S E C R E T SECTION 01 OF 02 SANAA 001192

SIPDIS

EB/ESC/ESP (GGLASS), S/CT (SFOX), NEA, IO/PHO (APEREZ),
NSC (GPETERS), TREASURY GENERAL COUNSEL (JZARATE), TREASURY
TASK FORCE ON TERRORIST FINANCING
TREASURY PASS OFAC

E.O. 12958: DECL: 05/25/2008
TAGS: KVPR ETTC EFIN PTER PREL CVIS TERFIN COUNTER TERRORISM DEMARCHE
SUBJECT: TERRORIST FINANCE: SANAA: PRENOTIFICATION OF
ADDITION OF AL AQSA FOUNDATION TO E.O. 13224 ASSET FREEZE
LIST

REF: A. SECSTATE 137082 B. SANAA 442

Classified By: DCM ALAN MISENHEIMER FOR REASONS 1.5 (B) AND (D)

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SUMMARY
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1. (S) Summary: The head of the Americas Desk at the
Ministry of Foreign Affairs had little substantive comment on
the USG designation of the al-Aqsa Foundation as a Foreign
Terrorist Organization. Al-Aqsa is a sensitive subject in
Yemen and USG efforts to extradite al-Aqsa's local leader,
Sheikh Muhammad Ali Hassan al-Muayad, from his current German
detention are not popular. We may see some public reaction to
the designation: at the same time our demarche was presented,
a public demonstration was calling for the release of
al-Muayad. End Summary

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REQUESTING ROYG COOPERATION
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2. (S) On May 26, Pol/Econ Chief spoke with Abdul Salam
al-Awadhi, the head of the MFA's America's desk, and Dirham
al-Saidi, USA desk officer, about USG plans to freeze assets
of the al-Aqsa Foundation and designate it as a Foreign
Terrorist Organization. Using reftel talking points and
background information (left as a non-paper) she emphasized
current international cooperation to end terrorist financing,
and Yemen's critical role in that campaign. To support these
efforts, the USG urged ROYG action to investigate the local
branch of the al-Aqsa Foundation, to freeze its assets and to
block the transfer of its funds.


3. (S) Al-Awadhi responded very briefly on substance, noting
that the issue remains sensitive. He believes the Al-Aqsa
Foundation's Sanaa office is still open, but has no
information about its activities. He recalled previous
instances of close cooperation between Yemen and the US on
terrorist matters, and promised that the al-Aqsa designation
information would be promptly conveyed to the appropriate
authorities and held confidential until the US public
announcement.


4. (C) Al-Awadhi and al-Saidi spoke at some length about
Islamic traditions of charity, without specifically
mentioning al-Aqsa or its leader, Sheikh Muhammad al-Muayad.
Yemenis, like other Arabs, were angered by the plight of the
Palestinians and gave charity to help them. If such
generosity had been subverted by terrorists, they agreed that
governments must monitor charitable operations. However, not
everyone who supported the Palestinians was a terrorist. The
POL/ECON chief firmly rejected that linkage: the USG funds
humanitarian relief to the Palestinians and encourages others
to do so as well. Terrorism is an entirely different
subject.

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DEMONSTRATION FOR AL-MUAYAD
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5. (C) Returning from the MFA, the Embassy vehicle was forced
to detour several blocks by a demonstration in Tahrir
(Liberation) Square. According to local press accounts, more
than 5,000 people attended the demonstration in support of
al-Muayad, calling for the ROYG to insist on his immediate
release from German detention, and to resist US efforts to
obtain his extradition. (RSO local staff estimated the actual
number of demonstrators at around 800.)


6. (C) Islaah, the conservative Islamic political party that
came second in Yemen's recent parliamentary elections,
sponsored the rally. The popular prayer leader, radical
Sheikh Abdul Majid al-Zindani addressed the crowd, calling on
President Ali Abdullah Salih to protect al-Muayad and bring
him home. According to press accounts, Salih recently
authorized the use of public funds for al-Muayad's defense in
the German courts, and plans to raise the matter during his
previously scheduled visit to Germany next month.

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THE GERMANS ARE QUERIED
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7. (C) The German DCM in Sanaa has also told us that the
German Embassy has received several recent queries from the
ROYG on al-Muayad's status, and numerous messages from the
Sheikh's supporters calling for his immediate release.

HULL