, and 
its strong desire to have effective money-laundering 
mechanisms and personnel in place before the economy takes 
off (in the next 2-3 years), Embassy strongly recommends we 
provide anti-money-laundering training for Algerian 
personnel.  Such a training program could be undertaken 
either at the ILEA center in Budapest or here in Algiers. 
 
ERDMAN