25422 1/14/2005 15:59 05BUCHAREST131 Embassy Bucharest CONFIDENTIAL 05BUCHAREST2514 This record is a partial extract of the original cable. The full text of the original cable is not available. C O N F I D E N T I A L SECTION 01 OF 02 BUCHAREST 000131
DEPT FOR INL DEPT ALSO FOR EUR/NCE - WILLIAM SILKWORTH TREASURY FOR FINCEN JUSTICE FOR OIA, AFMLS, NDDS
E.O. 12958: DECL: 01/14/2014 TAGS: SNAR, KSEP, EFIN, RO, KFTN SUBJECT: ROMANIA: ANTI-MONEY LAUNDERING AGENCY LACKS RESOURCES TO COMBAT FINANCIAL CRIMES
REF: BUCHAREST 2514
Classified By: ECONOMIC SECTION CHIEF JOHN R. RODGERS FOR REASONS 1.4 B AND D
1. (C) SUMMARY: Romanian authorities have the political will to combat illegal currency flows out of the country, but the Director of Romania,s National Office for the Prevention and Control of Money Laundering (NOPCML) claims his office lacks the training and resources to track illicit fund transfers. Post intends to implement programs to assist NOPCML in carrying out its mission of tracking and reporting financial crimes. END SUMMARY.
Central Bank Supports Efforts
2. (C) With the Government of Romania (GOR) in transition as the result of the largely unexpected election in December 2004 of center-right opposition National Liberal Party-Democratic Party (PNL-PD) Alliance candidate Traian Basescu as President over Adrian Nastase of the previously governing center-left Social Democratic Party (PSD), Post was concerned about the possible outflows of funds illegally obtained through politically connected transactions, including bribes, privatization kickbacks, and corrupt practices from Romania. EconOff, accompanied by a U.S. Treasury representative, discussed this topic with Nicolae Cinteza, Director of Supervision, National Bank of Romania (BNR) and Iulian Dragomir, Secretary of State and President of NOPCML.
3. (C) Cinteza understood our main interest to be money from cronies of the previous government that might be transferred to off shore destinations (Cayman Islands, Virgin Islands, Cyprus and other locations). He stated the BNR was eager to cooperate and that he, too, would like to see such flows halted and those responsible jailed. However, in his opinion, such money has already left the country. Nevertheless, he advised he would send out notices to all commercial banks advising them to be extra vigilant and immediately report any suspicious transactions. He affirmed the excellent working relationship the BNR now has with NOPCML since Iulian Dragomir,s appointment as President and that the two institutions would work together to address the problem.
NOPCML,s Director Admits Agency,s Limitations
4. (C) Following the meeting with Cinteza, EconOff, Treasury, and FBI met with Iulian Dragomir, President of NOPCML. EconOff stated we appreciated the Office,s past efforts in combating financial crimes and money laundering, but were concerned that in Romania,s current transitional period illicit money may be exiting the country. We urged he take extra measures to report &suspicious transactions8 and significant capital outflows.
5. (U) Judge Dragomir, formerly the Vice President of the Bucharest Court of Appeal, was appointed President of NOPCML in June 2004. Prior to his appointment, the agency was severely criticized by the BNR, banking regulators and the industry in general for its inefficiency and extraordinary delays in reviewing and reporting suspicious transactions. In some cases, investigative leads were reported to prosecutors over a year after discovery.
6. (C) Dragomir stated he was committed to fighting financial crimes, but provided us with a frank assessment of his agency,s limited ability and resources, candidly admitting NOPCML lacks the ability to real time track illicit fund transfers. In particular, he cited the following limitations:
- His staff lacks training and know-how. Almost all of the agency,s current 72 staffers were hired by the agency,s former President. Although the salary is relatively good for Romania ($600 - $700 per month), he acknowledged the professional skills of most of his staff were weak. Most of his employees were graduates of &second tier8 private law schools and lack basic analytical skills. He gave as an example that it took one employee four months to conclude a file. He advised he is in the process of &cleaning house,8 but it will take a long time before the agency acquires the talent to perform its mission.
- NOPCML lacks sufficient logistical support. He noted that his archivist doesn,t know how to archive, with the result the office has to rely almost exclusively on hard copy. He also informed that some files have simply &disappeared.8 His employees lack both knowledge and expertise in working in a classified regime. Also, he bemoaned the fact that the agency lacks the equipment and software necessary to perform its mission.
- Lack of manpower and training. The agency has the same operational staff as prior to 9/11, despite the agency,s expanded mission. He believes the agency needs double the personnel it has at present. None of this staff has any experience or training in combating terrorist financing.
7. (C) Dragomir is attempting to get help from other financial intelligence units (FIUs) especially from the United Kingdom and U.S. FINCEN. In November 2004, the Department of Justice,s Office of Overseas Prosecutorial Assistance and Training sponsored an assessment of NOPCML by U.S. FINCEN and a future technical assistance project between the two FIUs is planned for 2005. Dragomir stated he has been successful in developing cooperative protocols with other GOR agencies concerned with financial crimes, which has resulted in increased sharing of information. NOPCML has a twinning agreement with Italy under an EU PHARE program, but Dragomir has not been pleased with the assistance the Italians have provided. When the program expires in May, he hopes to replace it with one based on U.K. or German models.
8. (C) Comment: Dragomir,s candid assessment is that without outside assistance NOPCML cannot adequately perform its mission. While he did not specify in exact detail the skills NOPCML requires, it appears training in a full range of analytical and investigative skills would be helpful. Dragomir is extremely positive regarding NOPCML,s newly established relationship with U.S. FINCEN, and desires a closer relationship and increased cooperation with the U.S. FIU. Post,s resident Treasury representative has offered to assist NOPCML by conducting a training course in January on wire transfers and how to detect money laundering. End Comment.
9. (U) Amembassy Bucharest's reporting telegrams are available onthe Bucharest SIPRNet website: www.state.sgov.gov/p/eur/bucharest DELARE