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Cablegate: Aml Bill to Be Top Gok Priority in March

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PP RUEHWEB

DE RUEHNR #1015/01 0611105
ZNR UUUUU ZZH
P 021105Z MAR 07
FM AMEMBASSY NAIROBI
TO RUEHC/SECSTATE WASHDC PRIORITY 7934
INFO RUEHXR/RWANDA COLLECTIVE PRIORITY
RUEATRS/DEPT OF TREASURY WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEAWJA/DEPT OF JUSTICE WASHDC
RUEAHLC/HOMELAND SECURITY CENTER WASHDC

UNCLAS NAIROBI 001015

SIPDIS

SENSITIVE

DEPT FOR AF/E, AF/RSA
DEPT FOR EB/ESC/TFS KATHERINE LEAHY AND LEANNE CANNON, S/CT FINANCE
GALER AND NOVIS
JUSTICE FOR AFMLS DE KLUIVER
TREASURY FOR FINCEN
TREASURY FOR VIRGINIA BRANDON

SIPDIS

E.O. 12958: N/A
TAGS: EFIN ETTC KTFN LE PREL PTER KCRM KE
SUBJECT: AML BILL TO BE TOP GOK PRIORITY IN MARCH

SENSITIVE BUT UNCLASSIFIED. FOR USG USE ONLY.

1. (SBU) Summary: Kenya Anti-Money Laundering Task Force (AMLTF)
officials say they adopted many of USDOJ's suggested amendments to
the anti-money laundering bill, including the critical definition of
criminal offense, and that the bill will be one of the Government of
Kenya's top priorities in the Parliamentary session opening o/a
March 20. Mission is working with the AMLTF to develop and
implement an advocacy program for senior GOK officials, members of
Parliament (MPs), private sector stakeholders, and the public to
educate them on the need to fight money laundering, and the bill's
provisions. Kenya will remain acutely vulnerable to money
laundering, related crimes, and terrorist financing until it passes
and implements an AML law, making this a top Mission priority. End
summary.

2. (SBU) EconOffs met with the AMLTF on February 22 to discuss USDOJ
Jack de Kluiver's comments on the Proceeds of Crime and Anti-Money
Laundering Bill of 2006, the GOK's plans for submitting the bill to
Parliament, and the AMLTF's request for advocacy and implementation
support.

AMLTF Welcomed USDOJ Comments on Bill
-------------------------------------
3. (SBU) Jack de Kluiver, Senior Trial Attorney in USDOJ's Asset
Forfeiture and Money Laundering Section, worked very closely with
the AMLTF in 2005 to draft the AML bill. After reviewing the
revised text the GOK submitted to Parliament in November 2006, de
Kluiver noted two deficiencies that could make it difficult to use
the law to prosecute offenders. The bill did not provide a specific
definition of an "offence," making it unclear whether it included
all crimes in Kenya. It was also unclear how the bill would cover
either the laundering or forfeiture of the proceeds of any foreign
offences. De Kluiver offered a definition partly based upon the
2000 Model UN Anti-Money Laundering Proceeds of Crime Act that
addressed both these problems: "Offence" means an offence against a
provision of any law in Kenya or an offence against a provision of
any law in a foreign State for conduct which, had it occurred in
Kenya, would constitute an offence against a provision of any law in
Kenya."

4. (SBU) De Kluiver expressed concern about the ambitious scope of
the law, suggesting that requiring lawyers, notaries, car dealers,
insurers, etc. to report suspicious transactions will make
implementing all aspects of the law too difficult for Kenya's
regulators. He also noted the bill's obligation that banks report
all suspicious transactions to the financial intelligence unit
within seven days is unrealistic, especially since failure to comply
is a criminal offence. He suggested extending the reporting
deadline.

5. (SBU) AMLTF officials welcomed de Kluiver's comments, and said
they had accepted many of them, including the definition of
"offence." However, they believed it was necessary to maintain the
comprehensive scope of the law, even though other professional
organizations would likely echo the opposition already expressed by
the Law Society of Kenya. The AMLTF Chairman said he had briefed
the Finance Minister on the amendments, and offered to send a copy
of the revised text to the Embassy. He stated the Attorney General
had already sent the bill to the Minister of Finance for signature,
but that the amendments could still be incorporated. Any amendments
that did not get into the text before it was tabled in Parliament
could be added while the bill was in Committee.

Bill Will Be Top GOK Priority
-----------------------------
6. (SBU) The AMLTF officials were confident the GOK would resubmit
the AML bill to Parliament when the session begins o/a March 20, and
that the bill would be one of the GOK's top priorities. They could
not guarantee Parliament would pass the bill, especially in an
election year. The Task Force Chairman believed the Finance
Committee supported the bill in general, but had concerns about
unspecified provisions. He did not comment on the views of the
Administration & Justice Committee, chaired by MP Paul Muite.
(Note: After meeting the Finance Committee Chairman, we doubt his
support for the bill. And Muite has been a consistent critic of the
Anti-Terrorism Bill as a threat to civil liberties, and may oppose
the AML bill for the same reason. End note.)

Need to Educate MPs, Stakeholders and Public
--------------------------------------------
7. (SBU) USAID, through its parliamentary support program, will also
work with the AMLTF and Mission elements to develop an advocacy
strategy for senior GOK officials, members of Parliament (MPs),
private sector stakeholders, and the public to educate them on the
need to fight money laundering, and the bill's provisions. The
AMLTF has requested Mission support for two workshops designed to
educate MPs and stakeholders and build support by giving them a
sense of ownership. The AMLTF said FATF's Eastern and Southern
African Anti-Money Laundering Group (ESAAMLAG) would help it bring
in senior officials from South Africa and/or Nigeria to discuss
their experiences implementing AML laws at the workshops.

8. (SBU) The Mission has already been advocating for passage of the
bill, and will continue. Ambassador Ranneberger has raised it
repeatedly with President Kibaki and Ministers, and will raise it
with opposition leaders. Econ Counselor discussed it with the
Finance Committee Chairman and his deputy. EconOff urged the Kenya
Bankers Association, Nairobi Stock Exchange Chief Executive his
deputy, and the Capital Markets Authority chief to support the
bill.

9. (SBU) Comment: Kenya will remain acutely vulnerable to money
laundering, corruption, narcotics and weapons smuggling, and
terrorist financing until it implements an AML law. Encouraging
passage and supporting implementation of the law remain top Mission
priorities. The fact that the GOK tabled the bill last November
makes it very likely the GOK will table the AML bill again early in
the March Parliamentary session. We are also encouraged by the
GOK's willingness to accept suggestions to improve the bill's
effectiveness as a prosecutorial tool. However, any MPs involved in
corruption or money laundering may openly or subtly resist the bill,
and the run-up to the December general election increases the
unpredictability of Kenya's already-capricious politics. It is
therefore impossible to know how strongly the GOK will push the
bill, or whether Parliament will approve it.

RANNEBERGER

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