VZCZCXYZ0000
RR RUEHWEB

DE RUEHLM #1679/01 2860539
ZNR UUUUU ZZH
R 130539Z OCT 06
FM AMEMBASSY COLOMBO
TO RUEHC/SECSTATE WASHDC 4460
INFO RUEATRS/DEPT OF TREASURY WASHDC
RUCNFB/FBI WASHINGTON DC
RHEFHLC/HOMELAND SECURITY CENTER WASHINGTON DC
RHHMUNA/USCINCPAC HONOLULU HI

UNCLAS COLOMBO 001679 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
DEPARTMENT FOR SCA/INS, S/CT AND EB/ESC/TFS 
 
E.O. 12958: N/A 
TAGS: PTER PREL CE
SUBJECT: SRI LANKA: TEXT ON GSL REPORTS ON LTTE FINANCING 
 
REF: COLOMBO 1568 
 
¶1. (SBU) Summary: During reftel discussion to prepare for the 
initial meeting of the Contact Group, Government of Sri Lanka 
(GSL) officials gave Post copies of reports they had produced 
regarding Liberation Tigers of Tamil Eelam (LTTE) financing. 
The following are excerpts from two of those reports, each of 
which also included graphs and organization charts which 
could not be reproduced in cable format.  Two additional 
reports, marked "TOP SECRET (EYES ONLY)" by the GSL, 
addressed LTTE fundraising and procurement and LTTE shipping 
networks.  These contained even more extensive diagrams and 
notes which could not be compiled into cable format.  If 
Department and Washington agencies find the following 
information useful, Post could pouch acomplete set of the 
reports to the Department fo dissemination as appropriate. 
End Summary. 
 
2 (SBU) Begin text of Central Bank Financial Intellience 
Unit report (no GSL classification): 
 
The Tamil Rehabilitation Organization (TRO) 
 
The TRO is a registered non-governmental organization in 
terms of the Certificate of Registration of Voluntary Social 
Services-Non Governmental Organization under Voluntary Social 
Services Organizations (Registration and Supervision) Act 
No.31 of 1980 as amended by Act No.8 of 1998 bearing 
registration No.50706. Its registered office is at 410/112 
Bullers Road, Colombo 7. 
 
Since 2003, the TRO has maintained bank accounts at 7 
systematically important banks in the country, namely, 
People's Bank, the Bank of Ceylon, HNB, Commercial Bank, 
Seylan Bank, PABC Bank and the Standard Chartered Bank, 
though which banking network it has been in receipt of  large 
foreign remittances from across the world. To date it has a 
network of 153 accounts at the above-named banks, 139 of 
which are in the North and East. The breakdown of bank 
accounts per Bank is given bellow:- 
 
Bank of Ceylon, 10 accounts in Killinochchi, Vavuniya, 
Mannar, Trincomalee, Mutur and Mullaviativu; etc 
 
People's Bank, 22 accounts in Killinochchi, Mullaitivu, 
Akkaipattu, Karaitivu, etc. 
 
Hatton National Bank 26 accounts in Vavuniya, Mannar, 
Trincomalee, Jaffna, Batticaola, Wellawatte, etc. 
 
Seylan Bank 82 accounts in Vavuniya, Trincomalee, Batticaloa, 
Jaffna, First City Office, and Free Trade Zone; 
 
 
PABC Bank 6 accounts in Old Motor Street and in the Colombo 
         metropolitan Area; 
 
Commercial Bank 7 accounts in Batticaloa, Kotahena and in the 
North and East. 
 
During the period January 2003 to March, 2006 the TRO has 
received direct foreign remittances amounting to the Sri 
Lanka rupee equivalent of Rs.2.2 billion. These remittances 
have been received from the TRO offices in 9 countries 
consisting of 6 major European countries, Australia, Canada 
and the U.S.A. and from affiliated organizations and 
individuals abroad and international NGOs. 
 
Up to the last quarter 2005, 50 percent of these remittances 
were received trough TRO Accounts maintained by the Standard 
Chartered Bank. However, in view of stringent anti 
money-laundering requirements and know-your-costumer rules 
imposed by the Central Bank of Sri Lanka with regard to 
concerns on the conduct of the account, the TRO account was 
closed by SCB. The account was transferred from the SCB to 
the Seylan Bank, Vavuniya on September, 2nd 2005. The largest 
number of TRO accounts are maintained at the Seylan Bank 
which operates 66 accounts for the TRO. On inquiries made 
about the need for such large number of accounts for a single 
organization, the Bank said that each account was in respect 
of identified projects. The Bank was, however, able to submit 
only 10 project reports. 
 
Post - tsunami funds received by TRO 
 
Of total post-tsunami funds received through the banking 
system, the TRO received the largest sum of a total of Rs.4 
billion or 10 percent of all tsunami funds received through 
the banking system in Sri Lanka, for the period January 2005 
to June 2006. This figure includes domestic transfers-credits 
to the TRO accounts from NGOs and other banks amounting to 
Rs.2.6 billion. 50 percent of foreign remittances were 
received from the U.S.A. of which the TRO U.S.A. accounted 
for 50 percent. 
All these funds have been withdrawn for use in projects 
purporting to be for tsunami purposes. In effect 106 percent 
of bank funds have been withdrawn. It is evident that these 
funds have been utilized for whatever post-tsunami 
humanitarian work they were meant for which is deemed to have 
been undertaken by the TRO and should have been completed 
during a period of over one and a half years. The balances 
reported by 6 banks as at the date the freezing order, viz. 
Rs.113.8 million, are only a mere fraction of the funds 
received by the TRO, particularly during the post-tsunami 
period. It is therefore deemed that the funds coming through 
the banking system in the hands of the TRO. 
 
Several international NGO are carrying out humanitarian 
projects in the LTTE controlled areas purporting to be for 
Tsunami purposes with funds received for this purpose through 
 
SIPDIS 
the banking system. INGOs such as UNDP, UNICEF, Save the 
Children, Actionaid, ILO have transferred funds directly to 
the TRO for humanitarian projects. These INGOs may be 
requested to account for these funds. 
 
The TRO/USA connection 
 
The TRO Sri Lanka has received almost 10 million U.S. dollars 
in foreign currency remittances from the USA during the 
period January 2003 to March 2006 through the commercial 
banks in Sri Lanka. This represents the largest component of 
foreign currency remittances received by the TRO accounting 
for 41 percent. The TRO-USA is the largest contributor to the 
TRO Sri Lanka. In August alone this year, a total of 
U.S.566,000, or LKR 60 million, was remitted by the TRO USA 
to the TRO and various affiliated organizations in North and 
East. These funds have been received from TRO office 
registered in Cumberland in State of Maryland in the U.S.A. 
which is the entity that is presentlybeing investigated by 
the U.S. authorities with egard to arms purchases for LTTE. 
 
TRO Front orgnizations and transfers from International NGOs 
INGOs) 
 
Several front organizations of the TRO purporting to be NGOs 
in their own right have been identified. The following are 
some of them:- 
 
-White Pigeon-registered as a Charity in the UK but now 
delisted by the Charity Comissioner. 
-The Ghandi Seva Sangam - in receipt of funds from TRO 
-Social Economic Development Organization for Tamils (SEDOT) 
-The Bank of Tamil Eelam, in Killinochchi with branches in 
the North and East. 
-The Economic Consultancy House 
-The Dry Zone Development Foundation. 
 
 
The following the INGOs have direct dealings with TRO and 
regular transfers from the following INGO accounts have taken 
place purporting to be for projects handled by the TRO, many 
of which are in the uncleared areas under the LTTE 
administration:- 
 
-The ILO 
-Save the Children 
-Actionaid International Sri Lanka which has signed an MOU 
with the TRO 
-UNICEF 
 
(End text) 
 
¶3. (SBU) Begin text of Ministry of Foreign Affairs report (no 
GSL classification): 
 
Remittances received by Tamil Rehabilitation Organization 
(TRO) Sri Lanka from United States of America - 2003 - March 
2006 
 
TRO Sri Lanka (TROSL) has received USD 9.09 Mn of foreign 
currency remittances from the United States of America (USA) 
during the period January 2003 to March 2006 through the 
commercial banking system in Sri Lanka. Of total remittances 
received by the TROSL, remittances from the USA represent the 
 
largest at around 40.72 percent of total foreign currency 
remittances received by the TROSL. 
 
2004 recorded the highest inflow  with 38 percent of total 
remittances from the USA received amounting to USD 3.48 Mn., 
with USD 3.16 Mn or 35 percent and 2.06 Mn. or 23 percent in 
2003 and 2005, respectively. USD 0.39Mn has been received in 
the first quarter of 2006 representing a significant decline. 
 
According to a data available, TRO - USA is the largest 
contributor to the TROSL, remitting USD 5.01 Mn or 55.15 
percent of total remittances from the USA to Sri Lanka. Of 
these remittances from the US, the Raj Rathnam Family 
represent 3.3 Mn or 36.31 percent. These two remitting 
parties together have remitted USD 8.31 Mn. To the TROSL, 
representing 91.5 percent of total remittances from the USA. 
 
(End text) 
 
MOORE