VZCZCXRO0704
OO RUEHTRO
DE RUEHAS #1634/01 3111957
ZNR UUUUU ZZH
O 071957Z NOV 07
FM AMEMBASSY ALGIERS
TO RUEHC/SECSTATE WASHDC IMMEDIATE 4824
INFO RUEHFR/AMEMBASSY PARIS 2400
RUEHMD/AMEMBASSY MADRID 8675
RUEHRB/AMEMBASSY RABAT 2007
RUEHTU/AMEMBASSY TUNIS 6859
RUEHTRO/AMEMBASSY TRIPOLI
RUEHNK/AMEMBASSY NOUAKCHOTT 6093
RUEHNM/AMEMBASSY NIAMEY 1346
RUEHBP/AMEMBASSY BAMAKO 0295
RHMFISS/HQ USEUCOM VAIHINGEN GE
RUEAHLC/HOMELAND SECURITY CENTER WASHDC
RUEATRS/DEPT OF TREASURY WASHDC

UNCLAS SECTION 01 OF 02 ALGIERS 001634 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
DEPARTMENT FOR EEB/ESC/TFS, S/CT (NOVIS), INL 
PARIS FOR ICE ATTACHE (JOLLES) 
 
E.O. 12958: N/A 
TAGS: EFIN ETTC KTFN KCRM PREL PTER AG
SUBJECT: REDOUBLED EFFORTS TO COMBAT BULK CASH SMUGGLING AS 
INTERDICTIONS DROP 
 
REF: STATE 152088 
 
¶1. (SBU) SUMMARY: Algeria criminalized bulk cash smuggling in 
1996 and maintains strict reporting requirements and a 
non-convertible currency that limit most Algerians' access to 
foreign exchange.  The value and frequency of smuggled cash 
interdictions dropped from 2005 to 2006, although this may 
have less to do with the customs service's diligence than a 
drop in demand for black market foreign currency over the 
last two years.  The government recently launched a 
three-year, USD 150 million action plan to provide additional 
training to customs agents and encourage international 
cooperation to combat cash smuggling.  In this regard, post 
is organizing with the Department of Homeland Security's 
Immigration and Customs Enforcement (ICE) a four-day training 
seminar November 11-14 on bulk cash smuggling targeted at 
Algerian customs and police officials.  END SUMMARY. 
 
STRONG LEGAL FRAMEWORK... 
------------------------- 
 
¶2. (SBU) On July 9, 1996, Algeria adopted ordinance 96-22 
regarding exchange regulations and currency movements abroad. 
 The law criminalized cash smuggling as well as the failure 
to respect reporting requirements for the transfer of cash 
into or out of Algeria.  The maximum value of cash that may 
be carried by an individual at any given time is the 
equivalent of 7,600 Euro (roughly USD 11,000).  Higher sums 
may only be legally sent abroad by wire transfer.  Given the 
non-convertibility of the Algerian dinar, even sums less than 
the 7,600 Euro threshold must be accompanied by a bank 
statement declaring that the holder acquired the foreign 
currency with the authorization of the central bank.  Holders 
of foreign currency without such a declaration, such as 
individuals who traded dinars for foreign exchange on one of 
Algiers' many forex black markets, risk confiscation.  In 
addition to foreign currency, the ordinance applies to other 
liquid financial instruments, precious metals, and gemstones. 
 Penalties for non-compliance range from three to five years 
of imprisonment or a fine valued of up to twice the value of 
the seized property. 
 
...YET OFFICIAL INTERDICTIONS DROPPING 
-------------------------------------- 
 
¶3. (SBU) The Algerian customs service reported 373 cases of 
cash smuggling in 2006 with a total value of USD 5.6 million. 
 These cases occurred in 11 of the country's 50 wilayas 
(regional departments).  In 2005, customs reported 426 cases 
with a total value of USD 2.7 million.  The total fines 
levied against smugglers were USD 41 million in 2006.  (Note: 
 It is not readily apparent why the frequency and value of 
interdictions dropped sharply from 2005 to 2006.  The 
collapse of Algeria's parallel currency markets, for which 
the spread between the official and the black markets rates 
has dropped from 15 percent to roughly par in the last two 
years, is one possible explanation.  Another explanation may 
be the drop in demand for foreign currency as Algeria slowly 
moves to replace cash transactions with automated tools such 
as the real-time gross settlements system introduced last 
year.  End Note.) 
 
CUSTOMS TO WELCOME ICE SEMINAR NEXT WEEK 
----------------------------------------- 
 
¶4. (SBU) The Algerian government recently launched a USD 150 
million action plan for 2007-2010 to provide additional 
training to customs agents and intensify international 
cooperation.  Customs plans to increase the number of agents 
by 1,500 per year to reach 20,000 by 2010.  The customs 
service is also working with French authorities on smuggling 
operations conducted in 2004 and 2005 valued at more than USD 
500,000. 
 
¶5. (SBU) In this vein, post is working with the Department of 
Homeland Security's Immigration and Customs Enforcement (ICE) 
on a four-day training seminar November 11-14 on bulk cash 
 
ALGIERS 00001634  002 OF 002 
 
 
smuggling for Algerian officials.  The government is 
providing the venue for the event and intends to send 
representatives from the customs service, the Directorate of 
National Security, and the Gendarmerie Nationale to the 
seminar conducted by ICE officials.  We have collaborated 
with the Algerian financial intelligence unit, CTRF, to 
invite a member of the CTRF board seconded from the customs 
service to give opening remarks and describe Algeria's legal 
framework.  We look forward to the ICE seminar and future 
dialogue with Algerian agencies on this key element of 
anti-money laundering and counter-terrorist financing 
enforcement. 
FORD