Cablegate: Estonia: Scenesetter for Visit of Fbi Director


DE RUEHTL #0589/01 2501442
R 071442Z SEP 07 ZDK




E.O. 12958: N/A

1. (SBU) Summary: Welcome to Tallinn. Three and a half
years after NATO and EU accession, Estonia remains a strong
ally on all fronts. It is a steadfast ally in the Global
War on Terror (GWOT) in both Afghanistan and Iraq, and an
effective role model for democracy in the former Soviet
states and beyond. Estonia is deeply committed to trans-
Atlantic security institutions and pro-free market economic
policy. Bilateral cooperation on law enforcement and
security issues is very strong. The Office of the Legal
Attach works with the GOE on key issues including
terrorism, cyber crime, transnational crime, corruption,
organized crime and training.

2. (SBU) The last year has been a banner period for U.S.-
Estonian bilateral relations, including President Bush's
November 2006 visit to Tallinn. Estonians are very
grateful for U.S. support in the aftermath of their
government's decision to relocate a Soviet war memorial
known as the "Bronze Soldier" in late April. The Estonian
economy continues to boom, although inflation and the
current account deficit remain high while the labor market
is increasingly tight. Relations with Russia remain
difficult, particularly after the move of the Bronze
Soldier monument. Following cyber attacks on Estonia's
high-tech infrastructure in May, the GOE raised the
national security implications of the issue at NATO, within
the EU and bilaterally with its allies. Estonia's recent
progress in meeting Visa Waiver Program requirements and
U.S. Congressional action put the country on track to join
by the summer of 2009. End summary.

3. (SBU) This has been a big year for U.S.-Estonian
bilateral relations. President Bush came to Tallinn last
November, the first ever visit to Estonia by a sitting U.S.
President. In June, Estonian President Toomas Hendrik
Ilves met with President Bush at the White House. In
addition, the three Baltic Foreign Ministers recently met
with Secretary Rice to mark 85 years of relations with the
United States. Appreciation for U.S. non-recognition of
the Soviet occupation of Estonia remains an important
source of good will towards the United States. Following
the Bronze Soldier riots, cyber attacks and deteriorating
relations with Russia in late April and early May, the
United States voiced strong public support for Estonia.
One major challenge for our public diplomacy efforts,
however, is to engage the next generation of Estonians to
ensure that American-Estonian relations will remain strong
for the long term.


4. (SBU) The Regional FBI Legatt office (based in the
Embassy in Tallinn), covers all operational and
investigative interests of the FBI in the Republics of
Estonia, Latvia and Lithuania. This includes proactive
efforts such as Counter Terrorism, Counterintelligence and
Cyber Crimes. The Regional Security Officer and FBI Legal
Attach are the main USG contacts with Estonian law
enforcement and security services.

5. (SBU) TERRORISM. Estonia does not have an indigenous
terrorist threat and none of the organizations appearing on
the U.S. Department of State's list of recognized terrorist
organizations are present. Estonia's major terrorism
threat is border security, a particular concern for the
United States and Europe when Estonia became a full member
of NATO and the European Union in May 2004. Due to its
shared border with Russia, Estonia is considered a
potential transit risk for WMD materials. This risk has
been offset by the robust DOD/DTRA/FBI WMD Counter
Proliferation Initiative, which has provided considerable
training and assistance to the region since 2001.

6. (SBU) CYBER CRIME. The Estonian Prosecutor General's
Office identifies cyber-related crimes as one of the top
three criminal threats to country. Several significant FBI
computer intrusion cases had a nexus to Estonia, but the
perpetrators were usually from neighboring Belarus, Ukraine
or Russia. In 2006, the FBI conducted joint investigative
efforts with the Estonian Police, including embedding a
Cyber Special Agent in 2006.

7. (SBU) TRANSNATIONAL CRIME. Internet fraud is the
primary fraud perpetrated against U.S. citizens and
companies emanating from the Baltics. Numerous eBay
auction schemes and other internet frauds have been
initiated from the Baltic States and the proceeds
transmitted via wire transfer. These transactions resulted
in losses ranging from $15,000 to as much as $100,000 each.
An even larger number of financial fraud schemes were
initiated from Russian, Belarus and the Ukraine, with
Baltic banks used as a transit point for funds. Estonia

has experienced fewer of these "transit" cases than Latvia
or Lithuania. Money laundering through the Baltic States
is common practice due to the liberal banking environment.
Banks in the region routinely engage in significant foreign
transfer transactions with little-known or fictitious
customers. Although the situation is most egregious in
Latvia, it persists in Estonia and Lithuania.

Baltic States have identified corruption as a high priority
for their governments and law enforcement. The FBI Task
Force in Budapest has identified numerous organized crime
(OC) connections to the Baltic region, including in
Estonia. Several small OC groups (15 - 30 persons each)
currently operate in Estonia. Estonian Police believe that
the links with Russian OC groups have weakened in recent
years, although Russians continue to maintain some level of
coordination with the leaders of Estonian OC groups.
Although Estonian authorities do not believe that organized
criminal elements have been capable of influencing the
government process, the Prosecutor General has identified
public corruption as the top prosecutorial and political

9. (SBU) TRAINING. The Legatt Office provides training to
Estonian law enforcement to help increase their efficiency
and effectiveness. In 2007, the FBI hosted or provided
instructors in courses on organized crime, evidence
collection, cyber investigations, cyber evidence
collection, money laundering, public corruption, human
trafficking and intellectual property rights.


10. (U) Estonia is a strong supporter of the U.S. position
in the GWOT. Estonian troops participate in NATO
operations (in Afghanistan, Kosovo and Iraq), EU operations
(the EU's Nordic Battle Group), Operation Enduring Freedom
in Iraq and other missions (including the UN mission in
Lebanon). A company of Estonian soldiers (130) is deployed
to the southern province of Helmand (the epicenter of
Afghanistan's opium production and a stronghold for the
Taliban). In Iraq, Estonian soldiers are embedded with U.S.
troops in some of the toughest counter-insurgency
operations outside of Baghdad. On June 23, 2 Estonian
soldiers were killed in Afghanistan. In 2004, 2 others
were killed in Iraq. Overall, 8.2% of Estonia's military
is currently deployed overseas. The GOE is on track to
meet its NATO commitment of devoting 2% of its GDP to
defense spending (currently at 1.83%). Estonia is a vocal
supporter of NATO enlargement.


11. (U) Estonia plays an active role in encouraging
democratic reforms and economic development in several
former Soviet states. Estonia's experience of transforming
itself from a Soviet-occupied country into a healthy
democracy with a booming economy has given it immense
credibility in promoting democracy and transformational
diplomacy. The GOE has provided training in law
enforcement, judicial reform, freedom of the press,
democracy building, economic and market reforms and IT to
civil servants from the Balkans, Georgia, Moldova and the
Ukraine. Georgia is of particular importance for the GOE --
Estonian President Ilves, Prime Minister Ansip and Foreign
Minister Urmas Paet have all visited Tbilisi to strengthen
ties between the two countries. Former Prime Minister Mart
Laar serves as a personal advisor to Georgian President
Mikheil Saakashvili on political and economic reform.


12. (U) Estonia's economy is probably the most dynamic of
the "Baltic Tigers," and has been growing at 7-11% per year
for the past seven years. The state budget has been in
surplus since 2001, (currently 3.3% of GDP) and
unemployment is currently 5.3% and falling. The biggest
challenges facing the economy are: a labor shortage, a
growing current account deficit and inflation. The
national currency, the Kroon, is pegged to the Euro.
Estonia would like to join the Euro zone by 2011. (Note:
Estonia meets all Euro criteria except for inflation. End

13. (SBU) Since the early 1990s, consecutive Estonian
governments have backed a business- and investor-friendly
economic policy featuring a flat 22% tax on personal income
and no tax on reinvested profits. Leading sectors include
computer, software and cellular technologies, tourism and
manufacturing. The United States is the eighth largest
foreign direct investor, but U.S. direct investment

accounts for less than 2.5% of total FDI, well behind the
Swedes and Finns, who together account for more than 80% of
the total. Estonia is best known for its highly developed
IT sector and widespread use of technology in government
and daily life. Internet usage in Estonia is over 60%, and
online banking is upwards of 80% - both the highest in
Europe. Cabinet ministers work on the basis of e-
government and Estonia was the first country in the world
to offer e-voting in a nationwide election.

14. (U) Large domestic oil shale reserves have allowed
Estonia to remain relatively independent of Russian energy
supplies, although Estonia imports natural gas from Russia.
The GOE will need to invest in expensive upgrades to its
oil shale plants to meet EU environmental standards by
2012. A proposed Baltic-Polish nuclear reactor in
Lithuania, as well as possible participation in a new
Finnish reactor, presents other possibilities for expanding
electricity supply. The proposed NordStream gas pipeline
from Russia to Germany may pass very close to Estonia's
territorial waters. GOE officials frequently reiterate the
need for a common EU approach to energy security.


15. (SBU) RUSSIAN RELATIONS. Estonia's relationship with
Russia is difficult and complicated following nearly 50
years of Soviet occupation. While the countries share
trade and investment ties, they have not been able to
conclude a border treaty. Depending on the political
climate, trucks crossing from Estonia into Russia may
encounter delays of up to several days. Estonia's decision
to relocate the Bronze Soldier prompted riots by ethnic
Russians in Tallinn. Following the riots, Russia put heavy
economic and diplomatic pressure on Estonia - including
refusing to disperse a mob outside the Estonian Embassy in
Moscow for several days, limiting rail and truck traffic
across the border and encouraging a boycott of Estonian
goods. Since April, rail traffic (oil, coal, wood and
other materials) has been down by 30 to 50% - significantly
reducing Estonia's transit revenues and complicating supply
lines for Estonian companies.

16. (SBU) Ethnic Russians make up approximately 25 percent
of the population of Estonia. Russia has frequently
complained about GOE treatment of its Russian speaking
minority. However, until the Bronze Soldier riots,
Estonia's efforts to integrate its minority population were
viewed as a model for the region. While Estonia can still
point to significant accomplishments of its integration
strategy, the riots revealed deep fissures remain between
ethnic Russians and Estonians living in Estonia. The GOE,
which has traditionally engaged in language-based
integration programs, is working on a new strategy that
will continue with language programs, but also focus on
society building and cultural understanding among Estonians
of all ethnicities.


17. (SBU) Immediately following the Bronze Soldier riots,
Estonian websites, routers and servers came under a wave of
coordinated cyber attacks. The attacks targeted GOE
websites (e.g., of the President, Prime Minister, MFA and
MOJ) as well as commercial and media sites (e.g., online
banking and news portals). The attacks were not highly
technical and mainly employed botnets (robot networks of
computers and/or servers) to shut down targets through
"denial of service" attacks. Russian-language internet
chat-forums were used to discuss the times, targets and
methodology of these attacks. The GOE cannot prove a
direct link between the Russian government and the attacks,
but Estonian officials believe there is significant
circumstantial evidence implicating Russia. The GOE has
raised the cyber attacks at NATO, within the EU and
bilaterally with its allies -- with a focus on the national
security implications. Estonian President Ilves discussed
the cyber attacks with President Bush and other U.S.
officials during his visit to Washington at the end of


18. (SBU) Securing visa-free travel to the United States
for Estonian citizens remains a priority for both the GOE
and the Estonian public. Senior GOE officials and the
media regularly raise the issue of membership in the U.S.
Visa Waiver Program (VWP) at all levels with the USG.
Estonia's recent progress toward meeting the VWP criteria
and U.S. Congressional action have put the country on track
(perhaps) to join the VWP by the summer of 2009.


© Scoop Media

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