VZCZCXYZ0000
PP RUEHWEB

DE RUEHYN #1568/01 2661405
ZNR UUUUU ZZH
P 221405Z SEP 08
FM AMEMBASSY SANAA
TO RUEATRS/DEPT OF TREASURY WASHDC PRIORITY
RUEHC/SECSTATE WASHDC PRIORITY 0340
INFO RUEHEG/AMEMBASSY CAIRO PRIORITY 0896
RHMCSUU/FBI WASHINGTON DC PRIORITY
RHEHAAA/NATIONAL SECURITY COUNCIL WASHINGTON DC PRIORITY
RHEFHLC/DEPT OF HOMELAND SECURITY WASHINGTON DC PRIORITY
RUEAWJA/DEPT OF JUSTICE WASHDC PRIORITY

UNCLAS SANAA 001568 
 
SIPDIS 
 
DEPARTMENT FOR S/CT FOR GARY NOVIS 
DEPARTMENT FOR NEA/ARP FOR ANDREW MACDONALD 
DEPT OF TREASURY WASHDC FOR FINCEN FOR DANIEL HARRIS AND 
YAMAM FADL 
DEPT OF JUSTICE FOR ASSET FORFEITURE AND MONEY LAUNDERING 
SECTION FOR ROBERT STAPLETON 
FBI FOR TERRORIST FINANCE OPERATIONS SECTION FOR JILL MURPHY 
 
E.O. 12958: N/A 
TAGS: EFIN KCRM KTFN PREL PTER SNAR YM
SUBJECT: UPDATE ON YEMEN'S ANTI-MONEY LAUNDERING AND 
COUNTER-TERRORISM FINANCING EFFORTS 
 
REF: A. 07 SANAA 1418 
     ¶B. 07 SANAA 1423 
     ¶C. 07 SANAA 1424 
     ¶D. 07 SANAA 1425 
 
¶1.  This is an action request.  Please see paragraph 7. 
 
¶2.  SUMMARY:  The ROYG has recently taken some actions in the 
field of anti-money laundering (AML), including forming a 
Supervisory Committee to oversee AML efforts and 
restructuring of the Central Bank's Anti-Money Laundering 
Information Unit.  Yemen, however, still does not have a 
counter-terrorism financing law.  It remains to be seen if 
these steps will advance the state of play on this issue, 
which has been otherwise stagnant for over a year.  Post 
recommends that AML training opportunities be provided right 
away.  END SUMMARY. 
 
NEW SUPERVISORY COMMITTEE TO ASSIST IN AML AND CTF 
--------------------------------------------- ----- 
 
¶3.  In a September 14 meeting, Tax Authority Chair and 
National Anti-Money Laundering Committee (NAMLC) member Ahmed 
Ghaleb told Econoff that President Ali Abdullah Saleh is 
fully committed to carrying out recommendations listed in 
both the Financial Systems Assessment Team's (FSAT) and the 
Middle East North Africa Financial Action Task Force's 
(MENAFATF) reports.  (Note:  The multi-agency FSAT, led by 
Gary Novis of S/CT, conducted an in-country evaluation of 
Yemen's capacity to combat money laundering and terrorist 
financing, in order to determine its most critical training 
and technical assistance needs on March 1-7, 2007 (refels). 
The FSAT team generated a report, which Econoff released to 
Ghaleb on March 25, 2008.  End note). 
 
¶4.  Ghaleb said that in early September, President Saleh 
formed a "Supervisory Committee" to oversee Yemen's 
anti-money laundering (AML) program, which would be chaired 
by Minister of Finance Numan al-Suhaibi.  This Supervisory 
Committee is a separate institution from the NAMLC, but all 
members of the NAMLC would serve on the Supervisory 
Committee.  According to Ghaleb, the Supervisory Committee 
would have more authority than the NAMLC since it contains 
more powerful members, including the Deputy Minister of 
Interior, the Deputy Minister of Industry and Trade, the 
Deputy Minister of Communications, the Deputy Chair of the 
National Security Council and the Central Bank Governor. 
Ghaleb noted that the Supervisory Committee would meet on an 
ad-hoc basis and will eventually appoint a technical 
committee to carry out FSAT and MENAFATF recommendations, 
which would serve as the ROYG's AML Action Plan.  (Comment: 
The sucess of the Supervisory Committee will depend on the 
political will of its members and whether it complements the 
NAMLC.  End comment.) 
 
RESTRUCTURING OF ANTI-MONEY LAUNDERING INFORMATION UNIT 
--------------------------------------------- ---------- 
 
¶5.  In addition to forming a Supervisory Committee, the ROYG 
has decided to restructure the Central Bank's Anti-Money 
Laundering Information Unit (AMLIU).  The Head of the AMLIU, 
Abdo Hezam Saif, told Econoff on September 16 that the World 
Bank released an assessment report in August 2008 that 
outlined plans for restructuring the AMLIU.  In accordance 
with recommendations from the report, the World Bank will 
help establish three units within the AMLIU:  one to deal 
with financial investigations, another for receipt of 
complaints, and a third for database maintenance and exchange 
of information.  (Comment:  The AMLIU already has these three 
units within its structure, but is very understaffed.  This 
project will be beneficial if it improves efficiency of AMLIU 
operations and addresses the personnel issue.  End Comment.) 
 
 
TRAINING NEEDED 
--------------- 
 
¶6.  Success of Yemen's AML program will depend on adequate 
 
training.  Unfortunately, since the March 2008 release of the 
FSAT report, no anti-money laundering training has taken 
place in Yemen.  Ghaleb emphasized that training is crucial, 
especially for the AMLIU.  Abdo Hezam Saif added that twenty 
ROYG offices will need to be trained in AML techniques, 
including the Ministry of Interior, Ministry of Industry and 
Trade, the Customs Authority and the Prosecutor's Office.  An 
optimal location for training of ROYG officials, according to 
Saif, would be Egypt.  He said that the ROYG plans to 
participate in a workshop sponsored by the U.S. Department of 
Treasury's Financial Crimes Enforcement Network (FinCen) 
which will take place in Cairo in November. 
 
¶7.  ACTION REQUEST:  Post recommends that S/CT and the U.S. 
Department of Treasury's Financial Crimes Enforcement Network 
organize training for officials from the AMLIU, the Customs 
Authority and the Attorney General's/Prosecutor's Office in 
conducting anti-money laundering investigations and other 
areas, pursuant to recommendations from the FSAT Report. 
 
COUNTER-TERRORISM FINANCING LAW STILL PENDING IN PARLIAMENT 
--------------------------------------------- -------------- 
 
¶8.   Despite progress in the field of AML, Yemen still does 
not have a Counter-Terrorism Financing (CTF) law.  A joint 
technical committee (which was formed from the NAMLC and the 
Central Bank of Yemen's Anti-Money Laundering Information 
Unit (AMLIU)) completed a draft AML and CTF law in July 2007, 
with assistance from the United Nations Office of Drugs and 
Crime (UNODC), the IMF and the World Bank.  The committee 
submitted the draft law to the Cabinet in mid-August 2007. 
Ghaleb informed Econoff on September 14, 2008, that the draft 
law is still being reviewed by three committees in 
Parliament:  the Finance Committee, the Islamic Sharia 
Committee and the Constitutional Committee.  He added that 
the NAMLC is consulting with the Yemen Lawyers Association 
about the draft law and is "pushing hard to get the law 
approved."  One of the major reasons that the CTF legislation 
is held up in Parliament, according to Ghaleb, is that some 
Parliamentarians assert that the term "terrorism" is  poorly 
defined.  Another stumbling block is the Yemen Lawyers 
Association.  According to the Central Bank's Anti-Money 
Laundering Unit General Manager for Legal Affairs, Mustafa 
Kaid, there is still a lot of misunderstanding about the 
draft law among the lawyers.  In order to increase awareness 
of the law among Parliamentarians, the AMLIU sent three 
members of the Finance Committee (one from the pro-government 
General People's Congress (GPC) and two from the opposition 
Joint Meetings Party (JMP)) to Beirut in June 2008 on a study 
tour of Lebanon's AML institutions. GPC Finance Committee 
member Mohamed Abdo Saeed confirmed to Econoff on September 
15 that the draft law is in the late stages of review and may 
be presented to Parliament for a final vote by the end of 
¶2008. 
 
COMMENT 
------- 
 
¶9.  Not much action has taken place regarding AML and CTF in 
Yemen since the release of the FSAT report.  Post does not 
expect rapid passage of the CTF law because Parliament's 
attention is focused on other issues, like the April 2009 
Parliamentary elections.  President Saleh, however, appears 
genuinely interested in AML and CTF as demonstrated by his 
recent founding of a Supervisory Committee and the 
restructuring of the AMLIU.  Whether these two bodies will be 
effective mechanisms for AML remains to be seen.  Post will 
continue to engage the ROYG through training opportunities 
and possibly field visits by experts from the U.S. Treasury's 
Financial Crime Enforcement Network. 
 
SECHE