U.S.-EU TERRORIST FINANCING ISSUES

S E C R E T SECTION 01 OF 03 BRUSSELS 000254

SIPDIS

STATE FOR EEB/ESC, P, NEA/IR, ISN, S/CT, L, EUR, INLTREASURY FOR TFFC, TFI, OIA

E.O. 12958: DECL 02/22/2019
TAGS: ETTC KTFN PTER EFIN KCRM KJUS KHLS UNSC IR
PINR, FR, EUN
SUBJECT: U.S.-EU TERRORIST FINANCING ISSUES

REF: A. 2008 SECSTATE 134774

B. BRUSSELS 41

C. BRUSSELS 168

Classified By: USEU EconMinCouns Peter Chase for reasons 1.4 (b),(d),
(e).


1. (S) Summary: Deputy Assistant Secretary of State for
Energy, Sanctions and Commodities Douglas Hengel and USEU
Econoff met on February 6 with European Union
Counter-Terrorism Coordinator (EU CTC) Gilles de Kerchove,
Council Secretariat Principal Administrator for the
Counter-Terrorism Working Group (COTER) Ignacio Diez Parra,
and Commission Directorate General for Justice, Freedom and
Security Counter-Terrorism Policy Officer Ingo Weustenfeld to
discuss follow up action to the November 20, 2008 U.S.-EU
Terrorist Finance Troika (REF A). De Kerchove promised to
follow up on the U.S. suggestion for a "road-show" on how to
address the abuse of charities by terrorist financiers after
the EU's February 12 conference with the non-profit sector
and expressed concern over the future of the U.S. Terrorist
Finance Tracking Program. Diez Parra requested U.S.
confirmation of the May 27-28 U.S.-EU terrorist finance
workshop dates in Prague. End Summary.

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MEK, Al Qaeda: Preserving EU Counter-Terrorism Sanctions
-------------- --------------


2. (C) DAS Hengel sought de Kerchove's views on the action
and coordination needed to address the aftermath of the EU's
court decisions against UN-mandated Al Qaeda and Taliban
sanction designations (UNSCR 1267) and the EU's autonomous
designation of the Mujahideen-e Khalq (MEK) (REF B). De
Kerchove noted the Council is still awaiting a legislative
proposal from the Commission to address the deficiencies
identified by the courts in the EU's UNSCR 1267 system (REF
C, paragraph 11). Seven related cases are still pending
before the EU courts.


3. (C) On MEK, de Kerchove asked whether the United States
can present additional information to help the EU cause for
re-listing. He stressed that the Council "considers this a
terrorist organization that we did not manage to put on the
list." The French basis for listing has been "stretched to
the limit," and the EU "needs solid elements that can be
released to the public."


4. (C) De Kerchove noted he plans to visit the UN 1267
Committee in New York. His visit planned for the end of 2008
was vetoed by the French Presidency, who worried he might
"say the wrong thing." De Kerchove took umbrage with this
but kept the insult to himself, deferring to the Presidency's
wishes.

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Protecting Charities from Terrorist Abuse
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5. (C) DAS Hengel asked EU CTC De Kerchove whether he was
open to the idea of a one-week U.S. "road-show" (Treasury,
USAID, State) to key EU capitals to showcase the U.S. pilot
project related to the Financial Action Task Force Special
Recommendation VIII on Non-Profit Organizations (NPOs). De
Kerchove said it is too soon for him to respond; EU Member
States are still sensitive about engaging on this issue.
Their response will depend in part on the policy discussions
stemming from the Commission-hosted conference on this issue
on February 12 in Brussels. (Note: A U.S. Treasury
representative presented on the U.S. Alternative Relief issue
at this event. End Note.) Weustenfeld explained that the

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conference would present a study the EU commissioned two
years ago to discuss transparency, accountability, and
special cases in the EU NPO sector. Belgium had been rated
"compliant" with FATF SR VIII, as had the Italians. The two
countries were being asked to present their experiences to
the group. The EU would explore hand-picked NPO umbrella
organizations' thinking about what type of EU-level approach
they might be willing to accept. NPO interest in this
conference was significantly higher than the Commission's
previous attempt. The Commission is responsible for
reporting on the conference outcome to the Council, possibly
with a view to policy development. De Kerchove promised to
respond to DAS Hengel's suggestion after the conference with
ideas for next steps. Brussels should be a potential
"road-show" stop, he suggested.

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U.S.-EU Terrorist Financing Workshop
--------------


6. (C) For the May U.S.-EU Terrorist Financing Workshop in
Prague, de Kerchove will instruct the Commission
(Directorates General for Development and the Fight Against
Fraud (OLAF)) to help prepare a presentation on how the EU
prevents its assistance funds from being diverted for
terrorist purposes. For example, how do they prevent their
billions of euros in EU financing from being diverted in
Gaza? De Kerchove also instructed the Council's workshop
coordinator to see if Belgium and Italy could provide their
presentations from the February 12 conference on NPOs to the
U.S.-EU workshop.


7. (C) DAS Hengel inquired about the status of the EU's
approval of the workshop "capstone" document, summarizing the
series to date. Diez Parra explained that the U.S.
cancellation of the workshop under the French Presidency had
disrupted the process of the EU's finalizing the report;
furthermore, key Council personnel turnover meant the Czechs
were just now re-starting the process to circulate the latest
version for EU Member State comments. He requested that the
United States confirm that the May 27-28 dates for the Prague
workshop are agreed and settled by the U.S. side. DAS Hengel
responded that the misunderstanding over the French workshop
should not have happened, apologized, and confirmed that the
U.S. agrees to the May 27-28 workshop dates in Prague. De
Kerchove added his willingness to lean on the Czechs if no
response is received in a timely manner.

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SWIFT: U.S. Terrorist Finance Tracking Program
-------------- --


8. (S) De Kerchove provided a read-out of his recent meeting
in Washington with U.S. Treasury U/S Levey regarding the
Terrorist Finance Tracking Program and SWIFT. De Kerchove
seemed concerned to have learned that some of the data may
move to Switzerland, which "may make the program less
efficient." He said the Netherlands could be sited for
non-U.S. data, and Switzerland for U.S.-related and those who
opt in to accept mirrored data in the U.S. De Kerchove
expressed reservations over this set up, noting the U.S.
would "lose access to half of it." Even with a subpoena, the
USG would not be able to access 100 percent of the
information. De Kerchove said they are "trying to see what
we can do -- this is a very important terrorist financing
issue."


9. (U) Note: On February 17, the Commission issued a press
release following Vice President Jacques Barrot's closed-door
presentation to the European Parliament's Civil Liberties
Committee on February 16 of the designated "Eminent European

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Person Judge Bruguiere" report on Treasury's adherence to its
TFTP commitments to the EU. Barrot echoed De Kerchove's
sentiments, saying "The TFTP has generated significant value
in the fight against terrorism, notably in Europe." End
Note.


10. (U) DAS Hengel cleared this message.

MINIMIZE CONSIDERED

MURRAY
.