VZCZCXRO7222
RR RUEHDE RUEHDIR
DE RUEHYN #0259/01 0411153
ZNR UUUUU ZZH
R 101153Z FEB 09
FM AMEMBASSY SANAA
TO RUEHC/SECSTATE WASHDC 1165
INFO RUEHZM/GULF COOPERATION COUNCIL COLLECTIVE
RUEATRS/DEPT OF TREASURY WASHDC
RUEAWJA/DEPT OF JUSTICE WASHDC

UNCLAS SECTION 01 OF 02 SANAA 000259 
 
SIPDIS 
 
DEPARTMENT FOR S/CT FOR GARY NOVIS 
DEPARTMENT FOR NEA/ARP FOR ANDREW MACDONALD 
DEPT OF TREASURY WASHDC FOR FINCEN 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: ECON EFIN KCRM KTFN PREL PTER SNAR YM
SUBJECT: YEMEN: ANTI-MONEY LAUNDERING AND COUNTER-TERRORISM 
FINANCE ROUNDUP 
 
REF: A. 08 SANAA 1568 
     ¶B. 07 SANAA 1425 
     ¶C. 07 SANAA 1424 
     ¶D. 07 SANAA 1423 
     ¶E. 07 SANAA 1418 
 
 ¶1.  SUMMARY: ROYG institutions and Yemeni banks have made 
some progress on implementing Financial Systems Assessment 
Team (FSAT) and Middle East and North Africa Financial Action 
Task Force,s (MENAFATF) recommendations.  A draft 
counter-terrorism finance (CTF) law remains lodged in the 
Finance Committee in Parliament.  National Anti-Money 
Laundering Committee (NAMLC) members request membership in 
the Egmont Group for Financial Intelligence Units as well as 
training for anti-money laundering (AML) and CTF. 
 
¶2.  On January 27, Abdo Hezam Saif, Head of the Anti-Money 
Laundering Information Unit (AMLIU) at the Central Bank of 
Yemen (CBY), told Econoff that the ROYG has made some 
progress in implementing the recommendations from the 
Financial Systems Assessment Team (FSAT) and the Middle East 
and North Africa Financial Action Task Force (MENAFATF) 
reports.  Saif, who is also a member of the National 
Anti-Money Laundering Committee (NAMLC), indicated that the 
AMLIU will implement a comprehensive improvement plan in 
¶2009.  According to Saif, the AMLIU is preparing guidelines 
for expanding the reforms and the revamping the 
infrastructure of the AMLIU, and needs to improve its 
reporting system and procedures. 
 
¶3.  According to Ahmed M. A. Al-Khawi, General Manager of the 
Yemen Kuwait Bank for Trade and Investment and member of the 
NAMLC, the NAMLC is also implementing 40 recommendations from 
the MENAFATF and nine special recommendations from the UN on 
CTF.  Al-Khawi told Econoff on February 2 that the NAMLC is 
already in agreement with AML requirements stipulated by the 
Arab League.  Al-Khawi said that the addition of the NAMLC 
supervisory committee, which is headed by the Minister of 
Finance, has wide executive power and has been faster in 
implementing reforms then was the case in the past (REF A). 
The NAMLC recently sent an assessment team report of 
activities to parliament. 
 
CTF LAW STILL STUCK IN COMMITTEE 
-------------------------------- 
 
¶4.  A draft CTF law is still pending in the Finance Committee 
in parliament.  On January 27, Wadie Assadh, Member of the 
Financial Intelligence Unit (FIU) at the CBY, told Econoff 
that the law is hampered by a lack of general awareness about 
the importance of the law.  Also on January 27, AMLIU 
Chairman Ahmed A. Ghaleb indicated that the Yemeni Lawyers 
Association is impeding the law.  The Association objects to 
an article in the draft law that requires lawyers to report 
financial matters to ROYG intelligence units.  Ghaleb also 
said that there will be a cabinet decree establishing a 
technical committee to oversee reforms as recommended by the 
FSAT and MENAFATF.  (Note: The law is also stalled due to the 
approaching parliamentary elections, which are scheduled to 
take place in April 2009.  After the election, a new 
committee will consider the draft law. End Note.) 
 
EGMONT GROUP MEMBERSHIP REQUESTED 
--------------------------------- 
 
¶5.  Yemen is currently not a member of the Egmont Group, an 
informal, international grouping of Financial Intelligence 
Units (FIU), although it has a FIU based out of the CBY. 
Assadh indicated that ROYG desires membership in the Egmont 
Group, so that it can more effectively exchange information 
amongst members.  According to Assadh, in the past, Yemeni 
membership was supported by Egypt and the U.S. on separate 
occasions, but needs the support of two member nations 
simultaneously for it to be accepted.  (Comment: Membership 
in the Egmont Group could challenge Yemen in a good way to 
coordinate AML and CTF efforts, particularly in the area of 
information sharing.  Post supports Yemen's entry into the 
Egmont Group.  End Comment.) 
 
TRAINING STILL NEEDED 
--------------------- 
 
 
SANAA 00000259  002 OF 002 
 
 
¶6.  According to Ghaleb, Saif, and Al-Wareeth, ROYG 
institutions, including the AMLIU, continue to need 
assistance in order to effectively implement AML measures. 
The parts of the government mentioned by officials that need 
assistance are the AMLIU, the Customs Authority, the Attorney 
General,s/Prosecutor,s Office, and private banks. 
Specifically, Saif said that the AMLIU needs equipment, 
training, and reorganization.  (Note: Although the U.S. sent 
three Yemeni government officials to Jordan for training in 
March 2008, the U.S. has not provided in-country training. 
End Note.) 
 
¶7.  The NAMLC has consulted with the UN Office for Combating 
Crimes as well as received some assistance from the World 
Bank since August 2008 to implement the reforms as 
recommended by UN through the FATF and the nine special 
recommendations on CTF.  The AMLIU just finished phase one of 
the World Bank,s plan and is now starting on the second 
phase.  (Note: The assistance from the World Bank is focusing 
on UN recommendations and does not include training or 
technical assistance.  End Note.) 
 
¶8.  COMMENT: Yemen is a known recipient of and transit point 
for financial support for terrorism and violent extremism. 
Yemen has an underdeveloped system*in both the public and 
private sectors*for supporting AML and CTF efforts.  The 
lack of governmental oversight and weak financial 
institutions are a dangerous combination.  Post recommends 
extending training  to the AMLIU and other ROYG institutions 
in conducting anti-money laundering investigations as 
according to FSAT Report recommendations (REF A).  END 
COMMENT. 
SECHE