VZCZCXRO3752
OO RUEHDE
DE RUEHMK #1469/01 2201119
ZNY CCCCC ZZH
O 081119Z AUG 06
FM AMEMBASSY MANAMA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 5407
INFO RUEHZM/GULF COOPERATION COUNCIL COLLECTIVE IMMEDIATE
RUEATRS/DEPT OF TREASURY WASHDC IMMEDIATE

C O N F I D E N T I A L SECTION 01 OF 02 MANAMA 001469 
 
SIPDIS 
 
SIPDIS 
 
EB/ESC/TFS FOR BADKINS, S/CT FOR TKUSHNER, 
NEA/ARP, IO/PSC FOR BFITZGERALD 
TREASURY FOR DGLASER AND OFAC FOR RWERNER 
 
E.O. 12958: DECL: 08/07/2016 
TAGS: KTFN EFIN PTER BA CTR ECTRD POL
SUBJECT: FINANCIAL CRIMES LAW ESTABLISHES EXEMPTION FOR 
FUNDING "FREEDOM FIGHTERS" 
 
Classified By: CDA Susan L. Ziadeh, reasons 1.4 (b) and (d). 
 
¶1. (C) Summary.  A recently passed law on its way to the King 
for signature that addresses money laundering and terror 
financing establishes an exemption for funding "freedom 
fighters" and "nations struggling against foreign invasion 
and aggression."  Bahrain Monetary Agency Advisor Ralph Ricks 
confided that it would be embarrassing for Bahrain to enact 
the law after the BMA had worked so long to develop solid 
terror finance legislation.  However, he observed that the 
current political climate made it difficult to effect changes 
in the legislation at this point.  Shura (Consultative) 
Council (Bahrain's appointed upper house) Finance and Economy 
Committee Chairman Jamal Fakhro said the "freedom fighter" 
amendment had been inserted by Islamist deputies in the 
elected lower house of parliament, the Council of 
Representatives (COR).  Shura members felt it was totally 
wrong but ratified it under pressure from the GOB to pass the 
law as soon as possible.  In a related development, the press 
reported that six political societies plan to send a 
representative to deliver funds raised to benefit the people 
of Lebanon, despite lacking GOB approval to do so.  End 
Summary. 
 
¶2. (C) Ralph Ricks, Advisor to the Bahrain Monetary Agency 
(BMA) Governor, told Econoff August 3 that a revised money 
laundering law on its way to the King for signature contained 
several flaws.  The legislation prohibits money laundering to 
support terrorism, but expressly excludes from its definition 
of terrorism "freedom fighters" and "nations that struggle 
against invasion or foreign aggression, colonization, or 
foreign supremacy for the purpose of freedom and national 
liberty." 
 
¶3. (C) Ricks confided that it would be embarrassing for 
Bahrain to enact the law after the BMA had worked so long to 
develop solid terror finance legislation.  He added that it 
was unclear why the money laundering legislation carries a 
different definition of terrorism than does the recently 
passed anti-terrorism law, which defines terrorism as "any 
use of violence or threats of violence to others, for 
whatever reason, by an individual or group ... which will 
lead to the harm or threat of harm to people..."  There are 
no "freedom fighter" exclusions.  The anti-terrorism law is 
also currently awaiting the King's signature.  Ricks said 
that on a technical level, it was also disturbing that a 
number of IMF-recommended improvements to the money 
laundering law, having nothing to do with terrorism, had not 
been incorporated into the final draft.  He attributed the 
law's shortcomings to incompetence in the Cabinet Directorate 
for Legal Affairs and on the lack of an interministerial 
review process. 
 
¶4. (C) Ricks said it was possible that the King could send 
the draft back for modifications.  However, he observed that 
the current political climate would make it particularly 
difficult to effect changes to the "freedom fighter" 
provision.  BMA officials hoped to be able to introduce 
revisions to fix the legislation.  However, he noted that 
such revisions would have to be taken up by the new 
Parliament (following elections in Fall 2006) and doubted 
that this issue would take priority on the new Parliament's 
agenda. 
 
¶5. (C) Shura Council Finance and Economy Committee Chairman 
Jamal Fakhro told Pol/Econ Chief August 7 that the amendment 
adopting an exclusion for "freedom fighters" had been 
inserted by Islamist deputies in the COR.  Fakhro said the 
Shura felt the amendment was totally wrong but ratified it 
under pressure from the GOB to pass the law as soon as 
possible.  Referring to the Islamists, he added, "It's crazy 
that those sitting in the back rows were able to push this 
through."  (Note: The Shura Council's web site states that 
the money laundering law's definition of terrorism derives 
from the Organization of the Islamic Conference (OIC), which 
states, "People's struggle, including armed struggle against 
foreign occupation, aggression, colonialism, and hegemony, 
aimed at liberation and self-determination in accordance with 
the principles of international law shall not be considered a 
terrorist crime."  End Note.) 
 
¶6. (SBU) In a related development, the press reported August 
7 that six political societies would send a representative to 
deliver funds raised to benefit the people of Lebanon.  A 
spokesman said the societies did not obtain a government 
permit to raise or deliver the funds, a process separate from 
a government-sponsored drive to raise money for the Lebanese 
 
MANAMA 00001469  002 OF 002 
 
 
people through the Bahrain Red Crescent Society to be 
delivered via the United Nations Development Program.  Post 
will raise this issue with GOB officials and report their 
reactions. 
 
 
********************************************* ******** 
Visit Embassy Manama's Classified Website: 
http://www.state.sgov.gov/p/nea/manama/ 
********************************************* ******** 
ZIADEH