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Cablegate: Egypt to Amend Anti-Money Laundering Law, Expand Scope

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DE RUEHEG #2470 2240504
ZNR UUUUU ZZH
R 120504Z AUG 07
FM AMEMBASSY CAIRO
TO RUEHC/SECSTATE WASHDC 6481
INFO RUEATRS/DEPT OF TREASURY WASHDC
RUCPDOC/USDOC WASHDC 0308

UNCLAS CAIRO 002470

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SENSITIVE
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STATE FOR NEA/ELA, NEA/RA AND EEB/IDF/OMA
USAID FOR ANE/MEA MCCLOUD AND DUNN
USTR FOR SAUMS
TREASURY FOR MATHIASON AND HIRSON
COMMERCE FOR 4520/ITA/ANESA/OBERG

E.O. 12958: N/A
TAGS: ECON EFIN PTER EG
SUBJECT: EGYPT TO AMEND ANTI-MONEY LAUNDERING LAW, EXPAND SCOPE

Sensitive but Unclassified. Please protect accordingly.

1. (U) Recent press reports indicate that the GOE is planning to
amend the 2002 Anti-Money Laundering (AML) law to re-enforce the
authority of the Central Bank's Money Laundering Combating Unit
(MLCU) to handling economic and financial crimes connected to
terrorist finance or threatening the national economy. Econoff
spoke to Samir Shehad, Director of the MLCU, who said that the
amendments were designed to bring Egypt's AML law into greater
conformity with the 41 general recommendations and 9 special
anti-terrorist financing recommendations of the Financial Action
Task Force.

2. (U) According to Shehad, the main focus of the amendments is to
expand the predicate crimes covered by the AML law to include, inter
alia, tax evasion, embezzlement, insider trading, bribery, trade in
human beings, fraud, forgery and environmental crimes related to
hazardous materials or waste. Individuals found guilty of tax
evasion, illegal profit-making or insider trading will be subject to
Article 14 of the AML which mandates a maximum of 7 years
imprisonment, a fine commensurate with the severity of the crime,
and confiscation of the illegal funds. The new amendments will also
strengthen the MLCU's authority vis-a-vis banks and financial
institutions by requiring accounting firms, law offices, real estate
brokers, gold shops and casinos to report suspicious transactions to
the MLCU. In addition, the amendments will expand the definition of
"cash" to include negotiable instruments in the case of cash
couriers.

3. (U) Shehad noted that the amendments were drafted by a technical
team including lawyers and prosecutors from the Ministry of Justice
and officials from the Central Bank and financial regulatory
agencies. The draft amendments are currently under consideration by
the Cabinet of Ministers. Shehad hoped the amendments would be
passed in the next session of parliament, which begins in November.


4. (SBU) Comment: When asked about the timing of these amendments,
Shehad became somewhat defensive, asking "Why all the questions?"
In past bilateral discussions on Egypt's AML efforts, GOE officials
generally maintain that both the AML law and the GOE's enforcement
efforts have been adequate to address the relatively low money
laundering risk in Egypt. The amendments to the AML law may be a
genuine effort to bring Egypt's laws up to international standards,
but it is noteworthy that the GOE is now addressing deficiencies in
its AML law, just as several members of the banned Muslim
Brotherhood are on trial in military courts for alleged money
laundering.
RICCIARDONE

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