Cablegate: Terrorist Finance: Follow-Up Action Request On


DE RUEHMD #2072/01 3101530
R 061530Z NOV 07





E.O. 12958: N/A

REF: STATE 152088

1. (SBU) This message is sensitive but unclassfied.

2. (SBU) The information provided in this message is keyed to
the questions in reftel's para. 5.

3. (U) The June, 2006 Financial Action Task Force (FATF)
mutual evaluation of Spain found that Spain's "structures for
dealing with terrorist financing are generally sound."
However, with respect to FATF Special Recommendation IX on
"Cross Border Declaration & Disclosure", FATF found that:
"The declaration system as currently implemented raises some
issues of effectiveness." The FATF did not provide detail on
what were the issues of effectiveness. Spanish officials
were aware that FATF would make this an issue. As a result,
the 10/13/06 Boletin Oficial (Spain's equivalent of the
Federal Register) specified in Order EHA/1439/2006 that as of
2/14/07, it would be obligatory to declare upon entry to
Spain or exiting Spain the possession of euros 10,000 or more
in cash. The Spanish government issued a 2/13/07 statement
reminding the public of this obligation as of 2/14/07.

4. (U) Individuals caught smuggling an amount larger than
euros 10,000 are only allowed to keep a maximum of euros
1,000 and are liable to pay a fine of up to twice the amount
of cash found.

5. (SBU) EconOff asked Spanish Financial Intelligence Unit
(FIU) Area Chief Jesus Torbado whether most people who live
in Spain were aware of the declaration obligation given that
it is not widely publicized. For example, individuals flying
into Spain are not obliged to declare that they are carrying
less than euros 10,000 in cash. The same is true with
respect to the millions of people that take ferries every
year from Spain to North Africa and back. Torbado recognized
that this was a problem despite the fact that in Spain, as in
most legal systems, ignorance of the law and/or regulations
is not a valid excuse for non-compliance. Torbado said that
the GOS was considering publicizing the declaration
requirement more widely. Beyond checking for bulk couriers
per se, according to press reports Spanish law enforcement
agencies have up to 700 mosques under surveillance. Spanish
authorities are concerned about money being raised in these
institutions for the purpose of supporting yihad.

6. (SBU) The FIU's Jesus Torbado told EconOff that since
February 14 several cases (he did not have statistics though)
had been filed against individuals that had been found with
more than euros 10,000 on them. Spanish authorities
prosecute individuals on the grounds of material support for
yihad. For instance, on 10/24/07, Spanish police arrested
six North Africans who, among other activities, were raising
money for Islamic prisoners. On 9/20/07, Spain arrested two
Pakistani nationals on terrorism finance related charges.
These arrests were coordinated with the FBI. On 7/24/07, two
Syrian nationals were charged with "collaboration with a
terrorist organization, drawing up false contracts as well as
money laundering." Spanish prosecutors noted in a 5/1/07 El
Pais (Spain's leading daily) article that funds collected in
Spain were ending up financing Al Qaeda activities outside
Spain, but the prosecutors did not mention bulk cash
smuggling as one of the ways for getting the money out - they
mentioned hawalas, false contracts and Bahamian accounts as
the conduits for getting the money out.

7. (SBU) The Embassy economic section and Department of
Homeland Security Immigration and Customs Enforcement
(DHS/ICE) attache have exchanged information with Spanish
counterparts on a French-Spanish "twinning" program to
establish a Financial Intelligence Unit (FIU) in Morocco.
Embassy Madrid's ICE office has provided bulk cash courier
smuggling training to Morocco, which is complementary to the
French-Spanish program. Embassy's Economic Section and ICE
office intend to query Spanish officials further on how they
intend to make the euros 10,000 declaration requirement more
effective. Embassy Madrid's ICE office is also working with
Madrid Barajas airport officials on bulk cash courier
smuggling issues in the drugs context.

8. (SBU) Comment: Although Spanish law enforcement agencies
have not focused (at least publicly) on bulk cash smuggling,
a logical means of getting money from Spain to, for instance,
North Africa, is through cash smuggling. Both flights and
the heavily used ferries between Spain and North Africa would
be fairly easy ways to smuggle cash. Moreover, given the low
cost of financing many terrorist operations, we wonder
whether the euros 10,000 declaration requirement is
sufficient, even if more rigorously implemented. In the drug
context, ICE is working with Spanish officials at Barajas
airport to sensitize them to bulk cash smuggling. We will

explore the possibility of expanding this cooperation to the
terrorism finance arena.

© Scoop Media

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