G-8 SEEKING IMPROVED CT COOPERATION WITH INDIA

S E C R E T SECTION 01 OF 03 NEW DELHI 002072

SIPDIS

SIPDIS

E.O. 12958: DECL: 02/07/2017
TAGS: PREL PGOV PTER PINR PBTS MOPS KDEM KISL PK IN
SUBJECT: G-8 SEEKING IMPROVED CT COOPERATION WITH INDIA

Classified By: PolCouns Ted Osius, Reason 1.5 (B,D)


1. (C) Summary: PolCouns attended a meeting of the G-8
Counter-Terrorism Action Group (CTAG) in New Delhi, which is
now chaired by the German Political Counselor. The group
attempts to coordinate G-8 efforts to partner with the Indian
government against terrorism. The group discussed each
country's individual efforts to improve India's
counterterrorism cooperation, including the results of
several country's Counter-Terrorism Joint Working Group
meetings with the Ministry of External Affairs. Participants
overall expressed frustration with India's lack of police and
judicial capacity as well as the bureaucratic delays that
prevent new counter-terrorism initiatives from moving
forward. The group also analyzed recent terrorism
developments in India, concluding that Naxalite violence is a
growing, but largely overlooked, threat to the country's
stability. Finally, Germany gave a presentation on India's
efforts to combat terrorism financing and money laundering.
End Summary.

Germany Takes the Lead
--------------


2. (C) Germany held its first meeting chairing the New Delhi
G-8 Counter-Terrorism Action Group (CTAG) on April 23rd. The
participants began with a short overview of each country's
recent engagement with India on CT issues. Germany reported
that the last meeting of the Indo-German Joint Working Group
on Counter-Terrorism took place in April 2006, and the next
meeting is envisaged for the end of 2007. German officials
also commented that they had excellent relations with India's
intelligence services.

Italy, Spain, Japan, the EU, and Australia
--------------


3. (C) The representative from Spain said that his country
had opened its first intelligence office in New Delhi in
September 2006, largely in response to Spain's efforts to
increase its own counter-terrorism efforts after the Madrid
bombings in March 2006. The Japanese representative said his
country had held 11 seminars with New Delhi on various topics
related to countering terrorism, including immigration and
export controls, to prevent terrorism finance. The European
Union reported that Counter-Terrorism Coordinator Gijs de
Vries visited India in October 2006, to build cooperation
with India through both the UN and the EU, but that they were
waiting for the appointment of a new CT Coordinator as de
Vries has left his post. Australia held its
Counter-Terrorism and Immigration Joint Working Group with
India in February 2006, largely focusing on border control
and biometrics issues, export controls, and financial
intelligence. Australian officials hoped to hold a second
round in 2007.

Canada -- Focusing on Mutual Efforts
--------------


4. (C) Canada held a one day workshop on informal financial
remittance systems and terrorism on March 14, which largely
focused on concern that Hawala channels were being used to
finance terrorism. The country also hosted the Canada-India
Joint Working Group on Counter-Terrorism in Ottawa on March
21 through 22, and although the working group was supposed to
be annual, this was the first held in several years. The
discussions focused on India and Canada's mutual interests in
Afghanistan, since Canada has 2,500 troops based there.
Canada's approach to India was to discuss its legal regime on
a one-on-one basis with India, discussing its own efforts and
exchanging views rather than telling India how it should
modify its own legal framework.


NEW DELHI 00002072 002 OF 003


France -- A Good Intel Relationship
--------------


5. (S) France reported that there was good cooperation in
substance between France and India, that its efforts with
India's Research and Analysis Wing (RAW) had been operating
quite well, especially on Pakistan, Afghanistan, and
Bangladesh. He said there was a lot of concern about
emerging threats in India's South. He said France was
particularly interested in discussions of how to stem rising
levels of Islamic fundamentalism both in India and in Europe.

United Kingdom - Facing an Overburdened Bureaucracy
-------------- --------------


6. (C) The UK reported that after Prime Ministers Singh and
Blair met in London to discuss new joint CT efforts, the two
countries had agreed to focus on common areas of concern,
including safeguarding mass transit systems (mainly rail
networks) and improving security for international games.
While London prepares to host the 2012 Olympics, New Delhi is
working toward hosting the 2010 Commonwealth Games.
Unfortunately, UK officials were frustrated that India had
yet to follow through on much of the promises made in the
talks. After much work to analyze the problem, they realized
it had more to do with snags in the bureaucracy -- with
overworked Indian officials sometimes taking months to move
their requests forward. While they believed they had reached
to right people to resolve some of these issues, it remained
to be seen if the cooperation would materialize.

Regional Terrorism Concerns
--------------


7. (C) Noting the type and level of terrorist attacks in
recent months in India, participants said anecdotal evidence
suggests that, in general, while terrorism in Jammu and
Kashmir is falling, attacks in Naxalite controlled areas as
well as in the Northeastern states were becoming a larger
concern, especially in Assam and Manipur. German officials
noted that the Naxalites are merging and becoming more
organized, and that their weapons systems were becoming more
sophisticated. Referring to a publication from the Indian
Ministry of Home Affairs Annual Report for 2006-2007 (page
143),German officials noted that there was a steady fall in
infiltration into Indian Kashmir since 2001:

Year Estimated Infiltration into J&K
-------------- --------------

2001 2417

2002 504

2003 1373

2004 537

2005 597

2006 573


Terrorism Finance Overview
--------------


8. (C) Germany gave an overview of India's efforts to comply
with international standards t combat terrorism financing
and money laundering. While currently India has observer
status in the Financial Action Task Force (FATF),India is
trying to become a member and has a window of two years to
adopt certain internationally mandated standards to curb
terrorism financing and other financial crimes. India passed

NEW DELHI 00002072 003 OF 003


the Prevention of Money Laundering Act in July 2005 and has
issued some anti-money laundering guidelines. In March 2006,
the Financial Intelligence Unit (FIU) became operational to
receive suspicious transaction reports from banks and work
with the Reserve Bank of India to monitor financial criminal
activity. Since February 2007, there have been 1.8 million
cash transaction reports to the FIU, with 650 suspicious
transactions reported. The FIU appears able to process and
analyze these reports effectively. Overall though, India has
many challenges ahead, including meeting the requirements and
making legal changes to join the FATF and the Egmont Group,
urging its many bureaucracies to work together, and beginning
to tackle the steady stream of hawala remittances or other
unregulated cash flows from the Gulf.

Comment: Frustrations Remain
--------------


9. (C) Comment: G-8 discussions of India's cooperation on
terrorism continue to be dominated by expressions of
frustration with India's famous go-it-alone outlook. Several
countries, such as Canada, France, and the UK, have focused
their programs on reciprocal or parallel problems at a
bilateral level, hoping that this will bypass Indian
concerns. Nearly all, however, note that India's efforts may
be hampered more by a lack of bureaucratic capacity than an
issue of political will. The creation of a new
counter-terrorism cell in the MEA will ameliorate, but not
resolve this systemic problem. End Comment.
PYATT