TERRORISM FINANCE: 2005 UPDATE NO. 2 - EMBOFF ROLE

S E C R E T AMMAN 001957

SIPDIS

EB/ESC/TFS FOR NELSON
EB/EPPD FOR THOMPSON
S/CT FOR KUSHNER
IO/PSC FOR SCHWEITZER
NEA/ELA FOR MEYER/BARON
TREASURY FOR ZARATE/GLASER
OFAC FOR WERNER

E.O. 12958: DECL: 03/02/2015
TAGS: KTFN KVPR EFIN PTER ETTC PREL CVIS JO
SUBJECT: TERRORISM FINANCE: 2005 UPDATE NO. 2 - EMBOFF ROLE

REF: STATE 32688

Classified By: Charge d'Affaires David Hale for reason 1.4 (b) and (d)


1. Post provides replies to reftel queries as follows:


2. (C) Over the past two years, the GOJ has not reported the
seizure of any funds belonging to 1267-designated individuals
or entities, though it has sent out freeze orders after each
1267 designation. (They did, however, freeze hundreds of
millions of dollars worth of Iraqi assets, $250 million of
which has been transferred to the DFI.) Jordanian banks are
not allowed to perform any banking services for listed
individuals or entities subsequent to their being listed. If
1267-designated funds were to be found in Jordan's financial
system, the GOJ would freeze them under the regulatory
authority of the Central Bank of Jordan. The GOJ has legal
authority to act because UN Security Council Resolutions
override domestic laws.


3. (C) The GOJ has historically been supportive in
co-sponsoring designations upon our request. If in the
future, however, the U.S. were to ask for GOJ co-designation
of an individual or entity who in the statement of case was
described as having links to a Palestinian terrorist
organization, the GOJ might balk at co-sponsorship for
domestic political reasons (Jordanian citizens of Palestinian
origin are estimated to represent more than 60% of total
population).


4. (C) Recent events have sparked an intense interest within
the GOJ in improving its anti-terrorist financing regime.
The GOJ would readily accept any assistance offered it in
this field, including an assessment of training needs. The
GOJ's current priority needs center on the creation of a
financial intelligence unit in the Central Bank, which will
need to be set up in the most effective possible manner and
whose staff will need to be trained to effectively operate
the unit.


5. (S) Jordan is a high-risk country both for significant
fund raising and significant banking services. The former
risk is based on the presence of a large and relatively
high-income Palestinian-Jordanian community, much of which is
sympathetic to Palestinian militants operating next door, and
of a large, relatively high-income, and predominantly Sunni
Arab expatriate Iraqi community. Fund-raising risk is
mitigated by the relative ease of detection by Jordan's
General Intelligence Directorate, which has proven to be
highly competent in detecting conspiracies involving
Jordanian extremists operating in Jordan and has made HAMAS
and other Palestinian groups high-priority targets. More
worrisome is the risk that significant banking services will
be available to terrorists. There is evidence (for example,
the recent results of an OCC investigation of Arab Bank's New
York City branch) that services have inadvertently been
provided to terrorists by Jordanian banks in the past; again,
Jordan's proximity to areas of operation for terrorist groups
is a primary reason for the risk. Jordanian banks have by
far the most extensive branch networks in the West Bank and
Gaza Strip, hold banking licenses in Iraq or stakes in Iraqi
banks, have large numbers of expatriate Iraqis as customers,
and are now expanding on a small-scale basis into Syria.
HALE