TERRORIST FINANCE: GERMANY ON CASH COURIERS

C O N F I D E N T I A L BERLIN 000497 SIPDIS SIPDIS E.O. 12958: DECL: 03/05/2017 TAGS: EFIN ETTC KTFN PTER GM SUBJECT: TERRORIST FINANCE: GERMANY ON CASH COURIERS REF: A. STATE 16120 ¶B. BERLIN 321 Classified By: Minister-Counselor for Economic Affairs Robert F. Cekuta for Reasons 1.4 (b) and (d) ¶1. (SBU) Emboffs delivered demarche (ref A) to the German Ministries of Foreign Affairs, Finance, and the Interior. The MFA recalled the previous (G-8) discussion on the issue, stated Germany does not object to the U.S. proposal, and said the G-8 Lyon-Roma Group should be able to address the issue as long as it does not conflict with other efforts. The Finance Ministry official said he did not see an issue with cash couriers and stated that those trading with Iran use barter and clearinghouses in the Gulf states to settle payments. ¶2. (C) MFA Counterterrorism DG Busso von Alvensleben told EMIN Germany does not object to the U.S. proposal made in the G-8 Lyon/Roma Anti-Crime and Terrorism Group (ref B). Von Alvensleben asserted Germany is only looking to avoid duplication with FATF and the Egmont Group of Financial Intelligence Units. Von Alvensleben said as chair in the G-8 Lyon-Roma process Germany wants to avoid setting up another working group and avoid bringing in new groups of experts (e.g., from Finance Ministries). He suggested the U.S. proposal should concentrate on those aspects of the fight against cash smuggling appropriately addressed by the agencies represented at the Lyon-Roma. EMIN pushed back noting our governments need to engage all the expertise and resources at their disposal if we are to be successful in combating terrorism. ¶3. (C) Reacting to the points in the demarche, Finance Ministry Office Director for Money Laundering, Terrorism Finance, and Financial Crimes Michael Findeisen told Global Affairs Officer it is "an illusion" that large scale cash smuggling is occurring. There are too many logistical problems in conveying large amounts of cash, he asserted; the volumes of cash that would have to be shipped are too great. Further, there are machines at airports that detect the thin metal strips in modern bills, Findeisen said, and flights to "sensitive areas" are subject to extra screening. He asked for "hard facts" to substantiate U.S. concerns. He admitted that states such as North Korea and others under sanctions might resort to cash couriers, but, as for Iran and the possibility of cash payments for shipments relevant to Iran's nuclear program, Findeisen said "export credits to Iran are in the billions" making cash smuggling unlikely. Instead, Findeisen claimed, Iranian businesses use barter and settlement clearinghouses based in the Gulf states to reconcile their accounts with European trade partners, as they have done for decades: "I send you oil, you send me ten Mercedes" Findeisen said. ¶4. (SBU) Global Affairs Officer also presented the demarche to Interior Ministry Counterterrorism Finance officer Astrid Rosbeck, who said that her Ministry did not have a substantive reaction at this time. TIMKEN JR