SRI LANKA: NO OBJECTION TO PROPOSED TRO DESIGNATION

C O N F I D E N T I A L SECTION 01 OF 02 COLOMBO 000957 SIPDIS SIPDIS STATE FOR SCA/INS, SCA/RA, EEB/ESC/TFS, L/EB TOM HEINEMANN TREASURY/TSDN FOR J PHILIPP, P LURIE AND M DRAKE E.O. 12958: DECL: 07/06/2017 TAGS: KTFN PTER CE SUBJECT: SRI LANKA: NO OBJECTION TO PROPOSED TRO DESIGNATION REF: A. COLOMBO 608 ¶B. COLOMBO 830 ¶C. 06 COLOMBO 1568 ¶D. GABOR-LAMBERT ET AL EMAILS JUNE 2007 Classified By: Charge d'Affaires James R. Moore, reasons 1.4 (c,d) ¶1. (C) Embassy Colombo would support an E.O. 13224 designation of the Tamil Relief Organization (TRO) if the USG determines that there is sufficient evidence to establish that the TRO is channeling funds to the Liberation Tigers of Tamil Eelam (LTTE) for arms purchases or terrorist activities. ¶2. (C) As reported in refs A and B, the Embassy's views on and knowledge of the TRO in Sri Lanka are as follows: - The TRO does significant legitimate relief work, but also appears to have close connections to the LTTE, especially in the LTTE-controlled Vanni region. Some of the TRO's project outputs may be diverted to LTTE use. It has not been established whether this is forced or voluntary. - The LTTE is reported to siphon money from foreign NGOs and INGOs working in LTTE-controlled territory. According to an AmCit NGO worker, the LTTE requires foreign NGOs and INGOs to deposit their operating funds into bank accounts of local NGOs. According to this source, TRO members who are on the staff of those local NGOs withdraw some of those funds and provide them to the LTTE, allowing the foreign NGO to use the remainder to accomplish its projects. - The Government of Sri Lanka (GSL) has not banned the TRO nor closed its offices. The GSL is investigating whether the TRO diverted tsunami funds to the LTTE. While the investigation is in process, Sri Lanka's Financial Intelligence Unit has frozen the TRO's bank accounts and police have seized computers and other evidence from TRO offices (ref C). - We are told that the evidence the GSL used to get the authority to freeze the funds was mostly the evidence in the FBI indictment in the LTTE arms procurement case. The GSL's initial freeze of TRO accounts was for six months, and the attorney general recently obtained a court order to extend the freeze for another twelve months. It appears the GSL lacks sufficient evidence to get a court order to close the TRO down. It is also possible that the GSL has not banned the TRO because some in the international community would question such a move. A U.S. designation would make it more likely that the GSL would permanently freeze TRO funds and/ or ban the TRO. - USAID has a policy of not collaborating with the TRO to avoid any possible risk of USAID funds being diverted to the LTTE. Embassy officers have occasionally met with TRO representatives. COLOMBO 00000957 002 OF 002 ¶3. (C) The Embassy has not seen the evidence in the case, but we estimate that 90 percent or more of the funds that are channeled through the TRO are used for legitimate relief work in LTTE-controlled areas. Due to the ongoing conflict, the people living in these areas desperately need this assistance. A designation of the TRO would invite significant criticism of the U.S. from the broader Tamil community. The U.S. would be viewed as taking sides against the Tamil community in Sri Lanka's ongoing confli ct. Nevertheless, if the evidence warrants and U.S. law requires designation of TRO, the Embassy would support such a step. ¶4. (C) Should designation occur and ultimately prove to have a major impact on the TRO, we are not optimistic about the ability of the USG to assure complete "backfill" and compensate for the loss of legitimate relief work supported by the TRO. Access by foreign NGOs to LTTE-controlled areas is tightly controlled by the GSL. The GSL has approved a list of 21 international NGOs to work in the Vanni, but access is often difficult due to ongoing military actions and a deliberate but unstated GSL policy to limit the flow of relief and services to LTTE-controlled areas. ¶5. (C) Action request: If the TRO is designated, Embassy Colombo requests reasonable advance notice before any public announcement and formal guidance on implications of the designation, including the following: - Press points on the designation, and the evidence of TRO links to the LTTE. - Description of actions the USG will take toward the TRO, its employees, and its donors inside and outside the United States. - Background on USG actions to coordinate the designation with other countries. - Implications for U.S. citizens who work for or donate to the TRO, both inside and outside Sri Lanka. - Implications for U.S. NGOs or companies that work with the TRO or donate to the TRO, both inside and outside Sri Lanka. - Implications, if any, for non-U.S. citizens, NGOs, and companies that work with or donate to the TRO, both inside and outside Sri Lanka. - Information on how the TRO could appeal the designation. - Guidance on whether individuals or groups can apply to Treasury for an exemption from any restrictions on collaborating with the TRO. - Guidance for post on how to handle future contact with TRO representatives here. MOORE