ISRAELI COUNTER-TERRORISM OFFICIALS MEET WITH

C O N F I D E N T I A L SECTION 01 OF 02 TEL AVIV 006133

SIPDIS

E.O. 12958: DECL: 10/20/2015
TAGS: PTER EFIN KTFN PREL COUNTERTERRORISM
SUBJECT: ISRAELI COUNTER-TERRORISM OFFICIALS MEET WITH
STAFFDEL RICKMAN

REF: A. TEL AVIV 04145

B. TEL AVIV 05233

Classified By: Ambassador Richard H. Jones for reasons 1.4 (b) and (d).


1. (C) SUMMARY: Israeli MFA and NSC officials briefed
staffers from the U.S. House Subcommittee on Oversight and
Investigations on the GOI's efforts against terrorism and
terrorism finance. MFA officials stressed the importance of
the U.S. role in urging European nations to designate
Hizballah as a terrorist organization and to curb the
financing of terrorism within their borders by shutting down
Islamic charities involved in funding terrorism. They said
Iran and Syria pose threats to the region's stability because
of their continued support of Al-Qaeda, Hizballah, Hamas and
Palestinian Islamic Jihad (PIJ). MFA officials also
criticized the Palestinian Authority's (PA's) lack of will to
fight terrorism finance, and its weak financial system, which
lacks regulatory powers. An NSC official cautioned that
Saudi Arabia continues to support terrorist networks through
different charities and that numerous financial institutions
in the United Arab Emirates (UAE) also provide a springboard
for transfer of money to various terror networks around the
world. He indicated that the GOI is working with the PA to
set up an alternate social support infrastructure to the one
operated by Hamas, in order to undermine Hamas efforts to
gain political favor among Palestinians. END SUMMARY.

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MFA: Iran and Syria Still Supporting Terrorist Groups
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2. (C) On October 9, staffers from the Subcommittee on
Oversight and Investigations of the House International
Relations Committee (HIRC) -- Gregg Rickman, Greg McCarthy,
David Killion, and Cliff Stammerman -- accompanied by
econoff, met with the MFA's Director of Nonproliferation and
Counterterrorism, Yehuda Yaakov. Yaakov was accompanied by
his deputy, Joseph Moustaki, Principal Deputy Legal Adviser
Daniel Taub, and Ismail Khaldi from the ministry's North
American Division.


3. (C) Taub told the Rickman delegation that the current
legislation used by the GOI in its counterterrorism efforts,
such as the British Defense (Emergency) Regulations and the
Prevention of Terrorism Ordinance, dates back to the time of
the British Mandate. He indicated that the GOI's legislation
against terrorism finance includes the Prohibition on Money
Laundering Law (PMLL) of 2000. Pursuant to this Act, the
Ministry of Justice created in 2002 the Financial
Investigative Unit (FIU),now called the Israel Money
Laundering and Terror Financing Prohibition Authority (IMPA),
which is responsible for combating terrorism finance and
money-laundering (REF A).


4. (C) Taub characterized the GOI's efforts against terrorism
and terrorism finance in the international arena as
effective. He remarked that the GOI is signatory to eight
out of 13 global conventions on terrorism and that the GOI
advocates a treaty, or other form of international agreement,
to address suicide bombing. He underscored the importance of
vigilance regarding these issues, and said that nations that
have previously been critical of Israel's approach to
terrorism have begun making overtures to tap Israel's
knowledge and expertise.


5. (C) Yaakov said that Europe cannot afford to be complacent
and that European political will and efforts to implement
measures against terrorism are vital. He added that state
sponsors of terrorism such as Iran and Syria must be
marginalized because their support for Hizballah, Hamas,
Palestinian Islamic Jihad (PIJ),Al-Qaeda, and others allow
these groups to develop an "independent capability." This
allows these terror groups to function without the support of
sponsors. He said Hizballah has an independent capability
because it is involved in fundraising in places like North
America, Canada, Africa, and South America.


6. (C) Yaakov said Britain and France are not taking
effective steps to curb the activities of Islamic charities
such as INTERPAL in Britain and CDSP in France, which he
claimed are involved in terrorism finance. He said these two
organizations have not been outlawed and continue to
function. He also added that the GOI knows which Islamic
charities are involved in funding terrorism. He indicated
that when one charity is shut down, another one pops up, and
cited Germany, the Netherlands, and Denmark as examples of
countries that have experienced this phenomenon.


7. (C) Yaakov said terrorist groups in the Middle East
function much like proxy powers in a polarized world. Iran
and Syria support terror organizations in places like Iraq,
Lebanon, and the Palestinian territories, which allows these
state sponsors of terrorism to project their power in the
region. Iran and Syria in particular exert influence through
terrorist networks that seek to affect events by killing and
inflicting damage to civil infrastructure.


8. (C) Yaakov said the Palestinian Authority (PA) lacks the
ability to curb terrorism finance because it does not have a
Financial Investigative Unit (FIU). He told the delegation
that the PA has no financial transparency, effective
financial controls, or enforceable regulations to help it
control the flow of money to terrorist groups operating in
the territories. He said the PA has no will or ability to
fight terrorism finance at this point.

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NSC: Saudi Arabia "Bigger" Threat Than Iran
--------------


9. (C) On October 10, the National Security Council's
director of Counterterrorism Finance, Udi Levi, accompanied
by MFA official Khaldi, met with the Rickman staff delegation
and econoff. Levi said the GOI is not optimistic about Saudi
Arabia's efforts against terrorism or terrorism finance. He
said the Saudi government is still one of the major
supporters of terrorism around the world and that it has not
curbed non-governmental organizations involved in funding
terrorist groups. He said Saudi Arabia has many "mediators"
who move money between private donors, charities, and
terrorist groups.


10. (C) Levi said Iran is also involved in providing money to
Palestinian terrorist groups. He asserted that Iran tried to
funnel three million dollars through the UAE to various
(unspecified) Palestinian terrorist groups in the occupied
territories, but that GOI and UAE officials prevented the
transfer. He said the UAE and other gulf countries are
transit points for terror money and for the proliferation of
weapons.


11. (C) Levi criticized European dialogue with Hamas, saying
that it legitimizes the organization as a player in the
political arena. He said that Hamas is a terrorist
organization that works closely with Al-Qaeda and other
terrorist networks. In conclusion, Levi discussed the GOI's
efforts to help the PA set up an alternate social security
program, designed to help the Palestinians and to undermine
Hamas's system of social welfare (Ref B). The financial
support slated for the PA will come from an escrow account
made up of a variety of Palestinian pension accounts, and
other funds paid into by Palestinian workers. The GOI will
transfer money from this escrow account to the PA to help it
set up a social security system in the territories. He
indicated that the Prime Minister's office and Ministry of
Finance are aware of this program and have given it full
support.


12. (U) This cable was cleared by the staff delegation.

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