VZCZCXRO2336
PP RUEHDE RUEHDIR
DE RUEHKU #1607/01 3121515
ZNR UUUUU ZZH
P 081515Z NOV 07
FM AMEMBASSY KUWAIT
TO RUEHC/SECSTATE WASHDC PRIORITY 0262
INFO RUEHZM/GULF COOPERATION COUNCIL COLLECTIVE PRIORITY

UNCLAS SECTION 01 OF 02 KUWAIT 001607 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
PASS TO EEB, S/CT AND INL 
 
E.O. 12958: N/A 
TAGS: EFIN ETTC KCRM PREL PTER KTFN
SUBJECT: TERRORIST FINANCE: RESPONSE TO FOLLOW-UP ACTION 
REQUEST ON ILLICIT CASH COURIERS 
 
REF: STATE 152088 
 
¶1.  (SBU)  In response to reftel post provides the following 
responses. 
 
¶2.  (SBU) Status of host nation laws specifically 
criminalizing bulk cash smuggling: 
 
On March 10, 2002, the Amir (Head of State) of Kuwait signed 
Law No. 35/2002, which criminalized money laundering.  Law 
No. 35 criminalizes cash smuggling within the context of 
money laundering and criminal activity.  Article 2 of the law 
makes illegal "the conversion, transfer, possession, 
acquiring, using, keeping or receiving money, knowing that 
they are derived from a crime or one of the acts of 
participation herein.  The concealment or disguise of the 
true nature of the money, its origin, place, manner of 
disposition, movement or rights to it or its possession, 
knowing that it is derived from a crime or any act of 
participation in the same."  Since Law No. 35 was enacted, 
the GOK has embarked on a legal review of the existing law 
through the establishment of an inter-ministerial National 
Committee. 
 
¶3.  (SBU) Key elements of those laws: 
 
The anti-money laundering law provides for a penalty of up to 
seven years of imprisonment in addition to fines and asset 
confiscation.  The law includes articles on international 
cooperation and the monitoring of cash and precious metals 
transactions.  Currency smuggling into Kuwait is also 
outlawed under Law No. 35. 
 
¶4.  (SBU) Cross border reporting requirements for 
inbound/outbound movement of currency and monetary 
instruments: 
 
The GOK currently has only a cash entry declaration policy as 
stipulated in the 2002 law, and subsequent Finance Ministry 
resolutions.  The law does not require individuals to file 
declaration forms when carrying cash or precious metals out 
of Kuwait.  Cash reporting requirements are not uniformly 
enforced at ports of entry.  Provisions of Article 4 of Law 
No.35 require travelers to disclose to the customs 
authorities, upon entering the country, any national or 
foreign currency, gold bullion, or other precious materials 
in their possession valued in excess of 3,000 Kuwaiti dinars 
(approximately USD 10,000).  According to U.S. Customs 
advisors based in Kuwait, these legal requirements are not 
well publicized nor are they immediately visible to travelers 
arriving through key entry points (e.g., airports, ports). 
 
¶5.  (SBU) Host country actions to interdict potential cash 
couriers or to throw risk into the system: 
 
The GOK maintains an active inspection facility at Abdali on 
the Kuwait-Iraq border to inspect and seize cash and other 
smuggled goods bound for Iraq.  This facility is equipped 
with an x-ray machine and is staffed by Kuwaiti police and 
customs inspectors.  U.S. Customs advisors are working with 
Kuwait General Administration of Customs (KGAC) to replicate 
the efforts of the Abdali facility at other Kuwait entry 
points.  In an effort to outsource its revenue collection 
program, KGAC has signed a contract with two large private 
Kuwaiti firms (Global and Agility) to begin customs revenue 
collection at entry points as part of KGAC's broader 
privatization effort. 
 
¶6.  (SBU) Status of investigations into bulk cash smuggling 
laws: 
 
The Office of the Public Prosecutor confirms referring one 
case of bulk cash smuggling involving USD 1.2 million to  the 
Kuwaiti courts for further investigation and prosecution. 
 
¶7.  (SBU) Prosecutions under bulk cash smuggling laws: 
 
Several cases have been opened under Law No. 35, but only two 
cases have gone to court.  The cases reportedly involved cash 
smuggling and failure to report currency transactions.  No 
details have been made available to Post. 
 
¶8.  (SBU) How mission elements have engaged relevant partners 
to develop and execute a cash courier interdiction plan: 
 
As part of an intensive training program with the IRS on 
November 11-15, 2006, 42 representatives from over 31 
government agencies and financial institutions in Kuwait 
received training in financial investigative techniques.  The 
 
KUWAIT 00001607  002 OF 002 
 
 
program was designed to explore the practical skills required 
to conduct financial investigations and stop the illicit 
movement of funds.  In July 2005, the Finance Ministry issued 
a resolution (No. 9) requiring KGAC to "prepare a Declaration 
Form (for entry only) in coordination with the related 
bodies" and making KGAC "responsible for receiving the 
Declaration Form."  On August 15, 2005, the Director General 
of KGAC directed the KGAC Investigations Office to execute 
the ministerial resolution.  On June 16, 2007 the Aviation 
Customs Department began issuing the money declaration forms 
at the Kuwait City International Airport. 
 
Since 1992, the GOK has funded a U.S. Customs Advisory 
program to help strengthen its customs enforcement regime. 
There are currently two U.S. Customs advisors assigned to 
KGAC, who working directly with KGAC officials including the 
Director General, to strengthen the KGAC's operations. 
Through daily interactions and formal training seminars, 
hosted by the advisors and other USG participants, KGAC 
officials are increasingly exposed to new methods and ways of 
assessing the threats posed by money laundering and terrorism 
financing.  The U.S. Customs office in Kuwait routinely 
offers training courses locally, to enhance the KGAC's 
capabilities in financial investigations, money laundering 
operations and customs violations.  Post has also utilized 
the International Visitors Program to send key customs 
personnel on targeted visit programs in the U.S.  Post also 
supports frequent visits by senior U.S. Treasury officials to 
meet with senior GOK officials to discuss anti-money 
laundering and counter terrorism finance (AML/CTF) issues. 
 
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For more reporting from Embassy Kuwait, visit: 
http://www.state.sgov.gov/p/nea/kuwait/?cable s 
 
Visit Kuwait's Classified Website: 
http://www.state.sgov.gov/p/nea/kuwait/ 
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MISENHEIMER