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Cablegate: Tunisia International Narcotics Control Strategy Report

VZCZCXRO3871
PP RUEHTRO
DE RUEHTU #0896/01 3441433
ZNR UUUUU ZZH
P 101433Z DEC 09 ZDK ZDK
FM AMEMBASSY TUNIS
TO RUEHC/SECSTATE WASHDC PRIORITY 7055
INFO RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUEAWJB/DEPARTMENT OF JUSTICE WASHDC
RHEHNSC/NSC WASHDC
RUCNMGH/MAGHREB COLLECTIVE

UNCLAS SECTION 01 OF 03 TUNIS 000896

SIPDIS

STATE FOR INL, S/CT, EEB, NEA/RA and NEA/MAG
JUSTICE FOR AFMLS, OIA, AND OPDAT
TREASURY FOR FINCEN

E.O. 12958: N/A
TAGS: EFIN KCRM KTFN SNAR PTER TS
SUBJECT: TUNISIA INTERNATIONAL NARCOTICS CONTROL STRATEGY REPORT
PART II -- MONEY LAUNDERING AND FINANCIAL CRIMES

REF: STATE 114960

TUNIS 00000896 001.2 OF 003


1. There is no discernible money laundering or terrorist finance
activity occurring in Tunisia. Tunisia is not considered an
important regional financial center due in large part to the very
strict control exercised by the Central Bank over financial
transactions, particularly those involving foreign currency. Since
2003, Tunisia has taken important steps to create a legal framework
for the monitoring, investigation and prosecution of money
laundering and financial crimes. By creating an interagency
Financial Analysis Commission headed by the Central Bank Governor,
Tunisia has also established effective oversight and coordination
capabilities.

2. In December 2003, the Tunisian Parliament passed Law No. 2003-75,
a comprehensive counterterrorism and anti-money laundering law, to
support international counterterrorism efforts and to establish more
severe sentences for individuals convicted of terrorist acts. This
law makes it a crime to provide financial assistance or any other
type of support to terrorist activities, and provides for the
freezing of assets. Those suspected of violating the law can be
exempted from charges, however, if they report a planned terrorist
action to authorities. Money laundering is punishable where false
information is proffered relating to the illicit origin of property
or income arising directly or indirectly from an offense. Money
laundering is also defined as investing, depositing, transferring or
safekeeping of property or income resulting from an offense. The
law does not delineate specific crimes; rather it broadly states
that money laundering related to "a crime or infraction" is illegal.
Tunisia's 1992 law (Law No. 1992-52) against narcotics trafficking
also includes provisions that contribute to combating money
laundering. Under Articles 2 and 30 of Law No. 1992-52, anyone
aiding in narcotics operations or the transfer of proceeds in
connection with these operations, including financial institutions,
can be prosecuted.

3. On August 12, 2009, the Tunisian legislature passed Law No.
2009-65 as an amendment to law 2003-75. The new law is intended to
harmonize national legislation with UN Anti-Money
Laundering/Anti-Terrorist Financing (AML/ATF) resolutions, and to
implement the recommendations made in the 2007 Mutual Evaluation
Report of the Middle East and North Africa Financial Action Task
Force (MENAFATF). The modifications include: improving databases
to prevent terrorist financial transactions; protecting the identity
of individuals interviewed within investigation operations on
terrorism and money laundering; extending the period allowed for a
public prosecutor to issue his judgment on investigations carried
out by the Financial Analysis Commission from two to five days; and
enhancing measures for review of fund transfers, according to both
the nature of activity to which the funds are related to and the
financial transaction type. Law No. 2009-65 also provides new penal
measures, including six months to three years imprisonment and a
fine of 5,000 to 10,000 dinars ($3,869 to $7,738) for any individual
(including traders of jewelry and gems, managers of casinos, and
legal representatives and agents) linked to criminal financial
operations.

4. According to Samir Brahimi, the Central Bank official responsible
for coordinating Tunisia's AML/ATF efforts, the passage of Law No.
2009-65 was deliberately timed to coincide with the passage of
another law partially liberalizing financial services for the
off-shore sector. According to Brahimi, the two measures were
released simultaneously in order to send a message that Tunisia's
gradual opening to international financial markets would be
carefully coordinated with AML/ATF efforts.

5. The Tunisian penal code also allows for the sequestering,
confiscation, or seizure of assets and property in certain
situations, including narcotics trafficking and terrorist
activities. The definition of "assets" is broad and covers any
number of financial or physical assets. Financial assets are traced
by the Central Bank and Financial Analysis Commission, each of which
has broad powers for investigating and seizing financial assets.
Following an initial freeze of assets, authorities have four days to
present additional supporting evidence before the assets must be
released. At any time, the reviewing magistrate can release frozen
assets if he or she determines the evidence does not support such
measures. Tunisia has no legal provisions for sharing seized
criminal assets with other governments.

6. In 2003, Tunisia created an interagency Financial Analysis
Commission that includes representatives from the Central Bank,
Ministry of Finance, Ministry of Interior, Customs and the
judiciary. The Central Bank Governor acts as head of the
commission, which has both an investigatory and advisory role in

TUNIS 00000896 002.2 OF 003


combating money laundering and terrorist financing. The Financial
Analysis Commission has oversight functions for banks, non-banking
financial institutions such as stock brokerages, insurance companies
and casinos, intermediaries such as lawyers as well as
non-governmental organizations. In April 2006, the Financial
Analysis Commission issued a directive ordering all Tunisian banks
to designate a compliance officer, who serves as the direct liaison
with the Financial Analysis Commission.

7. Under Law 2003-75, as amended, all institutions or intermediaries
must report any suspicious, or unusual, transactions to the Tunisian
Financial Analysis Commission and freeze related accounts.
Financial institutions are also required to report all transactions
above 5,000 dinars (US $3,869). Although the Financial Analysis
Commission reports a rise in the number of suspicious transaction
reports (STRs) received over the past several years, this is
attributed to better reporting rather than an actual increase in
suspicious transactions. In accordance with the recommendations of
the MENAFATF Mutual Evaluation Report, Law No. 2009-65 no longer
mandates the automatic freezing of accounts subject to an STR, but
rather instructs banks to allow the transaction so that authorities
can trace the destination of the funds. To date, Tunisia has not
had any money-laundering or terror finance prosecutions.

8. Law 2003-75, as amended, also imposes obligations on all
financial institutions to gather full identifying information for
personal and business accounts. There are no anonymous or numbered
accounts allowed in Tunisia. Additionally, all bookkeeping,
accounting, and supporting documentation, in both paper and
electronic form, must be maintained for 10 years.

9. Banks report regularly receiving the US Government and United
Nations 1267 Sanctions Committee freeze lists from the Central Bank.
The Financial Analysis Commission reports that it has never
discovered any accounts or assets belonging to a listed individual
or entity.

10. The Central Bank retains strict control over foreign currency
operations. The Tunisian dinar is not fully convertible and it is
illegal to export dinars. Residents are generally prohibited from
holding or exporting foreign currency except for certain purposes,
such as travel or business, and are limited in the value of foreign
currency that can be used for these purposes. Only certain
categories of individuals and businesses are allowed to open foreign
currency or convertible dinar accounts and all of these accounts are
monitored by the Central Bank.

11. The import and export of foreign exchange is regulated by
Article 76 of Law No. 2003-75. There is no explicit mention of cash
couriers or cash smuggling in Tunisian law. Non-residents must
declare the import of foreign exchange equivalent to or in excess of
a ceiling fixed by the Ministry of Finance. Currently, the Ministry
of Finance has set the ceiling at the foreign currency equivalent of
25,000 dinars (about US $19,330). Non-residents entering Tunisia
with foreign currency or other instruments worth less than 25,000
dinars are required to declare the total amount if they wish to
re-export or deposit more than 5,000 dinars (US $ 3,869).
Non-residents do not need to declare currency exports under 5,000
dinars. Customs may at any time require declarations for gold or
securities.

12. Although all fund transfers must go through formal banking
institutions or the National Post Office, these restrictions and
currency exchange controls may encourage underground methods of
moving money or transferring value in and out of the country.
Remittances from abroad are a major source of hard currency, though
there is no evidence of an organized alternative transfer system
such as hawala. A significant black market in consumer goods does
exist in the country but is not believed to be funded by illicit
proceeds.

13. All offshore financial institutions are held to the same
regulatory standards as onshore financial institutions. Offshore
financial institutions undergo the same due diligence process as
onshore banks and are licensed only after the Central Bank
investigates their references and the Ministry of Finance approves
their application. Anonymous directors are not allowed. Tunisia
currently has eight offshore banks and a considerable number of
offshore international business companies. Offshore international
business companies are subject to all regulatory requirements,
except for tax requirements and currency convertibility
restrictions. There are five casinos in Tunisia. Although
Tunisians are not legally permitted to use them, in practice
Tunisians are able to circumvent this restriction. Bearer financial
instruments or shares are strictly prohibited (Act No. 35 of 2000).

TUNIS 00000896 003.2 OF 003

14. Tunisia has two free trade zones, in Bizerte and Zarzis, with a
limited number of companies manufacturing products for export.
There are no offshore financial institutions located in either free
trade zone. There have been no reports of trade-based money
laundering or terrorist financing activities using either free trade
zone. Government customs officials are present on site at the free
trade zones and at qualifying companies to supervise export
activities. Prior to opening a business in one of the two free
trade zones, the company must conclude a contract with the free
trade zone authority outlining project details, but are not required
to produce a company history.

15. Tunisia is a founding member of the Bahrain-based MENAFATF,
approved in November 2004. Tunisia is a party to both the 1988 UN
Drug Convention and the 1999 UN International Convention for the
Suppression of Financing of Terrorism. Tunisia has signed and
ratified the UN Convention against Transnational Organized Crime.
Tunisia signed the UN Convention Against Corruption in 2004, but has
not yet ratified the agreement. Tunisia has submitted its candidacy
to the Egmont group. Tunisia has bilateral agreements on "criminal
matters" with 29 countries and is party to 12 international
agreements on counterterrorism.

16. Embassy point of contact is Economic Officer Pete Davis (E-mail:
DavisPJ@state.gov; Phone: 216-71-107-431).

© Scoop Media

 
 
 
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