VZCZCXRO6346
PP RUEHROV
DE RUEHDS #0752 0911238
ZNR UUUUU ZZH
P 011238Z APR 09
FM AMEMBASSY ADDIS ABABA
TO RUEHC/SECSTATE WASHDC PRIORITY 4272
INFO RUCNIAD/IGAD COLLECTIVE PRIORITY
RUEPADJ/CJTF HOA PRIORITY
RUEAIIA/CIA WASHINGTON DC PRIORITY
RUEKDIA/DIA WASHINGTON DC PRIORITY
RHMFIUU/HQ USCENTCOM MACDILL AFB FL PRIORITY
RUEKJCS/JOINT STAFF WASHINGTON DC PRIORITY
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC

UNCLAS ADDIS ABABA 000752 
 
SENSITIVE 
SIPDIS 
 
TREASURY FOR OTA - LINDA DUBIEL 
 
E.O. 12958: N/A 
TAGS: ECON EFIN PREL ET
SUBJECT: CENTRAL BANK EASES REMITTANCE FLOWS, MOVING AML EFFORTS 
 
¶1. (U) On 26 March 2009, EconOff met with the National Bank of 
Ethiopia's (NBE, Ethiopia's central bank and the regulator of all 
private banks in country) legal department head Kibre Moges to 
discuss reports claiming that the Government of Ethiopia (GoE) had 
relaxed the process for international remittance transfers by 
Ethiopian nationals from abroad.  The media reported in mid-February 
that the NBE had issued a directive allowing remittances from any 
source, rather than requiring correspondent banking relationships 
with source banks.  Moges indicated that despite the recent press 
reports, NBE had issued no new directives regarding remittances. 
Moges continued that NBE had eased the process of remittances prior 
to the press reports, but had done so without working counter to 
anti-money laundering/countering terrorist financing (AML/CFT) 
efforts. 
 
¶2. (U) Moges indicated that in order to increase foreign currency 
reserves, NBE had lifted all processing fees and charges associated 
with the transfer of remittances.  Further, NBE had issued a press 
release stating that the transfer process would become more 
efficient.  Moges was very clear that the NBE directive published in 
2006 (FXD/30/2006) regarding the provisions for international 
remittance services had not been altered or circumvented by NBE's 
public statements.  Instead, Moges suggested that the public 
statements had been designed to increase public awareness of the 
efforts NBE was undertaking to ease the remittance process in order 
to increase the flow of foreign currency into Ethiopia. 
 
¶3. (U) Separately, Moges did indicate that Prime Minister Meles 
Zenawi had directed NBE to prioritize efforts to finalize adopting 
still draft AML/CFT regulations into law.  Though anti-money 
laundering legislation had previously been added to Ethiopia's 
criminal code, the government has made no progress toward completing 
the AML/CFT laws.  Moges said that NBE had shared the draft law with 
commercial banks for comment in late March and she expected the 
House of People's Representatives to have ratified the laws by circa 
late-May 2009. 
 
COMMENT 
------- 
 
¶4. (SBU) We are encouraged by Moges's confirmation that NBE has not 
eroded its limited existing AML/CFT safeguards to attract additional 
remittances.  Still, the NBE decision to forego desperately needed 
government revenue, in the form of fees, in order to attract 
additional remittances does shed light on how dire the government 
perceives the current foreign exchange crisis to be.  It also 
suggests that the government does not have a more lasting long-term 
solution to the crisis in mind.  Separately, the fact that the Prime 
Minister became involved in pressing for finalization of an AML/CFT 
regime suggests that the Embassy's continued engagement with his 
chief economic officer -- and the Prime Minister himself -- may be 
beginning to show progress. 
 
YAMAMOTO