VZCZCXYZ0004
RR RUEHWEB

DE RUEHMD #2380/01 2651212
ZNY SSSSS ZZH
R 221212Z SEP 06
FM AMEMBASSY MADRID
TO SECSTATE WASHDC 0814

S E C R E T MADRID 002380

SIPDIS

SIPDIS

STATE PASS S/CT DEPUTY COORDINATOR VIRGINIA E. PALMER

E.O. 12958: DECL: 09/22/2016
TAGS: PTER KTFN EFIN KPAO ASEC SP
SUBJECT: DISRUPTING EXTERNAL FINANCING TO THE TALIBAN -
OPERATIONAL COOPERATION WITH SPAIN BEST

REF: STATE 145269

Classified By: DCM Hugo LLorens - Reasons: 1.4 (b) and (d)

¶1. (S/NF) Although an info addressee, per reftel invitation
Embassy offers the following comments. The initiative on
disrupting external financing to the Taliban could help
induce the GOS to reenergize the fight against Taliban
financing, among other reasons because Spain has some 600
soldiers deployed in Afghanistan. But, as a September 2 El
Pais article (also appeared in the September 5 English
language version of El Pais) made clear, there are doubts,
including among senior GOS officials, regarding the efficacy
of the fight against terrorism finance, especially
designations. See Septel for a summary of the article. We
remain confident that the GOS checks for funds based on the
prenotifications we deliver. And anecdotal evidence suggests
that the formal financial sector takes the terrorism finance
regulation/oversight role by the Bank of Spain and Ministry
of Economy seriously and considers the terrorism related
compliance regulations to be extensive. Our sense is that a
renewed focus on operational cooperation would provide the
greatest impetus in intensifying the fight against terrorism
finance in Spain. There is already a joint U.S.-Spain
Counterterrorism Working Group. While not a perfectly
functioning entity, perhaps this group could do more in the
terrorism finance prevention area. Embassy offers the
following suggestions with respect to reftel.

A) We should continue to expend energy on getting al-Qa'ida
financier Imad Eddin Barakat Yarkas designated. This should
be relatively easy as he has already been convicted of
membership in a terrorist organization. The practical effect
of designating him may be limited as he is in jail, but it
would certainly have some symbolic value. We can certainly
continue to press on Barakat Yarkas cohort Driss Chebli. He
has been tried, but his conviction was overturned on appeal.
Although a conviction is not required for designation in
Spain, we suspect his release will continue to make the GOS
balk at designating him.


B) We should continue to press the GOS to adopt implementing
regulations for its 2003 terrorism law. Once implementing
regulations are adopted, the GOS would have preventative
freezing mechanisms. We understand that a turf battle
between the Ministry of Interior (which stands to gain
authorities) and the Bank of Spain (which stands to lose
authorities) is partly to blame for the continued
non-adoption of the implementing regulations. We also
understand that the regulations have gotten entangled with
jurisidictional battles between the central and regional
governments.

C) Consider intensifying terrorism finance cooperation in the
context of the U.S.-Spain Counterterrorism Working Group.
Information from the Afghanistan Threat Finance Cell (ATFC)
in Kabul could perhaps form the basis for investigations in
Spain - there are a number of hawalas with Pakistan links
(and therefore almost certainly with Afghanistan as well)
operating in Spain. Spanish authorities would probably be
willing to, upon request, intensify intelligence operations
against these entities. Interior Ministry Secretary of State
for Security, Antonio Camacho.
(a regular U.S. Embassy interlocutor) noted during his
intervention at the November 2005 U.S. Embassy-Ortega y
Gasset terrorism finance conference that dealing with hawalas
was big challenge for Spanish law enforcement.

D) Reftel says that the U.S. is working to establish an
information-sharing mechanism to be used against the Afghan
narcotics trade with U.K. and Russian counterpart agencies.
As a NATO ally, Spain has deployed 600 troops in Afghanistan
and is a major drug importer for transshipment and domestic
consumption purposes. We
believe we should consider cooperating in the same way with
Spain.

E) As part of the Treasury-led effort to bring the hawala
sector in Afghanistan under formal regulation, perhaps an
international workshop on this topic could be arranged.
Spanish authorities have the same issues with respect hawalas
operating in Spain.

F) Assuming Spanish participation would be welcome, Embassy
would be willing to encourage Spanish participation in the
envisioned December workshop on charities. The workshop may
want to bill itself as dealing with a broader range of
organizations than "charities". The Spaniards tell us that
there are few, if any, Islamic charities per- se operating in
Spain. There are, however, mosques that engage in charitable

activities. The press has reported that the Spanish National
Policy (SNP) has completed a survey of the approximately 600
mosques in Spain. It might be worthwhile having a Spaniard
discuss the results of this work.
LLORENS