This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 02 THE HAGUE 002331 
 
SIPDIS 
 
STATE FOR EUR/ERA 
 
E.O. 12958: N/A 
TAGS: ETTC PTER EFIN KTFN NL EUN
SUBJECT: TERRORISM FINANCE: DUTCH AUTHORITY TO FREEZE ASSETS 
 
REF: A. STATE 193684 
     ¶B. THE HAGUE 0026 
     ¶C. THE HAGUE 1213 
     ¶D. THE HAGUE 1040 
     ¶E. THE HAGUE 834 
     ¶F. THE HAGUE 771 
 
¶1.  The following is provided in response to ref A request 
for information on the status of the Netherlands' national 
authority to freeze assets related to terrorism financing. 
Ref B contains a detailed description of Dutch laws and 
regulations on terrorism financing and related money 
laundering activities as well as the relevant institutions 
responsible for implementing these standards. 
 
¶2.  NATIONAL AUTHORITY TO FREEZE:  The Netherlands has 
national authority to identify, freeze and seize terrorist 
finance assets, based on the "Sanction Provision for the Duty 
to Report Terrorism" (Sanction Act), originally adopted in 
1977 and amended on June 7, 2002, to include implementation 
of UNSCR 1373 and EU regulation 2580/2001.  Involvement in 
financial transactions with individuals and/or organizations 
designated nationally, by the EU (Clearinghouse process), or 
UN lists (UNSCR 1267 and 1373) is a criminal offense.  The 
Sanction Act allows measures to be taken against individuals 
or organizations on the basis of terrorist suspicion. 
Terrorist assets have been frozen based on the authority 
provided by the Sanction Act, UNSCRs, and EU Directives. 
 
¶3.  PROCESS AND LEGAL STANDARD:  UNSCR designations are 
automatically incorporated into EU regulations and are 
applicable within the Dutch financial sector.  A designation 
through the EU Clearinghouse requires a unanimous decision 
among member states, which is then applicable within the 
Dutch financial sector.  At the national level, an 
inter-ministerial working group has been established to make 
decisions on designations and to facilitate coordination and 
communication on terrorist financing measures.  The working 
group includes representatives from the Foreign Affairs 
Ministry, Justice Ministry, Finance Ministry, Netherlands 
Intelligence and Security Services (AIVD), Public Prosecutor, 
and financial sector supervisors.  The AIVD has the primary 
responsibility of collecting information for potential 
designations by the working group.  If the AIVD has an 
indication that an individual/organization supports an entity 
on the list, it can pass the information to the Public 
Prosecutor dealing with terrorist cases.  The Public 
Prosecutor can act on the basis of the Criminal Law and 
according to its discretionary powers.  If the police have 
specific information that the Sanctions Act has been 
violated, the Public Prosecutor can start a criminal 
investigation independently.  The working group also 
considers designations and evidence presented by other 
countries, such as the U.S. 
 
¶4.  The Finance Ministry, in close coordination with the 
Foreign Affairs Ministry, distributes lists of designated 
entities whose assets must be frozen to financial 
institutions and relevant government bodies, including local 
tax authorities.  Financial institutions screen lists of 
customers on a timely basis.  Exact hits automatically lead 
to the freezing of all accounts of the customer.  Personal 
information and transaction records are subsequently 
forwarded to AIVD through the Finance Ministry and the 
financial market supervisors.  The 1992 Asset Seizure and 
Confiscation Act (Asset Seizure Act) was amended in 2003 to 
improve and strengthen options for identifying, freezing and 
seizing criminal assets.  The police and special 
investigation services are responsible for enforcement in 
this area. 
 
¶5.  IMPLEMENTATION AND SUCCESSFUL CASES:  According to 
Justice Ministry sources, the Netherlands has frozen more 
terrorist-related assets that any other EU member state. 
Forfeiture statistics provided by the Office of the Public 
Prosecutor show that assets forfeited and/or seized amounted 
to 7.9 million euros (8.4 million dollars) in 2002, 9.1 
million euros (10.1 million dollars) in 2001 and 10 million 
euros (10.9 million dollars) in 2000.  (These figures do not 
represent exclusively terrorist financing assets.)  In July 
2004, the Netherlands froze all financial assets of the Dutch 
branch of Al-Haramain.  See ref C-F for further details. 
 
¶6.  OBSTACLES:  Our working level contacts largely agree that 
the biggest obstacle to implementing national asset freezing 
authority is the large burden of proof that is required under 
Dutch law before any action can be taken against individuals 
or organizations on the basis of terrorist suspicions. 
Although no Dutch judge has ever overturned an asset freeze 
order under the Sanctions Act, Dutch officials have 
repeatedly expressed concern that such actions are vulnerable 
to challenge in local courts without legally sufficient 
supporting evidence.  As a result, Dutch officials prefer to 
act under the umbrella of EU regulations and the EU 
Clearinghouse process.  However, proposals are under 
consideration in the Second Chamber to shift the burden of 
proof in the Dutch Asset Seizure Act from the Public 
Prosecutor to the criminal. 
SOBEL