VZCZCXYZ0000
PP RUEHWEB

DE RUEHYN #0138/01 0251429
ZNY CCCCC ZZH
P 251429Z JAN 10
FM AMEMBASSY SANAA
TO RUEHC/SECSTATE WASHDC PRIORITY 3609
RHMCSUU/FBI WASHINGTON DC
RUEAWJA/DEPT OF JUSTICE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
INFO RUEHZM/GULF COOPERATION COUNCIL COLLECTIVE
RUEAIIA/CIA WASHDC

C O N F I D E N T I A L SANAA 000138 
 
SIPDIS 
 
DEPT FOR S/CT GNOVIS AND NEA/ARP AMACDONALD 
DEPT OF TREASURY FOR FINCEN DHARRIS AND YFADL 
DEPT OF JUSTICE FOR ASSET FORFEITURE AND MONEY LAUNDERING 
RSTAPLETON 
FBI FOR TERRORIST FINANCE OPERATIONS JMURPHY 
 
E.O. 12958: DECL: 01/23/2020 
TAGS: ECON EFIN KCRM KTFN PREL PTER SNAR YM
SUBJECT: YEMEN FINALLY PASSES ANTI-MONEY LAUNDERING LAW 
 
REF: A. 09 SANAA 1629 
     ¶B. 09 SANAA 1517 
     ¶C. 09 SANAA 259 
 
Classified By: DCM Angie Bryan for reasons 1.4(b) and (d). 
 
¶1.  (U) Summary.  After pending in committee for two years, 
the ROYG's draft law "Regarding Anti-Money Laundering and 
Terrorism Funding" finally received Presidential approval on 
January 17 after being passed by Parliament December 29. 
Drafted with technical assistance from the World Bank, the 
new law will bring Yemen up to international standards 
regarding anti-money laundering (AML) and counter-terrorism 
finance (CTF).  Renewed interest in the law appears to be 
spurred by President Saleh himself, who encouraged 
parliamentarians to pass the draft AML law in the wake of 
counter-terrorism operations in December.  The ROYG continues 
to benefit from international assistance, particularly from 
international organizations.  Post recommends continuing to 
extend technical assistance and training to ROYG 
institutions, particularly the Central Bank.  End Summary. 
 
¶2.  (U) The ROYG's draft law "Regarding Anti-Money Laundering 
and Terrorism Funding" received Presidential approval on 
January 17, becoming Law 1 in 2010.  Passed by the Yemeni 
Parliament on December 29, the law contains 53 articles 
arranged in nine chapters which establish both the illegality 
of and punishments for money laundering and terrorism 
finance.  The law also identifies the role of specific 
government agencies in anti-money laundering (AML) and 
counter-terrorism finance (CTF), including the Central Bank 
of Yemen (CBY), the Central Organization for Control and 
Audit, the National Security Bureau, the Ministries of 
Finance, Justice, Interior, Foreign Affairs, Industry and 
Trade, and Social Affairs and Labor, the Banks Association, 
the Federation of the Chamber of Commerce, and the General 
Investment Authority. 
 
¶3.  (U) The new law will bring Yemen up to international 
standards regarding combating money laundering and terrorism 
finance.  According to Mustafa Saif Kaid, General Manager of 
Legal Affairs at the CBY and Deputy Chairman of the 
Anti-Money Laundering Investigative Unit (AMLIU), the new law 
replaces Law 35 of 2003, which was not comprehensive enough 
and, specifically, neither mentioned nor criminalized the 
funding of terrorism.  Under the new law, the ROYG's AMLIU 
will have an increased role to play, taking on new authority 
and becoming more independent.  In addition, Wadie M. Assadh 
of the CBY's Financial Intelligence Unit (FIU) told EconOff 
on January 17 that the law sets up monitoring and supervising 
committees related to AML issues.  The law also expands the 
types of financial institutions that the ROYG will monitor to 
include hawalas, jewelry shops, lawyers' associations, and 
real estate firms. 
 
¶4.  (C) Renewed interest in the law appears to have been 
spurred by President Saleh in the wake of December 
counter-terrorism operations.  Member of Parliament (MP) 
Fathi Abdulrahim, Chairman of the Parliamentary Finance 
Committee, told EconOff on December 24 that the Presidential 
Palace called him on December 18, one day after the 
airstrikes against AQAP in Abyan and Arhab, to instruct him 
to pass the draft AML law in order to burnish Yemen's CT 
credentials in the eyes of the West.  In fact, the law 
appears to have broad support across government; Islah MP 
Sheik Mohammed Damag told EconOff that the only reason his 
party did not vote for it was because they are participating 
in an ongoing political boycott and not because they did not 
support it.  The ROYG's draft AML law has been pending in 
Parliament since November 2007, where it was under discussion 
by the Constitution, Finance, and Sharia committees in 
addition to being rejected by the Yemeni Lawyers' Association 
(REF B). 
 
¶5.  (U) The ROYG continues to benefit from international 
assistance, particularly from international organizations. 
The CBY's Kaid told EconOff on January 17 the ROYG plans to 
implement and begin enforcing the new law immediately 
following Presidential approval.  Assadh of the FIU said that 
the CBY will be inviting experts from the World Bank and 
International Monetary Fund (IMF) to assist the ROYG in the 
implementation phase of the new law.  As a member of the 
Middle East and North Africa Financial Action Task Force 
(MENAFATF), the FIU's Wadie told EconOff he was able to share 
information about Suspicious Transaction Reports (STRs) and 
get feedback from MENAFATF members at a recent meeting in 
Qatar.  In addition to passing the draft AML law on December 
29, the Parliament also passed the UN's "International 
Convention for the Suppression of the Financing of 
Terrorism," bringing the ROYG into agreement with 
international norms regarding CTF. 
 
¶6.  (C) Comment.  The ROYG appears keen to demonstrate its 
commitment to counter-terrorism efforts ) even with respect 
to terrorism finance.  Passing a law of this caliber is an 
important first step in instituting AML and CTF efforts 
within the ROYG.  Implementing the law, and then enforcing 
it, will be the next challenges for the AMLIU, new committees 
handling AML issues, and agencies across government.  Due to 
capacity constraints within the ROYG, the CBY and responsible 
government agencies continue to make use of technical 
assistance and training from donors.  Post recommends 
continuing to extend technical assistance and training to 
ROYG institutions, particularly the CBY's AMLIU.  End 
Comment. 
SECHE