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.


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