TREASURY OFAC DIRECTOR ADAM SZUBIN'S MEETING WITH LIBYAN MFA

S E C R E T SECTION 01 OF 04 TRIPOLI 000913

SIPDIS

TREASURY FOR SZUBIN, LEV AND POLLACK; CAIRO FOR SEVERENS

E.O. 12958: DECL: 11/26/2018
TAGS: EFIN ETTC KTFN PTER PREL PGOV UNSC LY
SUBJECT: TREASURY OFAC DIRECTOR ADAM SZUBIN'S MEETING WITH LIBYAN MFA
OFFICIALS

CLASSIFIED BY: Chris Stevens, CDA, Embassy Tripoli, U.S. Dept of
State.
REASON: 1.4 (b),(c),(d)

1. (S) Summary: In a meeting with MFA officials on November 12
on UNSCR 1267-related issues, visiting Treasury Office of
Foreign Assets Control Director Adam Szubin: 1) stressed the
need for better U.S.-GOL coordination with respect to refining
the GOL's UNSCR 1267 listing submissions; 2) encouraged the GOL
to submit for listing three LIFG leaders and to withdraw its
circa 2004 request to list 74 individuals and instead re-submit
those names in smaller, better-coordinated tranches, and; 3)
urged the GOL to lift Libya's holds on U.S. submissions. Libya
had been a leader in submitting large numbers of names to the
UNSCR 1267 committee for listing; however, poor formatting and
insufficient biographical and evidentiary information had
hampered those efforts. Better communication and coordination
in advance of Libya's submissions, to include sharing
information on targeted individuals, could help alleviate such
problems. Host government officials expressed strong interest
in greater cooperation on listing submissions and agreed that
Libya's MFA and security organizations would work with Post to
develop mechanisms to facilitate such coordination. Szubin
urged Libya to be vigilant in dealing with Iranian banks and the
Islamic Republic of Iran Shipping Lines (IRISL) and its
subsidiaries, noting Iran's well-established record of duplicity
to mask proliferation activities. End summary.

Meeting participants:

Libya:
MFA Secretary for the Americas (A/S-equivalent) Ahmed Fituri
MFA Secretary for International Organizations Affairs
(A/S-equivalent) Hindy Abdulatif Hindy
Tajuri el-Sheradi Tajuri, Director of United Nations Affairs,
Ministry of Foreign Affairs
Assad al-Djerbi, MFA Americas Desk Officer

U.S.:
OFAC Director Adam Szubin
Charge d'Affaires Chris Stevens
OFAC Senior Advisor Ori Lev
Treasury Analyst Gregory Pollock
A/DCM John Godfrey (notetaker)


2. (S) Treasury Office of Foreign Assets Control Director Adam
Szubin and a small delegation visited Tripoli and met on
November 12 with Ministry of Foreign Affairs officials. Szubin
explained OFAC's mission and highlighted the effectiveness of
financial sanctions tools in countering terrorism finance and
curbing funding for weapons of mass destruction proliferators
and states of particular concern such as Iran. The U.S. shares
key strategic goals with the Government of Libya (GOL),
particularly with respect to defeating al-Qaeda and the Libyan
Islamic fighting Group (LIFG). On UNSCR 1267-related issues,
Szubin and his team: 1) stressed the need for better U.S.-GOL
coordination with respect to refining the GOL's UNSCR 1267
listing submissions; 2) encouraged the GOL to submit for listing
three LIFG leaders and to withdraw its circa 2004 request to
list 74 individuals and instead re-submit those names in
smaller, better-coordinated tranches, and; 3) urged the GOL to
lift Libya's holds on U.S. submissions.

UNSCR 1267 LISTING SUBMISSIONS


3. (C) Responding to Fituri's speculation that the incoming U.S.
presidential administration would be more focused on economic
issues than counter-terrorism (CT),Szubin stressed that CT and
CT finance would remain high priorities. Libya's current
membership on the UNSC and the recent implementation of the
U.S.-Libya claims settlement agreement afforded an excellent
window of opportunity in which to expand bilateral cooperation
on CT finance. The U.S. and Libya have a shared strategic
interest in impeding AQ and LIFG from obtaining funding. The UN
sanctions process can be very effective, but successful listing
requests require substantial evidentiary information and proper
formatting, which can take work to achieve. Praising the GOL's
decision to avail itself of the UNSCR 1267 mechanism and its
previous submission of large numbers of names for listing, he
noted that most of the GOL's submissions had unfortunately not
been accepted for designation to date.


4. (C) The problem was not a substantive difference over goals,
but a lack of advance coordination as well as specific
information on Libya's submissions, Szubin said. Pointing to
Libya's submission of 12 names for listing in 2005, Szubin noted

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that the 1267 Committee was only able to add three of these
individuals to the Consolidated List. Previous efforts to
improve coordination through Libya's MFA and UN Mission had not
been productive. Stressing that even if the information the GOL
shared was not publicly releasable, Szubin noted that additional
information from the GOL could help the U.S. build a case for
listing that met the U.S. legal standard. Doing so could allow
the U.S. to lift its holds on previous Libyan submissions and
support new ones. Drawing on intelligence and law enforcement
sources, the U.S. had worked to develop cases to support some of
Libya's submissions and had information it could share to help
bolster the GOL's listing requests. The focus was on building a
fact-based dossier to implicate targeted individuals, Szubin
said. Limiting the number of names submitted at one time would
also be helpful.


5. (S) In addition to lack of biographical and evidentiary
information, Libya's submissions had not been properly
formatted, a key hindrance in the UN's bureaucratic system. In
addition to bio-identifying data, a good submission would
feature several paragraphs on the basis for the designation,
with detail on what was done by the target, when it was done and
how those actions contributed materially to support for
designated terrorist entities. Szubin discussed with Fituri and
Hindy the UNSCR 1267 cover sheet (blank) and a sample statement
of case based on unclassified sources concerning a
LIFG-affiliated individual. Szubin also shared the names of two
additional LIFG members whose designation the USG could support.
He assured his interlocutors that OFAC stood ready to assist
the GOL in its efforts to craft submissions that secured
designation of individuals who were of concern to the GOL. The
key issue from the U.S. perspective was to facilitate good
communication between the GOL's security agencies and MFA to
obtain sufficient information about terrorist financiers to
support listing them under UNSCR 1267. The CDA and Szubin urged
the GOL to consider coordinating with the U.S. before submitting
its listing requests, as other countries do. Doing so would
allow us to share additional information we might have about
specific individuals and help properly format Libya's listing
requests.

SMALLER IS BETTER & LIFTING LIBYAN HOLDS ON U.S. SUBMISSIONS



6. (S) Noting that insufficient evidentiary and biographical
data and poor formatting had compelled the U.S. to place holds
on many of the 74 names the GOL submitted for listing in August
2004, Szubin stressed that the U.S. would ideally like to see
all of Libya's submissions accepted for listing. He suggested
that the GOL withdraw the list of 74 names, work in cooperation
with the U.S. and others to develop more robust statements of
case and re-submit the individuals' names in smaller tranches.
The U.S. would be happy to review the format and substance of
those submissions, and to work on possible joint submissions of
LIFG financial supporters based in Europe and, particularly,
Switzerland. In addition, there was confusion about 19 LIFG
leaders whose names Libya submitted in May 2005. The U.S. would
encourage the GOL to re-submit the names of two members from
that tranche and one additional individual - Abu Yahya al-Libi,
Abdallah Sa'id, and Atiyah Abd al-Rahman - whose designation the
USG could support and about whom the USG had information that
could bolster those submissions. Reiterating that the two sides
shared common goals but had suffered from a lack of good
communication, Szubin urged the GOL to lift holds Libya had
placed on recent U.S. submissions, including branches of the
Revival of Islamic Heritage Society (RIHS) and members of the
Abu Ghadiyah network.


7. (S) Denying that the holds had been politically motivated,
MFA UN Affairs Director Tajuri argued that Libya needed time to
perform its own investigations of the three indivduals. "Just
as the U.S. requested more information about the 74 names we
submitted, Libya needs more information about the listings the
U.S. requested", he said. Pushing back, Szubin underscored that
the RIHS had been previously designated so that there was no
question about the propriety of designating additional branch
offices, and that the activities of the Abu Ghadiyah foreign
fighter facilitation network were well-known. He urged his GOL
counterparts to seek additional information from the Libyan
security services should they need it, as the USG does when
other countries nominate names to the Committee. He added that,
to his knowledge, Libya had been the only state to place a hold

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on the submissions.

GOL WELCOMES GREATER COORDINATION


8. (S) Stressing the importance of having implemented the
U.S.-Libya claims compensation agreement, Fituri emphasized the
GOL's desire for greater dialogue and cooperation on the "very
sensitive" issues of 1267 listings and CT finance. He agreed
that greater exchange of information and coordination in advance
of Libya's submission of individuals' names for listing would be
beneficial, indicated the GOL would be receptive to such an
approach and said the Libya's MFA and security organizations
would work with Post to develop modalities for such exchanges of
information. Fituri was keen to hear Szubin's assessment of
Libya's cooperation in comparison with other Arab states.
Szubin said Libya's performance on implementing UNSCR 1267
sanctions appeared to have been good and pointed to Libya's
interest in FATF/MENA as a positive sign. Libya had been a
leader in terms of the volume of its submissions for UNSCR 1267
listing; however, formatting problems and insufficient
information had hampered those efforts. With better
communication and coordination, Libya was poised to be a leader
in this area.


9. (C) Fituri and Hindy both asked for Szubin's assessment of
Libya's efforts to modernize its banking and financial sector.
Emphasizing that recent bank privatizations and regulatory
reforms were positive signs, Szubin stressed the need to develop
robust banking supervision and controls in tandem with
modernization to mitigate the potential for Libya's financial
system to be exploited by terrorist financiers or rogue regimes.
States with more developed financial systems were in some ways
at greater risk for such exploitation. Transparency was key,
Szubin said: the questions asked of those establishing accounts
and executing funds transfers, the identification they were
required to provide and basic banking controls were the
essential building blocks to any effective effort to combat
money laundering and terrorist finance.


10. (C) Fituri asked what training opportunities for banking, CT
finance and money laundering were available, stressing that
Libya was particularly interested in receiving training from the
U.S. CDA outlined training possibilities under the Financial
Service Volunteer Corps (which conducted its first training in
Libya earlier this month),the Commercial Law Development
Program (which concluded an initial assessment visit this week)
and training under the auspices of the Treasury Department.
Szubin highlighted an upcoming opportunity for Libya to
participate in a regional workshop on CT finance, to be held
under Treasury-State auspices early next year. Fituri stated
unequivocally that Libya would participate, and asked to be
informed of any other potential CT finance and banking training
so that his office could help coordinate GOL support for same.

IRISL & IRAN AIR


11. (S) Noting that four separate UNSCR's called for tough
sanctions against Iran's banks and companies involved in
proliferation activities, Szubin stressed the need for vigilance
in dealing with Iranian banks, which had a long history of fraud
and using front companies to mask proliferation activities. In
a similar vein, the U.S. had, consistent with UNSCRs 1737, 1747
and 1803, designated the Islamic Republic of Iran Shipping Lines
(IRISL) and Iran Air Cargo under E.O. 13382. Noting the fact
that he had seen a number of IRISL cargo containers aboard
vessels in Tripoli's harbor, Szubin cautioned the GOL to be
careful with respect to any dealings with IRISL and/or its
subsidiaries. Echoing remarks reported ref B, UN Affairs
Director Tajuri questioned whether IRISL's designation was
really a multilateral issue (vice a bilateral U.S.-Iran one) and
called for more information. Szubin pushed back, stressing that
U.S. sanctions on IRISL had been adopted in parallel with a
UNSCR that singled out IRISL as a proliferation risk. The
important point with respect to interactions with Iranian banks
or commercial entities was that Iran's record of duplicity to
mask proliferation activities - to include submitting false
bills of lading in the case of IRISL - was well-established.
The GOL should take care to avoid interactions with Iranian
entities, which could expose Libya to exploitation by Iranian
proliferating entities and/or call into question Libya's
commitment to implementing UNSCRs targeting Iran.


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12. (U) OFAC Director Szubin's party cleared this message.
STEVENS