TERRORIST ASSETS: NEW DUTCH INITIATIVES

S E C R E T SECTION 01 OF 02 THE HAGUE 002458 SIPDIS NOFORN STATE FOR EB/ESC/ESP, S/CT, EUR/ERA, INR/EC, EUR/UBI, INL, EUR/PGI TREASURY FOR ZARATE JUSTICE FOR OIA/FRIEDMAN FBI FOR LORMEL E.O. 12958: DECL: 09/22/2013 TAGS: ETTC PTER NL EUN SUBJECT: TERRORIST ASSETS: NEW DUTCH INITIATIVES Classified By: DCM Daniel Russel. Reason 1.5(b) and (d) ¶1. (S/NF) Summary: The Dutch plan to take additional measures to clamp down on terrorist front organizations, and supporters, although their full effect will likely only be felt over time. Dutch officials will enact new measures to safeguard the Dutch financial system from terrorist funds. We also expect the Dutch to be active in the European Union to improve and intensify EU measures against terrorist assets. (Septels will report Dutch thinking and initiatives in other areas of counterterrorism). End summary. More Proactive in Designations -------------- ¶2. (S/NF) Dutch authorities have told us that they are gearing up several new initiatives against terrorist financing. The most significant is gearing up to take action toward terrorist fundraisers, supporters,and front organizations in the Netherlands, including through designation processes. A package of measures introduced in parliament by Justice Minister Donner will provide a clearer, more solid legal basis for taking action against these types of entities and to place additional restrictions on their activities once they are designated. In anticipation of a step up in activities against terrorist front organizations and fundraisers, we understand the Dutch security service has stepped up its surveillance of groups suspected of operating in the Netherlands. Some of these proposed measures will be hotly debated in parliament as some measures (e.g., making clear that organizations designated by the EU cannot use or be given funds to rent convention space for rallies) to clamp down on terrorist supporters could also be construed as clamping down on free speech. Tighter Financial Controls -------------- ¶3. (U) The Netherlands is also taking action to safeguard its financial sector against terrorist funds. New legislation expected to come into effect January 1, 2004 will bring companies engaged in providing international companies with domicile, management, tax, administrative, and legal services ("trust offices") under the supervision of the Dutch Central Bank (DNB). Before issuing a license, DNB will verify the identity of the ultimate beneficiaries of any entities under management and vett trust companies' top management. We understand that DNB plans to take additional measures to ensure banks and other financial institutions effectively implement terrorist "freeze" orders. The GONL has also announced that it will introduce measures to boost the transparency and effective supervision of non-profit organizations and the flow of funds to non-profit organizations (including Islamic schools) received from abroad. Multilateralizing Through the EU -------------- ¶4. (SBU) Especially with its EU Presidency scheduled for the end of next year, the Netherlands will attempt to multilateralize many of these measures against terrorist finance to the rest of the EU. Finance Ministry officials have told us that they will strongly push for a new EU anti-money laundering directive that incorporates the latest FATF guidelines. Several Dutch officials have told us that they hope to use their Presidency to streamline the EU clearinghouse process. The Dutch plan during their presidency to review and follow up on the Tampere Conclusions (from the October 15-16,1999 EU Council meeting) which may provide additional scope for police and judicial cooperation against terrorist financing. Comment -------------- ¶5. (C/NF) The pace of Dutch action against terrorist fundraisers, supporters, and front organizations is not likely to dramatically escalate but instead rise slowly but steadily. The new legislation introduced by the Justice Minister will take several months before it is enacted, and many Dutch law enforcement and intelligence officials will prefer to keep tight survelliance on terrorist supporters rather than pursue designations that could force these organizations underground. Nevertheless, most officials we have talked to believe that Dutch actions against Al Aqsa Foundation, BIN, and NPA leader Sison represent a psychological turning point in favor of designation. We apprised Dutch officials that the U.S. would need substantial information packages submitted in order to follow up any Dutch/EU designations with those of our own. To ensure a level playing field for Dutch companies, the Dutch will be active, we believe, in convincing the rest of the EU to follow their lead in AML, designation, and law enforcement financial issues. We should look forward to and support their leadership in these areas. SOBEL