VZCZCXRO2700
RR RUEHMA RUEHPA
DE RUEHMV #0976/01 3360806
ZNR UUUUU ZZH
R 010806Z DEC 08
FM AMEMBASSY MONROVIA
TO RUEHC/SECSTATE WASHDC 0572
RUEAWJB/DEPARTMENT OF JUSTICE WASHDC 0014
RUEATRA/DEPT OF TREASURY WASHDC
INFO RUEHZK/ECOWAS COLLECTIVE

UNCLAS SECTION 01 OF 03 MONROVIA 000976 
 
SENSITIVE 
SIPDIS 
 
DEPARTMENT FOR INL, SCT AND EEB 
JUSTICE FOR AFMLS, OIA AN OPDAT 
TREASURY FOR FINCEN 
 
E.O.12958: N/A 
TAGS: KCRM EFIN KTFN SNAR ECON LI
SUBJECT: LIBERIA:  2008-09 INTERNATIONAL NARCOTICS CONTROL STRATEGY 
REPORT (INSCR) PART II - MONEY LAUNDERING AND FINANCIAL CRIMES 
 
REF:  STATE 103815 
 
¶1. Attached is the text of Liberia's 2008-09 INSCR report.  The text 
has been e-mailed as instructed reftel.  Monrovia POC is economic 
officer Lucy Abbott abbottlk@state.gov.  (Note:  URLs exceeding 55 
characters have been removed but are included in the text sent via 
e-mail.  End note.) 
 
¶2.  Begin text 
Liberia is not a significant regional financial center but financial 
controls are weak and it is likely that money laundering occurs. 
Both Liberian and U.S. dollars are legal tender in Liberia, making 
it easier to launder U.S. currency.  There is a significant market 
for smuggled goods and borders are porous.  There is little 
information on whether money laundering is linked to the sale of 
narcotics, but few hard drugs are interdicted in Liberia.  There are 
no confirmed cases of money laundering or terrorist financing in the 
Liberian banking sector.  (Note:  All currency amounts are in U.S. 
dollars.  End note.) 
 
Offshore Financial Centers 
---------------------------- 
 
Liberia is not an offshore financial center and the country does not 
license offshore banks or businesses including casinos.  Anonymous 
directors are not allowed nor are bearer shares permitted for banks 
or companies. 
 
Free Trade Zones 
---------------- 
 
Liberia does not have a designated free trade zone. 
 
Legal Foundation of the AML Regime 
---------------------------------- 
 
Laundering the proceeds of "criminal conduct" is a criminal offense 
according to a 2002 amendment to Title 26, chapter 15, sub-chapter G 
of the Penal Code.  "Criminal conduct" is defined as an act that 
occurs in Liberia that constitutes a non-bailable first-degree 
felony or an act that occurs outside Liberia that would be 
considered an offense if it had occurred in Liberia.  (The only 
non-bailable crimes in Liberia are treason, armed robbery, and 
rape.)  The law does not specifically refer to drug-related money 
laundering.  The law also outlines measures to be taken by financial 
institutions to prevent money laundering.  There are criminal 
penalties associated with carrying out relevant financial business 
in contravention to the Act.  Drug trafficking is not a criminal act 
in Liberia, but possession of drugs is. 
 
The country has not enacted secrecy laws, but information is not 
easily available.  A draft Freedom of Information Act has been 
presented to the Legislature but has not been passed. 
 
Financial Sector 
---------------- 
 
The Central Bank of Liberia (CBL) supervises financial institutions. 
 Regulations on Know-Your-Customers (KYC) and Customer Due Diligence 
(CDD), issued by the CBL  in 2005, require that a financial 
institution should, at a minimum, have a customer acceptance 
procedure, a customer identification procedure, a procedure for 
on-going monitoring and scrutiny of transactions of high risk 
accounts, an appropriate risk management system, and a system for 
suspicious activity reporting.  Banks are required to freeze the 
assets of a suspicious account pending results of the government's 
investigation.  Records must be kept for five years. 
 
Under Central Bank KYC and CDD guidelines, banks should maintain 
integrity, promote ethical and professional standards, and combat 
the misuse of the financial system by criminal elements.  The 
threshold for suspicious transactions or transfers is $25,000 or 
more for individuals and $40,000 or more for corporations. 
 
Banks should report suspicious transactions but normally do not. 
Under the regulations, the CBL is authorized to carry out spot 
supervision to determine compliance with regulations.  Reporting 
institutions are protected by law if they report in compliance with 
regulation.  However, Liberia's justice sector is weak and legal 
protection is not always guaranteed.  Financial institutions that 
requested guidance from the CBL on how to handle a suspicious 
transaction were reportedly advised to "use your discretion."  The 
CBL does not have data on suspicious transaction reports, but told 
us that a bank did note some suspicious transactions this year and 
reported them directly to the Ministry of Justice.  The 
 
MONROVIA 00000976  002 OF 003 
 
 
ineffectiveness of Liberia's judicial system ensures that action on 
cases referred to the Ministry of Justice is unlikely. 
 
Financial institutions and non-financial institutions, including 
insurance companies and foreign currency exchange houses, are 
supervised and controlled by the CBL.  Stock brokerages do not 
exist, but they would be supervised by the CBL.  There are three 
casinos in Liberia's capital.  Casinos are registered as businesses, 
but taxation and profit-sharing are negotiated directly with the 
government.  The Central Bank does not regulate casinos and there is 
no specific law regulating money laundering activities linked to 
casino operations. 
 
Financial Intelligence Unit/Investigations 
------------------------------------------ 
 
There is no Financial Intelligence Unit (FIU).  Intelligence related 
to money laundering and other financial crimes is handled by various 
government security organizations in an uncoordinated fashion. 
There is no reporting on the number of suspicious transaction 
reports.  The Liberian National Police (LNP) investigates financial 
crimes through the Criminal Investigation Division's Technical 
Investigation Unit and the National Bureau of Investigation (NBI) 
investigates crimes through the Economic Crimes and Transnational 
Crimes Divisions.  The Ministry of National Security and the 
National Security Agency (NSA) all have intelligence units and are 
marginally responsible for investigating financial crimes.  None of 
the agencies are adequately staffed or resourced. 
 
Large amounts of remittances enter Liberia every year through 
institutions such as Western Union or Moneygram.  According to 2004 
regulations  governing money remittance entities, amounts over 
$5,000 must be sent through a bank.  There are numerous illegal 
money changers but no known alternative remittance systems that 
by-pass financial institutions.  The Liberian government has done 
little to combat illegal money changers.  Porous borders make cash 
smuggling likely. 
 
Asset Forfeiture and Seizure Legislation 
---------------------------------------- 
 
The anti-money laundering law provides for seizure of laundered 
assets including property, land, securities, and cash.  However, 
there have been no arrests, prosecutions or convictions for money 
laundering or terrorist financing.  The Liberian government has not 
frozen the assets of any of the Liberians (including four Liberian 
legislators) on the UN asset-freeze list.  The banking community may 
cooperate with enforcement efforts with the involvement of the CBL 
or court order.  The police and other security officials have the 
power to seize drug-related assets, but need permission from the 
courts.  Implementation of laws is hampered by political 
interference, judicial corruption, and lack of adequate resources. 
 
Terrorist Financing 
------------------- 
Liberia has not criminalized the financing of terrorism as required 
by United National Security Council Resolution 1373.  Liberia's 
anti-money laundering law does not cover "all serious crimes" and 
makes no specific mention of terrorist financing.  The Liberian 
government does not have a mechanism for circulating the UN 
terrorist financing list to financial institutions. 
Cross-Border Transportation of Currency and Negotiable Instruments 
The CBL regulations on international transportation of currency were 
issued in "Regulations Dealing with the Physical Movement of Foreign 
Currency Bank Notes" issued November 23, 2001, and on the Transfer 
of Foreign Currency, issued the same day.  The documents outline 
statutory requirements limiting or monitoring the international 
transport of currencies. 
International bank transfers from accounts are not limited, provided 
the funds have been in the account for three days.  Individuals 
without an account may make over-the-counter transfers of up to 
$5,000. 
Any person wishing to move foreign currency banknotes out of Liberia 
shall be allowed an undeclared limit of up to $7,500 or its 
equivalent in other foreign currencies.  Any amount in excess of 
$7,500 may be carried by one person only in the form of bank drafts, 
traveler's checks, money orders, and/or other similar instruments. 
Any amount of foreign currency banknotes is allowed into Liberia, 
but cash (banknotes/coins) in excess of $10,000 or its equivalent in 
other foreign currencies must be declared to the authorities of the 
CBL at the port of entry. 
International Cooperation 
------------------------- 
Liberia has accepted but not signed the UN International Convention 
against Illicit Traffic in Narcotic Drugs and Psychotropic 
 
MONROVIA 00000976  003 OF 003 
 
 
Substances (Vienna Convention), the UN Convention against 
Transnational Organized Crimes (Palermo Convention), the UN 
Convention Against Corruption, and the UN Convention for Suppression 
of the Financing of Terrorism. 
Liberia is not a member of the Financial Action Task Force, but does 
work with the Basle Committee for Banking Supervision for West and 
Central Africa and with GIABA (the regional Intergovernmental Agency 
Against Money Laundering). 
The government has not adopted any specific laws or regulations that 
allow for the exchange of records with the United States on 
narcotics and narcotics related money laundering, all-source money 
laundering, or terrorism finance investigations.  Liberia does have 
an extradition treaty with the United States, but we do not believe 
the Liberian courts have correctly interpreted the provisions of the 
treaty in recent cases.  The United States and Liberia do not have a 
mutual legal assistance treaty. 
THOMAS-GREENFIELD