EUR/ERA CHASE MEETING ON DUTCH TERRORIST FINANCING

UNCLAS SECTION 01 OF 02 THE HAGUE 002310 SIPDIS SENSITIVE STATE FOR EB/ESC/TFS, EUR/ERA, EUR/UBI E.O. 12958: N/A TAGS: ETTC ECON PTER NL EUN SUBJECT: EUR/ERA CHASE MEETING ON DUTCH TERRORIST FINANCING PRIORITIES REF: A. THE HAGUE 1741 ¶B. BRUSSELS 3236 ¶C. STATE 171579 ¶D. THE HAGUE 1883 This message is Sensitive But Unclassified. Please treat accordingly. ¶1. (U) In a September 10 meeting, Erik van Andel, Head of the Financial Integrity Division, Dutch Finance Ministry (MOF),briefed visiting EUR/ERA Office Director Peter Chase on Dutch EU Presidency priorities on combating terrorist financing. (See septels for reporting on Chase's meetings on EU development and political issues.) These priorities, van Andel explained, included approval of the EU Third Money Laundering Directive, improvements to the EU designation process (Clearinghouse mechanism),better regulation of cash couriers including cross border currency declaration issues, creation of standards for financial institutions on wire transfers, a tightening of the supervision of non-profits and charities to prevent abuse, universal compliance within the EU with Financial Action Task Force (FATF) special recommendations, and a cross-pillarization of efforts on combating terrorist financing within the EU's three pillars. See ref A for further details on Dutch EU Presidency priorities. SEEKING "POLITICAL AGREEMENT" ON MONEY LAUNDERING DIRECTIVE -------------- -------------- ¶2. (SBU) On the Third Money Laundering Directive, Jan Willem van den WallBake, MOF Senior Coordinator for Anti-Money Laundering and Terrorist Financing, said the Dutch hoped for "political agreement" within the EU by the year's end, with further discussion on the directive expected at the December Ecofin and adoption by the summer of 2005. He cautioned that this adoption target could slip as the European Parliament had not yet taken a position on the draft directive. (See ref B for details on the directive.) Meanwhile, divisions remained among member states on the need for a specific definition for beneficial ownership, the setting of a 15,000 euros large cash reporting minimum, and a definition for politically exposed persons that would not significantly increase administrative burden costs on financial institutions. The Dutch hoped to make further progress on these outstanding differences at the September 21 Working Party on Financial Services (money laundering, terrorist financing). Terrorist financing, van den WallBake added, would be addressed in each article of the new directive. ONLY "SMALL STEPS" ON EU CLEARINGHOUSE PROCESS -------------- - ¶3. (SBU) Margreet Wenting, MOF Senior Policy Advisor on terrorist financing, said that the Dutch-initiated September 22 EU seminar on terrorist financing (see refs C and D for details) would help to identify what was and what was not working within the EU Clearinghouse process. However, any proposals for improving the process would probably be limited to "small steps" within the existing legal framework given differences among member states on the degree of authority to be wielded by the body. Van den WallBake clarified that unanimity among member states would be required for any changes to the process. Any pressure for large changes risked the chance of reversing gains already made and creating an even less effective and efficient process. Quoting EU Counterterrorism Coordinator Gijs de Vries, van Andel suggested that any major changes or improvements to the Clearinghouse process could require Treaty amendments. SHARING OF INFORMATION AND BEST PRACTICES KEY -------------- ¶4. (SBU) On these and other Dutch priorities mentioned in para 1, the MOF welcomed further cooperation with the USG, especially regarding information exchanges on USG efforts and best practices in these areas. Van den WallBake hoped USG presentations on post-designation mechanisms/analysis (Justice Department) and the supervision of non-profits and charities (Treasury Department) at the September 22 EU seminar would serve to raise awareness and educate many within the EU on the importance of these issues in the fight against terrorist financing. Chase agreed and encouraged his MOF interlocutors to keep the Embassy and Washington informed of other opportunities for such exchanges. He also urged his MOF interlocutors to use existing fora, such as the Financial Market Regulatory Dialogue, to broaden the discussion on how these issues were being addressed in the U.S. and EU. ¶5. (U) This message has been cleared by EUR/ERA Office Director Peter Chase. SOBEL