US embassy cable - 05KUWAIT4741

C O N F I D E N T I A L SECTION 01 OF 02 KUWAIT 004741 
 
SIPDIS 
 
SIPDIS 
 
STATE FOR EB/ESC/TFS JCLARK, S/CT TKUSHNER, NEA/ARPI 
SWALKER, NEA/RA LLEE, IO/PSC BFITZGERALD, TREASURY FOR TFFC 
DGLASER AND OFAC FOR RWERNER, NSC FOR JZARATE, LONDON FOR 
LTSOU, MANAMA FOR JBEAL 
 
E.O. 12958: DECL: 11/13/2015 
TAGS: EFIN, ETTC, KTFN, PTER, CVIS, KVPR, KU, TERROR FINANCE 
SUBJECT: HEAD OF CENTRAL BANK'S AML UNIT ON MENA/FATF, 
DRAFT TF LAW, AND KUWAIT'S FIU 
 
REF: KUWAIT 3831 
 
Classified By: Ambassador Richard LeBaron.  Reasons 1.4 (b) and (d) 
 
1.  (C) Begin Summary.  On November 10, Emboffs met with 
Talal Al-Sayegh, head of the Kuwait Central Bank's Anti-Money 
Laundering unit, to discuss the latest MENA/FATF 
developments, get an update on the new terror finance 
legislation, and reaffirm USG technical assistance offers in 
support of Kuwait's CTF/AML efforts.  Al-Sayegh confirmed 
that Kuwait will host a training seminar for MENA/FATF 
assessors in December (17-21).  He explained that the draft 
of the new terror finance law was complete and pending the 
approval of the National Committee on Combating Terror 
Finance and Money Laundering prior to submission to the 
Council of Ministers (cabinet) and National Assembly.  He 
welcomed USG input on the draft and noted that the timing of 
consultations will be determined by the National Committee. 
Al-Sayegh explained that the new law would address systemic 
shortfalls, including deficiencies in Kuwait's Financial 
Intelligence Unit (FIU).  He acknowledged and welcomed USG 
technical assistance offers without committing to anything 
specific at this time.  End Summary 
 
Kuwait's Role in MENA/FATF 
-------------------------- 
 
1. (C) On November 10, Econoff, accompanied by U.S. Customs 
advisor and Poloff, met with Talal Al-Sayegh, head of the 
Central Bank of Kuwait's (CBK) Anti-Money Laundering (AML) 
unit to discuss Kuwait's participation in the latest Middle 
East and North Africa Financial Action Task Force (MENA/FATF) 
plenary held in Beirut on September 26-27.  Al-Sayegh 
informed Emboffs that the plenary was attended by members of 
the GOK's interagency National Committee on Combating Terror 
Finance and Money Laundering, resulting in Kuwait's active 
participation in the development of plenary papers 
identifying "best practices" on charities and cash couriers. 
 
2.  (C)  Al-Sayegh explained that these papers, including a 
third on hawalas, were approved by the MENA/FATF member 
states and would soon be available on the MENA/FATF website 
for public review.  He added that two subcommittees, one on 
"Training and Assessment" and a second on "Evaluations" were 
established with the objective of providing member states 
with appropriate technical assistance and guidelines for 
conducting self-assessments and mutual evaluations of their 
respective CTF/AML regimes. 
 
3.  (C)  Al-Sayegh noted that Kuwait's well-established 
standards of compliance allowed it the opportunity to host a 
training workshop for member state assessors, to be conducted 
in Kuwait on December 17-21.  He explained that the relevant 
training material had been provided by the World Bank and IMF 
and that each of the member states would nominate a total of 
three workshop participants from the financial, legal, and 
law enforcement sectors.  The training program would provide 
for mock assessments in anticipation of the March 2006 
FATF-mandated mutual country evaluations. 
 
4.  (C) When asked about possible Kuwait membership in the 
Paris-based Financial Action Task Force (FATF), Al-Sayegh 
explained that FATF was not looking to expand its membership 
at this time given budget constraints, but noted that Kuwait 
was an indirect member through GCC representation. 
 
New Terror Finance Law 
---------------------- 
 
5.  (C) Al-Sayegh said that the draft legislation amending 
the country's outdated 2002 money laundering law was complete 
and pending final review by the National Committee at its 
next meeting (date not confirmed).  Emboffs reaffirmed the 
USG's interest in reviewing the draft legislation in 
anticipation of its submission to the Council of Ministers 
and National Assembly for final approval.  Al-Sayegh 
acknowledged the pending USG offer to review the draft and 
explained that such offers by the USG's Department of 
Justice, FinCen and others, including the IMF, were welcome 
but would have to be agreed upon by the National Committee. 
(Note:  The Central Bank Governor is the Chairman of the 
National Committee and is amenable to "exchanging notes" on 
the draft per reftel meeting with Ambassador.) 
 
KUWAIT 00004741  002 OF 002 
 
 
 
Strengthening Kuwait's FIU 
-------------------------- 
 
6.  (C) With regard to the Kuwait Financial Intelligence Unit 
(FIU), Al-Sayegh explained that the current FIU is comprised 
of seven CBK officials, assigned on a part time basis from 
other CBK departments.  He acknowledged that the lack of 
Egmont Group membership and the FIU's overall structure and 
role at present were indicative of "deficiencies in the 
system."  Without offering specifics, Al-Sayegh noted that 
the new draft legislation would rectify the systemic 
shortfalls in the FIU, transforming the current operation 
into a management entity capable of receiving and sharing 
information on a timely and comprehensive basis.  He also 
noted that Kuwait Customs' request to assign a liaison 
officer to the FIU is under consideration.  U.S. Customs 
advisor stressed the importance of establishing a 
coordinating link between the FIU and Kuwait Customs to 
ensure timely information exchange.  Emboffs informed 
Al-Sayegh of USG technical assistance for FIUs and urged 
Al-Sayegh to take advantage of those resources.  Poloff cited 
USG support to Yemen's FIU as a notable example of the broad 
resources available from various USG agencies.  Al-Sayegh, 
although non-committal, was appreciative and promised to take 
these and other training offers into consideration. 
 
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LEBARON