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Transcripts and Remarks

Ambassador Wayne’s Welcome Speech Seminar on Bulk Cash Smuggling

December 6, 2009 | Serena Hotel, Kabul

Thank you very much, Minister Zakhilwal, ladies and gentlemen.  It is an honor to be here today, just days after President Obama’s historic speech on Afghanistan and early in President Karzai's second term, to talk again about a fundamental task for the future of Afghanistan:  Strengthening the rule of law and justice.

We estimate that an average of 10 million US dollars (or equivalent) in reportable currency leaves Kabul every day destined for Dubai.  In a recent 18-day sampling of currency declarations, 190 million US dollars left Afghanistan.  This is a lot of money – much of it is probably the result of illegal activity -- that the Afghan authorities should know about, should monitor, and should control, just as authorities worldwide do.  
We have come here today to better understand and to combat this scourge.  In fact, this Seminar on Bulk Cash Smuggling is the first event ever organized around this topic by the U.S. Embassy and our Afghan partners, the Ministry of Interior and the Ministry of Finance.  During the next four days, you, the participants -- representatives of many (8-9) Afghan ministries and agencies -- will be dealing with a very important issue for Afghanistan as well as for many other countries.

The training will help you identify how much of the money that flows across your borders is for valid trade and commerce; and how much is the proceeds of illicit activity.  The importance of the training you are about to receive will help prevent the illegal export of capital that is vital to the growth of Afghanistan.  This training will lay the foundation for ensuring that all people who enter or leave Afghanistan comply with the currency reporting requirements.  This training will improve your ability to identify people attempting to circumvent the reporting requirements and build your understanding of the rationale behind their choice to not declare their currency.  Success in these areas could lead to important increases in the Afghan Government's revenue collection, which is vital to fiscal sustainability and increasing the legitimacy of the Afghan government. 

The Afghan government, the United States, and the international community are all concerned about corruption and illicit finance in Afghanistan.  All of us here today recognize how essential this task is.  We share the vision of an Afghanistan where justice is available to all, and the institutions of government and society serve the wider interests of all the people, not the narrow interests of the few and the powerful. 
President Karzai set forth this vision on some of these issues in his Inauguration speech on November 19, including his acknowledgement that “corruption and bribery constitute a very serious problem in Afghanistan.”  We welcome his commitment to end the “culture of impunity” and violation of the law.  We also welcome his pledge to strengthen anti-corruption efforts, including by adopting a law to make it obligatory for senior government officials to identify the sources of their assets and to declare their properties in a transparent manner, and to face criminal penalties for filing false asset declarations or failing to file an asset declaration at all.  We pledge our vigorous support to these efforts.      

These and other measures are essential for this country to become a strong, prosperous and sovereign state.  But words are not enough.  Demonstrating on a daily basis to the people of Afghanistan that corruption is no longer tolerated will serve as an irrefutable counterweight to those enemies of Afghanistan who wish to return this country to lawlessness and anarchy.   It will also improve the effectiveness of President Karzai’s government and enhance its reputation at home and abroad.
Cash smuggling is one part of these broader problems, which is why we are here today. 

  • Illicit cash smuggling is a major method for criminals, insurgents, terrorists, and drug traffickers to move currency across borders in support of their activities.
  • As you know, economies began tightening banking and money laundering laws following the September 11th terrorist attacks and after other terrorist attacks elsewhere.
  • In response, terrorist groups have moved away from using traditional financial institutions to move their illicit monies to ”low tech alternatives” like illicit cash couriers who are more challenging to detect and control. 
  • Detecting and interdicting these smugglers is a very difficult task.  In the United States, for example, there are 317 official land, sea and air border crossing points, plus any number of unofficial routes along our borders with Canada and Mexico. 
  • During this seminar, you will see that U.S. border and law enforcement agents have caught thousands of smugglers who concealed cash in vehicles, commercial shipments, express packages, luggage, as well as on private aircraft and boats.  Couriers have been caught with concealed bulk cash hidden in their shoes, taped to their bodies and even ingested.  They have also tried creative tactics such as hiding cash in candy wrappers, bicycle tires, and even laundry detergent boxes.
  • Furthermore, we are seeing the emergence of new methods, such as the use of Stored Value/Pre-Paid Cards.  These provide a compact, easily transportable, and potentially anonymous way to store and access cash value. 
  • In recognition of this threat, the U.S. National Money Laundering Strategy of 2007 made addressing the flow of illicit bulk cash one of its major priorities.
  • The U.S. strategy emphasizes not only the illicit flow of funds within the United States and across our borders, but also their movement internationally. 
  • Such wide-ranging effort requires full commitment and coordination among a broad array of government agencies.  In the United States, this interagency team includes the Departments of Homeland Security, Treasury, Justice, and State. 
  •  At the global level, the U.S. is working with international counterparts through the Financial Action Task Force (FATF) to promote transparency of cross-border currency movements for purposes of identifying and interdicting illicit cash smuggling.
  • The United States is working with other FATF members countries to promote a four-prong strategy to identify and disrupt illicit cash smuggling: 
  1. Promoting transparency of physical cross border currency movements;
  2. Utilizing intelligence, law enforcement, and regulatory data to identify and target illicit movements of currency;
  3. Promoting investigation, confiscation and prosecution of illicit funds and illicit cash couriers through strong legal authorities and operational expertise; and
  4. Strengthening existing international standards at the FATF. 
  • At the same time, U.S. law enforcement agencies routinely provide training to and conduct joint operations with our state, local and international partners to combat this threat.
    • For example, the Department of Homeland Security developed “Operation Firewall,” through which they work with domestic and international partners on various aspects of bulk cash smuggling.   “Firewall” operations have involved interdiction of smuggling via commercial and private passenger vehicles, airlines, ferries and pedestrians.
    • In 2007, the United States expanded “Operation Firewall” to create the Hands Across the World (HAW) program, which emphasizes coordination of simultaneous interdiction operations and real-time information sharing. 
    • In 2009, the United States led two unprecedented multilateral cash smuggling operations through the G8 and World Customs Organization, both of which resulted in millions of dollars in seizures and the identification of global cash movements that would otherwise have gone undetected.

It is in furtherance of this Strategy that we come together today.
In conclusion, combating bulk cash smuggling and the vast network illicit cash couriers is an international problem that requires an international response.  As countries worldwide continue to tighten money laundering and related finance laws and regulations, it is likely that criminals will respond by becoming ever more creative in trying to avoid controls by governments and the private sector.  We pledge to work together with Afghanistan to stop them.  As President Obama said in his speech this past Tuesday, “We will support Afghan Ministries, Governors, and local leaders that combat corruption and deliver for the people.  And, we will continue to advise and assist Afghanistan’s security forces to ensure that they succeed over the long haul.  But it will be clear to the Afghan government – and more importantly to the Afghan people – that they will ultimately be responsible for their own country.”     

Thanks to our guests for taking the time to participate in this seminar.  My Embassy colleagues and I look forward to working together with you to ensure that funds intended for the Afghan people stay in the country to improve their lives and the future of Afghanistan.