S E C R E T SECTION 01 OF 02 ISLAMABAD 002113

SIPDIS

NOFORN
SIPDIS

STATE FOR S/CT PHILL, EB/ESC/TFS LLAMBERT AND DNELSON
TREASURY FOR PDEGARABEDIAN AND ASHARMA
JUSTICE FOR LSAMUEL AND RSTAPLETON

E.O. 12958: DECL: 05/08/2017
TAGS: PTER, KTFN, EFIN, KPAO, PK
SUBJECT: PAKISTAN'S ACTION ON DISRUPTING EXTERNAL FINANCING
TO THE TALIBAN

REF: STATE 54915

Classified By: Charge d'Affairs Peter W. Bodde for Reasons 1.4(b) and (
d)

1. (S) Summary: Post has been actively engaged with the
government of Pakistan on combating financing of the Taliban
and Al Qaeda. Members of the Country Team have taken an
inter-agency approach to informing and assisting the GOP at
all levels on ways to disrupt the Taliban's financial
networks. Intelligence has been shared, advice on
legislation given, and high-level visitors encouraged to
raise the issue in their meetings. There have been some
notable successes, and Post continues to work to encourage
the GOP to do more. End Summary

PRESSING THE GOP TO DO MORE
--------------

2. (S) Post frequently discusses the need for action against
Pakistan-based sources of Taliban financing and financial
transfer at the highest levels of Pakistan's government,
particularly with the President and Prime Minister. This
includes not only utilizing embassy personnel, but also
high-level visitors.

MAKING PROGRESS ON THE MONEY LAUNDERING BILL
--------------

3. (C) Post is seeing movement in the progress of the
anti-money laundering bill. The Standing Committee on
Finance and Revenue of the National Assembly has thoroughly
reviewed the bill, recommended amendments, and returned it to
the Ministry of Finance. Post will work with Ministry of
Finance to ensure the legislation meets international
standards, and it should be sent back to the National
Assembly for final passage in early June. (Note: State Bank
of Pakistan Head Dr. Shamshad Akhtar stated a similar time
frame in discussions with A/S Sullivan at their April 13
meeting in Washington. End Note)

ENCOURAGING INTERNATIONAL BEST PRACTICES
--------------

4. (SBU) Pakistan has already passed legislation regulating
hawalas. In essence, hawalas no longer exist in Pakistan as
they have been forced to register their businesses and are

now considered currency exchange centers. As a result, more
money from remittances abroad is flowing through the
regulated banking system. In addition, Post is working with
the Ministry of Social Welfare to help craft legislation
which would require charities to register under one uniform
act (Note: Currently, charities may register under any one of
three ordinances, some dating back to the mid-nineteenth
century. End Note) Under this proposed legislation, charities
would be required to disclose the names of all their
principals, in addition to sources of funding and how that
funding is being spent.

PROVIDING TRAINING
--------------

5. (SBU) Post's Legal Attache is working with the Ministry of
Interior and Federal Investigation Agency on developing
investigative training and an intelligence center to focus on
counter-terrorism measures that would develop the capacity to
identify and disrupt related money-laundering activities.
The U.S. Department of Justice will be providing training for
public prosecutors in Pakistan on financial crimes, including
forfeiture of assets in prosecutions in the special courts.
Once a money-laundering bill is passed, U.S. Department of
Justice will develop and present money laundering prosecution
training. This month, U.S. Department of Justice is
sponsoring the attendance of a Pakistani delegation at a
regional terrorism financing conference in Kuala Lumpur.


ISLAMABAD 00002113 002 OF 002


MONITORING AL RASHID TRUST
--------------

6. (C) On April 18, the GOP raided the offices of Al Akhtar
Trust and Al Rashid Trust, seized assets and sealed the
offices. No arrests were made. (Note: The raids were
conducted on a Sunday when there was little chance of the
offices being occupied. End Note). Al Rashid Trust has since
petitioned the Sindh High Court to overturn the closures.
Sindh High Court did grant an interim order allowing Al
Rashid Trust to remove perishable items from their warehouses
in order to distribute them to the earthquake-affected areas;
however, they cannot distribute the goods themselves and must
use the Pakistan Earthquake Relief and Reconstruction Agency
or another charity. Al Rashid Trust told the press they were
considering opening another charity using a different name in
order to avoid problems like this in the future. Post has
scheduled meetings to discuss the situation with the Ministry
of Finance and the Ministry of Social Welfare, and will be
closely following these events.

SHARING INTELLIGENCE
--------------

7. (S/NF) Post, through aggressive sharing of information,
has enabled the government of Pakistan to target the Taliban
in an organized and effective manner. Since January 2006,
Pakistan has arrested over 1400 Afghan nationals connected to
the Taliban, including seven on the list President Karzai
passed to President Musharraf in February. Pakistan has
repatriated over 750 of them to Afghanistan. Since mid-2006,
over 300 Taliban personnel have been detained in Quetta
alone, including senior Taliban leader Mullah Obaidullah, who
was captured in February 2007. Post continues to work with
the security services of both Pakistan and Afghanistan to
jointly target Taliban on both sides of the border, as well
as encouraging increased bilateral information sharing
between the two security services. In addition, Post is
working with coalition partners inside Pakistan to maximize
their information sharing with the government of Pakistan.
These efforts have resulted in substantial progress being
made against the Taliban target.

8. (S/NF) As a way forward, Post is pursuing two separate
strategies, one for targeting Taliban located in the
Federally Administered Tribal Areas of Pakistan and one for
those in the settled areas of the country such as Quetta and
Peshawar. Post has developed a three-pronged approach in the
Federally Administered Tribal Areas which involves increasing
the counter-insurgency and counter-terrorism capabilities of
Pakistan's military and paramilitary forces, especially the
Frontier Corps, providing development aid to the Federally
Administered Tribal Areas, and enabling continued and
increased security service operations against the Taliban.

9. (S/NF) Post plans to support security and law enforcement
services by helping to enhance their counter intelligence
capabilities and by providing appropriate development
assistance. As part of both strategies, Post plans to
continue its engagement and information sharing with the GOP
and coalition partners at all levels in order to ensure
sustained and aggressive efforts against the Taliban
throughout Pakistan.

COMMENT
--------------

10. (S) Post works closely with all levels of the GOP in
order to disrupt funding and material support to the Taliban.
In general, the GOP has been receptive and appreciative of
our efforts. Post will continue to engage in the areas of
money laundering and the misuse of charities.
BODDE