TERRORISM FINANCE: FRENCH AUTHORITY TO FREEZE

UNCLAS PARIS 003292 SIPDIS SENSITIVE STATE FOR EB/ESC/TFS (LLAMBERT),EUR/ERA AND EUR/WE TREASURY FOR TFFC, OFAC JUSTICE FOR CRM/ARFMLS E.O. 12958: N/A TAGS: ETTC PTER EFIN KTFN FR PGOV EUN SUBJECT: TERRORISM FINANCE: FRENCH AUTHORITY TO FREEZE ASSETS REF: A. 04 STATE 193684 ¶B. STATE 28352 ¶C. STATE 32688 ¶D. STATE 32549 ¶E. PARIS 7561 ¶1. (SBU) Per reftels, Post includes below points on French asset-freezing authority for terrorist finance issues. ¶2. (SBU) France's legal authority to freeze assets is based on the state's traditional power to use capital controls where necessary. Therefore, the main authority is based on French administrative law, which is sufficient for the GOF to exert full asset-freezing authority. Discussions on the enacting of specific asset-freezing legislation have continued but have not resulted in any concrete proposals. Investigating judges (a judge that combines both prosecutorial and judicial authority) can also order the seizure or freeze of assets of individuals under investigation. Three investigating judges specialize in investigating financial crimes and recently have collaborated with terrorism investigating judges on terrorism finance cases. ¶3. (SBU) France's Ministry of Finance implements sanctions against individuals and organizations, while approval to designate comes from the Ministry of Foreign Affairs (in collaboration with French intelligence agencies). The Ministry of Foreign Affairs authorizes and transmits national positions regarding individuals and entities proposed for listing by the EU Clearing House mechanism. ¶4. (SBU) France has national authority to freeze terrorist assets, and this authority is fully autonomous. Once the Ministry of Foreign Affairs has given its approval to designate, the Ministry of Finance implements the decision. In general, France does not designate lightly. It will not designate solely based on outside pressure, and insists on making an independent decision. It does not hesitate to buck consensus in the Clearing House if necessary and furthermore, it is especially touchy regarding the confidentiality of Clearing House discussions. ¶5. (SBU) No structural impediments currently exist for more robust cooperation on co-sponsoring designations. In general, French officials are eager to co-sponsor in situations where they agree on the merit of the designation, believing that cooperation at the UN is a key strength of the US-French counter-terrorism relationship. Most differences of opinion can be managed by comparing information on potential designees. The most important exception to this daily cooperation is French intransigence on designating Hezbollah. Although France claims it has not received definitive evidence of Hezbollah involvement in terrorism, designation in this case is a political decision with President Chirac believed to be the final arbiter. ¶6. (SBU) France would likely reject USG offers of training and technical assistance in the belief that they possess the same level of technical competence as their USG counterparts. They would likely welcome expert-level and political-level exchanges/discussions on terrorism finance issues. ¶7. (SBU) Given France's significant immigrant population, it is potentially a "high" risk as a site for significant fund raising for terrorists. The GOF recognizes this threat and has recently redoubled its efforts to focus on terrorist financing issues. On April 18-19, French police arrested twelve people in the Parisian area on suspicion of financing terrorist/Islamist causes. Three of those arrested continue to be held in detention, and one of them has been formally placed under investigation on terrorism finance charges. The mid-April sweep was the first in a joint investigation begun February 25 by terrorism investigating judge Jean-Louis Bruguiere and financial crime investigating judge Philippe Courroye. Ref E details how the GOF investigates terrorist finance from an administrative (as opposed to judicial) perspective. WOLFF