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Cablegate: 2006-2007 Senegal Incsr Part Ii: Financial

VZCZCXYZ0005
RR RUEHWEB

DE RUEHDK #2780/01 3251046
ZNR UUUUU ZZH
R 211046Z NOV 06
FM AMEMBASSY DAKAR
TO RUEHC/SECSTATE WASHDC 6908
RUEAWJA/DEPT OF JUSTICE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
INFO RUEHZK/ECOWAS COLLECTIVE

UNCLAS DAKAR 002780

SIPDIS

C O R R E C T E D C O P Y (CCY ADDEE IN SECTION 8)

SIPDIS

STATE FOR INL, AF, AF/RSA, AF/W, EB/ESC/TFS AND INR/AA
JUSTICE FOR AFMLS, OIA AND OPDAT
TREASURY FOR FINCEN

E.O. 12958: N/A
TAGS: EFIN KCRM KTFN PTER SNAR SG
SUBJECT: 2006-2007 SENEGAL INCSR PART II: FINANCIAL
CRIME AND MONEY LAUNDERING

REF: STATE 157136

OVERVIEW
--------
1. This cable is Part II of the 2006 National
Narcotics Control Strategy Report (INCSR), Financial
Crimes and Money Laundering report for Senegal.
Included is a narrative overview (paras 2-12). Para
13 contains responses keyed to the numbered questions
beginning with Reftel paragraph 17.

2. Senegal is vulnerable to money laundering. There
is some evidence of increasing criminal activity by
foreigners, such as drug trafficking by Latin American
groups and illegal immigrant trafficking involving
Pakistanis, however there is little evidence of
laundering by foreign criminal groups. Rather,
anecdotal evidence suggests that most laundering
involves domestically-generated proceeds from
corruption and embezzlement. Dakar?s hot real-estate
market is largely financed by cash and ownership of
properties is non-transparent. The building boom and
high property prices suggest that an increasing amount
of funds with an uncertain provenance is available for
property speculation. Other areas of concern include:
cash, gold and gems transiting Senegal?s airport and
porous borders, real estate investment in the Petite
Cote south of Dakar, and money/trade centered in the
region of Touba, a largely autonomous and unregulated
?free-trade zone? under the jurisdiction of the
Mouride religious authority. This latter region
reportedly receives between 550 and 800 million
dollars per year in funds repatriated by networks of
Senegalese vendors abroad.

3. Seventeen commercial banks operate alongside a
thriving micro-credit sector. Western Union,
MoneyGram and MoneyExpress, associated with banks, are
ubiquitous, suggesting that, while informal remittance
systems exist, they are not a large threat to the
business of the licensed remitters. The Central Bank
of West African States (BCEAO), based in Dakar, is the
Central Bank for the countries in the West African
Economic and Monetary Union (WAEMU or UEMOA): Benin,
Burkina Faso, Guinea-Bissau, Cote d?Ivoire, Mali,
Niger, Senegal and Togo, all of which use the French-
backed CFA franc (CFAF) currency, which is pegged to
the euro. The Commission Bancaire, responsible for
bank inspections, is based in Abidjan.

4. On February 6, 2004, Senegal became the first
WAEMU country to enact the WAEMU Uniform Law on Money
Laundering (the Uniform Law). The new legislation
largely meets international standards with respect to
money laundering; it does not comply with all
Financial Action Task Force (FATF) recommendations
concerning politically-exposed persons, and lacks
certain compliance provisions for non-financial
institutions. The law does not deal with terrorist
financing.

5. Senegal?s Financial Intelligence Unit (FIU) became
operational in August 2005. Since that date it has
received 59 (11 in 2005 and 48 in 2006) suspicious
declarations and has referred nine cases (three in
2005, six in 2006) to the Prosecutor General. All but
two of the declarations have been made by banks. The
other two came from Customs. Of the referrals, one
concerns drug trafficking, one diamond trafficking,
one relates to tax fraud, and three are corruption
related. No cases have concluded, although one arrest
has been made. The FIU currently has a staff of 23,
including six appointed members: the President, who
by law is chosen from the Ministry of Economy and
Finance, and five others detailed from the Customs
Service, the BCEAO, the Judicial Police, and the
judiciary. The FIU also relies on ?correspondents? in
the relevant governmental institutions, who can be
asked to provide information relevant to the FIU?s
investigations. With French sponsorship, Senegal?s
FIU is a candidate for membership in the Egmont Group.
Its candidacy is on hold pending the adoption of a
terrorist financing law.

6. Official statistics regarding the prosecution of
financial crimes are unavailable. There has been one

known conviction for money laundering since January 1,
2005, which resulted in the confiscation of a private
villa.

7. The BCEAO is working on a ?Directive against
Terrorist Financing.? The directive is expected to be
presented to the WAEMU Council of Ministers in
December 2006. If adopted, the member states would be
directed to enact a law against terrorist financing,
which most likely would be presented as a Uniform Law
in the same manner as the AML law. Because, like the
AML law, it is a penal law, each national assembly
must then enact enabling legislation to adopt the law.
(NOTE: Since the uniform AML law was adopted by WAEMU
in 2002, four of the eight member countries have
enacted it. END NOTE.) In addition, the FATF-style
regional body for the 15-member Economic Community of
Western African States (ECOWAS), GIABA (African Anti-
Money Laundering Inter-governmental Group) has drafted
a uniform law, which it hopes to have enacted in all
of its member states, not just the WAEMU states.
GIABA will present is draft at a conference November
21-23 in Niamey.

8. The UN 1267 Sanctions Committee consolidated list
is circulated both by the GOS through the FIU and by
the BCEAO to commercial financial institutions. To
date, no assets relating to terrorist entities have
been identified. The WAEMU Council of Ministers
issued a directive in September 2002 requiring banks
to freeze assets of entities designated by the
Sanctions Committee.

9. Senegal has entered into bilateral criminal mutual
assistance agreements with France, Tunisia, Morocco,
Mali, The Gambia, Guinea Bissau, and Cape Verde.
Multilateral ECOWAS treaties deal with extradition and
legal assistance. Under the Uniform Law, the FIU may
share information freely with other FIUs in WAEMU,
however, at present, only Senegal and Niger have
operational FIUs. The FIU has signed an MOU to
exchange information with the FIUs of Belgium and
Lebanon, and is working on other accords. In general,
the GOS has demonstrated its commitment and
willingness to cooperate with United States law
enforcement agencies. In the past the GOS has worked
with INTERPOL, Spanish, and Italian authorities on
international anticrime operations.

10. Senegal is a party to the 1988 UN Drug
Convention, the UN Convention against Transnational
Organized Crime, the 1999 UN International Convention
for the Suppression of the Financing of Terrorism, and
the Convention against Corruption. Senegal also is a
signatory to the African Union Convention on Terrorism
Finance.

11. Senegal has made considerable progress in
establishing an operational FIU. However, a
complicated political climate in advance of the 2007
elections, a generally non-transparent police and
judiciary, and governmental interests in the banking
sector threaten to retard any efforts to take this
progress to the next level of actual prosecutions and
convictions. Recent arrests of opposition
politicians, journalists, and a corruption scandal
that resulted in the early retirement, rather than
prosecution, of the implicated judges, illustrate the
weakness in the rule of law in Senegal.

12. The Government of Senegal should continue to work
with its partners in WAEMU and ECOWAS to establish a
comprehensive anti-money laundering and counter-
terrorist financing regime. Senegal should work on
achieving transparency in its judicial, financial and
real estate sectors; however, to the extent the money
laundering risks in these sectors stem from
governmental actors, this task will be difficult.
Senegal and the region should establish better control
of cross-border currency transfers.

RESPONSES TO SPECIFIC REFTEL QUESTIONS
--------------------------------------
13. The following responses are to specific Reftel
paragraphs/questions:

GENERAL QUESTIONS
-----------------
Question 17: Is the country (or territory or
dependency) considered an important regional financial
center (such as Hong Kong, Singapore, Panama,
Switzerland, etc.)? What is its significance in terms
of money laundering?

-- Senegal is not considered an important regional
financial center, although the financial sector is
growing. Senegal?s banking sector is governed by the
BCEAO, which issues the euro-pegged CFAF. Along with
the BCEAO, which is headquartered in Dakar, Senegal,
the ?Commission bancaire? is a supranational
supervisory entity created in April 1990 to control
and oversee financial institution operations. There
are 17 banks, several of which have opened in the last
few years, despite the estimate that fewer than 10
percent of Senegalese have accounts.

-- The largest (by investment and earnings) commercial
banks (2005 figures) are dominated by French banks:
Societe generale de Banques au Senegal (SGBS), Banque
Internationale pour le Commerce et l?Industrie au
Senegal (BICIS), Compagnie Bancaire de l?Afrique de
l?Ouest (CBAO) and Credit Lyonnais (CL). As of FY
2005, SGBS provided CFAF 300 billion (USD 600 million)
in loans for private investment projects and its after
tax earnings reached CFAF 7 billion (USD 14 million).
Citibank, the only U.S. bank, is active in corporate
financing. Bank of Africa and Ecobank have an
impressive network spread throughout West and part of
Central Africa. Moroccans (Attijariwafa), Libyans
(Banque Sahelo-Sahelienne pour le Commerce et
l?Industrie) and Saudis (Banque Islamique) are also
present in the banking sector. One bank, the Banque
de l?Habitat du Senegal (BHS), has affiliates licensed
as money remitters in the United States. BHS New York
was recently the subject of an enforcement action by
New York state authorities for failing to comply with
anti-money laundering regulations.

-- Other financial institutions, including insurance
companies, a venture capital firm, and a leasing
company, are also present. The West African Regional
stock exchange (BRVM) is headquartered in Abidjan with
local offices in each of the WAEMU member countries.
A few Senegalese firms are listed on the BRVM. There
is free convertibility of the CFA franc via the
banking system for commercial transactions.

-- The significance of money laundering in Senegal is
hard to gauge. The most likely source of money
laundering is corruption and embezzlement, and grand
corruption is unlikely to turn up in governmental
reporting. That said, three of the six referrals made
by the FIU to the Public Prosecutor reportedly concern
corruption, but none of these cases has become public.
Money laundering risks include large cash transfers
through the airport; large remittances from overseas
Senegalese, particularly through the regions of
Diourbel (including the city of Touba) and Louga; and
real estate investment in Dakar and the Petite Cote.
Customs sources report that large amounts of currency
in dollars, euros and sterling routinely transit the
airport, and there have been significant seizures of
cash entering Senegal from The Gambia. As noted
above, some reports estimate that between USD 550 and
800 million is repatriated to the Diourbel and Louga
regions annually by networks of overseas Senegalese
vendors. The buoyant real estate market creates
opporunities to recycle funds, and the strong market
n luxury properties does not appear, in a cursory
analysis, to match local capital availability. Gien
the small customer pool, the number of casino in
Senegal (reportedly over 15) is striking.

Question 18: To the extent it is known, is money
laundering/terrorist financing primarily related to
narcotics proceeds? (If applicable, specify drug.)
If not, what is the major source(s) of the proceeds?
Also to the extent known, do the criminal proceeds
laundered in the jurisdiction derive primarily from
domestic or foreign criminal activity? Are the money
laundering proceeds controlled by local drug-
trafficking organizations, organized crime, or

terrorist groups?

-- As noted above, one FIU referral reportedly
involves drug trafficking. The most common source of
proceeds, however, is probably corruption. With
respect to drugs, there is substantial cultivation of
marijuana in Senegal for the European market, and
there appears to be a growing traffic in cocaine from
South America through West Africa to Europe. The
quantity of drugs seized in Senegal is quite low,
however. There is some sense that some remittance
money, invested in luxury property and vehicles, comes
from drug dealing by Senegalese in Europe and the
United States. In 2005, the Senegalese confiscated
several properties of a drug dealer convicted in the
United States.

-- To the extent that the Senegalese vendor networks
in the U.S. and Europe deal largely in counterfeit
goods, remittance of these proceeds could be viewed as
laundering. Most of these networks and proceeds are
reportedly controlled by the religious authorities of
the Mouride Brotherhood.

Question 19: Is there a significant black market for
smuggled goods in the country? If so, do you believe
it is significantly funded by narcotic proceeds or
other illicit proceeds? Does contraband smuggling
generate funds that are laundered through the banking
system?

-- There is a significant informal (grey) market in
just about everything. Government intellectual
property experts report a growing problem with
counterfeit pharmaceuticals, building supplies and
other goods. Piracy of movies, music and software is
widespread. It does not appear to be narcotics-funded
or to involve laundering through the banking system.
A high proportion of smuggling is conventional
economic activity conducted by traders seeking to
avoid duties and taxes, and by foreign exporters
taking advantage of lax or nonexistent quality control
standards and consumer protection laws to sell goods
that are unmarketable elsewhere.

Question 20: Does money laundering/terrorist financing
occur in the banking system, within an offshore
financial center or free trade zone, or in the non-
bank financial system (e.g., exchange houses) or via
alternative remittance systems such as hawala, or all
areas? Is the country experiencing an increase in
financial crimes, not limited to money laundering or
terrorist financing, such as bank fraud and
counterfeit currency? Please explain.

-- The potential for significant involvement in money
laundering by all sectors exists. As discussed above,
the banking sector is becoming more compliant on paper
with international standards, but the potential for
corruption and insider-based money laundering is still
strong. The area around Touba has been compared to a
free-trade zone, and the lack of transparency in trade
transactions generally creates a risk of money
laundering. Senegal is not obviously linked to any
offshore financial center.

-- In addition to remittances via Western Union and
other formal systems, there are also some informal
money transfer systems, similar to hawala systems.

-- It is unclear whether Senegal is experiencing an
increase in financial crimes. Anecdotal evidence from
the foreign business community indicates a worsening
climate for foreign investment due to non-transparent
decision-making within the judiciary and government,
an indication of increasing corruption. Official
statistics regarding prosecution of financial crimes
are unavailable.

Question 21: To the post?s knowledge, do the country?s
financial institutions engage in currency transactions
involving international narcotics trafficking proceeds
that include significant amounts of United States
currency or currency derived from illegal drug sales
in the United States or that otherwise significantly
affect the United States?


-- Because of Senegal?s historically close ties to
France, the majority of Senegal?s international
currency transactions are denominated in euros.
Senegal?s financial institutions do not appear to have
a significant role in laundering drug proceeds.

OFFSHORE FINANCIAL CENTERS
--------------------------
Questions 22 to 24: These questions are not
applicable, and are not reproduced, as Senegal has no
offshore banking or other institutions.

FREE TRADE ZONES
----------------
Question 25: Are there free trade zones operating in
the jurisdiction? If so, please give the number and
briefly describe operations, capability and function.

-- The Dakar Industrial Free Trade Zone (ZFID) was
established in 1974 to encourage foreign investors to
set up intensive export-oriented companies. Its
enabling statute has been extended until 2016, but
only for companies already established within the
zone. The U.S. pharmaceutical company, Pfizer, has a
manufacturing plant in the ZFID. The ZFID is largely
inactive with few companies present.

-- As stated above, the city of Touba is by statute an
autonomous territory within Senegal. It is the
headquarters of the Mouride Brotherhood, and the city
is governed by the Mouride khalife. The city has seen
enormous economic growth, which one commentator
attributes almost entirely to the transnational
trafficking in contraband.

Question 26: Is there any indication that these free
trade zones are being used in trade-based money
laundering schemes or by the financiers of terrorism?

-- There is no indication that the ZFID is being used
by financiers of terrorism or in trade-based money
laundering schemes. There is no evidence that Touba
is used for terrorist-financing; trade-based
laundering certainly occurs if one considers the sale
of counterfeit goods on the streets of New York, for
example, to be a predicate crime.

Question 27: What type of supervisory programs and/or
due diligence procedures is in place to monitor
activities in the free zone? Are there identification
requirements for companies and individuals who use the
zone?

-- Police forces and customs officials monitor
activities in the ZFID. Companies and individuals
that use the zone are identified and registered. With
respect to Touba, there have been recent improvements
that have allowed the gendarmerie to begin policing
Touba, and reportedly trafficking in arms has
diminished. The FIU has not yet grappled with AML
enforcement issues in Touba, although it has
recognized the need to do so.

LAWS AND REGULATIONS TO PREVENT MONEY LAUNDERING
--------------------------------------------- ---
Question 28: Is money laundering a criminal offense in
this country?

-- Yes, in 2004, Senegal became the first WAEMU
country to pass WAEMU harmonized legislation
establishing a uniform law on money laundering.

Question 28 (continued): Does the law apply only to
drug-related money laundering? Does the country list
specific crimes or take an all serious crimes
approach? Note: In some jurisdictions, anti-money
laundering laws cover ?all serious crimes? which are
defined as crimes that carry a threshold minimum
sentence in the jurisdiction?s penal code. If the
country lists specific crimes, what offenses are
covered? If there is a threshold minimum, what is
that threshold?

-- Previously, criminal prosecution of money
laundering had been tied to Senegal?s anti-narcotics

legal code. Under the new legislation, the source of
the proceeds can be any crime.

Question 29: Has the country enacted secrecy laws that
prevent disclosure of client and ownership information
by domestic and offshore financial services companies
to bank supervisors and law enforcement authorities?

-- The uniform law on money laundering enables banking
information to be shared with law enforcement
authorities. The law states: ?Notwithstanding all
contrary legal provisions or rules, professional
secrecy may not be invoked . . . to refuse providing
information to the control authorities.?

QUESTION 30: Do current laws provide for the
establishment and funding of a financial intelligence
unit (FIU)?

-- Yes, Senegal was the first WAEMU country to
establish a functioning FIU.

FINANCIAL SECTOR
----------------
Question 31: Who supervises and examines financial
institutions for compliance with anti-money
laundering/counter-terrorist financing laws and
regulations?

-- The Banking Commission has the responsibility to
supervise financial institution compliance with
AML/CTF laws and regulations. The Commission
reportedly has conducted some AML compliance
examinations; however, due to the fact that half of
the member states have not adopted the uniform law,
its efforts have been limited.

Question 32: Are banks and other financial
institutions required to know, record, and report the
identity of customers engaging in significant
transactions, including the recording of large
currency transaction at thresholds appropriate to the
country?s economic situation? What is the statutory
threshold?

-- Yes, banks and other financial institutions are
required to know, record, and report the identity of
any customers engaged in significant transactions,
including the recording of large currency transaction
at thresholds appropriate to the country?s economic
situation. Banking regulations state that to open a
personal account a customer must provide appropriate
ID, two photos, and a permanent address through the
presentation of a telephone, water, or electricity
bill. The bank monitors and record the origin of any
deposit higher than CFAF 5 million for a single
individual account (USD 10,000) and CFAF 20 to 50
million for any business account.

Question 33: Are banks and other financial
institutions required to maintain for an adequate time
records necessary to reconstruct significant
transactions through financial institutions in order
to be able to respond quickly to information requests
from appropriate government authorities in narcotics-
related or other money laundering or terrorist finance
cases? For how long?

-- The la requires financial institutions to preserve
recrds for at least ten years.

Question 34: Are th money laundering controls applied
to non-bankingfinancial institutions, such as
exchange houses,stock brokerages, cash couriers,
casinos, insurace companies, etc., and to
intermediaries, such s lawyers, accountants, or
brokers/dealers? Who supervises such entities for
compliance?

-- The law applies to a host of sectors, including all
of those listed above and others. Some entities have
government regulatory authorities; others (such as
attorneys and accountants) have professional
supervisory authorities, while others have no
effective regulator. The FIU is considering the issue
of how to handle compliance in the sectors lacking a

functional regulator.

Question 35: Do financial institutions report
suspicious transactions? Is such reporting mandatory
or voluntary? Is reporting required for all
suspicious transaction, or is there a threshold amount
below which suspicious transaction reports are not
required? Are non-bank financial institutions
required to report such transactions?

-- The law requires financial institutions to report
suspicious transactions to the FIU; in 2005, the
CENTIF received 11 declarations and to date in 2006 it
has received 48. There is no minimum threshold. Non-
bank financial institutions are also required to
report.

Question 36: Are reporting individuals (bankers and
others) protected by law with respect to their
cooperation with law enforcement entities?

-- Reporting individuals and their supervisors are
accorded full civil and criminal immunity (as well as
protection from professional sanctions) for
information provided to the FIU in good faith.

Question 37: Are there statutory requirements for
limiting or monitoring the international
transportation of currency and monetary instruments?

-- In general, all incoming currency and monetary
instruments must be deposited in a bank, the post
office, or changed at an authorized foreign exchange
bureau within 30 days. There is no limit on the
amount. The entities report receipts monthly to the
BCEAO. Outgoing transfers must be handled by banks,
the post office, or, in the case of cash or travel
checks for travelers, by authorized change bureaus.
Regulations provide a long laundry list of
justifications for transfers; such transfers can be
done by the financial institutions without
authorization as long as the transferor provides
documentation of the purpose of the transfer (and, in
the case of the Post and change bureaus, is within a
certain amount). A notable exception is transfers for
the purpose of foreign investment, which, as with any
other purpose not on the list, must be approved by the
Minister of Finance. Financial institutions report
outgoing transfers monthly to the BCEAO.

Question 38: Please describe cross-border currency
reporting requirements, including those that apply to
cash couriers?

-- On entry, non-residents must declare in writing any
currency from outside the ?zone franc? in the amount
of CFAF one million (approximately USD 2,000) or more,
as well as monetary instruments denominated in cash in
any amount. On exit, non-residents must declare in
writing any non-franc-zone currency above
approximately USD 1,000 as well as all monetary
instruments from foreign entities. Residents are not
required to declare currency on entry; on exit, they
must declare in writing amounts any foreign currency
and any monetary instruments greater than
approximately USD 4,000. These requirements are for
the purpose of currency control and are not well
enforced.

FINANCIAL INTELLIGENCE UNIT/INVESTIGATION
-----------------------------------------
Question 39: Has the country established and
adequately staffed a financial intelligence unit
(FIU)? Where in the Government is it housed; e.g.,
within the finance or national police ministry, as an
independent agency, etc.

-- Senegal has established an FIU with 23 employees,
12 of whom are professional staff and 11
administrative support staff. The FIU is within the
Ministry of Economy and Finance, although its staff is
drawn from several ministries.

Question 40: Describe the authorities and functions of
the FIU. Is it an administrative body that performs
analytical duties or does it also have criminal

investigative responsibilities? Does it have
regulatory responsibilities?

-- A senior Treasury Inspector administers the FIU.
Its mission, among other things, is to receive and
analyze suspicious activity declarations, and, where
appropriate, to refer files to the Prosecutor General.
It is an administrative-type FIU, but has the
authority to obtain information through
?correspondents? within police entities (as well as
within other government entities). It also has two
senior police inspectors and a customs officer on
staff. Some of its functions could be viewed as
investigative, but it is not clear where the limits of
its investigative authority lie. It does not, at
present, have regulatory responsibilities.

Question 41: Does the FIU have access to the records
or databanks of other government entities? Financial
Institutions? Does it have formal mechanisms in place
to share information domestically or with other FIUs?

-- The FIU has the authority to request information
from any government entity through its
?correspondents? as well as from any reporting entity
(i.e., financial and designated non-financial
entities). Under the uniform law, information can be
shared freely among the FIUs in WAEMU; at present,
however, there is only one other operational FIU
(Niger). The FIU has signed an accord with the FIUs
in Belgium, Lebanon, and Nigeria, and is in the
process of negotiating additional accords.

Question 42: How many suspicious transaction reports
(STRs) were received in 2006? How many were the
subject of investigation or resulted in referrals to
law enforcement for investigation?

-- In 2006 to date, the FIU has received 48 STRs and
has made 6 referrals to the Prosecutor General.

Question 43: Which government bodies are responsible
for investigating financial crimes, including money
laundering and terrorist financing? Are they
adequately staffed and trained to fulfill their
responsibilities?

-- Apart from the FIU, the police, gendarmerie and
judiciary, through the judicial police, are
responsible for investigating money laundering and
terrorist financing. The U.S. Department of Treasury
presented a two-week financial investigations training
course in early 2006, which was directed towards
personnel who are involved in investigating matters
referred by the FIU. In addition, the French
government is sponsoring a project to create
specialized services to handle economic and financial
crimes within the judicial police, the prosecutors?
office and among the investigating judges.

Question 44: Have there been arrests and/or
prosecutions for money laundering or terrorist
financing since January 1, 2006. How many? Please
report highlights of any major cases not previously
reported.

-- One suspect is known to have been arrested and
interviewed but the details of the case have not been
provided as it is still before the investigating
judge.

Question 45: Has the jurisdiction criminalized the
financing of terrorism as required by the United
Nations Security Council resolution 1373? If so,
please provide title of act, date of enactment, and
pertinent details. If the jurisdiction has an ?all
serious crimes? anti-money laundering law, please
indicate if terrorism and terrorist financing are
considered ?serious crimes.?

-- As happened with the uniform law against money
laundering, the BCEAO has taken the lead in drafting a
directive against terrorist financing, which it
expects to present to the WAEMU Ministers? meeting for
consideration in December 2006. Once adopted by the
Ministers, a Uniform law will be drafted and be

available for adoption by the parliaments of member
states. GIABA has a draft uniform law for all ECOWAS
states that will be discussed at a seminar in Niamey
in November 2006.

Question 46: Has the jurisdiction circulated to its
financial institutions the list of individuals and
entities that have been included on the UN 1267
sanctions committee?s consolidated list as being
linked to Usama bin Ladin, members of the Al Qa?ida
organization or the Taliban, or that the USG or the EU
have designated under relevant authorities. If so,
did the jurisdiction identify, freeze, seize, and/or
forfeit related assets in 2005? If so, please provide
dollar amount.

-- The list is circulated both by the FIU and by the
BCEAO to commercial financial institutions. To date
no assets relating to terrorist entities have been
identified.

Question 47: Does the jurisdiction acknowledge the
existence and use of indigenous alternative remittance
systems that by-pass, in whole or part, financial
institutions? Describe the steps the jurisdiction has
taken regarding regulating alternative remittance
systems, such as hawala, black market exchanges, money
remitters, trade-based money laundering, cross border
cash smuggling, or the misuse of gold, precious metals
and gems.

-- Senegalese authorities acknowledge the existence
and use of indigenous alternative remittance systems
that by-pass, in whole or part, financial
institutions. Such entities are illegal; however,
there is little effort at present to enforce the law.
The banks complain about this sector; at the same
time, however, the prevalence of bank-affiliated
services such as Western Union, and the presence of
money remitters abroad opened by Senegalese banks
(such as BHS New York) indicate that banks are
competitive in this arena. Banks have also expanded
into Touba, showing that the economy is open to the
formal, as well as informal, sector. All financial
institutions must report suspicious transactions to
the FIU. With respect to trade-based laundering,
Customs is fairly well-automated and does share trade
information, which it uses in part to spot fraud, with
a few states including Mali, and, previously, Cote
d?Ivoire. In theory, this could be expanded to look
for trade-based laundering, but the quality of data is
suspect. Dealers in high value goods are required to
file suspicious activity reports to the FIU although
to date none have done so. By law, the import and
export of gold in commercial quantities must have the
authorization of the Minister of Economy and Finance,
but it is not clear that this requirement is enforced
or even known by Customs agents. Cross-border
currency, gold and gem smuggling is common; however,
Customs? ability to investigate quickly is low, and
therefore most goods are released. Similarly, large
and suspicious cash shipments go through unchecked
because there is no ability to investigate or hold the
money. Customs also is required to report suspicious
transactions to the FIU and has done so on two
occasions to date.

Question 48: Discuss the efforts the jurisdiction has
taken to thwart the misuse of charitable and/or non-
profit entities that can be used as conduits for the
financing of terrorism?

-- Regulation of charities is shared between the
Ministry of Family and Social Development and the
Ministry of Interior. In theory, NGOs are subject to
certain transparency and audit requirements; due to
lack of means, however, in practice the regulation is
administrative only. Reportedly, the police do watch
certain NGOs, including those thought to present a
risk of terrorism, and believe the sector to be high
risk and badly regulated. The WAEMU uniform AML law
adopted by Senegal covers charitable and non-profit
entities, which are required to file suspicious
transaction reports. There is no terrorist financing
law.


CASH SMUGGLING
--------------
Question 49: Bulk cash smuggling and the use of cash
couriers to move the proceeds of crime and terrorist
funding are of significant concern to the USG. Are
there laws criminalizing smuggling cash into and out
of the country? If so are Customs officials aware of
cash courier problems and capable of dealing with the
issue?

-- See Response to Question 47.

Question 50: Are cash smuggling reports shared between
host government entities (in particular with an
existing FIU)?

-- Currency declarations are not shared, although
there is an informal agreement to do so. Customs is
required and has filed Suspicious Activity
Declarations with the FIU. See Response to Question
47.

ASSET FORFEITURE AND SEIZURE LEGISLATION
----------------------------------------
Question 51: Has the country enacted laws and
established systems for identifying, tracing,
freezing, seizing, and forfeiting narcotics-related
assets as well as assets derived from or intended for
other serious crimes? If so, please describe the
authority (regulatory or judicial). Are now
legislation or changes in current laws, regulations,
judicial or administrative authorities, being
considered?

-- The uniform AML law provides for the freezing,
seizing, and confiscation of property by judicial
order. In addition, the FIU can order the suspension
of the execution of a financial transaction for 48
hours. The BCEAO can also order the freezing of funds
held by banks.

Question 52: What are the obstacles or disincentives
to enacting such laws, regulations, other authorities?

-- Senegal is a civil law country. As such, it does
not have a tradition of civil forfeiture.

Question 53: What are the major provisions in current
and/or proposed legislation? For example, what assets
can be seized? Do they include: instruments of crime
such as conveyances used to transport narcotics, or
farms on which illicit crops are grown or which are
used to support terrorist activity, or intangible
property such as bank accounts? Can substitute assets
be seized or must a relationship to the crime be
proven?

-- The uniform law allows the freezing, seizure and
confiscation of any property, corporal or incorporeal,
on order of the investigating judge as a conservation
measure. Upon conviction for money laundering or
attempted money laundering, the law provides for
obligatory confiscation of property that is the
proceeds of laundering; property into which that
property has been converted, commingled, invested or
transformed; and any proceeds (income) derived from
that property. There is an exception for an owner who
can establish that s/he was unaware of the illegal
source of the property. The court may also order, as
penal sanctions, the confiscation of any property used
or intended to be used in the offense, and the
confiscation of other property of the convicted person
(the latter does not appear to be ?substitute assets?
as that term is understood in the U.S.; the provision
does not relate the amount of licit property subject
to confiscation to the amount laundered or put beyond
the reach of the court).

Question 54: Can legitimate businesses be seized if
used to launder drug money, support terrorist
activity, or are otherwise related to other criminal
proceeds?

-- The AML law provides as stated in the previous
response. Whether the business is involved in the
offense, or subject to the innocent owner defense,

would depend on the facts of the case. A business
that is convicted of laundering can be dissolved or
closed. The law has not been applied in this regard.

Question 55: What government entities are responsible
for tracing, seizing and freezing assets? Is there a
period of time ascribed to the action of freezing,
after which the assets are released? Are frozen
assets confiscated? If yes, by what government
entity? Who receives proceeds from asset seizures and
forfeitures?

-- The FIU can order a 48-hour freeze (in the form of
a delay on the execution of a transaction). Such
action must be converted to a judicial order within 48
hours or the freeze must be lifted. As noted above,
the investigating judge can issue orders freezing or
seizing assets as a conservatory measure. Confiscated
property goes to the public treasury.

Question 56: Does the banking community cooperate with
enforcement efforts to trace funds and seize/freeze
bank accounts?

-- As far as is known, the banking community has been
very cooperative with enforcement efforts to trace
funds and seize/freeze bank accounts. The banking
community applauded the GOS decision to pass the
uniform law on money laundering, which reduces banking
secrecy. All but two of the 59 suspicious activity
declarations to date have come from the banking
sector, and two transactions (wire transfers) have
been stopped this year.

Question 57: Does the law allow for civil as well as
criminal forfeiture?

-- The uniform law allows explicitly for criminal
forfeiture. There is no provision for American-style
civil forfeiture. It is not clear what happens to
property seized if no prosecution results and no owner
is identified.

Question 58: Does the Government enforce existing
drug-related asset seizure and forfeiture laws? Does
the jurisdiction have adequate police powers and
resources to trace, seize and freeze assets? If so,
can the jurisdiction freeze assets without undue
delay?

-- Customs seizures are common; the number of
confiscations is not known.

Question 59: Does the government have an independent
system and mechanism for freezing terrorist assets?

-- Though the Government does not have an independent
system and mechanism for freezing terrorist assets,
there are several entities including the BCEAO,
financial entities such as banks (upon request from
the Government officials or the BCEAO), and the
Ministries of Justice and Interior can order the
freezing of terrorist assets.

Question 60: What was the dollar amount of non-
terrorist related assets frozen, forfeited and/or
seized in the past year? How does this amount compare
to amounts seized in previous years?

-- Statistics on the value of seized assets are
unavailable.

Question 61: Has the country enacted laws for the
sharing of seized narcotics assets, as well as the
assets from other serious crimes with other
governments?

-- The uniform law provides that the sharing of seized
narcotics assets with other governments can be
negotiated on a case-by-case basis.

Question 62: Is the Government engaged in bilateral or
multilateral negotiations with other governments to
enhance asset tracing freezing and seizure?

-- Senegal is required by the uniform law on money

laundering to freely exchange information with the
FIUs of each of the WAEMU countries, although at
present only Senegal and Niger have a functioning FIU.
The FIU has signed MOUs with the FIUs in Belgium,
Lebanon and Nigeria and has begun negotiations with
other countries including France and Monaco. Senegal
hopes to join the Egmont Group in 2007.

INTERNATIONAL COOPERATION
-------------------------
Question 63: Has the country adopted laws or
regulations that allows for the exchange of records
with the United States on narcotics and narcotics
related money laundering, as well all-source money
laundering, terrorism and terrorist financing
investigations and proceedings? Has the jurisdiction
reached agreement with the United States authorities
on a mechanism for exchange of records in connection
with such investigations and proceedings? If not, is
the country negotiating in good faith with the United
States to establish such an exchange mechanism? Does
the jurisdiction have similar arrangements with other
jurisdictions?

-- With respect to money laundering, the uniform AML
law provides that the FIU may enter into cooperation
accords with other FIUs. The Senegalese FIU will soon
begin this process with FinCen. The law also contains
extensive provisions for the exchange of information
on a judicial level. These provisions comport with
international standards.

Question 64: Identify all treaties, agreements, or
other mechanisms for information exchange that host
country has entered into with the USG or other
countries, including agreements between the FIU and
its counterparts, and those with home country
supervisors to facilitate the exchange of supervisory
information regarding banks and trust companies
operating in the host country. Describe the status of
efforts to update such agreements or arrangements.

-- To Mission?s knowledge, Senegal has entered into
agreements with a number of countries (Tunisia,
Morocco and France), and through ECOWAS, regarding
mutual assistance in criminal matters. Regarding the
FIU, as stated above, Senegal currently has agreements
with the FIUs in Belgium, Lebanon and Nigeria.
Senegal hopes to join the Egmont Group in 2007.

Question 65: Has the country cooperated, when
requested, with appropriate law enforcement agencies
of the USG and other governments investigating
financial crimes related to narcotics, terrorism,
terrorist financing and other crimes? If the country
has cooperated on important cases with USG agencies,
please describe.

Mission knows of no instance where the USG has
requested such cooperation, but in general Senegalese
authorities have demonstrated their commitment and
willingness to cooperate.

Question 66: Please detail any instances of refusals
to cooperate with foreign governments, as well as any
action taken by the USG and any international
organization to address such obstacles, including the
imposition of sanctions or penalties?

-- Mission is unaware of any refusals to cooperate
with foreign governments in routine cases.

Question 67: Is the country a party to the UN
International Convention against Illicit Traffic in
Narcotic Drugs and Psychotropic Substances (Vienna
Convention), the UN Convention against Transnational
Organized Crime, and, the UN Convention against
Corruption or other applicable agreements and
conventions? Does it adhere to relevant international
money laundering standards, such as the
recommendations of the Financial Action Task Force,
the policy directive of the EC, and the legislative
guidelines of the OAS and/or other similar
declarations? If so, what steps is it taking to
implement them? If not, what, if any, steps are the
country taking to become a party or implement?


-- Senegal is a party to the UN International
Convention against Illicit Traffic in Narcotics Drugs
and Psychotropic Substances (Vienna Convention), the
Convention against Transnational Organized Crime, the
1999 International Convention for the Suppression of
the Financing of Terrorism, and the Convention against
Corruption. Senegal accepts the recommendations of
the FATF, and is attempting to implement them through,
inter alia, the adoption of the uniform law and the
operationalization of the first FIU in the region.
Senegal is waiting for BCEAO/WAEMU action on the
criminalization of terrorist financing.

UPDATES TO ADDITIONAL QUESTIONS FROM 2005 INSCR
--------------------------------------------- --
Question: Does the jurisdiction have the authority to
identify, freeze, seize and/or forfeit terrorist
finance?related assets? If so, please describe the
authority invoked (regulatory, legislative, judicial,
administrative).

-- Pursuant to a September 19, 2002 BCEAO directive,
banks are required to freeze assets of UN-designated
terrorists and terrorist entities. There are no
provisions for seizing and/or forfeiting terrorist
financing-related assets.

Question: Has the jurisdiction become a party to the
1999 International Convention for the Suppression of
the Financing of Terrorism?

-- Yes. Moreover, the draft BCEAO directive on
terrorist financing adopts the definition of terrorism
found in the Convention.

Jacobs
Jacobs

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