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Identifier
Created
Classification
Origin
04TELAVIV1561
2004-03-11 15:50:00
CONFIDENTIAL
Embassy Tel Aviv
Cable title:  

ISRAELI FIU LEFT OUT OF RAMALLAH BANK OPERATION

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						C O N F I D E N T I A L TEL AVIV 001561 

SIPDIS

NEA FOR BURNS/SATTERFIELD
EB FOR WAYNE
NSC FOR ABRAMS/DANIN/KIFAYAT

E.O. 12958: DECL: 03/11/2014
TAGS: KWBG EFIN KPAL IS COUNTERTERRORISM ISRAELI PALESTINIAN AFFAIRS
SUBJECT: ISRAELI FIU LEFT OUT OF RAMALLAH BANK OPERATION

REF: A. TEL AVIV 1413


B. TEL AVIV 1392

Classified By: Deputy Chief of Mission Richard LeBaron for reasons 1.4
(b) and (d).

This message has been cleared by ConGen Jerusalem.

C O N F I D E N T I A L TEL AVIV 001561

SIPDIS

NEA FOR BURNS/SATTERFIELD
EB FOR WAYNE
NSC FOR ABRAMS/DANIN/KIFAYAT

E.O. 12958: DECL: 03/11/2014
TAGS: KWBG EFIN KPAL IS COUNTERTERRORISM ISRAELI PALESTINIAN AFFAIRS
SUBJECT: ISRAELI FIU LEFT OUT OF RAMALLAH BANK OPERATION

REF: A. TEL AVIV 1413


B. TEL AVIV 1392

Classified By: Deputy Chief of Mission Richard LeBaron for reasons 1.4
(b) and (d).

This message has been cleared by ConGen Jerusalem.


1. (C) Summary: The Director of the Israeli Money
Laundering Prohibition Authority (IMPA), Yehuda Shaffer, told
econoff on March 10 that the Israeli financial intelligence
unit (FIU) was left out of the Shin Bet/IDF raid on the
Palestinian banks on February 24. Shaffer claimed the FIU
was only given information about the suspected accounts after
the raid. Shaffer was confident that the raids were
justified, however, he was disappointed that his unit was not
allowed to contribute information until after the fact.
Shaffer said if the GOI adopted provisions similar to the
U.S. "PATRIOT Act," the Ministry of Justice could have seized
the money from the correspondent accounts of the two banks in
Israel, rather than conducting a military raid on the bank's
branches in Ramallah. Shaffer reiterated his unit's
willingness to work with the Palestinian Monetary Authority
and he is awaiting word from the PA. End summary.


2. (C) In a meeting with the IMPA on March 10, the Director,
Yehuda Shaffer, told econoff that contrary to many peoples'
expectations, the FIU played no role in the lead-up to the
IDF/Shin Bet raids in Ramallah two weeks ago. Shaffer said,
according to information that he has received, the money
seized by the raid was transmitted directly from Jordan to
the accounts in the West Bank. Shaffer added that the money
never passed through the Israeli banking system and therefore
did not pass through the FIU's monitoring network. When
asked whether IMPA was given a chance by the Shin Bet to
confirm whether this was true, Shaffer responded that they
were only given the account information after the raid.
Shaffer said that this was a purely security service/military
operation and therefore the IMPA was left out. Shaffer
believed this was an unfortunate choice because it is
possible that the IMPA could have traced other funds to the
suspected accounts and provided greater information to the
Shin Bet and the IDF. In Shaffer's opinion it is highly
probable that some of the accounts in question have received
funding through Israeli correspondent banks.


3. (C) Shaffer opined that even if the IMPA and Ministry of
Justice played a larger role in this operation there was
little they could have done to seize the funds in Israel,
since the funds did not transit Israeli banks. Shaffer said
that unlike the U.S., Israeli law prohibits the government
from seizing funds from foreign banks' correspondent
accounts. Shaffer said that had the GOI had terrorist
financing legislation similar to the "PATRIOT Act" in effect,
they could have seized the funds from the banks correspondent
accounts in Israel, rather than by conducting a military
style raid. Shaffer said that the GOI has been reluctant to
enact such a law because of the potential sovereignty issues
raised when a country seizes the assets of another country's
banks. Shaffer remarked that "the U.S. can do it because
nobody can afford not to do business with American banks, but
Israel is only a little country." Shaffer said that from a
law enforcement perspective he hopes that the U.S. will
encourage Israel to adopt such a law.


4. (C) Econoff informed Shaffer that ConGen Jerusalem had
passed his contact information to the Palestinian Monetary
Authority (PMA). Shaffer said that he was happy to hear that
the PA is interested in improving cooperation on terrorist
financing and that he remains committed to helping them in
any way possible. Shaffer said he has not heard from the PMA.

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