VZCZCXYZ0007
PP RUEHWEB

DE RUEHAN #0411/01 1170530
ZNR UUUUU ZZH
P 270530Z APR 07
FM AMEMBASSY ANTANANARIVO
TO RUEHC/SECSTATE WASHDC PRIORITY 4702
RUEHFR/AMEMBASSY PARIS 0883
RUEHLO/AMEMBASSY LONDON 0058
RUEHBS/AMEMBASSY BRUSSELS 0011

UNCLAS ANTANANARIVO 000411 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
DEPT FOR AF/E AND EB 
DEPT PASS USTR 
PARIS FOR D'ELIA 
 
E.O. 12958: N/A 
TAGS: EFIN PTER PGOV PREL ECON CN
SUBJECT:  Comoran Union Government Fights Shell Banks 
 
REF: ANTANANARIVO 399 
 
¶1. (SBU) SUMMARY:  In an ongoing struggle to attract foreign 
investment and repair the country's reputation, the Government of 
the Union of the Comoros has taken steps to address its "shell 
banking" problem and has renewed its request for U.S. assistance. 
Vice President Idi recently briefed PolEcon Chief on his efforts to 
eliminate money laundering and potential terrorism finance in the 
Comoros.  Central Bank Governor Abdoulbastoi shared with us his 
dossier of actions against illicit financial institutions.  The 
Governor emphasized that only the Union Central Bank, with the 
consent of the Union Finance Ministry, has the legal authority to 
issue banking licenses.  He renewed his call for U.S. assistance in 
spreading the word that Anjouan-accredited institutions are illegal 
and must be barred from world financial activities. END SUMMARY. 
 
Vice President Hosts Money-Laundering Seminar 
--------------------------------------------- 
 
¶2. (SBU)  The worldly Vice President Idi Nadhoim understands that 
the Comoros' international reputation for coups d'etat, shell banks, 
and possible terrorist harbor deters legitimate investors.  Charged 
with attracting foreign capital to revive the Comoran economy, Vice 
President Idi has actively courted hoteliers and other 
businesspeople to the country's exotic shores.  On the margins of 
the U.S. - Comoros bilateral talks April 19 (reftel), Idi was eager 
to brief PolEcon Chief on steps he had initiated to stop shell 
banking and money laundering in the Comoros.  He is particularly 
keen to address this and other issues which may block the Comoros 
eligibility for the African Growth and Opportunity Act (AGOA). 
 
¶3. (SBU) Vice President Idi and the Union Central Bank Governor 
recently co-hosted a widely publicized seminar on Union policy to 
combat money laundering and terrorist finance.  With sponsor Bank of 
France, the World Bank, and other financial officials in attendance, 
the event highlighted the problem of Anjouan's "Offshore Finance 
Authority" which has sold illicit banking licenses for USD 25,000 
each.  Marc Lanteri, head of the Franc zone at the Bank of France, 
made a presentation on financial risk management and money 
laundering. 
 
¶4. (SBU) Vice President Idi and colleagues cited World Bank analysis 
that a stable and healthy financial system is a prerequisite for 
economic growth; as important as governance and infrastructure. 
Jean Pierre Michau, advisor to the Governor of the Bank of France, 
indicated that internet-based banking license sales by Anjouan were 
against Comoran law and facilitated fraudulent banking activity.  In 
a public statement Vice President Idi named Mr. Lecler, resident of 
the French Department of Reunion, as an accomplice of Anjouan 
authorities in setting up money laundering operations. 
 
¶5. (SBU)  A press report following the event highlighted "Anjouan 
Corporate Services" based in London and managed by Ronnie Dvorkin, 
indicating that this and other entities sanctioned by Anjouan Island 
authorities were in violation of Union finance laws and 
regulations. 
 
Union Central Bank Shares Shell Bank Dossier; Requests Help 
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 
 
¶6. (SBU)  Vice President Idi also instructed Union Central Bank 
Governor Abdoulbastoi to send the entire shell banking dossier to 
the Embassy.  The package includes Central Bank notices indicating 
the following entities are not sanctioned by Union authorities: 
National Bank of Anjouan, the International Company Office, the Wall 
Street Bank, anjouan.net, anjouan.com, and anjouan.org.  Governor 
Abdoulbastoi cited a 2003 law which gave sole authority for granting 
banking licenses to the Union Central Bank and the Union Ministry of 
Finance.  Having already communicated with banking authorities in 
Brussels and Paris, he asked that American authorities prohibit 
financial transactions with these and all other banks accredited 
illicitly by authorities of the Anjouan Island Government. 
Abdoulbastoi further requested that all internet sites of shell 
banks and other entities with illegal Anjouan licenses be closed. 
The Governor requested U.S. technical assistance in their efforts, 
expressing full willingness of Union finance authorities to be open 
and cooperative. 
 
¶7. (SBU) The Union Central Bank shell bank file includes 
correspondence with several French commercial banks and banking 
authorities calling attention to shell banks and related internet 
sites established illicitly by the Anjouan Island Government.  The 
Union Central Bank has issued several public announcements warning 
financial institutions about any entity associated with Anjouan, 
indicating these shell banks were illegal under Comoran law. 
Regularly published circulars list the six banks legally accredited 
by the Union Government:  Central Bank of Comoros (BCC), Commerce 
and Industry Bank (BIC - Comoros), Comoros Development Bank (BDC), 
National Post Office and Financial Services Company (SNPSF), Meck 
Union, and Sanduk Union. 
 
¶8. (SBU) COMMENT:  The Comoros shell banking problem is one of 
several frustrations facing Union of the Comoros President Sambi 
with respect to his lack of authority over Anjouan Island President 
Bacar.  During the Ambassador's recent visit to the Comoros, Sambi 
was holding his council of ministers meeting in Anjouan as a 
symbolic demonstration of unity.  President Bacar maintains a 
personal army of at least 100 "bodyguards," and continues to resist 
Union Government attempts to integrate all Comoran security forces. 
Bacar thus runs Anjouan as his personal fiefdom, raising money with 
shell banking and other illicit activities.  Having failed to bring 
Bacar into the fold by force or compromise during his year in 
office, Sambi is now pushing for observers to guarantee fair Island 
President elections in Anjouan; thus -- hopefully -- allowing the 
polls to rid him of his Bacar problem.  END COMMENT. 
 
MCGEE