Identifier
Created
Classification
Origin
06LONDON5503
2006-07-27 10:28:00
CONFIDENTIAL
Embassy London
Cable title:  

TERRORISM FINANCE: MONTREUX INITIATIVE ON ISLAMIC

Tags:  ETTC KTFN PTER PREL EU UK 
pdf how-to read a cable
VZCZCXYZ0000
PP RUEHWEB

DE RUEHLO #5503/01 2081028
ZNY CCCCC ZZH
P 271028Z JUL 06
FM AMEMBASSY LONDON
TO RUEHC/SECSTATE WASHDC PRIORITY 7766
INFO RUEHSW/AMEMBASSY BERN PRIORITY 0383
RUEATRS/DEPT OF TREASURY WASHDC PRIORITY
RHEHNSC/NSC WASHDC PRIORITY
C O N F I D E N T I A L LONDON 005503 

SIPDIS

SIPDIS

STATE FOR EB/ESC/TFS YORKS, EUR/PGI REASOR, EUR/UBI ROY,
S/CT KUSHNER,
TREASURY FOR PONCY, HEFFERNAN, SERAFINI
TREASURY FOR OFAC LUIRE
NSC FOR HINNEN

E.O. 12958: DECL: 07/26/2016
TAGS: ETTC KTFN PTER PREL EU UK
SUBJECT: TERRORISM FINANCE: MONTREUX INITIATIVE ON ISLAMIC
CHARITIES

REF: 7/19 HAAS EMAIL

Classified By: Economic Minister Counselor Mark Tokola for reasons 1.5
(b) and (d)

C O N F I D E N T I A L LONDON 005503

SIPDIS

SIPDIS

STATE FOR EB/ESC/TFS YORKS, EUR/PGI REASOR, EUR/UBI ROY,
S/CT KUSHNER,
TREASURY FOR PONCY, HEFFERNAN, SERAFINI
TREASURY FOR OFAC LUIRE
NSC FOR HINNEN

E.O. 12958: DECL: 07/26/2016
TAGS: ETTC KTFN PTER PREL EU UK
SUBJECT: TERRORISM FINANCE: MONTREUX INITIATIVE ON ISLAMIC
CHARITIES

REF: 7/19 HAAS EMAIL

Classified By: Economic Minister Counselor Mark Tokola for reasons 1.5
(b) and (d)


1. (U) This is an action request. Please see paragraph 2.


2. (C) Summary and Action Request: The Montreux Initiative
is a non-governmental project designed to promote cooperation
in removing unjustified obstacles to the effective operation
of legitimate Islamic charities. The initiative, which is
being partially financed by the UK and Swiss governments,
seeks to develop a rigorous, voluntary code of conduct for
Islamic charities. The code of conduct will be buttressed by
independent assessments of charities' financial and
management controls. The Montreux Initiative is still in the
process of identifying a "Group of Friends" -- countries
which support the initiative. While they have a number of
Western government interested, they are seeking
representatives from the Gulf States. Representatives of the
initiative would like to present their project to Washington
agencies this fall. Our assessment is that they will not ask
the U.S. to join the Group of Friends; and there are a couple
of problems with the overall initiative which may preclude
our participation. But they would be interested in our
honest appraisal of the project, and possibly a quiet word
from us to Gulf States that we support the overall objectives
of the initiative to encourage Muslim states to join the
intitiave. Action requested: We would appreciate Washington
guidance regarding a fall visit by representatives of the
Montreux Initiative. End Summary.


3. (U) Embassy representatives met with members of the
Montreux Initiative's core group on July 21 and separately
with core group member and England Charity Commission head of
international programs James Shaw-Hamilton on July 24 to
discuss the Montreux Initiative. Core group members provided
a detailed briefing of the initiative (FAQ sheet and other

documentation emailed to Washington - ref A). The basic
objective of the initiative is to remove obstacles -- many
put into place to combat terrorism -- to the operations of
legitimate Islamic charities worldwide. Members of the core
group acknowledged that cases exist where charities have been
used to support terrorism, but they argue that many
legitimate charities are being unfairly caught up in
counter-terrorism finance measures.


4. (U) The initiative is working to develop a voluntary,
rigorous code of conduct for Islamic charities to adopt.
Core group members stressed that this code of conduct will be
fully consistent with the Financial Action Task Force's
Special Recommendation VIII on combating the abuse of
non-profit organizations and the associated best practice
papers and interpretive notes. Islamic charities who adopt
this code of conduct will subsequently be reviewed by an
independent assessment team to make sure that the charity has
the proper financial and operational controls in place. It
is hoped that this assessment process will give banks, aid
agencies, and donors confidence that the charity with which
they are dealing is serious and legitimate. Once a charity
has been assessed, members of the initiative's core group
will lobby any banks, institutions, or governments which
still have restrictions on the charities to eliminate those
obstacles.


5. (U) The initiative is in the process of establishing a
"Group of Friends," or countries willing to provide financial
and political support to the initiative. Switzerland, the
United Kingdom, and Spain have already provided funding, and
there are talks underway with several other European nations.
The initiative is also trying to recruit Muslim countries --
especially in the Gulf region -- to join the Group of
Friends. The core group views the participation of Muslim
countries as vital to the success of the initiative. They
admitted that they have encountered some reluctance from
these countries; most do not want to embrace the initiative
until they know what the U.S thinks of it.


6. (C) Members of the core group would be interested in
traveling to Washington this fall in order to present their
project to interested Washington agencies. Our assessment is
that they would not ask the U.S. to join the "Group of
Friends" of the initiative. And there are some aspects of
the initiative that we would be unwilling to accept. For

example, the UK charity Interpal, which has been designated
in the U.S. for its funding of Hamas, is a member of the
initiative's core group. In addition, the initiative calls
on governments to require evidence in the case of
designations on par with criminal law. It also calls on
governments to transfer frozen assets to other legitimate
charities.


7. (C) The core group would likely seek two things: expert
input and tacit support. Members of the core group are aware
of the expertise of the U.S. government in terrorism finance.
We believe that they would welcome detailed comment on their
initiative and how it might be tightened both to improve the
governance of Islamic charities and to boost the credibility
of the entire initiative. We also believe that they will
seek our tacit support of the initiative, as well as a quiet
word to key Muslim countries that we do not oppose it, so
that they can convince Muslim countries to join their Group
of Friends.


Visit London's Classified Website:
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