TERRORIST FINANCE: HUMAN APPEAL INTERNATIONAL

S E C R E T LONDON 000515 SIPDIS SIPDIS NOFORN STATE PASS EB/ESC/TFS LCANNON AND KLEAHY, S/CT PHILL, EUR/PGI LREASOR E.O. 12958: DECL: 02/08/2017 TAGS: KTFN EFIN PTER ETTC PREL ECON SUBJECT: TERRORIST FINANCE: HUMAN APPEAL INTERNATIONAL (HAI) POST-VETTING AND CHARITABLE REPLACEMENT SERVICES REF: SECSTATE 15260 Classified By: Economic Counselor Sandra Clark for reasons 1.4 (B) and (D). ¶1. (S/NF) Summary. Embassy London believes that HMG would object to a UN listing of the Human Appeal International (HAI) in its entirety unless we were able to provide it with specific information linking the UK branch to al Qaida or demonstrating that HAI-UK operated under the direction of HAI headquarters. While the UK would probably not publicly object to an EO 13224 designation of HAI-UK, it would not be able to freeze HAI-UK's assets domestically unless we were able to provide it with information demonstrating that HAI-UK funded specific Hamas entities already designated by the UK or EU, or that HAI-UK wittingly provided money to individuals or entities they knew were affiliated with Hamas. Although HAI-UK had nearly $5 million in expenditures in 2005, virtually all of that money was directed towards overseas projects. Therefore, no charitable replacement services would be required in the UK if HAI were designated at the UN. Should we decide to proceed with a designation of HAI -- either domestically or through the UN -- Embassy recommends that we pre-notify the UK as early as possible. End Summary. ¶2. (S/NF) In response to ref A, Embassy London believes that HMG would object to a UN listing of HAI in its entirety, unless we were able to provide the UK with specific intelligence directly linking HAI-UK to al Qaida. Alternatively, the UK might be willing to support a UN designation if we could provide clear evidence that HAI-UK operates under the direct control of HAI headquarters. Under UK charity law, all registered charities must demonstrate that they are independent. It will therefore be difficult to convince HMG officials that HAI-UK is not independent. In our view, this case resembles the case of ISRA/IARA, where the UK has opposed a UN designation of the entire entity since October 2004. ¶3. (S/NF) If we choose to do a EO 13224 domestic designation of the entire HAI network, Embassy does not believe that HMG would publicly object to our inclusion of HAI-UK. In the past, HMT and FCO have often responded to our domestic designations of UK-based entities by referring to them as "matters for the U.S. government." A U.S. domestic designation could, however, yield negative press coverage, particularly if our unclassified statement of case does not contain specific information linking HAI-UK to terrorism. The UK would be able to use its own domestic legal authority to freeze HAI-UK's assets only if we are able to provide it with intelligence linking HAI-UK either to Hamas entities that have already been designated by the UK or the EU, or we are able to demonstrate that HAI-UK has provided funds or support to individuals or entities that HAI-UK knew were affiliated with Hamas. The case of Interpal, a UK-based charity which we designated in August 2003 but which the UK has failed to designate, offers a useful insight into likely UK reaction to a U.S. designation of HAI-UK. ¶4. (S/NF) According to reports it filed with the Charity Commission, HAI-UK had expenditures of approximately $5 million in 2005. We believe that virtually all of HAI-UK's money was distributed in the approximately 20 countries HAI-UK is active, and, therefore, there would be no need for any charitable replacement services in the UK. ¶5. (S/NF) Given likely UK reactions to any designation of HAI-UK, we recommend the earliest possible pre-notification to the UK of our intended course of action. Visit London's Classified Website: http://www.state.sgov.gov/p/eur/london/index. cfm Tuttle