VZCZCXRO5490
RR RUEHGR
DE RUEHPO #0066/01 0341516
ZNR UUUUU ZZH
R 031516Z FEB 06
FM AMEMBASSY PARAMARIBO
TO RUEHC/SECSTATE WASHDC 8025
INFO RUCNCOM/EC CARICOM COLLECTIVE
RUEHAO/AMCONSUL CURACAO 0940

UNCLAS SECTION 01 OF 02 PARAMARIBO 000066 
 
SIPDIS 
 
SIPDIS 
 
DEPT FOR WHA/CAR: LLUFTIG, INL/LA: NBOZZOLO 
 
E.O 12958: N/A 
TAGS: ECON EFIN ELTN NS
SUBJECT: SURINAME'S FIU FOCUSED ON CAR DEALERS FOR NON- 
COMPLIANCE OF REPORTING UNUSUAL TRANSACTIONS 
 
REF: (A) 06 PARAMARIBO 028 (B) 05 PARAMARIBO 124 (C) 05 
 
PARAMARIBO 198 
 
PARAMARIBO 00000066  001.2 OF 002 
 
 
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Summary 
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¶1.  A significant increase in car imports in recent years, 
especially those in the luxury class range valued at 
US$25,000 and above, and suspected links between this 
activity and money laundering have prompted a crackdown on 
car dealerships by Suriname's Financial Intelligence Unit 
(FIU).  Last week, FIU head Radjendrekoemar Bhagwandas 
announced in the press that the "non-financial sector" 
category of compulsory reporters for unusual financial 
transactions, of which car dealers are a part, would face 
increased scrutiny in 2006. End summary. 
 
¶2. Suriname's dramatic increase in car imports began 
primarily after the Government of Suriname lifted the 
import license requirement in early 2004, according to 
Aroen Jadoenathmisier, Head of Import, Export and Foreign 
Exchange Control of the Ministry of Trade and Industry.  A 
car dealer thereafter only had to be registered with the 
Chamber of Commerce in order to operate.  Jadoenathmisier 
stated that the new system was meant to streamline and thus 
increase the receipt of revenue by the government from 
duties on imported vehicles.  In 2005, government income 
from the import of cars was 60 million SRD (about USD20.7 
million) in import taxes, fees and VAT tax.  As a result of 
the looser licensing requirements, car dealerships sprang 
up on seemingly every corner, including dealerships run by 
the Yokohama Trading Company, whose owner was arrested and 
convicted for money laundering in the Netherlands in 
January (see ref A).  This case underscores the suspected 
link between car lots and money laundering. 
 
¶3.  Between 2003 and 2005, approximately 44,787 new and 
used vehicles were imported into Suriname, a country with a 
total population of some 490,000.  Most of the car sales 
are to people living in the major urban areas of Paramaribo 
and Wanica.  Comparing 2005 car imports to estimates of the 
adult populations of those two urban areas, a rough 
calculation would say these could allow about 8 percent of 
the urban population to buy a car each year.  Suriname's 
estimated GDP per capita of just over USD 4,100 makes this 
volume and the appearance of increasingly expensive cars on 
the market, including luxury cars (such as Mercedes) with a 
market value of US$23,000, all the more surprising.  In 
2005 alone, the import of personal vehicles, trucks, pick- 
up trucks and buses was valued at 190 million SRD (or 
US$67.9 million), 25 million SRD more than in 2004.  The 
number of vehicles imported dropped from 15,697 in 2004 to 
15,090 in 2005, yet the individual value of imported 
vehicles increased. 
 
¶4.  In 2002, the Government of Suriname (GOS) passed and 
implemented a law establishing the Financial Intelligence 
Unit (FIU).  The FIU is tasked with collecting reports on 
unusual transactions from financial institutions, non- 
banking financial institutions and natural legal persons 
who conduct financial services (service providers).  Since 
its establishment, only banks have consistently reported 
transactions to the FIU.  Most other reporters were 
sporadic in meeting this disclosure requirement.  This was 
especially true among car dealerships.  According to FIU 
regulations, car dealers are required to report all cash 
transactions over US$25,000. Per Surinamese "Law on 
Reporting Unusual Financial Transactions," non-complying 
dealers could face a fine of up to 500,000 SRD 
(approximately US$178,500) or 10 years in prison. 
Bhagwandas believes that the threshold may be too high and 
should be adjusted downward to reflect the appropriate 
standard for a luxury car relative to Suriname income 
levels.  If so, the number of reports required to be 
submitted would increase accordingly. 
 
¶5.  Since last week's remarks to the press, Mr. Bhagwandas 
reports that there has been an increase in inquiries by car 
dealers to the FIU seeking information on how to comply 
with the regulations.  The FIU has scheduled informational 
sessions for car dealers to inform them of their 
responsibilities.  Every dealer will also be required to 
assign a contact person who will remain in touch with the 
FIU. Such outreach has previously been conducted by the FIU 
for banks and notaries. 
 
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COMMENT 
 
PARAMARIBO 00000066  002.2 OF 002 
 
 
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¶6. The increasing volume of car imports and the 
investigation into the Yokohama Trading Company (and legal 
action against its owners and associates) have long led to 
suspicions that something (i.e., money laundering) was 
afoot in this sector, making the FIU's enhanced attention 
to car dealerships a positive step toward Suriname's fight 
against financial crimes.  End Comment. 
 
LEONARD