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UNCLAS        AMMAN 01697

SIPDIS
CXAMMAN:
    ACTION: ECON
    INFO:   RSO RAO CONS ISU PA POL DCM USAID AMB

DISSEMINATION: ECON
CHARGE: PROG

APPROVED: DCM:DRUBINSTEIN
DRAFTED: TREAS:BGRANT
CLEARED: ECON: REASON

VZCZCAJI043
PP RUEATRS RUEHC RUEHZM RUEHAS RUEHGB RUEHLB
RUEHEG RUEHDM RUEHKH RUEHNK RUEHRB RUEHYN RUEHTV RUEHTU
RUEHCL RUEHJM RUEAHLC RUEAWJB RHMCSUU RHEHNSC
DE RUEHAM #1697/01 1091248
ZNR UUUUU ZZH
P 191248Z APR 07
FM AMEMBASSY AMMAN
TO RUEATRS/DEPT OF TREASURY WASHDC PRIORITY
RUEHC/SECSTATE WASHDC PRIORITY 8179
INFO RUEHZM/GULF COOPERATION COUNCIL COLLECTIVE PRIORITY
RUEHAS/AMEMBASSY ALGIERS PRIORITY 0181
RUEHGB/AMEMBASSY BAGHDAD PRIORITY 4902
RUEHLB/AMEMBASSY BEIRUT PRIORITY 2604
RUEHEG/AMEMBASSY CAIRO PRIORITY 3100
RUEHDM/AMEMBASSY DAMASCUS PRIORITY 3578
RUEHKH/AMEMBASSY KHARTOUM PRIORITY 0014
RUEHNK/AMEMBASSY NOUAKCHOTT PRIORITY 0019
RUEHRB/AMEMBASSY RABAT PRIORITY 0371
RUEHYN/AMEMBASSY SANAA PRIORITY 0587
RUEHTV/AMEMBASSY TEL AVIV PRIORITY 0552
RUEHTU/AMEMBASSY TUNIS PRIORITY 0984
RUEHCL/AMCONSUL CASABLANCA PRIORITY 0225
RUEHJM/AMCONSUL JERUSALEM PRIORITY 4421
RUEAHLC/DEPT OF HOMELAND SECURITY WASHDC PRIORITY
RUEAWJB/DEPT OF JUSTICE WASHDC PRIORITY
RHMCSUU/FBI WASHINGTON DC PRIORITY
RHEHNSC/NSC WASHDC PRIORITY 0310

UNCLAS SECTION 01 OF 04 AMMAN 001697 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: KTFN PTER PREL XF JO
SUBJECT: 5TH MENA-FATF PLENARY 
 
REF: ABU DHABI 4393 
 
SENSITIVE 
 
¶1.  (U) Summary:  Jordan hosted and presided over the 
fifth plenary of the Middle East North Africa Financial 
Action Task Force (MENA-FATF) from April2-4 at the 
Dead Sea.  Over the course of the plenary, delegates 
endorsed a World Bank anti-money laundering/combating 
the financing of terrorism (AML/CFT) assessment of Tunisia, 
created two ad hoc committees to study money laundering 
typologies, approved additional mechanisms for cooperation 
with regional and international bodies, and adopted a 
variety 
of internal procedures.  The last day was devoted to a 
seminar 
on mutual evaluation preparation for member countries 
undergoing AML/CFT assessments. End Summary. 
 
Well-attended with some exceptions 
------------------------------------------- 
¶2.  (SBU) Dr. Umayya Toukan, Governor of the Central Bank 
of 
Jordan (CBJ) and current President of the MENA-FATF, 
personally 
chaired the plenary which was well attended by both member 
countries and observers, including the U.S., the United 
Kingdom, 
France, Spain, the Palestinian Authority, the Financial 
Action Task 
Force (FATF), the International Monetary Fund, the World 
Bank, the Egmont Group, the Gulf Cooperation Council (GCC) 
and 
the UN Office on Drugsand Crime.  The absence of the United 
Arab Emirates, the organization?s current Vice President, 
was an 
exception to this otherwise robust turnout.  No 
representatives 
from the Saudi Arabian Financial Intelligence Unit attended 
the 
plenary. 
 
¶3.  (SBU) Note: In a private meeting with a member of the 
U.S. 
delegation, Toukan expressed frustration with the U.A.E., 
noting 
that this was the second time in two years the U.A.E. 
failed to appear 
at a plenary.  (The U.A.E. was absent from the March 2006 
plenary in 
Cairo, Egypt.)  He indicated that he would see the U.A.E. 
Central Bank 
Governor later in the month and remind him of the 
importance of 
consistent attendance.  In his closing remarks before the 
plenary, Toukan 
noted the absence of the U.A.E. and pledged to ask for 
their attendance 
at the next plenary.  End note. 
 
Day One:  Housekeeping, Creation of Ad Hoc Committees, 
and Adoption of Mutual Evaluation Procedures 
--------------------------------------------- --------- 
 
¶4.  (U) After opening remarks by Toukan, FATF President 
Frank Swedlove, 
MENA-FATF Executive Secretary Adel Al-Qulish, and Jordan?s 
Minister of 
Justice Sharif Al-Zu?bi, the plenary dealt with minor 
housekeeping 
items (e.g., adoption of 2006 annual report, budget, etc.) 
before approving 
Lebanon?s proposal to createtwo ad hoc committees to study 
AML/CFT 
vulnerabilitiesassociated with Designated Non-Financial 
Businesses 
and Professions (DNFBP?s) and Politically Exposed Persons 
(PEPs). 
Delegates from Saudi Arabia, Lebanon, Bahrain, Jordan, 
Egypt, Algeria, 
Syria, and Morocco expressed an interest in participating 
in these committees. 
 
¶5.  (SBU) The plenary then turned to a discussion of 
proposed 
mutual evaluation procedures.  The procedures for adopting 
mutual evaluations 
for GCC countries, which are concurrently members of both 
the MENA-FATF 
(as individual states) and the FATF (collectively through 
the GCC), proved to 
be a sticking point.  Delegates expressed concern that 
joint MENA-FATF/FATF 
mutual evaluations had to be separately endorsed by both 
the MENA-FATF and 
FATF plenaries, raising the specter of possible 
discrepancies in the reports 
ultimately adopted by the different organizations.  The 
procedures were 
adopted, however, after a variety of international 
observers, including 
the U.S., the U.K., and the FATF explained that 
simultaneous membership 
in the FATF and FATF-style regional bodies is a common 
occurrence and 
has yet to lead to the endorsement of conflicting reports. 
 
¶6.  (U) The day concluded with a presentation by Arab Bank? 
s Head of Global 
Regulatory Affairs, Michael Matossian, on the experience of 
Arab Bank in 
developing its AML/CFT compliance program. 
 
Day Two: Tunisian Assessment, Technical Assistance, and 
Engagement with 
Other Regional Bodies 
--------------------------------------------- --------------- 
------------- 
 
¶7. (SBU) The morning of the second day was devoted 
to discussion of 
the World Bank?s AML/CFT assessment of Tunisia.  Armed with 
a 
lengthy PowerPoint presentation, the Tunisian delegation 
argued vociferously 
for raising its compliance ratings with respect to a number 
of FATF 
recommendations. Several other delegations agreed with 
Tunisia?s argument that 
the World Bank assessment was overly harsh in certain areas 
and, as a result, 
upgraded Tunisia?s ratings for compliance with FATF 
recommendations on 
professional secrecy, suspicious transaction reporting, 
cross border reporting, 
and coverage of overseas branches and subsidiaries. 
 
¶8. (SBU) In response to the renegotiation of Tunisia? 
s compliance ratings, 
a number of international observer delegations intervened 
to emphasize the 
value of an accurate and transparent evaluation process 
based on the FATF evaluation 
methodology.  The U.S. delegation urged representatives to 
shift the focus away from 
compliance ratings and towards compliance implementation by 
recognizing that sub par 
scores can be used to demonstrate the need for additional 
AML/CFT resources to home 
country legislative and executive authorities.  The World 
Bank, FATF, and the UK 
emphasized that the assessment team utilized international 
standards through 
the use of the objective criteria established in the common 
(i.e. FATF, World Bank 
and IMF) evaluation methodology.  They noted these criteria 
must be satisfied through 
the development of transparent legal mechanisms and 
institutions.  Incidental or 
informal compliance, they argued, is insufficient.  The 
World Bank added that 
it is important to safeguard the rigor and objectivity of 
the assessment process 
in order to provide developing countries with a clear 
understanding of 
AML/CFT vulnerabilities.  Only then will governments be 
able to take the necessary remedial 
steps to allow their financial services sectors to become 
globally competitive. 
Note: This follows a similar discussion at the 4th 
MENA-FATF plenary concerning 
the Syrian mutual evaluation which resulted in an upgrade 
of Syria?s compliance ratings 
based on Syria?s perceived effort rather than verifiable 
results or criteria. (Ref A.) 
End Note. 
 
¶9.  (U) Following adoption of the Tunisian assessment, the 
plenary then discussed 
the provision of technical assistance to the Iraqi 
financial intelligence unit. 
Due to the prevailing security situation in Iraq, the 
plenary decided that 
any technical assistance provided by member countries 
should occur outside of Iraq. 
The United Arab Emirates, Egypt, and Jordan were mentioned 
as possible training venues. 
The plenary also accepted the Asia Pacific Group?s (APG) 
invitation to the MENA-FATF to 
serve as an observer at the APG and, on the basis of 
reciprocity, granted APG observer 
status at MENA-FATF. 
 
¶10. (U) In his concluding remarks, Governor Toukan 
announced that the next MENA-FATF 
plenary will be held in Damascus, Syria from November 4-8, 
¶2007. 
 
Seminar on Mutual Evaluation Preparation 
---------------------------------------- 
 
¶11. (U) After the conclusion of the plenary, a 
seminar on mutual evaluation 
preparation for countries undergoing AML/CFT assessments 
was held on April 4. 
Speakers from the FATF,World Bank, and the IMF described 
the mutual evaluation 
process, and provided guidance to member countries on the 
role of the evaluated 
country, the mutual evaluation questionnaire,and the mutual 
evaluation report drafting 
process. 
 
Bilateral Meetings 
------------------ 
 
¶12.  (SBU) On the margins of the plenary, U.S. delegation 
members engaged in productive 
discussions with several MENA-FATF members and observer 
organizations.  Delegation 
members discussed the renewal of training and technical 
assistance programs with 
the Iraqi delegate.  The US delegation also had productive 
discussions with 
the World Bank and IMF on Yemen?s new draft AML law, and on 
technical assistance 
coordination with respect to Iraq.  U.S. delegation members 
confirmed Egypt?s 
willingness to undergo an FSAT assessment,(first raised at 
the US-Egyptian 
Counter-terrorism Working Group meeting in March), and 
received initial approval from 
Kuwait on a revised FIU training seminar. 
 
CONCLUSION AND COMMENT 
----------------------- 
 
¶13. (SBU) Despite the absence of the U.A.E., the 5th 
MENA-FATF plenary was well 
attended and enjoyed strong delegate participation. 
Delegates pushed forward on 
new typologies research, continued building organizational 
infrastructure by adopting 
internal policies and procedures, approved a member country 
assessment, and took 
steps to further integrate the MENA-FATF into the global 
network of FATF-style 
regional bodies.  The agenda, however, was less substantive 
than that of the previous 
plenary given that only one member country was assessed and 
no MENA-FATF 
mutual evaluations were conducted. 
 
¶14.  (SBU) The debate surrounding the adoption of the World 
Bank?s Tunisia assessment 
demonstrated that the MENA-FATF is still a 
work-in-progress.  Delegates spent a great 
deal of time attempting to raise  Tunisia?s compliance 
ratings, rather than focusing on 
how to help Tunisia fill the gaps in its AML/CFT regime. 
Moreover, the potential 
for "grade inflation" could make it difficult for assessors 
to assign lower compliance 
ratings to any but the most egregious offenders.  Over 
time, this could undermine 
the integrity of the MENA-FATF.  The interventions of the 
international observers on this 
point, however, seemed to have registered with delegates 
who ultimately adopted 
the assessment with only four upwards ratings revisions. 
It is also likely that 
assessments undertaken by fellow MENA-FATF assessors will 
enjoy greater legitimacy 
than those undertaken by "outside" organizations such as 
the World Bank, 
however objective they may be. 
 
¶15.  (U) This cable was cleared by the members of the U.S. 
interagency delegation. 
 
HALE