TERRORISM FINANCE: NEXT STEPS ON THE TFTP

C O N F I D E N T I A L LONDON 008247 SIPDIS NOFORN SIPDIS STATE FOR S/CT, EB/ESC/TFS, EUR/PGI, EUR/ERA, EUR/UBI, TREASURY FOR FRIESS AND JACOBSEN NSC FOR HINNEN E.O. 12958: DECL: 12/06/2016 TAGS: ETTC EFIN PTER KTFN ECON EU UK SUBJECT: TERRORISM FINANCE: NEXT STEPS ON THE TFTP REF: STATE 194473 Classified By: Economic Minister Counselor Mark Tokola for reasons 1.4( b) and (d). ¶1. (C) Summary: The UK is extremely concerned that the Terrorist Finance Tracking Program, and SWIFT's involvement in it, is being treated by the European Commission purely as a privacy issue when it should be "rooted in a national security debate." While HM Treasury officials are currently preparing advice for ministers on UK next steps, they are planning to argue that the European Council, not the Commission, has competency over this issue. The UK is also trying to identify possible allies among other Member States for their view (they would appreciate any information we can share on others' views) and is developing an internal strategy to reassure its private sector. The UK also suggests that we discuss this issue with EU Counterterrorism Coordinator Gijs de Vries if we have not already done so. End Summary. ¶2. (C) According to Sean Byrne, HM Treasury Senior Policy Adviser for Financial Systems and International Standards, the UK is very concerned about the European Commission's handling of the TFTP program. According to Byrne, the Commission is handling the case "in a privacy silo" when is should be "rooted in a national security debate." Byrne added that, if the TFTP is treated primarily as a national security issue, the competency for dealing with the issue falls to the European Council with all 25 Member States needing to act together. Moreover, he stressed that EU data protection laws do no apply to national security issues. In this regard, Byrne implied that Commissioner Frattini may have more interest in dealing with the issue as a privacy issue (where the Commission has competence) rather than as a national security issue (where they do not). Byrne said that he had been in touch with key staff of EU Counterterrorism Coordinator Gijs de Vries to discuss this issue. He said that he has been told that the Commission has not looped de Vries in on this issue, and that de Vries' staff has been "bemused" by the way the issue is being handled. Byrne suggested that the U.S. might want to engage with de Vries if it hasn't already, as de Vries' job is to coordinate counterterrorism efforts across the EU's three pillars. ¶3. (C) Byrne agreed that there is also a broader debate to be had regarding the balance between efforts to combat terrorism and the need to protect privacy. But he said that that debate should be not be taking place within the Commission, but rather within individual Member States as they seek to balance their various international and domestic obligations. Byrne said that the U.S. message to Member States stressing the importance of this balance was extremely helpful. ¶4. (C) Byrne said that he is currently working with the Cabinet Office, Foreign Office and Department for Constitutional Affairs to develop a recommendation for ministers on how to approach this problem. Byrne acknowledged that the UK will have to tread carefully -- he wants to be sure that, given the UK's tight relationship with the U.S., its actions are not counterproductive. He said that the UK would be trying to learn other Member States' views on this issue to determine whether it might be able to work together with a smaller grouping. Byrne said he would appreciate it if the U.S. could share information with the UK's possible allies. The UK is also considering how and whether to make public statements domestically to calm the private sector. Visit London's Classified Website: http://www.state.sgov.gov/p/eur/london/index. cfm Tuttle