US embassy cable - 03KUWAIT3140

UNCLAS KUWAIT 003140 
 
SIPDIS 
 
STATE FOR EB/ESC/ESP (GLASS) 
STATE FOR S/CT (FOX) 
STATE FOR IO/PHO (PEREZ) 
STATE FOR NEA/ARP AND NEA/RA 
TREASURY FOR GENERAL COUNSEL AUFHAUSER 
TREASURY FOR OFAC DIRECTOR NEWCOMB 
TREASURY FOR DAS FOR TERRORISM AND VIOLENT CRIMES (ZARATE) 
TREASURY FOR TASK FORCE ON TERRORIST FINANCING 
 
E.O. 12958: N/A 
TAGS: EFIN, ETTC, PTER, PREL, PGOV, KU 
SUBJECT: IRAQ ASSETS FREEZE/GOK REVIEW OF TERRORIST FINANCE 
INTERVENTION EFFORTS 
 
REF: A. KUWAIT 3044 
     B. KUWAIT 2992 
     C. STATE 196163 
     D. STATE 186972 
     E. STATE 71056 
     F. KUWAIT 1221 AND PREVIOUS 
 
1. (U) In initial courtesy calls, in-coming Econ Chief met on 
28 June with Ministry of Finance U/S Abdul Mohsen Al-Hunaif 
and Dep U/S Mustafa Shamali; on 30 June with Kuwait Stock 
Exchange Technical Chief Wafa Al-Rashid; and on 1 July with 
Banking supervisors Abdul-Aziz Al-Bader and Abdullah Al-Sabah 
of the Central Bank of Kuwait (CBK) for general discussions 
regarding GOK activities in support of UNSCR 1483, earlier 
resolutions, and actions of the UN 661 Iraq Sanctions 
Committee. 
 
2. (U) CBK officials on 1 July confirmed receipt of Ref D 
letter from Treasury Secretary Snow and informed us that 
Ministry of Foreign Affairs officials, in conjunction with 
the Ministry of Finance, would conduct a review of GOK 
actions thus far in support of terrorist finance 
interdiction.  Subsequently, ECON provided the Ministries of 
Finance and Foreign Affairs copies of the Treasury letter and 
renewed our earlier request (Ref E) for an update on the 
specifics of GOK's finance interdiction activities. 
 
3. (U) ECON delivered Ref C demarche and talking points to 
Ministry of Foreign Affairs on 10 July and subsequently to 
the appropriate offices of the CBK and the Ministry of 
Finance.  The accompanying diplomatic note reiterated earlier 
requests for an update on Kuwait's finance interdiction 
program.  Our interlocutors cited the recent National 
Assembly elections concluded on 5 July and the current 
reorganization of Government as factors that have delayed 
GOK's review and update of Kuwait's actions to date in the 
interdiction of terrorist financing. 
 
4. (U) Comment.  We sense no reluctance on the part of our 
interlocutors to provide the promised review of Kuwait's 
activities in support of UNSCR 1483, earlier resolutions, and 
actions of the UN 661 Iraq Sanctions Committee.  The National 
Assembly elections indeed have brought some changes (Refs A 
and B) in the political line up that inevitably will affect 
who does what regarding the War on Terrorism, which 
understandably is a raised profile issue here.  Additionally, 
the GOK recently re-organized key elements for its financial 
house supervision.  Within the past six weeks, the GOK has 
promulgated Law 30 amending the 1968 Law 32 to bring the 
"Islamic Banks" under Central Bank supervision as if they 
were regular commercial operations; the Kuwaiti interagency 
Anti-Money Laundering and Anti-Terrorism Financing Committee 
was organized formally; and the Finance Ministry transferred 
control of the Financial Intelligence Unit to the Central 
Bank from the Ministry of Justice.  We expect the 
bureaucratic dust of the elections and the supervisory units' 
reorganization to settle soon and will encourage our 
interlocutors to bring us up-to-date immediately thereafter. 
End Comment. 
JONES