Cablegate: Results of Financial Systems Assessment Team Visit To

DE RUEHDK #0126/01 0350926
P 040926Z FEB 08





E.O. 12958: N/A


DAKAR 00000126 001.3 OF 008

NOTE: This cable is Part II of two-part report. See Reftel for
Part I.

30. (U) The Uniform Law obliges the public treasury, the BCEAO,
financial institutions, and "producers of business for financial
institutions" to file STRs. Other obliged entities include: banks,
auditors, real estate agents, notaries, dealers in high-value items,
cash transporters, owners, directors, and managers of casinos and
gambling establishments (including national lotteries), travel
agencies, and NGOs. Members of the independent legal professions
are also covered. Correspondents from other ministries and the
private sector are required to collect and report financial
intelligence to the CENTIF. By statute, the entire range of
financial institutions are required to send STRs to the CENTIF.

31. (U) BCEAO examiners review AML programs (in addition to the
regulatory safety and soundness examinations performed by the BC)
but do not address underlying inequalities. Under the Uniform Law,
each bank is required to have a compliance officer responsible for
that bank's AML program. However, not all banks have designated
this officer. Similarly, as of 2007, the BCEAO and the BC require
an annual report on banks' AML programs, but not all banks have an
AML program in place.

32. (SBU) The sector today lacks a uniform minimum level of
understanding, knowledge, and standard of compliance requirements.
Despite the regulatory framework's emphasis on AML compliance, banks
and other obliged entities do not exercise Know Your Customer (KYC)
measures or employ Customer Due Diligence (CDD) in any standardized
manner; thereis no industry-wide approach. Guidance should come
from a regulator or from the Ministry of Finance but there are no
guidance notes for CDD or for TR reporting, and banks follow
different standars. The APBEF has not advocated for upgrades to
ank monitoring and reporting. As evidenced by the ow statistics
reported by CENTIF (55 STRs YTD, wth 4 forwarded on to the
judiciary), there appeas to be a fundamental lack of understanding
by oliged entities to interpret, dentify, and describe suspicious

33. (U) There is a wide variance in training efforts and monitoring
operations between branches of large international banks and
Senegalese banks. Staff in Senegalese branches of large
international banks receives AML/CFT training through their
respective headquarters. However, in Senegalese financial
institutions (without a parent company) staff have just recently
begun receiving basic AML/CFT training. For these banks, more
in-depth training is necessary.

34. (SBU) As authorities within a subsidiary of a U.S. bank,
compliance officers at Senegal's Citigroup have had training and
exercise due diligence measures (including a KYC program) mandated
by the parent company beyond what is required. In contrast, the
local BHS (also with branches in the U.S.) has to date not filed and
money laundering or terrorist financing STRs. Although the
compliance officer for BHS described a fairly thorough CDD and STR
policy exceeding the legal requirements, disparities still exist.
BHS personnel received only rudimentary training exclusively from
CENTIF, but more in-depth training is necessary.

35. (SBU) Although its program is nascent, CENTIF has provided
outreach to obligated financial sectors. CENTIF utilizes the
UNODC's Computer Based Training (CBT) as its basic AML training.
However, the obliged institutions expressed a need to understand the
various money laundering typologies. Of particular concern to the
FSAT is the apparent widespread confusion over the definition of an
STR and when and why one should be filed.

36. (U) The FSAT recommends that the full scope AML/CFT
examinations be performed at each safety and soundness examination

DAKAR 00000126 002.2 OF 008

to determine compliance with rules and regulations and to ascertain
the condition of the overall AML/CFT program at the institution.
For supervisory bodies and regulators, experiential training is
paramount. BCEAO personnel should receive more specialized training
incorporating AML/CFT, bank/financial institution examinations, and
analysis training. Financial forensics training may also improve
the efficacy of some agencies. In order to improve efficacy,
assistance to help agencies communicate with one another directly
and share information is key.

37. (U) The FSAT recommends that all individuals responsible for
filing STRs receive in-depth, specialized AML-CFT training that uses
live cases and covers methods and procedures, such as how and when
to file STRs, identification of suspicious activities, and
collection of money laundering evidence. Training should be
conducted to ensure that 100 percent of the staff is up to standard.
The Team recommends that local Senegalese banks in particular be
priority recipients of more specialized AML/CFT training since they
do not benefit from training through a parent company.

38. (U) Article 16 of the Uniform Law on Money Laundering requires
countries to establish a Financial Intelligence Unit (FIU).
Senegal's FIU, the "Cellule Nationale de Traitement des Informations
Financiers" or CENTIF, was established in August, 2004 (decree No.
2004-1150 of 18 August 2004). The CENTIF is an autonomous agency
under the authority of the Ministry of Finance, and defines itself
as an administrative FIU with financial and decision-making
authority over its own functions. The CENTIF receives its own
budget line item and so is not dependent on the Ministry of Finance
budget. However, its budget is determined by top administration
officials. The CENTIF has five sub-divisions, each headed by a
deputy director seconded to CENTIF for a three-year term from the
Ministry of Finance, Ministry of Justice, the Customs Department,
and the Ministry of Interior. The BCEAO also has a representative
within the leadership of the CENTIF. There are approximately 26
employees in the CENTIF, incorporating financial, investigative,
accounting, legal, and computer expertise. France is reportedly
sponsoring the CENTIF for membership to the Toronto-based Egmont

39. (U) The CENTIF has a mandate to receive, analyze, and process
financial intelligence (although not necessarily to disseminate it).
Once an STR is received, CENTIF is required to provide confirmation
of receipt. Incoming STRs are logged by the administrative staff
and given to the analysis unit to ensure that all information is
provided correctly by the reporting institutions, it is then
uploaded to the database. The Secretary General then determines if
the case warrants further investigation. If so, the case is sent to
the Administrative and Financial Investigations Division for further

40. (SBU) The spokes of law enforcement feed into the CENTIF hub,
but information does not pass back to law enforcement. Once the
investigation is completed, a report goes to the Deputy Director for
International Relations and Judicial Matters for a judicial opinion.
Based on his/her legal opinion, the case is either sent directly to
an Examination Committee, or the case is held until further
information is received. If the Committee finds that the case has
merit, the report is submitted to the prosecutor, who must
immediately pass it to an investigating judge. After CENTIF
forwards the case to the investigative judge, there is no assurance
the case will be pursued or that law enforcement entities and their
investigations will benefit from the information that has been

41. (SBU) The CENTIF receives a fairly low number of STRs, but they
have increased since its March 2005 inception. That year, the unit
received 11 STRs, three of which were forwarded to the investigative
judge. In 2006, CENTIF received 60 STRs, eight of which were
forwarded to the investigative judge. As of early November 2007,
CENTIF reports that it has received 55 STRs, but only four have been
forwarded beyond CENTIF. There are currently 22 cases pending
judicial action. According to Citigroup, which sent a case to the

DAKAR 00000126 003.2 OF 008

CENTIF last year, and BHS, which has filed 30-40 STRs so far this
year, the FIU acknowledges when an STR is received; however, the
banks do not learn of the fate of the reports.

42. (SBU) Senegal's FIU has an adequate framework, but the CENTIF
faces a number of hurdles in its efforts to combat money laundering
and, once legislation is passed, terrorist financing. A more
in-depth assessment of the FIU's actual operations and effectiveness
would be valuable to determine the CENTIF's largest deficiencies
before recommending a training continuum. Any training should
include basic analysis and specialized AML/CFT training. The CENTIF
could also use help in drafting guidance notes for reporting
institutions and provide outreach to non-bank financial institutions
and designated non-financial businesses and professions, such as the
insurance and gaming sectors.

43. (U) The Team met with the Customs Agency, the Senegalese Tax
Authority, and the Ministry of Interior, the main agencies charged
with financial crime investigations. The Customs Agency has two
main missions and employs inspectors, analysts, and investigators.
Its primary task is as a revenue agency, with most funds coming from
duties associated with imported goods. In 2007, forty seven percent
of Senegal's budget was generated from Customs duties.

44. (SBU) As a secondary mission, Customs controls all persons and
goods entering and exiting Senegal, enforces Customs laws and
regulations, and interdicts contraband being brought into and out of
the country. Customs performs interdiction and enforcement
functions, but does not conduct complex investigations. Rather, the
agency provides technical assistance regarding Customs-related
investigations to other investigative entities such as the
gendarmerie and Ministry of Interior. Customs works with, and has a
correspondent assigned to, the CENTIF. The relationship with CENTIF
appears solid, although as of November 2007, Customs had only filed
three STRs.

45. (SBU) Customs lacks a computer database to facilitate or record
passenger analyses and inspection, although one is being created.
Inspectors staff passenger processing operations, and specialized
inspectors provide limited intelligence and investigative support at
ports of entry (POE). There are no traditional passenger screening
methods or automated criminal record and intelligence queries.
Records are maintained solely as paper declarations completed by
passengers. Inspections are performed on a subjective basis.
Senegal's land borders are typically not patrolled by Customs

46. (SBU) Senegal has reporting requirements for inbound and
outbound currency exceeding CFA 6 million (approximately USD
14,000), but travelers are expected to self-declare if they are
carrying such funds. The Immigration/Customs forms required of
arriving passengers at the Dakar airport do not include declarations
regarding currency or monetary instruments. Officials advised that
a separate currency reporting form does exist and is to be completed
at POE, but it is incumbent upon the traveler to request the
relevant document from a Customs Officer and voluntarily disclose
the currency. By law, inbound currency must be deposited at a
financial institution within one week of entry into Senegal. This
not only leaves a week without controls, but it also shifts the
burden from law enforcement to financial institutions and their
reporting requirements. Therefore, it is likely that significant
amounts of currency are not disclosed, either due to lack of
awareness of the requirement or as a result of lax enforcement.

47. (U) Inspection operations for inbound cargo use an automated,
computer-based targeting system with a risk-based assessment program
targeting specific criteria, indicating that Senegal is able to
competently identify and interdict suspect importations. The
seaport operation at Dakar is managed in accordance with the
enforcement strategy of the agency and reflects its primary mission:
to identify Customs fraud which would result in non-payment of

DAKAR 00000126 004.2 OF 008


48. (U) Because inspections focus on revenue-generating imports, no
system exists for assessing exported cargo. In addition to
smuggling, the lack of oversight allows for trade-based money
laundering (TBML). Customs officials acknowledge that a computer
system could easily be modeled on the inbound targeting system and
implemented with only slight modifications.

49. (U) The Ministry of Finance tracks proceeds of exports. As
with currency importers, exporters also must open a bank account to
handle export financial transactions. It is then incumbent upon the
bank to decide to file an STR. However, compliance with the
suspicious transaction reporting requirement is weak. Again, as
with importation of currency, this places the burden of identifying
possible fraud schemes and TBML activities from law enforcement onto
regulators -- from Customs onto entities with completely different

50. (U) Ideally, customs should collect all shipping export
documents and have access to bank records through a clear legal
process. The development and implementation of a computerized
tracking/targeting system and intelligence database for both
travelers and for outbound cargo is critical. A system modeled
after its existing inbound computer based targeting system would
accomplish this.

51. (U) The Senegal Tax Authority (STA) is an agency within the
Ministry of Finance (MOF) that collects a range of taxes, amounting
to approximately 30 percent of the government's revenue in 2007.
The tax code does not address money laundering, and with a mandate
to levy and collect taxes, STA does not focus on the origin of the
income. The STA also administers the land tenure system, which
oversees all transactions relating to land acquisition and transfer
of real estate. It is mandatory for all transactions to be
registered at STA to obtain legal ownership, and STA imposes a
transaction tax based on the transaction amount. Non-bank dealings
comprise by far the majority of such transactions.

52. (U) Agents in the STA's fiscal investigations unit are involved
in examinations, fiscal activities, and monitoring and
cross-checking financial transactions. The STA is authorized to
obtain bank records and is not subject to bank secrecy laws. The
STA also has access to registries of all businesses and NGOs.
However, the STA's investigations are focused on determining taxable
income and tax obligations, not to detect terrorist financing or
money laundering. The STA collects data beneficial to other
agencies, but there is not a history of sharing this data. The STA
is implementing a new database to improve transparency and better
organize and manage all taxpayer information and transactions.
Although there is a legal provision for real property seizure, this
rarely occurs; when a target discovers his property may be seized by
STA, he usually settles the tax obligation. Asset seizures are much
more common by Customs at the point of importation.

53. (SBU) The CENTIF relies heavily on the STA for non-bank
information However, the STA correspondent to CENTIF does not
analyze intelligence, but simply collects data for CENTIF and
reports any suspicious activity uncovered during tax investigations.
The STA can, however, assist with investigations on behalf of the
CENTIF. Upon request, the STA searches its files, conducts
interviews and record checks, and provides the information to
CENTIF. Since 2005, the STA correspondent has worked 19
CENTIF-directed cases. Occasionally the CENTIF-directed
investigations benefit the STA by identifying individuals who may be
avoiding taxes. Although the STA does not look for money
laundering, it has become more aware of it through its relationship
with CENTIF. The STA recognizes a need to have a better
understanding of money laundering. However, to date the CENTIF has
only provided two days of generalized training to STA investigators.


DAKAR 00000126 005.2 OF 008

--------------------------------------------- --------
54. (U) By Law, the Ministry of Interior (MOI) has broad authority
over people and activities within Senegal. In 1997, the first legal
provisions relating to money laundering were written under
anti-narcotics provisions. Issues surrounding terrorism and other
international crime are also addressed by the Judicial Police, the
Senegalese Gendarmerie, and the Department of Surveillance of
National Territories (DST).

55. (SBU) The MOI's Narcotics Investigation Bureau can conduct
investigations related to narcotics trafficking, including
narcotics-related money laundering, without the permission of the
Ministry of Justice, the Prosecutor, or another judicial authority.
Agents can initiate investigations, make arrests, and detain
suspects prior to opening an official file. They are authorized to
contact banks and financial institutions directly for account

56. (SBU) The MOI maintains a working relationship with the CENTIF,
but reported some difficulty in completing cases on behalf of the
CENTIF when the FIU controls the flow of information. The CENTIF
periodically requests the MOI to conduct checks of its investigative
records to determine if the subject of an STR has a prior record.
MOI has thus far been contacted by CENTIF regarding 80 potential
money laundering cases.

57. (SBU) With the exception of narcotics-related money laundering,
the MOI cannot conduct financial investigations independent of
CENTIF and the Prosecutor/Investigative Judge. Thus, independently
derived intelligence must be vetted through CENTIF before an
investigation can commence, resulting in delays and lost
opportunities to act on time-sensitive intelligence. MOI
investigators opined that prosecutors and judges have scant
knowledge of money laundering or terrorist financing, and need

58. (SBU) The MOI, through the Department of National Security
(DST), examines charitable entities and NGOs working throughout
Senegal. NGOs and charities are required to register with several
different Ministries, including the AT-CPEC, the Ministry of Social
Affairs, and Ministry of Families, but the MOI has the lead to track
and investigate these entities. Ministry officials stated that
there may soon be legislation permitting further monitoring of NGOs.

59. (SBU) The lack of technology-based tools is a hindrance to the
effectiveness of the MOI. Criminals frequently have more
technological resources, and there are few computer experts working
in the Ministry. While officials are aware that ill-gotten gains
could be laundered or could support terrorist financing and criminal
activity, their flow information is limited to traditional law
enforcement techniques, including informants. At the same time,
investigators are generally lacking the knowledge and skills to
conduct an effective money laundering investigation resulting in a
conviction. Weaknesses include interpreting information, conducting
complex investigations, and shepherding the case through the legal

60. (U) Training for law enforcement should include evidence
collection, forensics/financial analysis, investigative conduct,
basic AML/CFT methods and procedures, and case assembly. Practical,
exercise-based, multi-disciplinary training for investigators,
police, prosecutors and judges is important so that each facet of
the system becomes familiar with the issues and legal challenges of
the others. Senegal's Customs service would benefit from specific
training on basic Bulk Cash Smuggling (BCS) related to passenger
inspections and cargo. This course could also involve the agencies
patrolling land borders between POEs and would bolster enforcement
efforts at the POEs against laundering via cash couriers. A basic
course on targeting outbound cargo for examination could highlight
strategies for these operations. Customs, alongside the Ministry of
Finance (which oversees the financial transactions involving

DAKAR 00000126 006.3 OF 008

importations and exportations), would both benefit from training
addressing TBML. The STA needs specific fiscal examinations or
forensic accounting training focusing on income analysis and net

61. (SBU) The Ministry of Justice (MOJ) is widely perceived to be a
key agency, yet the weakest link in Senegal's AML regime. All
ministries and organizations visited by the FSAT stated that the MOJ
had the least knowledge or experience in the AML/CFT area.
Information on approximately fifty potential cases has been
transmitted from the CENTIF to the Court of Investigation where they
are managed by Investigative Judges, however, to date there have
been no prosecutions or convictions for money laundering. Absent
ministerial direction, prosecutors have an administrative role and
have little involvement with money laundering cases.

62. (SBU) An MOJ magistrate is seconded to CENTIF to act as
gatekeeper, rendering a legal opinion on cases before the dossier is
forwarded to the court. While the predicate offense need not be a
conviction, it is a necessary element of the money laundering crime,
and the Investigative Judge must investigate the predicate crime
that allegedly generated the laundered proceeds. While the law
provides for AML cases on any predicate offense, the CENTIF has
focused on offenses incorporating narcotics, fraud, and
"contraband." The CENTIF can also pursue cases it believes derives
from corruption, graft, or misuse of public funds.

63. (U) Senegal has a fairly comprehensive asset forfeiture regime.
Upon a conviction, if the Court determines that the assets were not
the proceeds of or used in the commission of crime, the money/goods
are returned; if the assets are determined to have facilitated the
crime or been the proceeds of the crime, the goods are transferred
to the Public Treasury; or if the assets are deemed to be hazardous
materials are destroyed.

64. (SBU) The MOJ is cognizant of the importance of a strong
AML/CFT regime, and there has been some AML training organized by
the U.S. Embassy and by CENTIF. In general, however, even skillful
prosecutors and judges lack the necessary understanding of the
overall coordinated nature of AML/CFT. Part of the deficiency is an
apparent lack of understanding of the complexity and multi-faceted
nature of money laundering and terrorist financing. The MOJ has
excellent candidates for multidisciplinary training based upon
actual cases and experiences. Such training would include police
and gendarmes, as well as prosecutors and judges. Coordinated
workshops requiring police, gendarmerie, judges, prosecutors and
CENTIF analysts to work together would result in better
understanding of each office's responsibilities and lead to better
coordination among all.

65. (U) The FSAT also met with a number of governmental and
extra-governmental organizations throughout the week whose missions
were indirectly related to AML/CFT: the Inspector General of the
State (IG), the Anticorruption Commission, the Forum Civil (a local
affiliate of Transparency International), and the local office of
the U.N Office for Drugs and Crime (UNODC). These organizations are
occupied mainly with corruption issues, with the exception of UNODC,
which also has AML/CFT mandates.

66. (U) The IG, under Presidential authority, monitors the
activities and finances of all government agencies and
administrative services, and is designated to conduct reviews of
bank accounts of government officials, and investigate matters of
waste, fraud and abuse. Investigative missions are initiated at the
request of the President, who may then accept the findings and
approve further investigation or refer the matter to the judicial
authority for action, or terminate the matter.

67. (U) The IG is more concerned with corruption and embezzlement

DAKAR 00000126 007 OF 008

than with money laundering or terrorist financing, although they
recognize parallels. Senegal's IG interacts with IGs in Canada,
Djibouti and the European Union, as well as the African Forum of
IGs, whose mission statement is to promote good governance and
transparency. An information sharing agreement with the IGs of the
EU allows requests for the collection and sharing of information in
a foreign jurisdiction.

68. (U) Senegal's Anticorruption Commission was established by
decree in March 2004. Senegal has recently ratified the UN
Convention Against Corruption and has had an anticorruption law for
almost five years. The Commission's members are interdisciplinary,
appointed by the President, and work without compensation. The head
of the Commission is a retired former attorney general. The
commission's annual budget is determined by the Presidency,
significantly limiting its independence and coercive authorities.

69. (U) The Commission's priority has been outreach and
consciousness-raising. With guidance from WAEMU, the Commission
helped draft Senegal's 2007 public procurement law that limits the
occasion for sole-source contracts and generally requires an open
and competitive bidding process. On the investigative side, the
Commission passes dossiers to CENTIF as the legal authority for
investigations, and may or may not receive information back. The
law does not authorize Commission investigators access to bank or
other personal records, although by law, the Commission has recourse
to state services to properly conduct its missions.

70. (SBU) The Forum Civil (FC) strongly noted its concern about
corruption, graft, and the need for good governance measures. The
FC also provided input to the new public procurement code and is
advising on the implementation of new financial disclosure
regulations for all civil servants and Parliamentary members, a
measure supported by related African conventions against corruption
and money laundering. The FC also involves the press in corruption
issues and has provided investigative journalism training to one
hundred journalists. In general, the FC lauded the CENTIF's broad
mandate, which allows it to delve into everything from embezzlement
to violations of regulations for currency exchange.

71. (SBU) The UNODC noted concerns about corruption and frustration
with the ineffectiveness of the Anticorruption Commission and the
FC. Regionally, UNODC has been working with the BCEAO on terrorism
financing legislation with the hope that it will be approved within
the next six months. The UNODC also works with the CENTIF and
provided its computer-based training modules to the FIU as a
training aid for obliged entities. UNODC claimed the largest
vulnerabilities in Senegal were a lack of inter-agency cooperation
in investigations on organized crime and corruption and also weak
implementation of asset forfeiture and recovery.

72. (U) Based on its visit, the FSAT recommends the following
training programs be given priority consideration: AML/CTF training
for MOJ personnel, judges and prosecutors; AML/CTF financial
regulatory training; Financial Investigative Training; enhanced
training for the CENTIF; and Bulk Cash Smuggling training.

73. (SBU) Post thanks the FSAT for its visit and hard work and
looks forward to coordinating and supporting important training
activities that further Senegal's capacity and effectiveness in
combating money laundering and terrorism financing. The visit of
the FSAT generated a bit of inaccurate local press coverage, which
claimed the FSAT included officials from the NSA, CIA, and
Transportation Department, and that the goal was to determine if
Senegal needed to be "more closely monitored."

74. (SBU) Institutionally, Senegal has one of the most advanced
network of agencies and professionals in the region for addressing
money laundering and terrorism financing threats. However, these
institutions remain heavily influenced by Senegal's political
leadership through appointments, budget allocations, and control of

DAKAR 00000126 008.2 OF 008

interagency coordination (or lack thereof). By establishing one of
the first functional FIUs in Africa, Senegal could set a positive
example for domestic action and international cooperation on AML/CTF
efforts. Therefore, in addition to the provision of training and
technical assistance, Washington agencies should look for
opportunities to reinforce the message that the CENTIF needs the
continued commitment from the Presidency and the Finance Ministry to
be adequately funded, supported by other agencies in its
investigative efforts, and remain free of political manipulation.

75. (SBU) Washington agencies should also keep in mind that
corruption, graft, and the misuse of public finances remain
significant problems in Senegal and threaten the country's economic
well-being and political stability.


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