TREASURY DAS MENDELSOHN DISCUSSES TERROR FINANCE

S E C R E T CAIRO 002395 SIPDIS TREASURY OIA/MENDELSOHN E.O. 12958: DECL: 11/20/2018 TAGS: EFIN EG PGOV PREL PTER SUBJECT: TREASURY DAS MENDELSOHN DISCUSSES TERROR FINANCE ISSUES WITH EGYPTIAN GOVERNMENT Classified By: ECPO Minister Counselor William Stewart for reasons 1.4 (b) and (d). ¶1. (S) Summary: Treasury DAS for Intelligence and Analysis Howard Mendelsohn met with Ashraf Mohsen, counter terrorism coordinator for the Ministry of Foreign Affairs, and State Security Brigadier General Hisham Abda on November 13. Also accompanying were Eugene Oleynikov from Treasury's Office of Intelligence and Analysis (OIA) and Alex Severens, Treasury Attache. The goal of the meeting was to improve the USG relationship with Egypt in the area of exchanging information on terrorism finance and specifically to discuss how to fill information gaps on the 13 outstanding names which Egypt has sent to the UN 1267 committee. The U.S. has placed a hold on these designations due to insufficient information. Prior to the meeting, Treasury provided Mohsen with specific questions and some new information on the 13 names, as well as eight potential new targets of interest. The meeting was constructive and productive, exceeding our expectations, given Mohsen's initial lack of enthusiasm about the meeting. Mohsen and Abda agreed to get back to the USG with answers to the questions on the 13 names, and to also follow up on the information Treasury provided on the potential new targets. Mohsen stated that the GOE will be formally writing to the UN to request that 5 of the 13 names no longer be considered for designation. DAS Mendelsohn and Mohsen agreed to work bi-laterally, in coordination with others as appropriate, on terrorist designation targets of mutual interest and to have a follow-up meeting on the margins of the annual U.S.-Egypt counter-terrorism bilateral, which is scheduled to be in Washington in early-2009. End summary. Discussion of Proposed Designation Targets -------------- ¶2. (S) DAS Mendelsohn started the meeting with providing an overview of OIA's role in advancing the USG designation process. He discussed the importance of OIA's work to analyze all relevant information, and the importance of legal review in the U.S. domestic process. This contrasts with the way most countries work as they can typically take an action against a designated entity simply based on the UN determination. DAS Mendelsohn emphasized that the U.S. is committed to making every effort possible to support the names that Egypt has submitted, but that we would need to work together closely to develop the evidence needed to support designation. ¶3. (S) Mohsen stressed the importance of the U.S.-Egypt bilateral counter-terrorism efforts, as well as the direct threat of terrorism on the national security of Egypt and its relationship to the conflicts in the area. He inquired about Treasury's sudden urgency to respond to the three-year old Egyptian UN 1267 submissions. DAS Mendelsohn explained that his office was following senior USG direction to carefully review all U.S. holds (of all countries) and try to resolve any outstanding issues. In addition, DAS Mendelsohn noted that Treasury was making increased efforts to engage directly with partner countries in instances where we needed additional information to support UN nominations. He also recognized Egypt's expertise and leadership role in combating terrorist support network activity, as reason to believe we could begin a much more robust and on-going dialogue. ¶4. (S) Regarding the 13 names, Mohsen welcomed Treasury's non-paper and repeatedly said that he, in coordination with State Security, will provide additional information on the potential designation targets as soon as the information becomes available and hopefully before the U.S.-Egypt CT bilateral which is due to take place early 2009. ¶5. (S) Mohsen indicated that of the 13 names which the U.S. has a hold on, five of these targets no longer pose a threat, because they are either in jail, placed under close surveillance, or are participating in the counter-radicalization program. As such, the GOE will be formally writing to the UN to request that these names not be considered for designation. (Note: These five individuals are Muhammad Sha'ban Muhammad Hasanayn, Isam Muhammad Shu'ayb Jad Al-Mawla, Salim Id Salim Abdul Hadi, Ashraf Sha'rawi Muhammad Hamad, and Hamdi Ali Khalid Umar. End note.) DAS Mendelsohn appreciated the new information and agreed that if the GOE had determined that these targets were contained, there may be no need to designate them. ¶6. (S) DAS Mendelsohn pointed out that one of the submissions appears to be a Muslim Brotherhood member, who can be designated only if his link to al Qaida could be proven and not because he is a member of the Muslim Brotherhood. Mohsen agreed. This also provided an opportunity to clarify for State Security the sort of intelligence necessary to support the nominations, including information broadly relating to the individuals, actions in support of or on behalf of Al Qaida and EIJ -- not just relating to financing. ¶7. (S) Mohsen and Brigadier Hisham Abda were not in a position to respond immediately to the specific questions posed in the Treasury non-paper but promised to investigate further and get back to the USG. Mohsen also said they would do all they could to follow up on the information Treasury provided on the potential new targets, many of whom appear to be involved in supporting activities in Iraq, and requested that Treasury provide additional identifying information, if and when it becomes available, that would help the Egyptian security services locate these individuals. ¶8. (S) Mohsen strongly agreed with the USG's efforts to target terrorist activity in Iraq, as well as other terrorist activity which may fall outside the purview of the UN 1267 Committee (which covers only Taliban and Al-Qaida). Mohsen said that all counter-terrorism means should be used against extremists, including Baathist insurgency supporters. DAS Mendelsohn agreed with Mohsen's suggestion that the U.S. and Egypt work on terrorist designation targets of mutual interest bi-laterally (outside the UN 1267 framework), especially non-Taliban and non-Al-Qaida members. ¶9. (S) Mohsen underlined the importance of the interagency process in Egypt for designating targets. He also requested Treasury to notify Egypt in advance of the USG's intention to designate Egyptian targets in order to avoid undermining USG's position in the Middle East (USG may be perceived as targeting Muslims) and the credibility of the UN 1267 committee process. DAS Mendelsohn expressed understanding and noted that the eight new potential targets in the non-paper were not necessarily designation targets and that we deferred to the GOE as to the best way to investigate these individuals and determine what, if any, action should be taken against them. Mohsen Reiterates Concerns About the 1267 Process -------------- -------------- ¶10. (S) Mohsen raised several concerns about the UN 1267 process. For example, he noted the inflexibility of the list, and the need for the 1267 team to find ways to delist deceased individuals. Allowing deceased individuals to remain on the list has a negative effect as it prevents family members from receiving pension payments, which can increase the likelihood that family members will turn to terrorism to revenge the injustice. He also noted an example of an Egyptian extremist operating in the UK who has been allowed to run an anti-Egyptian government Internet site. Mohsen said that such cases could cause the GOE to lose faith in the UN designation process. ¶11. (S) Mohsen also expressed frustration, much of which he has shared in previous meetings with USG officials, about the UN designation process and the UN 1267 committee staff. He specifically complained about the large amount of resources Egypt had to commit to support the last UN 1267 monitoring team visit several weeks ago. He also specifically complained about the fact that the Analytical Support and Sanctions Monitoring Team has been working on "radicalization" and has established a new "Radicalization Working Group" which Mohsen argued is outside its mandate. DAS Mendelsohn said that Mohsen's frustrations with the UN 1267 process will be conveyed to the USG officials responsible for coordinating the UN counter-terrorism policy. ¶12. (S) Mohsen expressed a pessimistic view about the UN 1267 process, in light of the recent European Court of Justice (ECJ) ruling on the Al-Kadi case requiring that the EU provide due process rights to the listed individuals. He said that such a ruling can open up a door to other de-listings of terrorists and their supporters and as a result de-legitimize the entire process. He inquired how DAS Mendelsohn anticipated the USG dealing with these issues. ¶13. (S) In response to Mohsen's comments about the UN process, DAS Mendelsohn said that designation is one of many important tools used to effectively combat terrorism. He agreed that it was not a good use of a country's time to designate an individual just for the sake of designating. Rather, careful consideration should be given as to how such a designation will impact that individual. In response to Mohsen's question regarding the USG reaction to the ECJ ruling, DAS Mendelsohn recognized that it presents a challenge, but noted his confidence in the USG's ability to withstand legal scrutiny of its designations and indicated that the USG will continue to support the domestic and international designation process, which the USG considers an important tool in the overall CT strategy. Mohsen Discuses Terror Finance Challenges -------------- ¶14. (S) In response to DAS Mendelsohn's request about regional trends in terrorism, and after consulting with Brigadier Abda, Mohsen said that the nature of the terrorist threat has changed in the recent years: with the greater regulation of the formal financial system the fundraising is increasingly generated on a local level, while the use of the Internet to recruit and finance terrorists poses a major new challenge. Mohsen also said that Egypt is greatly concerned with non-registered Egyptian NGOs that receive money from the West, because their financial activities cannot be properly monitored. He specifically said that there are instances when these NGOs "use human rights" to publicly advocate against Egyptian security operations such as security check points designed to prevent terrorists from operating in the Sinai and support the families of dead terrorists. Mohsen agreed to provide specific information on the NGOs that provide assistance to families of terrorist martyrs. ¶15. (S) Mohsen briefed DAS Mendelsohn on the Egyptian efforts to train local and foreign imams to use theological arguments in countering Islamic extremism in prisons and in the society in general. Mohsen invited the USG to participate in their program and advised that a number of other Arab countries participated in the program. ¶16. (C) Mohsen suggested that Treasury should participate in the annual U.S.-Egypt counter-terrorism bilateral which is due to be held in Washington in early 2009. He also suggested that a separate meeting between the Egyptian delegation and Treasury officials to follow up this discussion would be beneficial. DAS Mendelsohn agreed and welcomed the opportunity to meet again. Mohsen also indicated that the GOE would attend (but not host) the "Targeted Financial Sanctions" workshop that Treasury seeks to organize early next year. ¶17. (U) DAS Mendelsohn cleared this cable. SCOBEY